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Appeal No. 759 of 1957.
Appeal from the judgment and Order dated June 26, 1957, of the Bombay High Court in Appeal No, 92 of 1956.
J. C. Bhatt, section N. Andley, J. B. Dadachanji, Rameshuar Nath and.
P. L, Vohra, for the appellants.
R. Ganapathy Iyer and D. Gupta, for respondent.
February 16.
The Judgment of Gajendragadkar, Subba Rao, Wanchoo and Mudholkar, JJ., was delivered by Wanchoo, J. Sarkar, J., delivered a separate Judgment.
WANCHOO, J.
This appeal by certificate granted by the High Court of Bombay raises the constitutionality, of section 114(2) of the Bombay Industrial Relations Act, No. XI of 1947, hereinafter called the Act).
The brief facts necessary for present purposes are these.
108 The appellant is a cotton textile mill situate in Bombay.
It is said that the appellant had been continuously making losses from 1950 to 1955.
References were however made under section 73 A of the Act by the Rashtriya Mill ' Mazdoor Sangh, Bombay, in respect of disputes relating to bonus for the years 1952 and 1953, which are said to be pending before the Industrial Court, Bombay.
The ease of the appellant before the Industrial Court was that as it had made losses there was no question of its paying any bonus for the years in dispute.
It seems that at the same time there were cases relating to bonus of other mills pending before the Industrial Court and the appellant applied that its case should be dealt with separately, and this prayer was acceded to.
It seems that while the references were pending, an agreement was.
arrived at between the Mill owners ' Association, Bombay and the Rashtriya Mill Mazdoor Sangh, Bombay, with respect to payment of bonus for the years 1952 to 1957 and the agreement was to come into force with respect to each mill when it was signed by each member mill of the Mill owners ' Association.
Clause (6) of that agree ment provided for payment of bonus even where the profit made by a mill was not adequate to provide for all prior charges as per the Full Bench formula evolved by the Labour Appellate Tribunal in The Mill owners ' Association, Bombay vs The Rashtriya Mill Mazdoor Sangh (1) or even where a mill made actual loss, the minimum bonus being in either of these two cases 4 8 per cent.
of the basic wages.
earned during the year, subject to such mill being entitled to adjust the amount thus paid by it as the minimum bonus against any available surplus in any subsequent year or years under the provisions of the agreement.
This agreement was registered and was made enforceable as an award against those mills which were parties thereto.
The appellant however did not sign the agreement and therefore it was not enforced as an award by the Industrial Court against the appellant.
Thereafter the Rashtriya Mill Mazdoor Sangh wrote to the Government of Bombay requesting that the (1) 109 said award should be enforced against the appellant in exercise of the powers vested in the Government by section 114(2) of the Act.
After necessary action under section 114(2), the Government of Bombay issued a notification dated July 31, 1956, directing that the award made by the Industrial Court on March 13, 1956, for payment of bonus for the years 1952 and 1953 and also for the years 1954 to 1957 be enforced against the appellant.
This was followed by a writ petition by the appellant in the High Court challenging the constitutionality of section 114(2) and also challenging the power of the State Government to issue such a notification under that provision.
The petition was however dismissed on October 9, 1956.
There was then an appeal to a Division Bench of the High Court in which also the appellant failed.
The appellant then applied for a certificate to enable it to file an appeal to this Court, which was granted and that is how the matter has come up before us.
Two main points have been urged on behalf of the appellant before us.
In the first place, it is urged that section 114(2) is unconstitutional as it violates the fundamental rights guaranteed under article 19(1)(f) and (g) of the Constitution.
In the second place, it is urged that even if section 114(2) is constitutional, the notification has gone beyond the powers conferred on the State Government by that section and therefore the notification is bad.
We do not think it necessary for purposes of the present appeal to consider the constitutionality of section 114(2), for we have come to the conclusion that the notification is bad because it goes beyond the powers conferred on the State Government by that section.
This brings us immediately to the second point that has been urged before us and in that connection we have to consider the ambit of the power of the State Government under section 114(2).
Section.
114(2) reads as follows. "In cases in which a Representative Union is a party to a, registered agreement, or a settlement, submission or award, the State Government may, 110 after giving the parties affected an opportunity of being heard, by notification in the Official Gazette, direct that such agreement, settlement, submission or.
award shall be binding upon such other employers and employees in such industry or occupation in that local area as may be specified in the notification: Provided that before giving a direction under this section the State Government may, in such cases as it deems fit, make a reference to the Industrial Court for its opinion.
" The words of section 114(2) are very general and may at first blush be open to the interpretation that any agreement, settlement, submission or award may be extended thereunder provided it fulfills its terms.
But further consideration shows that there are two obvious limitations on the power of the State.
Government in that behalf.
The first limitation arises out of the subject matter of the agreement etc., to be extended.
Suppose the agreement etc.
deal with (lot us say) the wages of a certain type of workmen in a certain mill.
Suppose that the agreement etc., are extended to ano ther mill where that type of workmen does not exist.
Obviously the agreement cannot be extended in these circumstances and the power of the State Government is thus limited by the subject matter of the agreement etc.
The second limitation which again, is obvious arises from the provisions of law.
The proviso to section 114(2) shows that before exercising its power under the said section the Government can refer the matter to an Industrial Court and there can be no doubt that an Industrial Court cannot and will not, advise anything against the law.
Section 95 A makes the determination of any question of law in any order, decision, award or declaration passed or made, by the Full Bench of the Industrial Court under the regulations made under section 92 binding in all proceedings under the Act.
What is done under section 114(2) is also a proceeding under the Act after notice to the parties affected.
The State Government is thus bound by any decision on a question of law while proceeding under a. 114(2).
The 111 policy of the Act underlying section 95 A therefore lead,,; to the conclusion that the exercise of power conferred by section 114(2) has to be in conformity with the industrial law laid down by the Full Bench of the Industrial Court and also by any decision of this Court.
The State Government therefore when it passes an order under section 114(2) must have full regard to the law as laid down by the legislature and by the decisions of this Court and cannot pass an order under section 114(2) which is against such law.
Besides, section 114(2) places a registered agreement, a settlement, a submission and an award on the same footing and so if an award has to conform to section 95 A as it must so must the other three mentioned therein.
Therefore, when the State Government acts under section 114(2) it can only do as between the parties before it what a labour court, an Industrial Court or a wage board can in law do under the Act.
We do not think that section 114(2) authorises the State Government to act against the law as laid down by the legislature or by this Court.
Section 114(2) therefore appears to be speedy remedy (dispensing with all appeals provided under the Act) by which the State Government may direct that the terms and conditions of employment in the matter of wages, hours of work and so on may be the same in a particular industry or occupation in a particular area as may have been settled between a representative union and other employers in that area and as could if necessary be enforced through an award in a case to which the representative union was a party.
There can be no doubt however that the State Government cannot do under section 114(2) what an adjudicator has 'no power to award under the provisions of the Act.
Therefore, as we read a, 114(2) we cannot escape the conclusion that the State Government 's power to make a direction under that section is co terminus with the power of an adjudicator (be it a labour court, an Industrial Court or a wage board under the Act) to make an award thereunder, and the State Government cannot under section 114(2) do what an adjudicator cannot do under the Act.
This being the ambit of the State Government 's power in respect of giving a direction under a. 114(2), 112 let us now proceed to see whether the impugned notification is within the ambit of these powers.
By this notification the State Government has directed that the award dated March 13, 1956, made by the Industrial Court shall be binding on the appellant and its employees in the matter of payment of bonus for the years 1952 to 1957 (both inclusive).
It is not in dispute that the said award was based, on an agreement between the Mill owners ' Association, Bombay and the Rashtriya Mill Mazdoor Sangh, Bombay.
The said agreement provided that it would have to be signed by each member mill of the Mill owners ' Association before it would be binding on it and again it is not in dispute that the appellant mill though it is a member of the Mill owners ' Association never signed it.
Farther, cl.
(6) of the agreement provided for payment of minimum bonus even in cases where there was no adequate profit to provide for all prior charges as per the Full Bench formula and also in cases where a mill had made actual loss on the year 's working, subject to a proviso as to adjustment.
Thus by the direction given in the impugned notification the appellant is subjected to payment of bonus even where it has not made adequate profit to provide for all prior charges or has in fact made a loss.
The contention on behalf of the appellant is that it would not be open to an Industrial Court to grant bonus when profit was not adequate to meet all prior charges or where there was an actual loss and therefore when the impugned notification made it possible for grant of bonus even in these cases (for prima facie the appellant had made losses upto 1955), it directed something which even an Industrial Court could not do. ' In consequence, it is urged that the notification inasmuch as it makes this possible is beyond the powers conferred on the State Government under section 114(2) because it allows something to be done which even an Industrial Court could not allow.
Reliance in this connection is placed on the decision of this Court in The New Manekchowk Spinning.
Co. Ltd. and Others vs The Textile Labour Association (1).
In that case this Court was considering (1) [1961] 3 S.C.R. 113 a similar agreement relating to Ahmedabad.
The Industrial Court had imposed that agreement after its expiry for one year on the mills inspite of their contention that they were not bound to pay any bonus for the years in dispute in view of the law laid down by this Court in The Associated Cement Companies, Limited vs The Workmen (1).
After examining the terms of the agreement then in dispute this Court came to the conclusion that in view of the law laid down in The Associated Cement Companies ' case, the Industrial Court had no jurisdiction to impose that agreement on the mills.
It further held that an agreement of that kind could only continue by consent of parties.
and could not be enforced by industrial adjudication against the will of any of the parties.
The agreement in the present case directed to be enforced by the impugned notification is similar in terms and as held New Manekchowk 's case (2) it could not be enforced by industrial adjudication against the will of any of the parties.
The power of the State Government under section 114(2) being co terminus with the power of an adjudicator under the Act, such an agreement cannot therefore be directed to be enforced against the will of the appellant even under section 114(2) inasmuch as by doing so the State Government would be going beyond the powers conferred on it by that section.
The impugned notification therefore must be held to be bad inasmuch as it goes beyond the powers conferred on the State Government under section 114(2) and must therefore be struggle down.
We therefore allow the appeal with costs and setting aside the order of the High Court hold that the notification dated July 31, 1956, is beyond the powers of the State Government under section 114(2) and direct that it will not be enforced.
We should however like to make it clear that this decision will not prejudice the trial of any references with respect to bonus which may be pending or which may hereafter be made between the appellant and its employees with respect to years 1952 to 1957 (both (1) (2) ; 114 inclusive).
If such references are pending or are hereafter made they will be decided in accordance with the decision of this Court in The Associated Cement Companies ' Case SARKAR, J.
This appeal arises but of an application made by the appellants to the High Court at Bombay under article 226 of the Constitution for a writ directing the respondent, the State ' of Bombay, to forbear from acting upon or enforcing a certain notification issued by it under a. 114(2) of the Bombay Industrial Relations Act, 1946.
This order was; sought on two grounds.
The first ground was that section ll4(2) was ultra vires, illegal and void.
The second ground was that if it was not so, the notification had been issued in improper exercise of the powers conferred by that provision.
The appellants are a cotton textile mill in Greater Bombay, a local area under the Act, and its directors and shareholders.
Their application was dismissed by the High Court and hence the present appeal.
It appears that certain references were pending since 1953 and 1954 under the Act in the Industrial Court between various cotton textile mills in Greater Bombay and their employees, in respect of disputes concerning bonus for the years 1952 and 1953.
In these references the employees were represented by the Rashtriya Mill Mazdoor Sangh, a Representative Union of workmen in the cotton textile industry as defined in the Act and a union registered under it.
The appellant mill was a party to these references.
On March 1, 1956, while these references were pending, the Rashtriya Mill Mazdoor Singh entered into an agreement with the Mill Owners Association, Bombay, of which fortyseven cotton textile mills including the appellant mill, were members, regarding the bonus to be paid to the employees of these mills for the years 1952 to 1957.
This agreement was subsequently accepted individually by about fortytwo of the mills who were members of the Association and parties to the references, and became binding on these mills.
This agreement was later registered under the Act and filed in the pending references and an award was (1) 115 made by the Industrial Court on March 13, 1956, in terms of it, as between the mills who had individually accepted the agreement and their employees.
The appellant mill did not accept the agreement and no award was made in the references concerning it and so far as it was concerned, the references remained pending.
On July 31, 1956, the respondent made the order which is challenged in these proceedings.
That order was in these terms: "Whereas the.
Rashtriya Mill Mazdoor Sangh, Bombay. .is a party to an award dated the 13th March 1956 And whereas the Government of Bombay, con siders that the award should be made binding upon the employers specified in column 1 of the schedule hereto annexed and their employees And whereas the said employers and the Rash triya Mill Mazdoor Sangh, Bombay, representing the said employees being the parties affected were heard Now, therefore, in exercise of the powers conferred by sub section (2) of section 114 of the said Act, the Government of Bombay hereby directs that the said award shall be binding on the employers specified in column 1 of the schedule hereto annexed and their employees in the matter of payment of bonus for the years specified against the employers in column 2 of the said schedule.
" The appellant mill was one of the employers men.
tioned in the schedule to the notification and the schedule further provided that the award would be binding on the appellant mill and its employees for the years 1952 to 1957, both inclusive.
As a result of this notification the appellant mill became liable to pay bonus to its employees for the. years mentioned, in terms of the award based on the agreement, to neither of which it was a party.
The appellants contend that the appellant mill is not liable to pay bonus in law as laid down by this Courtin Muir Mills Co. Ltd. vs Suti Mills Mazdoor Union (1) and by the Full Bench (1) ; 116 of the Labour Appellate Tribunal, in Mill Owners ' Association, Bombay vs Rashtreeya Mills Mazdoor Sangh (1) as it has not made any profit for the period commencing from June 30, 1950, and ending on June 30,1955.
The agreement on which the award was based, adopted a formula for ascertaining the available surplus of the profits of an employer and provided for payment of certain bonus out of it.
This bonus, I gather, would have been of a smaller amount than that payable under the formula laid down in the cases mentioned earlier.
The appellants have no complaint against this Part of the agreement for, presumably, under it, they would not be liable to pay any bonus at all.
What they object to is el.
6 of the ' agreement.
This clause in substance provided that when no avai.
lable surplus was found to exist according to the for mula or even when a mill had incurred loss in a particular year, it would have to pay its employees "a minimum bonus equivalent to 4.8 per cent of the basic wages earned by them during the year", with a right to recoup the bonus so paid, out of the bonus that would be payable under the agreement in subsequent years and out of the residue of the surplus profits then remaining, it would have to pay bonus in terms of the agreement.
The substance of the appellants ' grie vance against the notification is that under it the appellant mill has to pay bonus in terms of cl. 6 of the agreement even though it has been working at a loss.
The first question is whether section 114(2) is invalid and illegal.
That section so far as is material is in these terms: "section 114 (1).
A registered agreement or a settlement, submission or award shall be binding upon all per.
sons who are parties thereto: (2) In cases in which a Representative Union is a party to a registered agreement, or a settlement, submission or award, the State Government may, after giving the parties affected an opportunity of (1) 117 being heard, by notification in the Official Gazette, direct that such agreement, settlement, submission or award shall be binding on such other employers or employees in such industry or occupation in that local area as may be specified in the notification.
" The appellants first challenge the validity of the .section on the ground that it offends article 14 of the Constitution.
It is said that it gives an unguided and arbitrary power to the State Government to discriminate between various sets of employers and employees and make an order on any one set at its pleasure leaving out others.
It seems to me that this contention is not well founded.
The power given by the provision is not, in my view, uncontrolled.
The object of the Act clearly is the settlement of industrial disputes and attainment of industrial peace.
Furthermore, under the section the order can be made on employerS and employees in a local area which again is a limitation of the power.
Now, a local area is an area notified as such for the purposes of the Act: see section 2(23).
The object of this pro vision as to local areas is to divide the State into several areas for better maintenance of industrial peace and to group together for that purpose, the industries in a region.
If conditions of labour in any area where a large number of workmen is collected, are uniform, then there is less likely to be disaffection among them whereas if such conditions are not the same, the workmen are likely to become restive.
It is well known that regional considerations are closely connected with industrial disputes and are of importance for their settlement.
The local area contemplated by section 114(2) is obviously the area in respect of which the Representative Union mentioned in it has been registered.
No reference can be found in the section to any other local area.
Under section 2(33) a Representative Union means a union registered as such under the Act and under section 13(1) a Representative Union is a union which has a membership of not less than fifteen per cent.
of the employees in any industry in any local area and registered for that industry in the area.
118 The agreement, settlement, submission or award mentioned in the section has to be one to which a Representative Union is a party.
It follows from this that a substantial body of workmen in an area has come to a decision or become bound by an award as to a question or questions affecting them.
Therefore, the power under the section can be exercised only for achieving industrial peace in that area.
It is not unlikely when a substantial section of workmen congregated in an area have secured certain rights that the other employees in that area may claim similar rights and this may disturb industrial peace in that area.
The power can be exercised only for meeting such disturbance and only in the local area where it occurs.
There are therefore two guiding principles.
First, the power can be exercised only to prevent breach of industrial peace.
Secondly, it can be exercised only in a specified area if there is a threat to industrial peace there.
An exercise of the power outside the area and for purposes other than maintenance of industrial peace, would be beyond the scope of the section.
Again, once there is occasion for legitimate exercise of the power and it is exercised, it must be exercised in all units of the industry in that local area in which units the threat to the industrial peace exists if that would restore the peace.
It would be open to the Courts to correct a discriminatory use of the power or its use outside the scope of the section.
Therefore it does not seem to me that the section confers unguided and arbitrary power.
is of some interest to state that in the present case there has been no such discriminatory use of the power or any use outside the section.
The respondent has made the award binding on all the remaining mills who had not accepted the agreement and there is evidence that there was: threat of breach of industrial peace in these mills.
Then also, I find that the section has conferred the power on the highest authority, namely, the Government itself.
That would be some guarantee that it would be duly exercised.
This is a further reason for 119 holding that the section does not confer absolute and arbitrary Power.
The next objection to the section is that it offends article 19(1)(g) in that it puts an unreasonable restriction on a person 's right to carry on business.
This contention also is unacceptable to me.
There is no doubt that the section puts certain restrictions on a person 's right to carry (in an occupation or business.
The real question is whether the restrictions have been put in the interest of the general public and are reasonable.
That the restrictions have been put in the interest of the general public seems to me to be unquestionable.
The reason why the restrictions have been put is that otherwise, industrial peace would be disturbed.
The entire country is interested in industries and, therefore, in industrial peace.
This point requires no elaboration.
, Then, are the restrictions put, reasonable? It seems to me that they are.
The restrictions are that an agreement; settlement, award or submission all of ,Which of course must be concerning industrial disputes to which a person is not a party is made binding on him.
By an "agreement", the parties to an industrial dispute settle it themselves.
A "settlement" means a settlement of an industrial dispute arrived at with the assistance of a conciliator in the course of conciliation proceedings under the provisions of the Act.
A "submission" is a reference of an industrial dispute to arbitration.
An "award" is an adjudication on an industrial dispute by the court constituted under the Act.
An agreement, a settlement or a submission is the result of the free consent of the parties to the dispute.
As earlier stated, the section only applies to an agreement, settlement or submission to which a Representative Union, which is a union representing a substantial number of workmen, is a party.
Therefore, the section can apply to an agreement, settlement or submission which a substantial number of workmen and an employer has, of their free choice, accepted.
It would follow that such an agreement, settlement or submission has been considered reasonable by parties 120 interested and in the case of a settlement by the con ciliator appointed under the Act also.
The restrictions imposed by any of these must therefore be reasonable.
An award, on the other hand, is a decision of a court and can, therefore, always be expected to be reasonable.
If certain restrictions are reasonable for an employer and his employees, I suppose it would follow that those restrictions would be equally reasonable for other employers and employees and more so, when they are all in the same neighborhood where the conditions are likely to be more or less the same.
Therefore, it seems to me that the restrictions imposed by section 114(2) cannot be said to be unreasonable.
I have earlier summarised the offending part of the agreement.
I do not think that there is anything unreasonable there.
The employer pays only 4.8 per cent of the basic wage in the year when he makes no profit with a right to recoup it in a subsequent and more prosperous year.
The maximum that he has to pay as bonus in the best year is, I gather, less than what he would have to pay under.
the formula regarding bonus laid down by this Court.
The agreement extends over 6 years and it would not be unreasonable to suppose that during_ these years profits might be made to wipe off the minimum bonus paid in a lean year.
The restrictions put by the present agreement are, therefore,, in my view quite reasonable.
It may be that in individual cases, which are not likely to be many, the restrictions may work hardship.
But that would not justify a conclusion that section 114(2) itself imposes unreasonable restrictions on a man 's right to carry on his business or occupation.
This view was taken by this Court in Bijay Cotton Mills vs The, State, of Ajmer (1), where it was said in respect of the ; "Individual employers might find it difficult to carry on the business on the basis of the minimum wages fixed under the Act but this must be due entirely to the economic conditions of these particular employers.
That cannot be a reason for the striking down the law itself as unreasonable." (1). [1955] 1 S.C.R. 752, 755 6. 121 Another ground on which the validity of the section was challenged was that it prevented a party from having an industrial dispute decided by an Industrial Court under the Act.
But I do not see that there is an inherent right in a party to an industrial dispute to have it decided by an Industrial, Court under the Act.
The right to ask for an adjudication by an Industrial Court is itself created by the Act.
What the Act has given, it can clearly restrict or take away in any manner it thinks fit.
The provisions of the Act must be read together and in cases in which power under section 114(2) has.
been exercised, the right to ask for an adjudication by an Industrial Court must be considered either as taken away or unavailing.
I thus come to the conclusion that the section is not invalid for any of the reasons mentioned.
I also feel no doubt that the section was quite within the legislative competence of the legislature which passed it.
I did not understand the learned counsel for the appellants to contend to the contrary.
I have mentioned the legislative competence only to dispose of another argument which also, I think, was aimed at the validity of the section.
It was said that there is no power anywhere to provide for payment of bonus where in law such bonus is not payable.
This argu ment is founded on the decision of this Court in the Muir Mills case (1) where it had been said that no bonus is payable where no profit has been made.
Therefore it is said that the section authorises payment of bonus where none is payable in law.
This argument seems to me to be misconceived.
If the section is legislatively competent and otherwise valid, as I think it is, then it cannot be invalid for the simple reason that it directs payment of bonus where, as held by this Court, as a matter of adjudication, none would be payable in law.
The law laid down by this Court is only for application when the question comes up for adjudication by a court bound by that law.
It has no relevance, in deciding the validity of an otherwise competent law.
The law laid down by any Court cannot take away legislative competence.
The (1) ; 122 enactment in question has left the law laid down by this Court quite unaffected; it will still apply in all cases where it is applicable.
Now I proceed to consider the validity of the notification.
As I understood the learned counsel for the appellants, he put his case on two grounds.
He first said that the notification was invalid as it was made while a reference was pending in an Industrial Court.
The reasoning is that it is invalid as it takes away the jurisdiction of that Court to decide the pending reference.
I think what I have earlier said is a sufficient answer to this contention.
The right to have the pending reference proceeded with was given by the Act.
There is nothing to prevent that Act or any other, from providing that the pending reference shall be discontinued or become infructuous.
If a notification could be made under the section, as the present argument assumes it could be, then as to when it could be made, would certainly depend on the terms of the statute.
I find nothing in the Act to show that a notification could not be made while a reference was pending and so as to render it 'abortive.
Therefore I think that no exception can be taken to the notification in the present case for the reason that it was issued while the reference was pending.
The other challenge to the notification does not appear to have been raised in the High Court.
It was based on section 95A of the Act which is in these terms: section .95A.
The determination of any question of law in any order, decision, award or declaration passed or made, by the Full Bench of the Industrial Court, constituted under the regulations made under section 92, shall be recognised as binding and shall be followed.
in all proceedings under this Act.
It is said that the Government in issuing a notification under section 114(2) was, in view of section 95A, bound by the decisions of the Full Bench but in issuing the present notification, it ignored a decision of the Full Bench which provided that no bonus would be payable by an employer where he had made no profits.
Therefore it is contended that the notification is invalid.
I am unable to accept this argument.
I will assume 123 that there is Full Bench decision of the kind mentioned.
It is also true that the effect of the notification is to make the appellant mill pay bonus for a year when it had made no profit.
All this, however, to my mind makes no difference for, though in issuing a notification under section 114(2) the respondent has to give the parties sought to be affected by it a hearing, there is really no proceeding held within the meaning of section 95 A in connection with the issue of the notification.
All that section 95A does is to make "the determination of any question of law" by the Full Bench binding in certain proceedings.
In order that determination of a question of law may be binding in another proceeding, that proceeding must raise the same question for, a determination of one question of law cannot be binding on another question.
Now what is the question when a notification is intended to be issued under is.
114(2)? The only question is whether it is necessary for preserving industrial peace in a locality that a certain agreement, settlement, submission or award should be made binding on persons who are not parties to it.
Such a question would not be a question of law at all; it would not be a question which could ever have arisen before the Full Bench.
It would follow that no occasion of being bound by a determination of a question of law by the Full Bench can ever arise when the Government is considering whether a notification under section 114(2) should be issued.
It may be that the result of a notification made under section 114(2) is to create a liability, for example, to pay bonus.
The question of law as to the liability to pay bonus may have been decided by the Full Bench.
That however cannot make the question arising under section 114(2) a question whether in law bonus is payable.
The questions remain essentially different.
Therefore, it seems to me, that section 114(2) does not contemplate a proceeding of the nature conceived by section 95A.
Then I find that section 95A occurs in Chapter XIII of the Act which is concerned with Industrial Courts.
It appears from the provisions of this chapter that the Industrial Court is the highest Court contemplated by 124 the Act.
Under section 92 it has power to provide by regulations made by it that it will sit in Benches consisting of more than one person.
Obviously it is intended that when a question of importance and difficulty arises, the Court will sit in a larger Bench.
Section 95A appears, therefore, to have been enacted for the purpose that other courts acting under the Act should follow the decisions of the Full Bench so that there might be uniformity of law.
It was not intended to have any application to the issue of a notification under is.
114(2).
It also seems to me that if in issuing a notification under section 114(2) the Government were to be bound by the decisions of the Full Bench, then that section would be rendered almost completely infructuous.
The question whether in view of section 95A, in issuing a notification under section 114(2) the Government is bound to follow the decisions of the Full Bench can arise only if section 114(2) is valid.
If section 114(2) is valid, an interpretation of a. 95A which renders it infructuous cannot be correct.
The sections of a statute must be so interpreted as not to affect the operation of one another.
Let me take the case of an agreement concerning bonus between employer A and his employees.
Now there is nothing in law to prevent an employer and his employees from making any agreement they like as to bonus.
They may agree that bonus would he paid at a certain rate even when the employer has not made any profit.
That would be a perfectly valid agreement.
The agreement that was made in this case was of that kind.
It has not been suggested that the agreement was invalid.
Indeed, the fact that it was filed in the pending references and an award was made in terms of it would put it beyond doubt that it was unexceptionable for, the award was made in terms of the agreement as required by section 115A and it could not have been so made unless the agreement was in all respects valid.
The Act therefore contemplates an agreement of this kind.
If the argument of the learned counsel for the appellants is right, this agreement cannot be made 125 binding between B and his employees.
Now, first, section 114(2) does not say that the agreement contemplated by it must comply with all decisions of the Full Bench.
I find no justification for adding to the word "agreement" in section 114(2) the words "provided it is in compliance with decisions of the Full Bench".
Secondly, common experience would show that when; disputants settle their disputes themselves by an agreement, they rarely, if ever, make the agreement strictly in terms of their legal 'rights; they, as it is said, give and take and adjust matters in their own way.
So cases would be rare where the parties make ' the agreement strictly in terms of the law laid down ' by the Full Bench.
Thus if the contention of the appellants is right, there would practically be no agreement to which section 114(2) would apply.
Now, what is the law that can be laid down by the Full Bench regarding right to bonus? It can Only be general principles as to when it is to be payable and if payable, how the amount of it is to be calculated.
This is what this Court did in the Muir Mills Case (1) and the subsequent cases regarding bonus.
The actual award of bonus by the Full Bench on the facts of the case before it, would of course not be a determination of a question of law.
Suppose now that the agreement between A and his employees was in compliance with the Full Bench decision.
That agreement must therefore only provide that bonus of a certain amount would be paid in certain years.
I do not find it possible to conceive of an agreement concerning bonus made after the Full Bench decision, which does not provide for the amount of the bonus to be paid but ,only lays down the formula for calculating what is to be paid, for, the formula is in the Full Bench decision and does not require to be laid down afresh.
That agreement would be an agreement in compliance with the Full Bench decision.
Suppose such an agreement provides for payment of a month 's wage,% as bonus.
Now this agreement is to be made binding on B and his employees.
If the argument that it can be made so binding only if as a result, B is not made to pay (1). [1955] 1 S.C.R. 991.
126 anything more than what he would have to pay under he Full Bench decision itself, is right then, it seems to be that the only case in which the agreement can be made so binding will be that in which the figures for example, of income, expenses, rehabilitation and a host of other things on which according to the Full Bench decision the bonus is to be calculated, are in the case of B absolutely identical with those in the case of A.
If the figures were not so identical, then in the case of B, a month 's wages may be too large a bonus according to the Full Bench decision, though it La just right in the case of A.
I do not think that such identity would ever exist.
I think it right to point out here that under section 114(2) only the agreement as made can be extended to become binding on others.
There is no power under it to alter the agreement in any way and then make it binding.
What I have said so far concerning agreements would apply equally to settlements.
Therefore, again almost all agreements made in terms of the Full Bench decision would also be taken out of the operation of section 114(2).
Then I take the case of an award.
An award is a decision of a court adjudicating upon an industrial dispute under the Act.
I do not consider now an award based on an agreement for such an award would in substance be an agreement and with agreements, I have already dealt.
I will, therefore, take an award passed as a matter of adjudication.
I should suppose that such an award would be in accordance with the law as decided by the Full Bench for the decision of the Full Bench would be binding on the court passing the award in view of a. 95A.
As stated in connection with agreements such an award would only decide how much bonus, assuming the dispute to be concerning bonus, would have to be paid; it would not be laying down any general principle for calculating bonus for, ex hypothesis those principles have already been laid down by the Full Bench.
Here again, as in the case of agreements and for the same reason, if the argument for the appellants is right, the award can be made binding on employers not parties to it only when the relevant figures in the case if both the employers, 127 namely, the one who is a party to the award and also the other on whom the award is sought to be made binding, are identical.
I conceive, such identity would never exist.
As regards submissions, I am unable to see how section 95A can have any application at all.
Submissions are defined in section 66 of the Act which, so far as material, provides, that "Any employer and a Representative Union may, by a written agreement, agree to submit any present or future industrial dispute to . . arbitration Such agreement shall be called a submission.
" It does not appear to me to be conceivable that the Full Bench could ever have decided whether such a submission shall be made or not.
The making of a submission involves no question of law.
It can be made only in respect of industrial disputes.
Section 66 gives the parties concerned the right to make it.
Clearly, when a submission by A and his employees is sought to be made binding on B and his employees, there can be no question of compliance with any Full Bench decision.
It would, therefore, appear that section 114(2) would become almost wholly infructuous if a notification under it could be issued only where the effect of that would not be to produce a result which is not in compliance with Full Bench decisions.
It also strikes me that if in issuing the notification, the Government had to follow the Full Bench decisions, then the issue of that notification would really become an adjudication, the Government taking the place of the Industrial Court.
The very same questions would then arise as would have arisen if the matter had to be decided by an Industrial Court.
I am unable to hold that the inten tion was to make the Government itself an Industrial Court.
If an adjudication by a court was necessary then the Industrial Court was already there and there was no need to put the duty of adjudication on the Government.
For all these reasons I do not think that in issuing a notification under section 114(2) any question of complying with any Full Bench decision arises.
In my view, 128 the issue of the notification is not a proceeding as contemplated by section 95A.
Lastly, it was contended that the notification under the section had been issued mala fide.
The only reason for this contention was that the object of such issue was to get round the decision of this Court in Muir Mills case (1).
It is true that one of the reasons why the Rashtriya Mill Mazdoor Sangh wanted the notification to be issued was that it wanted to find a "way out of the situation arising as a result of the decision of the Supreme Court in Muir Mills case (1)".
But I am not able to agree that makes the notification mala fide.
Apart from the fact that the Sangh felt that the decision had not helped the industry or the workmen, which feeling I have no reason to doubt was perfectly honest, I am unable to see bow, if it is legally permissible under the statute to do a thing the result of which would be to get round a decision of this Court, the doing of it can be said to be mala fide.
The Act directly permits and contemplates a notification which would produce a result in variance with a decision of this Court.
There has been no misuse of the Act at all.
As I have earlier stated, in the case of bonus the effect of a notification under section 114(2) would almost always be to permit something which is not permitted under the rule laid down in the Muir Mills case (1).
That being so, a notification duly issued under the section cannot be said to have been issued mala fide.
For all these reasons, in my view, the Act is not invalid and the notification of July 31, 1956, is unobjectionable and cannot be set aside.
I would, therefore, dismiss the appeal with costs.
By COURT: In accordance with the majority judgment, the order of the High Court is set aside and the appeal is allowed with costs.
Appeal allowed.
| The disputes regarding bonus to be paid to the ' workmen of the appellant mill and other cotton textile mills in Greater Bombay for the year 1952 and 1953 were referred to the Industrial Court under the provisions of the Bombay Industrial Relations Act, 1946, and while the references were pending, an agreement was arrived at between the Mill owners ' Association, Bombay, and the Rashtriya Mills Mazdoor Sangh, a Representative Union of workmen in the cotton textile industry with respect, to payment of bonus for the years 1952 to 1957, providing inter alia for payment of bonus even where a mill made actual loss, the minimum bonus being 4.8 per cent.
, of the basic wages earned during the year, subject to such mill being entitled to adjust the amount thus paid by it as the minimum bonus against any available surplus in any subsequent year or years.
This agreement was registered and was made enforceable as an award (1) L.L.R. (2) A.I.R. 1937 Mad.
763. 106 against those mills which were parties thereto.
The appellant; however, did not sign, the agreement, and its case before the Industrial Court was that it had been continuously making losses from 1950 to 1955.
On July 31, 1956, the Government of Bombay issued a notification under section 114(2) Of the Act directing that the award made by the Industrial Court aforesaid, for payment of bonus for the years 1952 and 1953 and also for the years 1954 to 1957 be enforced against the appellant.
The appellant challenged the validity of section 114 on the grounds (1) that it offended article 14 Of the Constitution inasmuch as it gave an unguided and arbitrary power to the State Government to discriminate between various sets of employers and employees and make an order on any one set at its pleasure leaving out others, (2) that it offended article 19(i)(g) in that it put an unrea sonable restriction on a person 's right to carry on business, and (3) that it prevented a party from having an industrial dispute decided by an Industrial Court under the Act.
In any event, the appellant contended that the notification was bad, because (a) it was made while a reference was pending in an Industrial Court and, therefore, took away the jurisdiction of, that Court to decide the pending references and (b) the notification went beyond the powers conferred on the State Government by section 114 since under that section the Government was bound by the decisions of the Full Bench in view of section 95A, but in the present case it ignored a decision of the Full Bench which provided that no bonus would be payable by an employer where it had made no profits.
Held (Sarkar, j., dissenting), that the notification dated July 31, 1956, was beyond the powers conferred on the State Government under section 114(2) Of the Bombay Industrial Relations Act, 1946, and must, therefore, be struck down, There are three limitations on.
the power of the State Government when acting under section 114(2): (1) that it is limited by the subject matter of the agreements, or settlement, submission or award sought to be extended, (2) that it has to be in conformity with the industrial law laid down by the Full Bench of the Industrial Court and also by any decision of the Supreme Court, and (3) that the State Government 's power to make a direction under that section is co terminus with the power of an adjudicator and the State cannot do 'what an 'adjudicator cannot do under the Act.
Action taken by the State Government under section 114(2) is a proceeding under the Act within the meaning Of section 95A of the Act.
The New Maneckchowk Spining Co. Ltd. and others vs The Textile Labouy Association, [1961] 3 S.C.R. I, relied on.
Per Sarkar, J. (1) Section 114 of the Bombay Industrial Relations Act, 1946, does not offend article 14 Of the Constitution.
The object of the Act is the settlement of industrial disputes and 107 attainment of industrial peace and the section does not confer absolute and arbitrary power.
(2) The restrictions imposed by section 114(2) are reasonable and have been put in the interest of the general public.
Consequently, the section does not contravene article 19(i)(g).
Bijay Cotton Mills Ltd. vs The State of Ajmer, ; , referred to.
(3) The provisions of the Act must be read together and in cases in which power under section 114(2): has been exercised, the right to ask for an adjudication by an Industrial Court must be considered either as taken away or unavailing.
(4) The issue of a notification under section 114(2) is not a proceeding as contemplated by section 95A and, therefore, any question of complying with any Full Bench decision does not arise.
(5) Section 114 directly permits and contemplates a notification which would produce a result in variance with a decision of the Supreme Court and, therefore, a notification duly issued under that section cannot be said to have been issued, mala fide.
Muir Mills Co. Ltd. vs Suti Mills Mazdoor Union, Kanpur, ; , referred to.
(6) The Act is not invalid and the notification of July 31, 1956, is unobjectionable and cannot be set aside.
|
8209 & 8821 of 83.
Under Article 32 of the Constitution of India) M.K. Ramamurthi B. Dutta, Anil Divan, Dr. L.M. Singhvi, O.P Rana, S.N Kackar, M.C. Bhandare, Shanti Bhushan.
Milan K. Banerji, Additional Solicitor General, M.A. Krishnamoorthy, Rishi Kesh, K.N Bhat, M.G. Ramachandran, Miss A. Subhashini, K.K. Jain.
A.D. Sangar, P. Dayal, C.V Subba Rao, Raju Ramachandran S.M. Suri R.N. Mehrotra, S.M. Suri, C.M. Nayyar, Harjinder Singh, G.N. Rao, M. Karanjawala, Shakeel Ahmed Syed, S.K. Jain, Mrs. Shobha Dikshit, P.P. Juneja, P.K Jain, J.B.D. & Co., Indra Makwana, A. SubbaRao, B.P. Singh, Parijat Sinha, C.P. Lal, Shri Narain, S.K. Gupta, K.R. Namiar, S.S. Jauhar, D. M. Nargolkar, Mrs Rani Chhabra, Kapil Sibbal, B.P. Maheshwari, R.P. Singh, S.A. Syed for the appearing parties.
The Judgment of the Court was delivered BHAGWATI, J.
This case has been argued at great length before us not only because a large number of lessees of lime stone quarries are involved and each of them has pains takingly and exhaustively canvassed his factual as well as legal points of view but also because this is the first case of its kind in the country involving issues relating to environment and ecological balance and the questions arising for considerations are of grave moment and significance not only to the people residing in the Mussoorie 173 Hill range forming part of the Himalayas but also in their implications to the welfare of the generality of people living in the country.
It brings into sharp focus the conflict between development and conservation and serves to emphasise the need for reconciling the two in the larger interest of the country.
But since having regard to the voluminous material placed before us and the momentous issues raised for decision, it is not possible for us to prepare a full and detailed judgment immediately and at the same time, on account of interim order made by us, mining operations carried out through blasting have been stopped and the ends of justice require that the lessees of lime stone quarries should know, without any unnecessary delay, as to where they stand in regard to their lime stone quarries, we propose to pass our order on the writ petitions.
The reasons for the order will be set out in the judgment to follow later.
We had by Order dated 11th August 1983 appointed a Committee consisting of Shri D.N. Bhargav, Controller General, Indian Bureau of Mines, Nagpur, Shri M.S. Kahlon, Director General of Mines Safety and Col. P. Mishra, Head of the Indian Photo Interpretation Institute (National Remote Sensing Agency) for the purpose of inspecting, the lime stone quarries mentioned in the writ petition as also in the list submitted by the Government of Uttar Pradesh.
This Committee which we shall hereinafter for the sake of convenience refer to as the Bhargav Committee, submitted three reports after inspecting most of the lime stone quarries and t divided the lime stone quarries into three groups.
The lime stone quarries comprised in category were those where in the opinion of the Bhargav Committee the adverse impact of the mining operations was relatively less pronounced; category comprised those lime stone duarries where in the opinion of the Bhargav Committee the adverse impact of mining operations was relatively more pronounced and category covered those lime stone quarries which had been directed to be closed down by the Bhargav Committee under the orders made by us on account of deficiencies regarding safety and hazards of more serious nature.
It seems that the Government of India also appointed a working Group on Mining of Lime Stone Quarries in Dehradun Mussoorie area, some time in 1983.
The Working Group was also headed by the same Sh.
D.N. Bhargav who was a member 174 of the Bhargav Committee appointed by us.
There were five other members of the Working Group along with Shri D.N. Bhargav and one of them was Dr. S.Mudgal who was at the relevant time Director in the Department of Environment, Government of India and who placed the report of the Working Group before the Court along with his affidavit.
The Working Group in its report submitted in September 1983 made a review of lime stone quarry leases for continuance or discontinuance of mining operations and after a detailed consideration of various aspects recommended that the lime stone quarries should be divided into two categories, namely category 1 and category 2; category 1 comprising lime stone quarries considered suitable for continuance of mining operations and category 2 comprising lime stone quarries which were considered unsuitable for further mining.
It is interesting to note that the lime stone quarries comprised in category of the Bhargav Committee Report were the same lime stone quarries which were classified in category 1 by the Working Group and the lime stone quarries in categories and of the Bhargav Committee Report were classified in category 2 of the Report of the Working Group.
It will thus be seen that both the Bhargav Committee and the Working Group were unanimous in their view that the lime stone quarries classified in category by the Bhargav Committee Report and category 1 by the Working Group were suitable for continuance of mining operations.
So far as the lime stone quarries in category of the Bhargav Committee Report are concerned, they were regarded by both the Bhargav Committee and the Working Group as unsuitable for continuance of mining operations and both were of the view that they should be closed down.
The only difference between the Bhargav Committee and the Working Group was in regard to lime stone quarries classified in category B. The Bhargav Committee Report took the view that these lime stone quarries need not be closed down, but it did observe that the adverse impact of mining operations in these lime stone quarries was more pronounced, while the Working Group definitely took the view that these lime stone quarries were not suitable for further mining.
While making this Order we are not going into the various remifications of the arguments advanced before us but we may 175 observe straight away that we do not propose to rely on the Report of Prof. K section Valdia, who was one of the members of the Expert Committee appointed by us by our Order dated 2nd September 1983, as modified by the Order dated 25th October 1983.
This Committee consisted of Prof. K.S. Valdia, Shri Hukum Singh and Shri D.N. Kaul and it was appointed to enquire and investigate into the question of disturbance of ecology and pollution and affectation of air, water and environment by reason of quarrying operations or stone crushers or lime stone kilns.
Shri D.N. Kaul and Shri Hukum Singh submitted a joint report in regard to the various aspects while Prof. K.S. Valdia submitted a separate report.
Prof. K.S. Valdia 's Report was confined largely to the geological aspect and in the report he placed considerable reliance on the Main Boundary Thrust (hereinafter shortly referred to as M.B.T.) and he took the view that the lime stone quarries which were dangerously close to the M.B.T. should be closed down, because they were in this sensitive and vulnerable belt.
We shall examine this Report in detail when we give our reason but we may straight away point out that we do not think it safe to direct continuance or discontinuance of mining operations in lime stone quarries on the basis of the M.B.T. We are therefore not basing our conclusions on the Report of Prof. K.S. Valdia but while doing so we may add that we do not for a moment wish to express any doubt on the correctness of his Report.
We shall also examine in detail the question as to whether lime stone deposits act as aquifers or not.
But there can be no gain saying that lime stone quarrying and excavation of the lime stone deposits do seem to affect the perennial water springs.
This environmental disturbance has however to be weighed in the balance against the need of lime stone quarrying for industrial purposes in the country and we have taken this aspect into account while making this order.
We are clearly of the view that so far as the lime stone quarries classified in category in the Bhargav Committee Report are concerned which have already been closed down under the directions of the Bhargav Committee, should not be allowed to be operated.
If the leasees of these lime stone quarries have obtained any stay order from any court permitting them to continue the mining operations, such stay order will stand dissolved and if there 176 are any subsisting leasees in respect of any of these lime stone quarries they shall stand terminated without any liability against the State of Uttar Pradesh.
If there are any suits or writ petitions for continuance of expired or unexpired leases in respect of any of these lime stone quarries pending, they will stand dismissed.
We would also give the same direction in regard to the lime stone quarries in the Shasradhara Block even though they are placed in category by the Bhargav Committee.
So far as these lime stone quarries in Sahasradhara Block are concerned, we agree with the Report made by the Working Group and we direct that these lime stone quarries should not be allowed to be operated and should be closed down forthwith.
We would also direct, agreeing with the Report made by the Working Group that the lime stone quarries placed in category 2 by the Working Group other than those which are placed in categories and by the Bhargav Committee should also not be allowed to be operated and should be closed down save and except for the lime stone quarries covered by mining leases Nos. 31, 36 and 37 for which we would give the same direction as we are giving in the succeeding paragraphs in regard to the lime stone quarries classified as category in the Bhargav Committee Report.
If there are any subsisting leases in respect of any of these lime stone quarries they will forthwith come to an end and if any suits or writ petitions for continuance of expired or unexpired leases in respect of any of these lime stone quarries are pending, they too will stand dismissed.
So far as the lime stone quarries classified as category in the Bhargav Committee Report and/or category 1 in the Working Group Report arc concerned, we would divide them into two classes, one class consisting of those lime stone quarries which are within the city limits of Mussoorie and the other consisting of those which are outside the city limits.
We take the view that the lime stone quarries falling within category of the Bhargav Committee Report and/or category 1 of the Working Group Report and falling outside the city limits of Mussoorie, should be allowed to be operated subject of course to the observance of the requirements of the , the Metallferous Mines Regulations, 1961 and other relevant statutes, rules and regulations.
Of course when we say this we must make it clear 177 that we are not holding that if the leases in respect of these lime stone quarries have expired and suits or writ petitions for renewal of the leases are pending in the courts, such leases should be automatically renewed.
It will be for the appropriate courts to decide whether such leases should be renewed or not having regard to the law and facts of each case.
So far as the lime stone quarries classified in category in the Bhargav Committee Report and or category 1 in the Working Group Report and falling within the city limits of Mussoorie are concerned, we would give the same direction which we are giving in the next succeeding paragraph in regard to the lime stone quarries classified as category in the Bhargav Committee Report.
That takes us to the lime stone quarries classified as category in the Bhargav Committee Report and category 2 in the Working Group Report.
We do not propose to clear these lime stone quarries for continuance of mining operations nor to close them down permanently without further inquiry.
We accordingly appoint a high powered Committee consisting of Mr. D. Bandyopadhyay, Secretary, Ministry for Rural Development as Chairman and Shri H.S. Ahuja.
Director General, Mines Safety, Dhanbad, Bihar, Shri D.N. Bhargav, Controller General, Indian Bureau of Mines, New Secretariat Building, Nagpur and two experts to be nominated by the Department of environment, Government of India within four weeks from the date of this Order.
The lessees of the lime stone quarries classified as category in Bhargav Committee Report and for Category 1 in the working Group Report and falling within the city limits of Mussoorie as also the lessees of the lime stone quarries classified as category in the Bhargav Committee Report will be at liberty to submit a full and detailed scheme for mining their lime stone quarries to this Committee (hereinafter called the Bandyopadhyay Committee) and if any such scheme or schemes are submitted the Bandyopadhyay Committee will proceed to examine the same without any unnecessary delay and submit a report to this Court whether in its opinion the particular lime stone quarry can be allowed to be operated in accordance with the scheme and if so, subject to what conditions and if it cannot be allowed to be operated, the reasons for taking that view.
The Bandyopadhyay Committee in making its report will take into account the various aspects which we had directed the Bhargav Committee and the Kaul Committee to consider while making their respective reports including 178 the circumstance that the particular lime stone quarry may or may not be within the city limits of Mussoorie and also give an opportunity to the concerned lessee to be heard, even though it be briefly.
The Bandyopadhyay Committee will also consider while making its report whether any violations of the provisions of the , the Metalliferous Mines Regulations, 1961 and other relevant statutes, rules and regulations were committed by the lessee submitting the scheme or schemes and if so, what were the nature, extent and frequency of such violations and their possible hazards.
The Bandyopadhyay Committee will also insist on a broad plan of exploitation coupled with detailed mining management plans to be submitted along with the scheme or schemes and take care to ensure that the lime stone deposits are exploited in a scientific and systematic manner and if necessary, even by two or more lessees coming together and combining the areas of the lime stone quarries to be exploited by them.
It should also be the concern of the Bandyopadhyay Committee while considering the scheme or schemes submitted to it and making its report, to ensure that the lime stone on exploitation is specifically utilised only in special industries having regard to its quality and is not wasted by being utilised in industries for which high grade lime stone is not required.
The necessary funds for the purpose of meeting the expenses which may have to be incurred by the members of the Bandyopadhyay Committee will be provided by the State of Uttar Pradesh including their travelling and other allowances appropriate to their office.
The State of Uttar Pradesh will also provide to the members of the Bandyopadhyay Committee necessary transport and other facilities for the purpose of enabling them to discharge their functions under this Order.
If any notice, are to be served by the Bandyopadhyay Committee the District Administration of Dehradun will provide the necessary assistance for serving of such notices on the lessees or other interested parties.
The Bandyopadhyay Committee will also be entitled before expressing its opinion on the scheme or schemes submitted to it, to hear the petitioner, the interventionists in this case and such other persons or organisations as may be interested in maintenance and preservation of healthy environment and ecological balance.
The Indian Bureau of Mines will provide secretarial facilities to the Bandyopadhyay Committee.
The report submitted by the Bandyopadhyay Committee in each case will be considered by the Court and a decision will then be taken whether the limit stone quarry or quarries in respect of which the report has been 179 made should be allowed to be operated or not.
But until then these lime stone quarries will not be allowed to be operated or worked and the District Authorities of Dehradun will take prompt and active steps for the purpose of ensuring that these lime stone quarries are not operated or worked and no mining activity is carsied on even clandestinely.
This order made by us will supersode any stay or any other interim order obtained by the lessee of any of these lime stone quarries permitting him to carry on mining operations and notwithstanding such stay order or other interim order or subsisting lease, the lessees shall not be entitled to carry on any mining activity whatsoever in any of these lime stone quarries and shall desist from doing so.
The lessees of these limestone quarries will also not in the meanwhile be permitted to rectify the defects pointed out in the orders issued by the District Mining authority but they may include the proposal for which rectification in the scheme or schemes which they may submit to the Bandyopadhyay Committee.
We may however make it clear that non rectification of the defects pursuant to the notices issued by the District Mining authorities shall not be taken advantage of by the State of Uttar Pradesh as a ground for terminating the lease or leases.
We may point out that so far as the lime stone quarries at Sl.
Nos. 1 7 to 20 in category in the Bhargav Committee Report are concerned we are informed that they have already been closed down and no further direction therefore is necessary to be given in regard to them save and except in regard to removal of the lime stone, dolomite and marble chips which may have already been mined and which may be lying at the site for which we are giving separate directions in one of the succeeding paragraphs in this order.
The consequence of this Order made by us would be that the lessees of lime stone quarries which have been directed to be closed down permanently under this Order or which may be directed to be closed down permanently after consideration of the report of the Bandopadhyay Committee, would be thrown out of business in which they have invested large sums of money and expanded considerable time and effort.
This would undoubtedly cause hardship to the but It is a price that has to be paid for protecting and safeguarding the right of the people to live in healthy environment with minimal H 180 disturbance of ecological balance and without avoidable hazard to them and to their cattle, homes and agricultural land and undue affectation of air, water and environment However, in order to mitigate their hardship, we would direct the Government of India and the State of Uttar Pradesh that whenever any other area in the State of Uttar Pradesh is thrown open for grant of lime stone or dolomite quarrying, the lessees who are displaced as a result of this order shall be afforded priority in grant of lease of such area and intimation that such area is available for grant of lease shall be given to the lessees who are displaced so that they can apply for grant of lease of such area and on the basis of such application, priority may be given to them subject, of course, to their otherwise being found fit and eligible.
We have no doubt that while throwing open new areas for grant of lease for lime stone or dolomite quarrying, the Government of India and the State of Uttar Pradesh will take into account the considerations to which we have averted in this order.
We are conscious that as a result of this Order made by us, the workmen employed in the lime stone quarries which have been directed to be closed down permanently under this Order or which may be directed to be closed down permanently after consideration of the report of the Bandopadhyay Committee, will be thrown out of employment and even those workmen who are employed in the lime stone quarries which have been directed to be closed down temporarily pending submission of scheme or schemes by the lessees and consideration of such scheme or schemes by the Bandyopadhyay Committee, will be without work for the time being.
But the lime stone quarries which have been or which may be directed to be closed down permanently will have to be reclaimed and afforestation and soil conservation programme will have to be taken up in respect of such lime stone quarries and we would therefore direct that immediate steps shall be given for reclamation of the areas forming part of such limestone quarries with the help of the already available Eco Task Force of the Department of Environment, Government of India and the workmen who are thrown out of employment in consequence of this Order shall, as far as practicable and in the shortest possible time, be provided employment in the afforestation and soil conservation programme to be taken up in this area.
There are several applications before us for removal of lime 181 stone, dolomite and marble chips mined from the quarries and lying at the site and these applications also are being disposed of by this Order.
So far as lime stone quarries classified as category in the Bhargav Committee Report and for category 1 in the Working Group Report and falling outside the city limits of Mussorrie are concerned, we have permitted the lessees of these lime stone quarries to carry on mining operations and hence they must be allowed to remove whatever minerals are lying at the site of these lime stone quarries without any restriction whatsoever, save and except those prescribed by any statutes, rules or regulations and subject to payment of royalty.
So far as the other lime stone quarries are concerned, whether comprised in category of Bhargav Committee Report or category 1 of the Working Group Report and falling within the city limits of Mussorrie or falling within category or category of the Bhargav Committee Report or category 2 of the Working Group Report, there is a serious dispute between the lessees of these lime stone quarries on the hand and the petitioners and the state of Utter Pradesh on the other as to what is the exact quantity of minerals mined by the lessees and lying at the site.
We had made an order on 15th December 1983 requiring the District Magistrate Dehradun to depute some officer either of his Department or of the Mining Department to visit the site of these lime stone quarries for the purpose of assessing the exact quantity of lime stone lying there and to report in this connection.
The District Magistrate, Dehradun deputed the Sub Divisional Magistrates of Mussoorie and Tehsildar (Quarry) Dehradun to inspect the 20 stone quarries comprised in category of the Bhargav Committee Report which had been ordered to be closed down under the directions of the Bhargav Committee and an affidavit was filed on behalf of the District Magistrate Dehradun, by Kedar Singh Arya, Tehsildar (Quarry) Dehradun, annexing a chart showing the details of the minerals mined by the lessees of those lime stone quarries and lying at the site.
Thereafter, when again the case came up for hearing before us an 5th January 1984, we, in order to allay any apprehensions on the part of the lessees that the District Authorities had not done their job correctly in assessing the quantity of minerals lying at the site, appointed a Committee of two officers, namely, Shri D. Bandophadyay and Director of Geology (Mines) Lucknow for the purpose of visiting the time stone quarries which had been directed to be closed down and to assess the quantity of minerals lying on the site of those limestone quarries 182 after giving notice to the concerned lessees as also to the District Magistrate Dehradun and the representatives of the petitioners.
Pursuant to this order made by us, Shri D, Bandhopadhyay and the Director of Guology (Mines) Lucknow visited the lime stone quarries comprised in category of the Bhargav Committee Report and directed to be closed down and assessed the quantity of minerals lying at the site of each of these lime stone quarries.
The quantity of minerals lying at the site, a cording to Shri D. Bandopadhyay and the Director of Geology (Mines), was very much less than what was claimed by the lessees and it does appear that though these lime stone quarries were directed to be closed down, illegal mining was being carried on clandestinely, because otherwise it is difficult to understand how the figures of the quantity of the minerals lying at the site as assessed in December.
1983 by the District Authorities became inflated when Shri D. Bandophadyay and Director of Geology (Mines) made their assessment in January 1984 and thereafter the figures again got inflated if the quantity now claimed by the lessees as lying on the site is correct.
We do not, however, propose to go into the question as to what was the precise quantity of minerals mined by the lessees of these limestone quarries and lying at the site at the time when these lime stone quarries were closed down under the directions of the Bhargav Committee.
We would permit the lessees of these lime stone quarries to remove whatever minerals are found lying at the site or its vicinity provided and of course such minerals are covered by their respective leases or quarry permits.
Such removal will be carried out and completed by the lessees within four weeks from the date of this Order and it shall be done ill the presence of an officer not below the rank of Deputy Collector to be nominated by the District Magistrate, Dehradun, a gazetted officer from the Mines Department nominated by the Director of Mines and a public spirit individual in Dehradun, other than Mr. Avdesh Koushal, to be nominated by Shri D. Bandopadhyay.
These nomination shall be made within one week from today and they may be changed from time to time depending on the exigencies of the situation.
Notice of intended removal of minerals lying at the site shall be given by the lessees to the District Magistrate Dehradun, Director of Mines Dehradun and the person nominated by Shri D. Bandophadyay.
No part of the minerals lying at the site shall be removed by the lessees except in the presence of the above mentioned three persons.
The lessees will on the expiry of the period of four weeks 183 submit a report to this Court setting out the precise quantities of minerals removed by them from the site pursuant to this Order made by us.
The lessees shall not be entitled to remove any minerals after the expiration of the period of four weeks.
Before we close we wish to express our sense of appreciation for the very commendable assistance rendered to us by Shri Pramod Dayal, learned advocate appearing on behalf of some of the lessees.
He undertook the responsibility of arranging the various affidavits and written submissions in a proper and systematic manner and we must confess that but for the extremely able assistance rendered by him, it would not have been possible for us to complete the hearing of this case satisfactorily and to pass this order within such a short time.
We would direct that the Government of India and the State of Uttar Pradesh should each pay a sum of Rs. 5,000 to Shri Pramod Dayal for the work done by him.
We may point out that this payment to Shri Pramod Dayal is not in lieu of costs but is an additional remuneration which we are directing to be paid in recognition of the very valuable assistance rendered by him to the Court.
| The respondent in the appeal an election, filed an election petition challenging the election of the appellant to the Assembly.
He contended in the petition that in the election to the Haryana Legislative Assembly from Jind constituency one Dog Ram filed nomination paper.
His name was proposed by Ram Pratap, an elector of the constituency.
Dog Ram Candidate was registered as an elector at serial No. 177 and house No. 57 in part 39 of the electoral roll of the constituency whereas the proposer was registered as elector at serial No. 313 and house No. 6 in part 39 of the same constituency.
The name and postal address of Dog Ram were correctly given in the nomination paper but the part of the electoral roll was mentioned as 57 instead of 39 by an inadvertent mistake committed by the person who filed the nomination paper.
Similarly, in the case of the proposer, the serial number of the elector and the number of the constituency were given correctly but the number of his house was wrongly entered in the column meant for the part of the electoral roll.
At the time of scrutiny no other candidate or proposer objected to the acceptance of the nomination paper of Dog Ram but the Returning Officer on his own rejected the nomination paper on the ground that particulars of the candidate and the proposer have been wrongly entered in the nomination paper.
The appellant contested the election petition contending that the Returning Officer had compared the admittedly inaccurate particulars given in the nomination paper with those entered in the part of the voters ' list mentioned in the nomination paper and found them to be incorrect and asked candidate Dog Ram to show the names of himself and his proposer in the electoral roll and that as the candidate was unable to do so he rejected the nomination paper and was right in doing so.
In the nomination paper the serial numbers in the voters ' list of the candidate and his proposer have been correctly given as 177 and 313 respec 322 tively but the part numbers have been given wrongly as 57 and 6 respectively which are their respective house numbers instead of the correct part No. 39.
In the appeal to the High Court the question was as to whether the nomination paper of Dog Ram was improperly rejected.
On the evidence led by the parties the Single Judge found that the candidate Dog Ram and his proposer were registered as voters in the constituency and were qualified to contest the election and propose the candidate respectively.
It was further found that errors in regard to electoral roll numbers of the candidate and the proposer in the electoral roll and the nomination paper do not constitute defects of a substantial character as mentioned in the proviso to Section 33(4) of the Act.
The Single Judge accepted the evidence of P.W. 2 that when he and the candidate presented the nomination paper the Returning Officer told them that it was in order and held that the Returning Officer had thus tripped them into an error and 'observed that had he told them that there were some discrepancies in the nomination paper they would have either made the corrections then and there and would have gone more fully prepared to meet objections at the time of the scrutiny.
Accordingly the election petition was allowed and appellant 's election was declared as void.
On the ground that the nomination paper of Dog Ram was improperly rejected.
The elected candidate appealed to this Court, Allowing the Appeal, ^ HELD: l.
The Returning Officer in the instant case could not be said to have improperly rejected the nomination paper of Dog Ram.
[340G] 2.
It is not possible to say generally and in the abstract that all errors in regard to electoral roll numbers of the candidate and the proposer in the electoral rolls or nomination papers do not constitute defects of a substantial character.
They would not be defects of a substantial character only if at the time of the scrutiny the Returning Officer either by himself with the materials placed before him during the scrutiny or with the assistance of the candidate For his proposer or any other person is able to find out the correct serial number of the candidate and the proposer in the electoral roll.
If that is not the case, he would be committing a grave error by accepting the nomination paper without verifying whether the candidate is a voter in that or any other constituency of the State and whether the proposer is a voter in that constituency [334G H: 335Al 3.
No amount of evidence can be looked into upon a plea which was never put forward in the pleadings.
In the instant case, there is no allegation in the election petition that there was any assurance by the Returning Officer at the time of receipt of the nomination paper that there was nothing wrong in it.
In the absence of any such allegation in the election petition, the evidence of proposer P.W. 2, which is not even corroborated by the evidence of any other witness that he and the candidate presented the nomination paper to the Returning Officer and showed him the voters ' list and that he told them 323 then that the nomination paper was in order, is not acceptable.
In the circumstances the Single Judge was not justified in accepting the evidence of P.W. 2 and holding that the Returning Officer was guilty of tripping the candidate and the proposer by any assertion on his part into any one believing that there was nothing wrong in the nomination paper.
[335B; C E] 4.
The candidate and the proposer are always expected to go fully pre pared to meet any objection that may be raised by any candidate or even by Returning Officer himself suo moto at the time of the scrutiny and they cannot be expected to go any the less prepared merely because the Returning Officer had received the nomination paper without raising any objection.
It is at the time of scrutiny which is done in the presence of all concerned that the nomination papers come up for more detailed consideration at the hands of the Returning Officer against whom there is no estoppel in regard to the statutory duty of scrutiny.
[335F G] 5(i) The evidence of P.W. I is largely corroborated by the Returning Officer 's order.
R.W. I is an advocate and was himself a candidate but retired at a later stage.
He stated that the electoral rolls were lying on the table of the Returning Officer at the time of the scrutiny.
There is no reason for not accepting this evidence of R.W. 1.
[336D E] 5(ii) The electoral rolls were lying on the Returning Officer 's table at the time of the scrutiny and therefore, there would have been no necessity for Dog Ram and P.W. 2 to ask the Returning Officer to give them the electoral roll relating to their village for clearing his doubt.
The evidence of P.W. 2 is therefore not acceptable.
[336F] 5(iii).
The evidence of P.W.3 that the Returning Officer did not ask Dog Ram to show the names of himself and his proposer in the electoral roll is inconsistent with the allegations in the election petition as also the evidence of P.W. 2 that the Returning Officer said so.
Therefore, the evidence of P.W. 3 is not acceptable.
The evidence of R.W. 1 is accepted.
The Returning Officer found discrepancy in the names, serial number and part number mentioned in the nomination paper on the one hand and those found in the electoral roll with reference to those numbers on the other and that on account of his in ability to ascertain with the particulars made available before him whether the candidate Dog Ram and his proposer P.W. 2 were electors in the constituency he asked the candidate Dog Ram to point out the names of himself and his proposer in the electoral roll to satisfy him that they are electors in the constituency and that as he was unable to do so, he rejected the nomination paper by his order exhibit P.W. l/B. [337G H; 338A] Hira Singh Pal vs Madan Lal ; , Ram Awadesh Singh v Sumitra Devi & Ors ; and Viveka Nand Giri vs Nawal Kishore Sahi ; ; not applicable.
|
vil Appeal No. 1660 (NT) of 1974.
From the Judgment and Order dated 23.12.1971 of the Allahabad High Court in Income tax Reference No. 53 of 1968.
H.K. Puri for the Appellants.
Miss A. Subhashini and H.B. Rao for the Respondent.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
This appeal by special leave is from the judgment and order of the Allahabad High Court dated 23rd December, 1971 in the Income Tax Reference.
The assessee is a limited company under the Indian Companies Act and derived its income from the manufacture and sale of sugar and confectionery.
The assessment for the assessment year 1958 59 was completed under the Indian Income Tax Act, 1922.
The Income Tax Officer in the said assessment, inter alia made the following additions besides others in respect of the following items: (i) For cane cost Rs.48,500/ (ii) For shortage in cane Rs.67,500/ (iii) For salary of outstation staff Rs.21,700/ The assessee did not challenge the said assessment order passed by the Income Tax Officer in so far as the additions of the above amounts in appeal or otherwise.
It was the case of the assessee that it did not appeal because it wanted to keep good relations with the revenue although, according to the assessee, the above additions made by the Income Tax Officer were totally unjustified and illegal.
On 14th March, 1963 the Income Tax Officer issued notice under section 274 read with section 271 of the Income Tax Act, 1961 (hereinafter called 'the Act ') in respect of the assessment year 1958 59 for imposing penalty.
The assessee company demurred.
After considering the reply the 696 Inspecting Assistant Commissioner on 1st October, 1964 imposed a penalty of Rs.70,000 under section 274 read with section 271 of the Act holding inter alia that there was concealment of income to the tune of Rs.1,37,700 and the maximum penalty of Rs.1,06,317 was imposable in law but a sum of Rs.70,000 was imposed as penalty considering the facts and circumstances of the case.
The assessee preferred an appeal against the said order.
The Tribunal after considering the entire matter, reduced the penalty to Rs.5,000.
The Tribunal referred the three following questions, two at the instance of the assessee and one at the instance of the revenue, to the High Court for determination: "1.
Whether, on the facts and in the circum stances of the case, the Tribunal was correct in holding that the provisions of section 271 of the Income Tax.
Act, 1961 are applicable to the present case; 2. 'Whether, there is any material to warrant the finding that the assessee company had concealed the particulars of its income or deliberately furnished inaccurate particulars thereof within the meaning of section 271(2) of the Income Tax Act, 1961; and 3.
Whether, on the facts and in the circum stances of the case, the Tribunal is correct in reducing the penalty under section 271(1)(c) from Rs.70,000 to Rs.5,000?" The High Court was of the opinion that the third question did not clearly bring out the matter in dispute between the parties and as such it was reframed as follows: "Whether, on the facts and in the circum stances, the finding of the Tribunal that the assessee had not concealed income to the extent of Rs.67,500 and Rs.21,700 within the meaning of section 271(1)(c) of the Indian Income Tax Act, 1961, is correct in law?" The High Court noted that the Income Tax Officer had made certain additions and disallowed certain expenses and of the various amounts disallowed only three amounts were required to be considered by the High Court namely; (i) inflation in price of sugar cane of an amount of Rs.48,500, (ii) excess shortage claimed for cane 697 Rs.67,500 and (iii) salary of out station staff of loading contractors of Rs.21,700.
So far as the first question is concerned the High Court held in favour of revenue and answered the question in the negative.
The answer to this question is no longer in dispute here.
So far as the second question is concerned the High Court answered the question in the nagative and in favour of the assessee.
There is no dispute about that question too, in so far as there is no appeal by the revenue.
As regards the third question re framed as mentioned hereinbefore, it was answered by the High Court in the affirmative and in favour of the revenue.
The assessee has come up in appeal to this Court challenging the correctness of that answer.
In this appeal we are con cerned with the correctness or otherwise of the answer given to this question and the appeal must be confined to the correctness of the answer given to the third question as reframed.
The Income Tax Officer in his assessment order out of which this penalty proceedings arose noted that there were several disallowances in various accounts and he mentioned altogether 19 items totalling Rs.3,01,787.
All these were on account of disallowances.
Main item was shortage in cane and the amount was Rs.67,500.
Another items was salary of out station staff and the amount was Rs.21,700.
There was also addition of Rs.48,500 on account of inflation in the price of sugar cane.
The Inspecting Assistant Commissioner in his order noted, inter alia three items, namely, (i) inflation in price of sugar cane Rs.48.500 (ii) excess shortage claimed for cane Rs.67,500 and (iii) salary of outstation staff of loading contractors Rs.21,700.
It was found so far as the last item was concerned that the amount was disal lowed being a false debit.
It was found that the assessee attempted to understate the income by debiting a false expenditure of Rs.48,500.
The Inspecting Assistant Commis sioner noted that actual shortage was 21,143 Mds.
valuing Rs.26,429 while the assessee had claimed Rs.1,34,661 for shortage at 2%.
The excess claim was also indicative of the real position that the shortage was fictitiously claimed at a high figure.
Faced with these facts the assessee eventual ly surrendered Rs.67,500.
Therefore, the Inspecting Assist ant Commisioner held that the assessee was certainly reduc ing the income by debiting false claims for excess shortage and the action amounted to intentional concealment.
Salary amounting to Rs.21,700 paid by the contractors to their staff working at out centres was debited in the books and while it was claimed that the staff working at these centres were actually employed by the company, on investigation the claim was found to be false.
In this connec 698 tion a reference was made to the statement of one Shri Kedar Nath Kanodia.
He had stated that he had employed five per sons at the out centres and there was no employee of the mill working at the centres.
The mill had kept there neither any clerk not any chowkidar.
He confirmed that he had paid the employees out of his own funds and had categorically denied that they were the employees of the mill or that they were paid by it.
In his statement he further stated that although the staff was actually paid by him yet the compa ny 's accountant had obtained their signatures on salary sheets and thus inflated the expenses by raising false debit in the salary account.
This procedure was followed in re spect of other contractors also.
The salary bill was thereby inflated by Rs.21,700.
The Inspecting Assistant Commissioner therefore, held that the assessee had concealed income to the extent of Rs.21,700.
He had also come to the conclusion that the cane purchases noted against these last entries were false and fictitious and the quantity covered by these entries was 31, 561 Mds.
valuing at Rs.48,500.
This was a false debit.
The assessee debited the three items of Rs.48,500, Rs.67,500 and Rs.21.700.
The assessee admitted that these items represented income.
It was also borne out by records that the amounts were not included in the return by the company.
The offence of deliberate under statement of income was, thus clearly established according to the In specting Assistant Commissioner.
He, therefore, found that the tax sought to be evaded came to Rs.70,914 and the maxi mum penalty worked out to Rs. 1,06,37 1.
Having regard to the facts and circumstances of the case, he imposed a penal ty of Rs.70,000.
In appeal the Income Tax Tribunal was of the view that not much turned upon the fact that the assessee agreed to the additions of the amounts in the assessment.
So far as the reliance placed upon Kanodia 's statement by the Inspect ing Assistant Commissioner was concerned, it had no rele vance or bearing to the facts of the assessment year in question.
He was not the contractor employed by the assessee in the year of account.
He came in only for a later year.
One Avinash Chand was the contractor in the year in ques tion.
He had specifically stated that he was responsible for shortages.
He had also admitted that there was staff main tained by the mill at the centre at which he was the loading contractor.
In fact he had gone to the extent of and stated as to what staff was maintained in that centre; there was a man in charge of the centre, a weighment clerk, a cane clerk and three to four chowkidars.
He had also stated that they were not his employees.
According to the Tribunal in these circumstances the assessee could very well have argued against the addition of the two sums, 699 namely, Rs.67,500 and Rs.21,700.
But the assessee as we have noted had agreed to the amounts being included.
The Tribunal was of the view that the mere fact that the amounts were agreed to be taken into account by the assessee did not ipso facto indicate any criminality in its action to conceal any portion of the income.
The Tribunal found that so far as Rs.48,500 was concerned in the inflation in the price of sugar cane, the previous history was against the assessee.
It had agreed to the similar additions in the earlier years 1955 56 and 1956 57 the Tribunal noted.
From the above facts, it was seen that the penalty was warranted in similar amount for this year also, the Tribunal noted.
Taking into consideration that the sum involved against this year was Rs.48,500 the tribunal considered that a smaller penalty was imposable.
The Tribunal accordingly imposed a total penalty of Rs. 5,000.
The High Court reiterated that the onus of proving concealment was on the revenue because the proceedings for penalty were penal in character.
In that view of the matter the High Court was of the opinion that so far as Rs.48,500 was concerned it was not proved that there was any deliber ate concealment.
So far as the other two amounts of Rs.67,500 and Rs.21,700 were concerned, it was contended that the High Court noted the history of the order of the Inspecting Assistant Commissioner and the circumstances of the case and the High Court was of the view that the Tribu nal had not at all considered the fact that the value of the shortage was only Rs.26,429.
According to the High Court, the Tribunal had brushed aside the fact that the assessee had agreed to the addition of this amount.
According to the High Court, the Tribunal had not set aside the finding of the Inspecting Assistant Commissioner that the assessee surrendered the amount of Rs.67,500 when it was faced with facts which clearly established concealment.
The assessee according to the Inspecting Assistant Commissioner had surrendered the amount only after the Income Tax Officer had conclusive evidence in his possession that the amount repre sented its income.
In other words, what the High Court sought to state was that acceptance by the assessee was material to give proper weight to judge the criminality of the action which according to the High Court was not given.
The High Court highlighted that so far as Rs.67,500 was concerned only on being faced with facts from which there could possibly be no escape from the inference that the amount represented his income, that the assessee agreed to its inclusion.
The High Court was of the view that the Tribunal was in error in brushing aside consideration of these aspects while considering the question of concealment.
In respect of the addition of Rs.21,700 the Inspecting Assistant 700 Commissioner had relied upon the statement of Kedar Nath Kanodia as also the fact that the assessee admitted that this item represented its income.
The Tribunal did not place reliance upon the statement of Kedar Nath Kanodia.
It, however, omitted to take into account the fact that the assessee had admitted that these items represented its income.
The High Court was of the view that such admissions were made by the assessee but the Tribunal had not properly appreciated that aspect.
Therefore in respect of these two items the High Court was of the view that the Tribunal was not right in holding that the assessee was not guilty of any concealment.
So far as question No. 2 was concerned which dealt with Rs.48,500 the High Court confined itself to the disallowance in respect of purchase of cane.
So far as this question was answered in favour of the assessee and there is no challenge by the revenue, it is not material any more.
The High Court came to the conclusion that the finding of the Tribunal in respect of the concealment of Rs.48,500 was not justified in law.
It was urged before us that as the second question which was in general form has been answered in favour of the assessee, the third question as reframed could not have been answered otherwise.
We are unable to accept this contention.
As evident from the discussion by the High Court, the High Court confined to second question with regard to disallowance in respect of purchase of cane that amounted to Rs.48,500.
So, therefore it cannot be said that in view of the answer given to the second question, the third question was no longer open.
The second question was confined to only Rs.48,500.
So far as whether there was justification for the answer given to the reframed third question or was proper or not has to be judged on the basis as to how far the High Court in a reference could interfere with a finding of fact and transform the same into a question of law on the ground that there has been non consideration of all relevant facts.
The law on this point is quite settled.
The question was considered by this Court exhaustively in Sree Meenakshi Mills Limited vs Commissioner of Income tax, Madras, where this Court reiterated that findings on questions of pure fact arrived at by the Tribu nal were not to be disturbed by the High Court on a refer ence unless it appeared that there was no evidence before the Tribunal upon which they, as reasonable men, could come to the conclusion to which they have come; and this was so, even though the High Court would on the evidence have come to a conclusion entirely different from that of the Tribu nal.
In other words, such a finding could be reviewed only on the ground that there was no evi 701 dence to support it or that it was perverse.
When a conclusion had been reached on an appreciation of a number of facts established by the evidence, whether that was sound or not must be determined, not by considering the weight to be attached to each single fact in isolation, but by assessing the cumulative effect of all the facts in their setting as a whole.
Where an ultimate finding on an issue was an inference to be drawn from the facts found, on the application of any principles of law, there would be a mixed question of law and fact, and the inference from the facts found was in such a case, a question of law.
But where the final determination of the issue equally with the finding or ascertainment of the basic facts did not involve the appli cation of any principle of law, an inference from the facts could not be regarded as one of law.
The proposition that an inference from facts was one of law was, therefore, correct in its application to mixed questions of law and fact, but not to pure questions of fact.
In the case of pure questions of fact an inference from the facts was as much a question of fact as the evidence of the facts.
In the instant case there is a finding of fact and unless it could be said that all the relevant facts had not been considered in a proper light, no question of law arises.
In our opinion, the Tribu nal took into account all the relevant facts.
The Tribunal had been accused by the High Court of not taking into con sideration the fact that the assessee had admitted these amounts in the assessment.
To admit that there has been excess claim or disallowance is not the same thing as delib erate concealment or furnishing inaccurate particulars.
At least in the background of the law as it stood at the rele vant time that was the position.
There have been some changes subsequentiy which we have not noticed for the present purpose.
In Omar Salay Mohamed Sait vs Commissioner of Income tax, Madras, 1, this Court held that the In come tax Appellate Tribunal was a fact finding tribunal and if it arrived at its own conclusions of fact after due consideration of the evidence before it the court could not interfere.
It was necessary, however, that every fact for and against the assessee must have been considered with due care and the Tribunal must have given its finding in a manner which would clearly indicate what were the questions which arose for determination, what was the evidence pro and contra in regard to each one of them and what were the findings reached on the evidence on record before it.
The conclusions reached by the Tribunal should not be coloured by any irrelevant considerations or matters of prejudice and if there were any circumstances which required to be ex plained by the assessee, the 702 assessee should be given an opportunity of doing so.
In this case, the Tribunal had taken into consideration the fact that the assessee had admitted the additions as its income when faced with non disclosure in assessment proceedings.
The High Court accused the Tribunal of not considering the time when the assessee admitted the additions.
We find that it was duly considered by the Tribunal.
We find that the assessee admitted that these were the income of the assessee but that was not an admission that there was deliberate concealment.
From agreeing to additions it does not follow that the amount agreed to be added was concealed.
There may be hundred and one reasons for such admissions, i.e., when the assessee realises the true position it does not dispute certain disallowances but that does not absolve the revenue to prove the mens rea of quasi criminal offence.
In Udhavdas Kewalram vs Commissioner of Income tax, Bombay City 1, , the Court held that the Income tax Appellate Tribunal performed a judicial function under the Income tax Act and it was invested with authority to determine finally all questions of fact.
The Tribunal must, in deciding an appeal, consider with due care all the material facts and record its findings on all contentions raised by the asses see and the Commissioner in the light of the evidence and the relevant law.
The Tribunal was undoubtedly competent to disagree with the view of the Appellate Assistant Commis sioner, but in proceeding to do so, it had to act judicially i.e. to consider all the evidence in favour of and against the assessee.
An order recorded on a review of only a part of the evidence and ignoring the remaining evidence could not be regarded as conclusively determinative of the ques tion of fact raised before the Tribunal.
It is for the Income tax authority to prove that a particular receipt is taxable.
If, however, the receipt is accepted and certain amount is accepted as taxable, it could be added but it was not accepted by the assessee, however, that it hard deliber ately furnished inaccurate particulars or concealed any income.
In our opinion, the Tribunal has properly considered all the evidence in the instant case.
In Rameshwar Prasad Bagla vs Commissioner of Income tax, U.P., , this Court again reiterated that it was for the Tribunal to decide questions of fact, and the High Court in a reference under section 66 of the Act as at that time could not go behind the Tribunal 's findings of fact.
The High Court could only lay down the law applicable to the facts found by the Tribunal.
The High Court in a reference under section 66 of the Act, as at that time could, however, go into the ques tion as to whether the conclusion of the Tribunal on a question of fact was based upon relevant evidence.
If the High Court found that there was no such evidence to support the finding of fact of the Tribunal, those circumstances would give rise to a question of law and 703 could be agitated in a reference.
Here in the instant case that is not the position.
This Court again reiterated that it was also well established that when a Tribunal acted on material which was irrelevant to the enquiry or considered material which was partly relevant and partly irrelevant or based on conjectures, surmises and suspicions and partly on evidence, then in such a situation an issue of law arose and the finding of the Tribunal could be interfered with.
That is not the position here.
In the instant case, it is not said that the Tribunal had acted on material which was irrelevant to the enquiry or considered material which was partly relevant and partly irrelevant or based its decision partly on conjectures, surmises and suspicions.
The High Court was wrong in saying that proper weight had not been given to all the evidence and admissions made by the asses see.
The High Court further observed that the time of admis sion was not noted by the Tribunal and this fact had not been properly appreciated by the Tribunal.
That is also not correct.
The Tribunal had made additions during the assess ment proceedings.
In any event that would be appreciation of evidence in a certain way, unless in such misappreciation which amounted to non appreciation no question of law would arise.
Non appreciation may give rise to the question of law but not mere misappreciation even if there be any from certain angle.
Change of perspective in viewing a thing does not transform a question of fact into a question of law.
In the instant case we are of the opinion that in pre ferring one view to another view of factual appreciation, the High Court transgressed the limits of its jurisdiction under the Income tax reference in answering the question of law.
In the premises, we are of the opinion that the High Court was in error in so far as it held that the Tribunal had acted incorrectly.
We are further of the opinion that the reframed question must be answered in the affirmative and in favour of the assessee.
The appeal is allowed and the judgment and order of the High Court in so far as answer to the question No. 3 is concerned is set aside.
The assessee is entitled to the costs of this appeal.
P.S.S. Appeal al lowed.
| There were disputes between the partners of the respond ent firm and several legal proceedings were taken in the courts below, which ultimately came to this Court.
This Court by an order dated 2nd of November, 1982 referred the disputes to an Arbitrator.
An application for appointment of Receiver was also directed to be disposed of by the trial court.
The Arbitrator duly filed the award dated 3rd of April, 1985 in this Court under Section 14(1) of the .
The petitioner in the special leave petitions filed an affidavit alleging that the Arbitrator was guilty of legal misconduct, and that there were errors which were amenable to correction by this Court, that the award was inconsistent and, therefore, the award should be set aside so far as it was against the applicant.
On behalf of the Respondent Workers an application was filed and it was contended that their claims have not been fully protected, and that the workers ' claim on account of gratuity would come to about Rs.7 lakhs while the Arbitrator had estimated it erroneously at Rs.4 lakhs, and had also made no sufficient provision in respect thereof.
Disposing of the Civil Miscellaneous Petitions, the Court, HELD: There is no legal proposition either in the award or in any document annexed therewith which was erroneous.
The alleged mistake or alleged errors, if there be any, of which grievances are made, are mistakes of fact, if at all.
The grievances, even if true, do not amount to an error apparent on the face of the record.
[857A, B, D] 853 Sufficient provisions have been made in the award for the existing liabilities of the workers and for any further contingencies is respect of their claims.
The right of gratuity has been recognised.
It cannot, therefore, be said that the award of the arbitrator is left incomplete and this dispute left undetermined.
[855C D] The objection to the award cannot be sustained.
There will, therefore, be judgment in terms of the award.
There will be no interim interest.
There will, however, be inter est on judgment at 9%.
[857E] Union of India vs A.L. Raffia Ram, ; ; Champsey Bhara and Company vs Jivraj Balloo Spinning and Weaving Company Ltd., [1932] L.R. 50 I.A. 324; Kanpur Nagar Mahapalika vs M/s Narain Das Haribansh, ; Allen Berry and Co. (P) Ltd. vs Union of India, New Delhi, ; and Hindustan Tea Co. vs K. Sashikant Co. and another, , referred to.
|
Special Leave Petition (Civil) No. 2730 of 1987.
From the Judgment and Order dated 8.12.1986 of the Punjab and Haryana High Court in R.S.A No. 1773 of 1986 (0 & M).
K.G. Bhagat and Sunil K. Jain for the Appellants.
The Judgment of the Court was delivered by VENKATARAMIAH, J.
The short question which arises for consideration in this case is whether under the provisions of the (hereinafter referred to as 'the Act ') a step son of a female dying intestate is entitled to claim a share in her property simultaneously with her son.
In other words the question involved is wheth er the word 'sons ' in clause (a) of sub section (1) of section 15 of the Act includes 'step sons ' also.
The facts involved in this Special Leave Petition are thus.
One Battan Singh who was also known as Badan Singh had two wives, namely, Mahan Kaur and Khem Kaur.
Mahan Kaur died during his life time after giving birth to two sons Lachman Singh (petitioner) and Gurdas Singh from the loins of Battan Singh.
Respondent No. 1 Kirpa Singh is the son of Battan Singh and Khem Kaur.
Gurdas Singh died during the life time of Battan Singh leaving behind his widow Gurbux Kaur and his son Amarjit Singh.
Battan Singh died intestate after the Act came into force.
On his death his property devolved on his heirs including his second wife Khem Kaur in accordance with the provisions of the Act.
Thereafter Khem Kaur died.
On her death dispute arose between her son Kirpa Singh on the one side and Lachman Singh, Amarjit Singh and Gurbux Kaur on the other.
Kirpa Singh claimed the entire property left behind by Khem Kaur on the ground 936 that he was the only son of Khem Kaur.
Lachman Singh, Amar jit Singh and Gurbux Kaur claimed that Kirpa Singh was entitled to only one third share in the property of Khem Kaur, Lachman Singh was entitled to one third share and Amarjit Singh, who was the son of Gurdas Singh, was entitled to the remaining one third share.
Both the parties relied upon clause (a) of section 15(1) of the Act.
While Kirpa Singh contended that the word 'sons ' in section 15(1)(a) of the Act meant only sons born of the body of the Hindu female dying intestate the others contended that the word 'sons ' in that clause included stepsons also.
In view of the above dispute Kirpa Singh filed a suit on the file of the Sub Judge 1st Class, Nakodar in the District of Jalandhar inter alia for a declaration that he was entitled to the entire property belonging to Khem Kaur against Lachman Singh, Amarjit Singh and Gurbux Kaur who contested the suit.
The trial court vide its judgment dated February 18, 1984 de creed the suit declaring that Kirpa Singh was entitled to the property belonging to Khem Kaur.
Lachman Singh preferred an appeal against the decree of the trial court in R.C.A. No. 202 of 1985 on the file of the learned Additional Dis trict Judge, Jalandhar.
That appeal was dismissed on Febru ary 19, 1986.
The second appeal filed by him against the judgment of the Additional District Judge, Jalandhar, in R.S.A. No. 1773 of 1986 on the file of the High Court of Punjab & Haryana was also dismissed in limine on December 8, 1986.
Aggrieved by the judgment of the High Court Lachman Singh has filed this petition for special leave under Arti cle 136 of the Constitution of India.
Section 15 of the Act, which is relevant for purposes of this case, reads thus: "15(1).
The property of a female Hindu dying intestate shall devolve according to the rules set out in section 16 (a) firstly, upon the sons and daughters (including the children of any predeceased son or daughter) and the husband; (b) secondly, upon the heirs of the husband; (c) thirdly, upon the mother and father; (d) fourthly, upon the heirs of the father; and (e) lastly, upon the heirs of the mother.
937 (2) Notwithstanding anything con tained in sub section ( 1 ), (a) any property inherited by a female Hindu from her father or mother shall devolve, in the absence of any son or daughter of the deceased (including the children of any predeceased son or daughter) not upon the other heirs referred to in sub section (1) in the order specified therein, but upon the heirs of the father; and (b) any property inherited by a female Hindu from her husband or from her father in law shall devolve, in the absence of any son or daughter of the deceased (including the children of any predeceased son or daugh ter) not upon the other heirs referred to in sub section (1) in the order specified there in, but upon the heirs of the husband.
Section 15 of the Act deals with the general rules of suc cession in the case of female Hindus.
Sub section (1) of section 15 provides that the property of a female Hindu dying intestate shall devolve according to the rules set out in section 16 of the Act firstly, upon the sons and daugh ters (including the children of any predeceased son or daughter) and the husband; secondly, upon the heirs of the husband; thirdly, upon the mother and father; fourthly, upon the heirs of the father; and lastly, upon the heirs of the mother.
Sub section (2) of section 15 of the Act arises for consideration only when a female Hindu dies intestate leav ing property without leaving behind her any son or daughter (including the children of any predeceased son or daughter) and in that event any property inherited by her from her father or mother shall devolve not upon the other heirs referred to in sub section (1) of section 15 of the Act in the order specified therein but upon the heirs of the father and any property inherited by her from her husband or from her father in law shall devolve not upon the other heirs referred to in sub section (1) of section 15 in the order specified therein, but upon the heirs of the husband, Rule 1 of section 16 provides that among the heirs specified in sub section (1) of section 15 those in one entry shah be preferred to those in the succeeding entry and those includ ed in the same entry shall take simultaneously.
It is not necessary to refer to rule (2) and Rule (3) of section 16 of the Act for purposes of this ease.
The only question which is to be determined here is whether the expression 'sons ' in clause (2) of section 15(1) of the Act includes 938 step sons also, ie., sons of the husband of the deceased by another wife.
In order to decide it, it is necessary to refer to some of the provisions of the Act.
Section 3(j) of the Act defines 'related ' as related by legitimate kinship but the proviso thereto states that illegitimate children shall be deemed to be related to their mother and to one another, and their legitimate descendants shall be deemed to be related to them and to one another and that any word expressing relationship or denoting a relative shall be construed accordingly.
Section 6 and section 7 of the Act respectively deal with devolution of interest in coparcenary property and devolution of interest in the property of a tarwad, tavazhi, kutumba, kavaru and illom.
Sections 8 to 13 of the Act deal with rules of succession to the property of a male Hindu dying intestate.
We are concerned in this case with the rules of succession to the property of a female Hindu dying intestate.
Sections 15 and 16 of the Act are material for our purpose.
Ordinarily laws of succession to property follow the natural inclinations of men and women.
The list of heirs in section 15(1) of the Act is enumerated having regard to the current notions about propinquity or nearness of relationship.
The words 'son ' and 'stop son ' are not defined in the Act.
According to Collins English Dic tionary a 'son ' means a male offspring and 'step son ' means a son of one 's husband or wife by a former union.
Under the Act a son of a female by her first marriage will not succeed to the estate of her 'second husband ' on his dying intes tate.
In the case of a woman it is natural that a step son, that is, the son of her husband by his another wife is a step away from the son who has come out of her own womb.
But under the Act a step son of a female dying intestate is an heir and that is so because the family headed by a male is considered as a social unit.
If a step son does not fall within the scope of the expression 'sons ' in clause (a) of section 15(1) of the Act, he is sure to fall under clause (b) thereof being an heir of the husband.
The word 'sons ' in clause (a) of section 15(1) of the Act includes (i) sons born out of the womb of a female by the same husband or by different husbands including illegitimate sons too in view of section 3(j) of the Act and (ii) adopted sons who are deemed to be sons for purposes of inheritance.
Children of any predeceased son or adopted son also fall within the meaning of the expression 'sons '.
If Parliament had felt that the word 'sons ' should include 'step sons ' also it would have said so in express terms.
We should remember that under the Hindu law as it stood prior to the coming into force of the Act, a step son, i.e., a son of the husband of a female by another wife did not simultaneously succeed to the stridhana of the female on her dying intestate.
In that case the son born out of her womb had precedence over a step son.
Parliament would have made express provision in the Act if it intended that there 939 should be such a redical departure from the past.
We are of the view that the word 'sons ' in clause (a) of section 15(1) of the Act does not include 'step sons ' and that step sons fall in the category of the heirs of the husband referred to in clause (b) thereof.
The decision of the Mysore (Karnataka) High Court in Mallappa Fakirappa Sanna Nagashetti and Others vs Shivappa and another, A.I.R. ; takes the view which we have expressed above.
According to the decision of the Bombay High Court in Rama Ananda Patil vs Appa Bhima Redekar and Others, A.I.R. 1969 Bombay 205 the emphasis in clause (a) of section 15(1) of the Act is on the aspect that the sons or the daughters are of her own body and not so much on the husband who was responsible for their birth and that therefore children of a female though by different husbands inherit her estate simultaneously.
The High Court of Punjab and Haryana has in Gumam Singh vs Smt.
Ass Kaur and Others, A.I.R. 1977 P & H 103 following the observations in the decisions of the Mysore and Bombay High Courts, referred to above, held that the word 'sons ' in section 15(1)(a) of the Act does not include a 'step son '.
The High Court of Calcut ta has also taken the same view in Smt.
Kishori Bala Mondal vs Tribhanga Mondal & Others, A.I.R. 1980 Calcutta 334.
It is true that the Allahabad High Court has taken a contrary view in Ram Katori vs Prakash Wati, I.L.R. 1968 (1) Allahabad 697.
In that case the facts were however slightly different, but the point involved was almost the same.
The facts of the case were as follows.
One Chandu Lal had mar ried a woman.
She died during the life time of Chandu Lal leaving behind her a daughter by Ram Katori.
Thereafter Chandu Lal married a second woman by name Ram Kali through whom he got a daughter by name Prakashwati.
Chandu Lal died in 1920 and on his death Ram Kali being his widow succeeded to his estate as a limited owner.
After the coming into force of the Act in 1956 her limited estate ripened into absolute estate and she became the full owner of the estate inherited by her from her husband.
Ram Kali died thereafter.
On her death Ram Katori, the daughter of Chandu Lal by his first wife contended that she was entitled to succeed simul taneously with Prakashwati to the estate of Ram Kali which originally belonged to her father and claimed one half share in it.
Her claim was resisted by Prakashwati stating that the word 'daughters ' in section 15(1)(a) of the Act did not include 'step daughters ' and that Ram Katori would fall under the category of the heirs of the husband and would be entitled to succeed either under clause (b) of section 15(1) or under clause (b) of section 15(2) of the Act and that too in the absence of 940 sons and daughters of Ram kali (including children of prede ceased sons and daughters).
It was further contended by Prakashwati that the fact that the property in question had formerly belonged to the husband of Ram Kali did not matter at all because Ram Kali had left behind her who was a daugh ter of her own body entitled to succeed under section 15(1)(a), and that Ram Katori being a step daughter could not claim under section 15(1)(a) of the Act.
The High Court of Allahabad felt that there was a distinction between clause (a) of section 15(1) and clauses (a) and (b) of section 15(2) of the Act in that whereas in section 15(1)(a) the words 'sons and daughters ' were unqualified, the words 'son or daughter ' in clauses (a) and (b) of section 15(2) were qualified by the words 'of the deceased ' and therefore conclusion was irresistible that the unqualified words 'sons and daughters ' in section 15(1)(a) of the Act indicated that they included also the children of her husband by another wife.
The High Court also appears to have been moved by the consideration that the opposite construction would be pat ently unfair to the children by her husband 's another wife since they would be deprived of their share in the property which originally belonged to their father.
We feel that neither of these reasons is correct.
The words 'sons and daughters . . and the husband ' in clause (a) of section 25(1) only mean 'sons and daughters . and the husband ' of the deceased.
They cannot be 'sons and daughters . and the husband ' of any body else.
All relatives named in the different clauses in sub section (1) of section 15 of the Act are those who are related to the deceased in the manner specified therein.
They are sons, daughters, husband, heirs of the husband, mother and father, heirs of the father and heirs of the mother of the deceased.
The use of the words 'of the deceased ' following 'son or daughter ' in clauses (a) and (b) of sub section (2) of section 15 of the Act makes no difference.
The words 'son or daughter of the deceased (including the children of any predeceased son or daughter) ' in clauses (a) and (b) of section 15(2) of the Act refer to the entire body of heirs failing under clause (a) of section 15(1) of the Act except the husband.
What clauses (a) and (b) of sub section (2) of section 15 of the Act do is that they make a distinction between devolution of the property inherited by a female Hindu dying intestate from her father or mother on the one hand and the property inherited by her from her husband and from her father in law on the other.
In the absence of any son or daughter of the deceased (including the children of any predeceased son or daughter), in a case failing under clause (a) of section 15(2) of the Act the property devolves upon the heirs of the father of the deceased and in a case falling under clause (b) of section 15(2) of the Act the property devolves upon the heirs of the husband of the 941 deceased.
The distinction made by the High Court of Allaha bad on the ground of the absence or the presence of the words 'of the deceased ' in sub section (1) and sub section (2) of section 15 of the Act appears to be hyper technical and the High Court has tried to make a distinction where it does not actually exist.
The second reason, namely, that exclusion of 'step sons ' and 'step daughters ' from clause (a) of section 15(1) of the Act would be unfair as they would thereby be deprived of a share in the property of their father is again not well founded.
The rule of devolu tion in section 15 of the Act applies to all kinds of properties left behind by a female Hindu except those dealt with by clauses (a) and (b) of section 15(2) which make a distinction as regards the property inherited by her from her parents and the property inherited from her husband or father in law and that too when she leaves no sons and daughters (including children of predeceased sons and daugh ters).
If the construction placed by the High Court of Allahabad is accepted then the property earned by the female Hindu herself or purchased or acquired by her would devolve on step sons and stepdaughters also along with her sons and daughters.
Is it just and proper to construe that under clause (a) of section 15(1) of the Act her stepsons and step daughters, i.e., children of the husband by another wife will be entitled to a share along with her own children when the Act does not expressly says so? We do not think that the view expressed by the High Court of Allahabad represents the true intent of the law.
When once a property becomes the absolute property of a female Hindu it shall devolve first on her children (including children of the ' predeceased son and daughter) as provided in section 15(1)(a) of the Act and then on other heirs subject only to the limited change introduced in section 15(2) of the Act.
The step sons or step daughters will come in as heirs only under clause (b) of section 15(1) or under clause (b) of section 15(2) of the Act.
We do not, therefore, agree with the reasons given by the Allahabad High Court in support of its decision.
We disagree with this decision.
In the circumstances, we hold that the High Court of Punjab and Haryana against whose decision this petition is filed was right in affirming the decree passed in favour of Kirpal Singh, Respondent No. 1 herein.
The Special Leave Petition is, therefore, dismissed.
A.P.J. Petition dismissed.
| In the Haryana Educational Service, there were two categories of teachers described as Masters and Basic Trained Teachers.
25% of the posts of Masters were reserved for promotion from the posts of Basic Trained teachers.
Masters could be promoted to higher posts.
By an order dated July 23, 1957 there was a revision of the scales of pay.
Teachers were placed according to their qualifications in two categories, Catetogy A consisting of B.A, B.Com, B.Sc.
(Agriculure) and B.T., and Category 'B ' consisting of four groups of whom Group I was Matric with basic training (including J.B.T.).
The scale of pay was linked to the qualification and for category 'A ' it was Rs.110 250 with a higher start for M.A. and M.Sc.
and for Category 'B ' it was Lower Rs.60 120, Middle Rs.120 175 and Upper Rs.140 200.
While Kripal Singh Bhatia 's case and other petitions were pending, the Government of Haryana issued an order further revising the scales of pay of teachers working in Government schools in 1968 consequent on the acceptance of the recommendations of the Kothari Commission with effect from December 1, 1967.
There was, however, no departure from the principle of the 1957 order, that trained graduates would be entitled to the higher scales of pay.
On September 5, 1979, the Government issued an order granting Masters grade to unadjusted J.B.T. teachers who had passed B.A., B.Ed.
subject to certain conditions.
This order was challenged before the High Court by 'trained graduates ' i.e. those who possessed the B.Ed.
or B.T. degree in addi tion to B.A. degree.
They did not possess this degree ini tially but acquired it subsequent to their joining service which was between 1953 and 1973.
The High Court held that those teachers who had acquired the B.T. or B.Ed.
qualifica tion subsequent to December 1, 1967 (the date on which the 1968 order came into force) 924 and before September 5, 1979 would be entitled to the Higher grade but with effect from September 5, 1979 only and that those who acquired the qualification subsequent to September 5, 1979 would not be entitled to the higher grade.
It fur ther held that the 1968 order did away with the principle of the 1957 order, that teachers acquiring B.T. or B.Ed.
quali fication should get the higher grade, and that a concession was shown in 1979 enabling the teachers who acquired the B.T. or B.Ed.
qualification between 1968 and 1969 to get the higher scale from 1979.
Allowing the appeal, this Court, HELD: 1.
From 1957 to 1980, it was always accepted that teachers who acquired the B.T. or B.Ed.
qualification would be entitled to the higher scale of pay as soon as they acquired the qualification irrespective of the dates when they were adjusted against the posts of Masters.
The adjust ment against the posts of Masters was relevant for the purpose of seniority in the post of Masters and for the further purpose of promotion from that post.
So far as the scale of pay was concerned irrespective of adjustment against the post of Masters, a teacher was always held entitled to the higher scale of pay from the date of the acquisition of the B.T. or B.Ed.
qualification.
[930E G] 2.
It is plain that the High Court has ignored all the events that took place between 1957 and 1980.
The principle that pay should be linked to qualification was accepted by the Punjab Government in 1957 and when Kirpal Singh Bhatia 's case was argued in the High Court and this Court there was not the slightest whisper that the principle had been de parted from in the 1968 order.
In fact the 1968 order ex pressly stated that the Government had accepted the Kothari Commission 's report in regard to the scales of pay and the main feature of the report with regard to pay was the link ing of pay to qualification.
The High Court was not justi fied in departing from rule which had been well established and consistently acted upon, it was not open to the State Government to act upon the principle in some cases and depart from it in other cases.
[931E G; 932B] 3.
The 1968 order must be read in the light of the 1957 order and the report of the Kothari Commission which was accepted.
If so read there could be no doubt that the Gov ernment never intended to retract from the principle that teachers acquiring the B.T. or B.Ed.
qualification would be entitled to the higher grade with effect from the respective dates of their acquiring the qualification.
The 1979 order was indeed superfluous.
There was no need for any special sanction for the grant of 925 Master 's grade to unadjusted J.B.T. teachers, who had passed B.A., B.Ed.
That was already the position which obtained both as a result of 1957 and 1968 orders and the several judgments of the Court.
[931G H; 932A B] (The respondents directed to give the higher grade admissible to Masters to all the teachers who have acquired the B.T/B.Ed.
qualification with effect from the respective dates of their acquiring the qualification).
State of Punjab and another vs Kirpal Singh Bhatia & Ors., ; , referred to.
|
Appeal No. 1726 of 1971.
(Appeal by Special Leave from the Judgment and Order dated 20 4 1971 of the Allahabad High Court in Misc.
Sales Tax Reference No. 137 of 1970).12 1234SCI/76 684 S.C. Manchanda, M.V. Goswami and O.P. Rana, for the Appellants.
The Judgment of the Court was delivered by KHANNA, J.
This is an appeal by special leave against the judgment of Allahabad High Court whereby the High Court answered the following question referred to it under section 11 ( 3 ) of the UP Sales Tax Act (hereinafter referred to as the Act) in favour of the dealer respondent and against the revenue: "Whether the time taken by the dealer in obtaining another copy of the impugned appellate order could be excluded for the purpose of limita tion for filing revision under section 10 (1 ) of the UP Sales Tax Act when one copy of the appellate order was served upon the dealer under the provi sions of the Act ?" The matter relates to the assessment year 1960 61.
An appeal filed by the respondent against the order of the Sales Tax Officer was disposed of by the Assistant Commis sioner (Judicial) Sales Tax, Bareilly.
The copy of the appellate order was served on the dealer respondent on August 2, 1965.
The respondent, it appears, lost the copy of the appellate order which had been served upon him.
On June 15, 1966 the respondent made an application for obtaining another copy of the above order.
The copy was ready on August 17, 1967 and was delivered to the respondent on the following day, i.e. August 18, 1967.
Revision under section 10 of the Act was thereafter filed by the respondent before the Judge (Revision) Sales Tax on September 9, 1967.
Sub section (3B) of section 10 of the Act prescribes the period of limitation for filing such a revision.
According to that sub section, such a revision application "shall be made within one year from the date of service of the order com plained of but the Revising authority may on proof of suffi cient cause entertain an application within a further period of six months.
" Question was then agitated before the Judge (Revision) as to whether the revision application was within time.
The respondent claimed that under section 12(2) of the , he was entitled to excluded in computing the period of limitation for filing the revision, the time spent for obtaining a copy of the appellate order.
This contention was accepted by the Judge (Revision).
He also observed that the fact that the said copy was not required to be filed along with the revision petition would not stand in the way of the respondent relying upon section 12(2) of the .
The Judge (Revision) thereafter dealt with the merits of the case and partly allowed the revision petition.
At the instance of the Commissioner of Sales Tax, the question reproduced above was referred to the High Court.
The High Court, as stated above, answered the ques tion in favour of the respondent and in doing so placed reliance upon the provision of section 12(2) of the Limita tion Act,1963 (Act 36 of 1963) which reads as under: "(2) In computing the period of limitation for an appeal or an application for leave to appeal or for revision or for review of a judgment, the day on which the judgment complained 685 of was pronounced and the time requisite for ob taining a copy of the decree, sentence or order appealed from or sought to be revised or reviewed shall be excluded.
" It may be stated that the language of section 12(2) of the Act of 1963 is in variance with that of section 12(2) of the Indian Limitation Act,1908 (Act 9 of 1908) so far as the applicability of section 12(2) is concerned in computing the period of limitation for filing revision application.
Section 12(2) of the Indian Limitation Act, 1908 read as under: "(2) In computing the period of limitation prescribed for an appeal, an application for leave to appeal and an application for a review of judg ment, the day on which the judgment complained of was pronounced, and the time requisite for obtain ing a copy of the decree, sentence or order ap pealed from or sought to be reviewed, shall be excluded.
" Bare perusal of sub section (2) of section 12 of the Act of 1908 would show that it did not deal with the period of limitation prescribed for an application for revision.
As against that, the language of sub section (2) of section 12 of .the
Act of 1963 makes it manifest that its provisions would also apply in computing the period of limita tion for application for revision.
There can, therefore, be no manner of doubt that in a case like the present which is governed by the Act of 1963, the provisions of sub section (2) of section 12 can be invoked for computing the period of limitation for the application for revision if the other necessary conditions are fulfilled.
It is, however, contended by Mr. Manchanda that the UP Sales Tax Act constitutes a complete code in itself and as that Act prescribes the period of limitation for filing of revision petition, the High Court was in error in relying upon the provi sions of sub section (2) of section 12 of the .
This contention, in our opinion, is wholly bereft of force.
Sub section (2) of section 29 of the reads as under: "(2) Where any special or local law pre scribes for any suit, appeal or application a period of limitation different from the period prescribed by the Schedule, the provisions of section 3 shall apply as if such period were the period prescribed by the Schedule and for the purpose of determining any period of limitation prescribed for any suit; appeal or application by any special or local law, the provisions contained in sections 4 to 24 (inclusive) shall apply only in so far as, and to the extent to which, they are not expressly excluded by such special or local law.
" There can be no manner of doubt that the UP Sales Tax Act answers to the description of a special or local law.
According to sub section (2) of section 29 of the , reproduced above, for the purpose of determining any period of limitation prescribed for any application by any special or local law, the provisions contained in section 686 12(2), inter alia, shall apply in so far as and to the extent to which they are not expressly excluded by such special or local law.
There is nothing in the U.P Sales Tax Act expressly excluding the application of section 12(2) of the for determining the period of limitation prescribed for revision application.
The conclusion would, therefore, follow that the provisions of section 12(2) of the of 1963 can be relied upon in computing the period of limitation prescribed for filing a revision petition under section 10 of the UP Sales Tax Act.
It has been argued by Mr. Manchanda that it was not essential for the dealer respondent to file a copy of the order of the Assistant Commissioner along with the revision petition.
As such, .according to the learned counsel, the dealer respondent could not exclude the time spent in ob taining the copy.
This contention is equally devoid of force.
There is nothing in the language of section 12(2) of the to justify the inference that the time spent for obtaining copy of the order sought to be revised can be excluded only if such a copy is required to be filed along with the revision application.
All that section 12(2) states in this connection is that in computing the period of limitation for a revision, the time requisite for obtaining a copy of the order sought to be revised shah be excluded.
It would be impermissible to read in section 12(2) a proviso that the time requisite for obtaining copy of the decree, sentence or order appealed from or sought to be revised or reviewed shall be excluded only if such copy has to be filed alongwith the memorandum of appeal or application for leave to appeal or for revision or for review of judgment, when the legislature has not inserted such a proviso in section 12(2).
It is also plain that without procuring copy of the order of the Assistant Commissioner the respondent and his legal adviser would not have been in a position to decide as to whether revision petition should be filed against that order and if so, what grounds should be taken in the revi sion petition.
The matter indeed is not res integra.
In the case of J.N.Surty vs T.S. Chettyar(1), the Judicial Committee after .noticing the conflict in the decisions of the High Courts held that section 12(2) of the Indian Limitation Act, 1908 applies even when by a rule of the High Court a memo randum of appeal need not be accompanied by a copy of the decree, Lord Phillimore speaking on behalf of the Judicial Committee observed: "Their Lordships have now to return to the grammatical construction of the Act, and they find plain words directing that the time requisite for obtaining the two documents is to be excluded from computation.
12 makes no reference to the Code of Civil Procedure or to any other Act.
It does not say when the time is to be excluded, but simply enacts it as a positive direction.
If, indeed, it could be shown that in some particular class of cases there could be no object in obtaining the two documents, an argument might be offered that no time could (1) 55 I.A. 161.
687 be requisite for obtaining something not requisite.
But this, is not so.
The decree may be complicat ed, and it may be open to draw it up in two differ ent ways, and the practitioner may well want to see its form before attacking it by his memorandum of appeal.
As to the judgment, no doubt when the case does not come from up country, the practitioner will have heard it delivered, but he may not carry all the points of a long judgment in his memory, and as Sir John Edge says, the Legislature may not wish him to hurry to make a decision till he has well considered it.
" Following the above decision, it was held by a Full Bench consisting of five Judges of the Lahore High Court in the case of The Punjab Co operative Bank Ltd., Lahore vs The Official Liquidators, The Punjab Cotton Press Co. Ltd. C) that even though under the Rules and Orders of the High Court no copy of the judgment is required to be filed along with the memorandum of appeal preferred under section 202 of the Indian Companies Act from an order of a single Judge, the provisions of section 12 of the Indian Limitation Act would be attracted.
The provisions of section 12 were also held to govern an appeal under Letters Patent.
A Full Bench of the Patna High Court in the case of Mt. Lalitkuari vs Mahaprasad N. Singh(2) also held that the provisions of section 12 of the Limitation Act were applica ble to Letters Patent appeals under clause 10 of the Letters Patent.
The above decision of the Judicial Committee was followed by this Court in the case of Additional Collector of Customs, Calcutta & Anr.
vs M/s. Best & Co.(3) Similar view was expressed by this Court in the case of section A. Gaffoor vs Ayesha Beghum & Ors.(4) It is plain that since 1928 when the Judicial Commit tee decided the case of Surty (supra), the view which has been consistently taken by the Courts in India is that the: provisions of section 12(2) of the Limitation Act would apply even though the copy mentioned in that subsection is not required to be filed along with the memorandum of ap peal.
The same position should hold good in case of revision petitions ever since Limitation Act of '1963 came into force.
Lastly, it has been argued that the copy of the order of the Assistant Commissioner was served upon the respond ent, and as such,; was not necessary for the respondent to apply for copy of the said order.
In this respect we find that the copy which was served upon the respondent was lost by him.
The loss of that copy necessitated the filing of an application for obtaining another copy of the order of the Assistant Commissioner.
(1) Lahore Series 191.
(2) Patna Series 157.
; (4) CA No. 2406 of 1969 decided on August 18, 1970.
( See Unreported judgements of Supreme Court.
2. page 784).
688 In the case of State of Uttar Pradesh vs Maharaj Narain & Ors.(1) the appellant obtained three copies of the order appealed against by applying on three different dates for the copy.
The appellant filed along with the memorandum of appeal that copy which had taken the maximum time for its preparation and sought to exclude such maximum time in computing the period of limitation for filing the appeal, This Court, while holding the appeal to be within time, observed that the expression time requisite in section 12(2) of the Limitation Act cannot be understood as the time absolutely necessary for obtaining the copy of the order and that what is deductible under section 12(2) is not the minimum time within which a copy of the order appealed against could have been obtained.
If that be the position of law in a case where there was no allegation of the loss of any copy, a fortiori it would follow that where as in the present ease the copy served upon a party is lost and there is no alternative for that party except to apply for a fresh copy in order to be in a position to file revision petition, the time spent in obtaining that copy would necessarily have to be excluded under section 12(2) of the .
The High Court, in our opinion, correctly answered the question referred to it in favour of the dealer respondent and against the revenue.
The appeal fails and is dismissed.
As no one appeared on behalf of the respondent, we make no order as to costs.
M.R. Appeal dismissed.
| The proprietor of large tracts of laud leased blocks of land to.
the lessees at a stipulated rate of royalty and rent.
The lessees sub leased the land to the appellant who undertook to pay the lessees the same royalty and rent.
payable by them to the proprietor.
They also agreed to pay an additional royalty to the head lessee.
The sub lease gave an option to the appellant to make payment of royalty directly to the head lessor in terms of the head lease.
The lessees transferred their rights, title and interest in the head lease and sub lease to the respondent.
By virtue of a notification under section 3 of the Bihar land Reforms Act, 1950 the estate belonging to the head lessor passed to and became vested in the State.
Another notifica tion issued under section 3A of the Act declared that all inter mediary interests in certain districts had passed to and became vested in the State.
In exercise of its option under the sub lease the appel lant paid rent a.nd royalty directly to the head lessor and the additional royalty to the head lessee (respondent) but stopped payment of additional royalty to the respondent in terms of the sub lease, from July 1, 19.58.
On August 8, 1959 Controller of Mines and Leases for India passed an order enhancing the royalty payable to the State and in c1.(9) of the order it was stated that "royalty will be.
payable to State Government by the appellants in accordance with section 9 of the Mines and Minerals (Regulation & Develop ment) Act, 1957 and dead rent according to the order passed in these proceedings.
" The respondent filed a suit claiming arrears of additional royalty.
The High.
Court decreed the suit.
In appeal to this Court, it was contended that (i) since the respondent was merely a tenure holder and all its rights, title and interest as such extinguished alongwith the interest of the erstwhile proprietor with the coming into force of the 1950 Act it was the appellant as a sub lessee that became a direct lessee of the State and, there fore, the respondent was not entitled to claim additional royalty.
(ii) since the enhanced royalty was payable by the respondent which was paid by the appellant, the appellant was entitled to reimbursement to the extent it paid the amount as agent of the respondent.
Dismissing the appeal, HELD :(1)(a) A combined reading of sections 4(a) and 10 of the 1950 Act leaves no room for doubt that the interests of the head lessee were left unaffected by the notifications.
[369 D] (b) The respondent could not be said to be a tenure holder as contemplated by the 1950 Act as it had neither acquired from the head lessor by virtue of the lease a right to hold the land for the purpose of collecting rent nor a right to hold the land for bringing it under cultivation by estab lishing tenants on it.
The right of the respondent as a head lessee of the mines and minerals also did hot cease and the appellant did not acquire the status lessee.
According to section 4(a) of 1950 Act on the publication of the notifications the interests of the proprietor or tenure holder comprised in such estate or tenure inclu sive of such right of a lessee of mines and minerals com prised 7 1104 SC I/76 360 in such estate or tenure vest absolutely in the State free from encumbrances and such proprietor or tenure holder has to cease to have any interest in such estate or tenure other the interest expressly saved by or under the provisions of the Act.
The last words of section 4(a) of the Act, namely, "other than the interest expressly saved by or under the provisions of the Act" unequivocally show that those inter ests which are expressly saved are= not ' affected or im paired by the notifications.
According to 9.10 which itself is in the nature of a non obstante provision overriding other provisions of the Act, every lease of mines and miner als comprised in the notified estate or tenure or any part thereof which may be subsisting immediately before the date of vesting has to be treated, with effect from the date of vesting, as a lease from the State Government to the holder of the said subsisting lease for the residue of the term of that lease and such holder acquires the right to retain possession oF the leasehold property for that period.
In other words, in place of every contractual lease which might have been subsisting immediately before the date of vesting of the estate or tenure a statutory lease on practi cally identical terms and conditions came into being.
[368 F H, 369 A C] Bihar Mines Ltd. vs Union of India ; , Chhatu Ram Horil Ram Private Ltd. vs State of Bihar & Anr. ; ; , M/s. Hindustan Steel Ltd., Rourkela vs Smt.
Kalyani Banerjee & ; and State of Bihar& Anr.
vs Khas Karsmpura Collieries Ltd. etc.
[1977] I SCR. 157 followed.
(c) The introduction of s.10A in the 1950 Act indicates that the law as it obtained prior to the amendment was not intended to have the effect of divesting a lessee of his interests in a lease of mines or minerals which subsisted immediately before the vesting of a notified estate or tenure.
[369 F] (2) In view of the order passed by the Controller that the appellant agreed to say the enhanced royalty the burden of payment is to be borne by the appellant and the question of its being reimbursed by the respondent does not arise.
[371 D] (3) The contention that it is not permissible to inter pret a statute by reference to what has been said in subse quent statutes with reference to the situation obtaining before the introduction of the amendment is not well found ed.
Sometimes light may be thrown upon the meaning of an Act by taking into consideration 'Parliamentary expositions ' as revealed by the later Act which amends the earlier one to clear up any doubt or ambiguity.
This principle has to be followed where, a particular construction of the earlier Act will render the later incorporated Act ineffectual or otiose or inept.
[370 A] Krikness vs John Hudson & Co., , Yogendra Nath Naskar vs
C.I.T. Calcutta, , Cape Brandy Syndicate vs
I.R.C. referred to.
In the instant case resort can be had to the provisions of section 10A introduced in 964 while interpreting section 10 of the 1950 Act with reference to the situation obtaining at the relevant time before the introduction of section 10A.
The estate comprised in the head lease which was assigned to the re spondent notionally stood leased by the State from the date of vesting to the holder of the subsisting lease and the respondent became entitled to retain possession of the leasehold property.
[370D]
|
Appeals Nos. 5 and 6 of 1955.
Appeals from the judgment and decree dated September 15, 1952, of the Madras High Court in Second Appeals Nos.
2256 of 1947and 2545 of 1948, 2 arising.
out of the judgment and decree dated September 19, 1946, of the Court of Subordinate Judge of Kozhikode in Appeal Suit Nos. 336 and 180 of 1946, against the judgment and decree dated October 9, 1945, and June 29, 1946, respectively of the Court of Districts Munsif, Chowghat, in O. section Nos. 131 and 158 of 1945.
B. K. B. Naidu, for the appellants.
V. Karunakara Menon and M. R. Krishna Pillai, for the respondents.
October 1.
The Judgment of the Court was delivered by VENKATARAMA AIYAR J.
The point for determination in these two appeals is whether one Kesavan Kaimal who was one of three executants of a will dated February 10, 1906, became entitled under that will to the properties, which are the subject matter of these appeals.
The will is a short one, and is as follows: " Will executed on 28th Makaram 1081 M. E., corresponding to 10th February, 1906, jointly by Kunhan Kaimal, son of Karayamvattath Katbayakkal Kunhu Kutti Amma, Kesavan Kaimal, son of Theyi Amma and Theyi Amma, daughter of Nani Amma of Etathiruthi amsom and Etamuttan desom in Ponnani Taluk.
We have hereby settled and agreed that all the movable and immovable properties acquired jointly and separately by us till now, and those which we may be so acquiring in future and those which have devolved on us and those which we may yet be obtaining shall be held by us in our possession and under our control and dealt with by us as we please till our death and that subsequent to our death, Kalliani Amma 's children, Kali and Kunhu Kutty, Thona Amma 's children, Parukutty, Kunhunni, Kochu Govindan and Ramar, and the children of the deceased Narayani Amma, namely, Kunhunniri, Kuttiparu and Lakshmikutty and their children and the children who may be born to them as also the children who may be born of them, shall as our heirs and legal representatives, hold the said properties in their 3 possession and enjoy them hereditarily in equal shares amongst themselves.
Except after our death, the aforesaid persons shall not lay claim to any of the properties belonging to us.
It is settled that in the event of our effecting any transfers or alienations of the said properties.
either jointly or severally till our death, the aforesaid ' persons shall have the right and freedom only in respect of the remaining items of properties to the exclusion of those items of properties included in the above transactions.
It is hereby further settled and agreed that subsequent to our death, save our legal representatives aforesaid and such of those as may be born hereafter, no other persons shall have the right to claim to or right of entry upon the entire properties moveable and immoveable found belonging to us.
And we have signed herein in the presence of the undersigned witnesses (signed) Kunhan Kaimal.
( " " ) Kesavan Kaimal.
(" " ) Theyi Amma.
" of the three testators, Theyi Amma died first the exact date of her death does not appear and is not very material and Kunhan Kaimal died thereafter sometime in 1930.
It is the case of Kesavan Kaimal that in the events which had happened, he had become entitled by survivorship to all the properties disposed of by the will, including those of Kunhan Kaimal, and on this footing he conveyed on October 14,1938, seven items of properties, of which three belonged to Kunhan Kaimal, to one Sankarankutti Kaimal and on October 16, 1944, another three items of properties which belonged to Kunhan Kaimal, to Kalyani and Vijayan.
These transfers led to the two litigations; which have culminated in the present appeals.
The legatees under the will dated February 10, 1906, instituted O. section No. 131 of 1945 in the Court of the District Munsif, Chowghat, then in the Province of Madras, for recovery of possession of three items of properties which had belonged to Kunhan Kaimal 4 after redeeming a mortgage for Rs. 100 created over those properties on February 3, 1901.
The plaintiffs claimed that on the death of Kunhan Kaimal in 1930 they had become entitled to those properties as legatees under the will.
Defendants 1 to 3 represented the mortgagees.
Defendant 6 was Kesavan Kaimal, and defendants 4 and 5 were brought on record as persons claiming to be entitled to the suit properties under a deed of transfer by defendant 6, dated October 16, 1944.
Defendants 4 to 6 contested the suit, and pleaded that on a proper construction of the will, the properties of Kunhan Kaimal survived to Kesavan Kaimal on the death of the former in 1930, and that the plaintiffs got no title to them.
This contention was overruled by the District Munsif, and the suit was decreed.
There were two appeals against this decree, A. section No. 179 of 1946 and A. section No. 180 of 1946 in the Court of the Subordinate Judge, Calicut, the former by defendants 4 and 5 and the latter, by defendant 6.
The Subordinate Judge agreed with the construction put on the will by the District Munsif, and dismissed the appeals.
Against that decree, defendant 6 preferred section A. No. 2256 of 1947 in the High Court of Madras.
Basing himself on the deed of transfer dated October 14, 1938, Sankarankutti Kaimal instituted O. section No. 158 of 1945 in the Court of the District Munsif, Chowghat, for recovery of possession of three items of properties, of which one belonged to Kunhan Kaimal absolutely and the other two ' to him and others as co owners.
In the plaint, he alleged that there was an oral lease of the properties to the first defendant and to one Kali Amma, whose legal representatives were defendants 2 and 3, that the defendants were in arrears in the payment of rent, and were disputing his title to the properties, and that he was therefore entitled to eject them.
Defendant 4 is Kesavan Kaimal, the vendor of the plaintiff.
The contesting defendants who were the same as the plaintiffs in O.S. No. 131 of 1945 pleaded that under the will they became entitled to all the properties of Kunhan Faimal, that the oral lease was untrue, and that the 5 suit was barred by limitation.
The District Munsif found all the contentions in favour of defendants 1 to 3 and dismissed the suit.
, Against this decree, there was an appeal, A. section No. 336 of 1946, in the Court of the Subordinate Judge of Ottapalam, and that was dismissed, the Subordinate Judge agreeing with the District Munsif on all the issues.
Against his decree, the plaintiff preferred section A. No. 2545 of 1948 in the High Court of Madras.
Both the second appeals came up for hearing before Raghava Rao J. who held that on its true construction the will operated to vest, in the three testators all the properties covered by it in joint ownership, that, in consequence, on the death successively of Theyi Amma and Kunhan Kaimal, their interest survived to Kesavan Kaimal, and that the transfers made by him on October 14, 1938, and October 16, 1944, were valid.
In the result, both the second appeals were allowed, the suit for redemption, O. section No 131 of 1945, was dismissed, and the suit in ejectment, O. section No. 158 of 1945, was decreed.
Against this judgment, the present appeals have been brought on a certificate granted by this court under article 136.
The sole point for determination in these appeals is whether under the will all the three testators became joint owners of all the properties on which it operated.
After hearing the question fully argued, we have come to the conclusion that that is not the effect of the will, and that the judgment of the High Court contra cannot be supported.
There were three executants of the will.
Each of them possessed properties, which were his or her self acquisitions.
They also owned some properties which they had jointly acquired, but their title to such properties was as tenants in common and not as joint tenants.
Each of them would have been entitled to execute a will of his or her properties, and if that had been done, the legatees named therein would undoubtedly have been entitled to those pro perties.
In the present case, the legatees who were intended to take were the same persons, and it was for that reason that the three testators instead of each executing a separate will jointly executed it.
It ist 6 nevertheless, a will by which each testator bequeathed properties belonging to him or to her, and therefore on the death of each testator, the legatees mentioned in the will would be entitled to the properties of the testator, who dies.
The contention of the respondents which has found favour with the High Court is that the will must be construed as a transfer by the several testators of all their individual properties to themselves jointly as joint tenants.
That would really be a transfer inter Vivos and not a will.
The word "will" is widely known and used, and it has a well understood significance as meaning a disposition which is to take effect on the death of a person.
The executants of the will could not have therefore intended that it should operate inter ViVOs.
Moreover, if the document was intended to take effect as a present disposition, it should have to be stamped under the provisions of the Stamp Act, but the will is an unstamped document.
Coming to the recitals in the will, there are no words by which the executants thereof divest themselves of their individual ownership and vest it in themselves jointly.
It is said that that could be implied from the words " all the movable and immovable properties acquired jointly and separately by us till now, and those which we may be so acquiring in future and those which have devolved on us and those which we may yet be obtaining shall be held by us in our possession and under our control ".
We are unable to read any such implication in those words.
It is difficult to imagine how properties which were to be acquired in future could form the subject matter of a disposition in praesenti.
On the other band, the true purpose of this clause would seem to be to emphasise that the execution of the will does not affect the rights of the testators over their properties, and that is an indication the it is to operate as a will.
The matter appears to us to be concluded beyond all doubt by the terms of clause 3, which provides that the testators could alienate the properties jointly or severally.
If the properties were intended to be impressed with the character of joint property, an alienation by any 7 one of them singly would be incompetent.
In coming to the conclusion to which he did, the learned Judge in the Court below was very largely influenced by the fact that the will dealt with, not only the separate properties of the testators but also of their joint properties, and that there was one disposition as regards all of them.
But this reasoning is based on a misconception of the recitals in the will.
The will does not refer to any joint properties of the testators but to properties jointly acquired by them which is very different.
They would hold these properties as tenants in common, and their share therein would devolve as their separate properties.
It was further argued for the respondents that it could not have been the intention of Theyi Amma, one of the testators, to benefit the legatees under the will in preference to her own son, Kesavan Kaimal, and that, therefore, it must be held that she intended that her son who was the youngest of the testators should take all the properties.
But if Kesavan Kaimal could himself agree to bequeath his properties to those legatees, we see nothing unnatural in his mother also agreeing to bequeath her properties to them they being the heirs of the testators under the Marumakkat tayam Law.
Learned counsel for the respondents sought to rely on the subsequent conduct of the parties as showing that they understood the will as conferring a joint estate on the testators.
It was said that it was in that belief that Kesavan Kaimal was dealing with the properties of the other testators as his own, after their death.
It was also said that the conduct of the other members of the tarwad, including the plaintiffs, showed that they shared that belief.
And this was sought to be made out by reference to the proceedings in E. A. No. 320 of 1938 in section C. No. 480 of 1933.
The facts were that one Kunhunni Kaimal obtained a decree against Kesavan Kaimal in section C. No. 480 of 1933, and in execution of that decree, he brought some of the tarwad properties to sale, purchased them himself and got into possession.
The members of the tarwad then filed an application, E. A. No. 320 of 1938, under 0. 21, r. 100, for redelivery of the 8 properties to them on the ground that the decree and the sale proceedings were not binding on them, and that was dismissed.
In the order dismissing the application, the District Munsif observed that under the will dated February 10, 1906, Kesavan Kaimal had the power to transfer the properties.
This order was relied on in these proceedings as operating as res judicata in favour of the respondents; but that contention was negatived by the Courts below, and has not been repeated before us.
But these proceedings are now sought to be relied on as showing that the members of the tarwad did not dispute the title of Kesavan Kaimal to the properties which were dealt with by the will.
As against this, the appellant referred us to a partition deed dated May 16, 1915, and a mortgage deed dated March 4, 1926, to both of which Kesavan Kaimal was a party, in which be and other members of the family had understood the will in question as meaning that the testators held the properties covered by the will in separate ' and exclusive ownership.
Whatever value one might attach to the above considerations if there was any doubt or uncertainty as to the meaning of the will, when once it is held that the language thereof is clear and unambiguous, evidence of the subsequent conduct of the parties cannot be admitted for the purpose of limiting or controlling its meaning.
In our view, the terms of the will are clear, and the subsequent conduct of the parties sought to be relied on must be disregarded as wholly inadmissible.
We are accordingly of opinion that the will dated February 10, 1906, is what it purports to be a will, and nothing else.
It does not confer any rights inter se on the testators; it only vests the title to the properties disposed of by it in the legatees on the death of the testators.
In this view, the will must be held to be a testamentary disposition by the three testators of their properties operating on the death of each testator on his properties, and is, in effect, three wills combined in one.
A joint will, though unusual, is not unknown to law.
In Halsbury 's Laws of England, Hailsham 's Edition, Vol. 34, p. 17, para.
12, the law is thus stated: 9 " A joint will is a will made by two or more testators contained in a single document, duly executed by each testator, disposing either of their separate properties, or of their joint property.
It is not, however, recognised in English law as a single will.
It operates on the death of each testator as his will disposing of his own separate property, and is in effect two or more wills ".
There is a similar statement of the law in Jarman on Wills, 8th Ed., p. 41.
The following observations of Farewell J. in Duddell in re.
Roundway V. Roundway (1) are apposite: ". in my judgment it is plain on the authorities that there may be a joint will in the sense that if two people make a bargain to make a joint will, effect may be given to that document.
On the death of the first of those two persons the will is admitted to probate as a disposition of the property that be possesses.
On the death of the second person, assuming that no fresh will has been made, the will is admitted to probate as the disposition of the second person 's property. .
It was also argued for the respondents that the will might be construed as a mutual will, but that, in our opinion, is an impossible contention to urge on the recitals of the document.
A will is mutual when two testators confer upon each other reciprocal benefits, as by either of them constituting the other his legatee; that is to say, when the executants fill the roles of both testator and legatee towards each other.
But where the legatees are distinct from the testators, there can be no question of a mutual will.
It cannot be argued that there is, in the present case, a bequest by the testators to themselves.
There is nothing in the will to support such a contention, which would be inconsistent with the position taken by the respon dents that there was a settlement of the properties inter vivos converting separate properties into joint properties.
In this view, on the death of Kunhan Kaimal his properties vested in the legatees under the will dated February 10, 1906, and therefore neither Kesavan Kaimal nor his transferees under the deeds could lay any claim to them.
(1) , 592.
2 10 In the result, the appeals are allowed, the decrees passed by the High Court are set aside, and those of the Courts below are restored, with costs throughout.
Appeals allowed.
| Steel pipes and tubes (including blanks therefore) all sorts, whether rolled, forged, spun, cast, drawn, annealed, welded or extruded were dutiable under Item 26AA(iv) of the First Schedule to the .
The Department, however, sought to classify 'pipe fittings ' such as elbows, bends and reducers, manufactured by the appellants, from out of the steel pipes purchased from the open market on payment of excise duty, under Item 68 which was a residuary entry, on the ground that they were known in the market differently as pipe fittings, a totally different commercial commodity.
The appellants ' claim that the process undertaken by them did not amount to manufacture as the products turned out were nothing but pipes and tubes, and that they were being virtually asked to pay duty twice over on the same product, was rejected by the Appellate Tribunal.
Allowing the appeal under section 35L(B) of the Act, the Court, HELD: 1.
Unless the Department could establish that the goods in question could by no conceivable process of reason ing be brought under any of the tariff items, resort could not be had to the residuary item.
This has not been done in the instant case.
[62F] 2.1 The use of the words 'all sorts of ' and the refer ence to the various processes by which the excisable items could be manufactured set out in Entry 26AA(iv) are compre hensive enough to encompass all sorts of pipes and tubes.
[64F] 2.2 The expression "pipe fittings" merely denotes that it is a pipe or tube of a particular length, size or shape.
Pipe fittings do not cease to be pipes and tubes; they are only a species thereof.
In order to achieve 61 fully the purpose for which the pipes and tubes are manufac tured, it is necessary to manufacture smaller pieces of pipes and tubes and also to manufacture them in such a shape that they may be able to conduct liquids and gases, passing them through and across angles, turnings, corners and curves or regulating their flow in the manner required.
This is done by a process of forging, welding, hammering and so on applied to the longer tubes.
There is no change in their basic physical properties and there is no change in their end use.
They are merely intended as accessories or supple ments to the larger pipes and tubes.
It could not, there fore, be said that pipe fittings, though they may have a distinctive name or badge of identification in the market, were not pipes and tubes.
[63B C, 62G 63A, 64E] Indian Aluminium Cables Ltd. vs Union of India & Ors., ; , referred to.
No doubt "tubes and pipes" and "pipe fittings" fall under different sub items under the Harmonised Code as well as under the Customs Cooperative Council Nomenclature where two expressions are used in contrast and the sub classifica tion is more detailed.
That dichotomy could not be imported into the instant case where there was only one comprehensive and generic entry.
[65B C]
|
Civil Appeal No. 1501 of 1978.
Appeal by Special Leave from the Judgment and Order dated 18 1 1978 of the Delhi High Court in Civil Misc.
Petition No. 1120 W of 1977 and 109/78 in Writ Petition No. 585/77.
Soli J. Sorabjee Addl.
General, Girish Chandra for the Appellant.
13 549 SCI/78 736 section T. Desai, B. P. Maheshwari and Suresh Sethi for Respondent No. 1.
A. K. Sen and Vineet Kumar for Respondent No. 2.
ORDER An ad interim order of stay passed by the High Court of Delhi has been challenged before us in this appeal.
We should have hesitated to interfere with an interlocutory order following the usual practice in this Court.
But, where repercussions are incalculable and the basis of the direction; though interlocutory, is obscure, the ends of justice dominate and we may interfere if public interest so dictates.
Here is an order of the Company Law Board under sec.
408(1) of the , which gives a wealth of facts and a variety of reasons to support an ultimate direction which runs thus: "Since all the three conditions referred to in sub section (1) of sec.
408 of the , are established on the facts and circumstances of the case, the Company Law Board hereby appoint officers for three years, in addition to the existing directors of the company: 1.
Shri B. M. Kaul, Member, Railway Board (Retd.) 5 J 4 Jawahar Nagar, Jaipur.
Shri A. K. Mazumdar, Chief Secretary, Orissa Govt.
(Retd.) 26/2, Dover Road, Apartment No. 4, Calcutta 19. 3.
Shri P. K. Choksi, Senior Partner, Price Water house Pest & Co., B 4, Gillander House, Calcutta 1. 4.
Shri section K. Mitra, President, Institute of Cost & Works Accounts of India, 14 A/6 Western Extension Area, Karol Bagh, New Delhi 5. 5.
Shri P. A. section Rao, Formerly President of the Institute of Company Secretaries of India, C 7/7, Vasant Vihar, New Delhi.
Shri M. C. Bhatt, Joint Secretary, Govt.
of India (Retd.) B 22, Defence Colony, New Delhi 24. 7.
Shri Triloki Nath Sharma, Business Executive, 247, Mohan Nagar, G. T. Road, Sahibabad, Ghaziabad (U.P.) 737 The Company Law Board direct further under sub section (6) of sec.
408 of the Act that Shri B. M. Kaul will act as Chairman of the Board of Directors of the Company.
In accordance with the order passed by the Delhi High Court on 24th August, 1977, referred to hereinbefore the implementation of this order will be subject to any order that may be passed by the Delhi High Court in the matter pending before it." This order, which inducted seven additional directors was based on the ground that the affairs of the company in question "are being conducted in a manner which is prejudicial to the interests of the company and to public interest." The High Court, after hearing counsel on both sides, passed a laconic order that: "We consider that the proper order to be made, in view of the circumstances of the case, is to stay the operation of the order of the Company Law Board, dated 17th December, 1977, except as regards Shri P. K. Choksi, Shri section K. Mitra and Shri P. A. Rao, and also to direct that the said three gentlemen will not vote at the meetings of the Board of Directors till the disposal of the writ petition.
We order accordingly.
" A company of considerable financial dimensions and involved in operations using public resources as investment, naturally becomes the concern not merely of the Company Law Board but also of the economic process of the country.
The specialised body with responsibility to watchdog corporate process, is the Company Law Board.
When it investigates and reaches a definite conclusion and makes a consequential direction, it is entitled to prima facie respect unless there are glaring circumstances to the contrary.
We do not wish to make any observations on the merits of the matter since the High Court is seized of the case.
It may well be that the order of the Board may be vitiated by infirmities, legal or other.
It may also be that the reasoning of the Board and the factual foundation for it is sound.
In such situations, acting at an interlocutory stage, the benefit of reasonable doubt belongs to the specialised body.
Of course, as stated earlier, if there are good grounds to strike down the order, certainly the High Court has jurisdiction to stay its operation.
However, we find nothing stated in the order itself indicating why the High Court prima facie thought it necessary substantially to stay the operation of the Company Law Board 's order of induction of seven persons as directors.
Nor have we any light regarding the total eclipse of four directors and the partial eclipse of the other three.
Unfortunately, the inscrutable face of a sphinx does not go well with the judicial process.
Whatever might have been 738 the basis of the High Court 's order we do not make any comments thereon we are inclined to nullify the interim stay.
Our inclination is explained by the prefatory observations we have earlier made in this order.
To expatiate more may prejudice one side or the other.
To indicate this much is obligatory to explicate ourselves.
There was some argument at the Bar about an order under sec.
18AA of the Industries (Development and Regulation) Act, 1951, and its impact upon the order impugned before us.
Maybe, by virtue of that appointment, the entire company comes under the control of the authorised person appointed under that provision.
It is not for us to explore here the effect and import of the order of the Central Government under section 18AA and we desist from doing so.
All that we need do and that we can do in the present appeal is to allow it so that the Company Board 's direction in regard to seven additional directors will come into full force until the final decision of the High Court.
We allow the appeal.
We may make it clear that the learned Additional Solicitor General did assure the court that nothing which will stultify the two writ petitions before the High Court will be done by the Company Law Board or the Central Government.
We hope the High Court will dispose of the case very expeditiously.
S.R. Appeal allowed.
| The appellant runs a hotel in which meals are served to non residents also in the restaurant located in the hotel.
The sales tax authorities treated a portion of the receipts as representing the price of foodstuffs served and levied tax.
The High Court affirmed the view of the sales tax authorities.
On the question whether the transaction constituted sale of foodstuffs.
Allowing the appeals ^ HELD. 1.
Service of meals to non residents in the restaurant of 'the appellant is not taxable under the Bengal Finance (Sales Ta%) Act 1941, as extended to the Union Territory of Delhi.
This is so whether a charge is imposed for the meal as a whole or according to the dishes separately ordered.
[562 F; 2.
In State of Punjab vs M/s. Associated Hotels of India ; this Court held that there was no sale when food and drink were supplied to guests residing in the hotel.
The Court pointed out that the supply of meals was essentially in the nature of a service provided to the guests and could not be identified as a transaction of sale.
This Court declined to accept the position that the Revenue was entitled to split up the transaction into two parts, one of service and the other of sale of foodstuffs.
If that be true in respect of hotels, a, similar approach seems to be called for on principle in the case of restaurants.
Like the hotelier, a restaurateur provides many services in addition to the supply of food.
He provides furniture and furnishings, linen, crockery and cutlery, and he may add music, an area for floor dancing and in some cases a floor show.
The classical legal view being that a number of services are concomitantly provided by way of hospitality, the supply of meals must be regarded as ministering to a bodily want or to the satisfaction of a human need.
No reason has been shown for preferring any other view.
[562 B, 560 F G, 562 C] State of Punjab vs M/s. Associated Hotels of India Ltd. ; applied.
M/s. Associated Hotels of India Ltd., Simla vs Excise and Taxation Officer Simla not approved.
Municipal Corporation of Delhi vs Laxmi Narain Tandon and Another not approved.
Crisp vs Pratt [1639] Cro.
Car 549, Parker vs Flint [1699] 12 Mod.
254 Newton v .
Trigg 3 Mod.
327, Saunderson vs Rowles Electa B. 558 Merrill vs James W. Hodson , and Mary Nisky vs Child Company SO A.L.R. 227 referred.
|
Civil Appeal No. 151 of 1981.
Appeal by Special Leave from the Judgment and Order dated 16.8.1969 of the Addl.
Judge (Revisions) Sales Tax, Saharanpur in Revision Appln.
No. 1688/78.
J. Ramamurthi and Miss R. Vaigai for the Appellant.
section C. Manchanda.
B. P. Maheshwari and Suresh Sethi for the Respondent.
The Judgment of the Court was delivered by TULZAPURKAR, J.
This appeal by special leave raises the question whether hypodermic clinical syringes could be regarded as "glass ware" under Entry No. 39 of the First Schedule to U.P. Sales Tax Act, 1948 ? The facts giving rise to the question lie in a narrow compass.
The appellant firm (hereinafter called the assessee) manufactures and sells hypodermic clinical syringes.
For the assessment year 1973 74 the assessee filed a return disclosing net U.P. sales of such syringes at Rs. 95,065.
The disclosed turnover was accepted by the 296 Sales Tax Officer, Sector III Muzaffarnagar, but as regards the rate of tax the assessee contended that the clinical syringes in respect of their turnover of Rs.91,513 up to November 30, 1973 should be regarded as an unclassified item and taxed at the rate of 3 1/2% or at 4% as "hospital equipment and apparatus" under Entry 44 of the First Schedule to the Act and on the turnover of Rs. 3,552/ for the period from December 1, 1973 to March 31, 1974 at the rate of 7% as an unclassified item.
The Sales Tax Officer, however, treated the syringes as "glass ware" and taxed the entire turnover of Rs.95,065/ at the rate of 10% under Entry No. 39 of the First Schedule.
The said assessment was upheld in appeal by the Assistant Commissioner (Judicial), Sales Tax, Muzaffarnagar and also in revision by the Additional Judge (Revision), Sales Tax, Saharanpur on August 16, 1979.
It is this view taken by the assessing authorities as well as by the Additional Judge in revision that is being challenged by the assessee before us in this appeal.
It may be stated that up to November 30, 1973 there were two competing entries in the First Schedule to the U.P. Sales Tax Act so far as the item in question is concerned, namely, Entry 39 which ran: "Glass wares other than hurricane lantern chimneys, optical lenses and bottles" and Entry 44 which ran: "Hospital equipment and apparatus" and for an item falling under the former the rate of tax was 10% while under the latter the rate of tax was 4% and for an unclassified item the rate was 3 1/2%.
From December 1, 1973 onwards Entry 44 was deleted and, therefore, if the clinical syringes did not fall within Entry 39 it became an unclassified item under section 3A (2A) of the Act and the rate of tax was 7%.
In view of this position that obtained for the relevant periods during the assessment year 1973 74 the assessee had claimed before the assessing authorities that its turnover in respect of syringes for the period up to November 30, 1973 was liable to tax at 3 1/2% as an unclassified item or in the alternative at 4% as "hospital equipment" under Entry 44 and its turnover for the period from December 1, 1973 to March 31, 1974 was liable to be taxed at 7% as an unclassified item.
But, negativing its contentions the entire turnover was held to be taxable at the rate of 10% on the basis that clinical syringes fell within the expression "glass ware" occurring in Entry 39.
Counsel for the assessee contended before us that in the absence of any definition of "glass ware" in the Act that expression must be understood in the ordinary commercial parlance and not in any scientific and technical sense and if such test were applied to the instant case then clinical syringes manufactured and sold by the 297 assessee could never be regarded as "glass ware".
Counsel pointed out that the Revising Authority negatived the contention of the assessee in view of a decision of the Allahabad High Court in the case of Commissioner of Sales Tax vs section section R. Syringes and Thermometers but urged that the contrary view taken by the Orissa High Court in the case of State of Orissa vs Janta Medical Stores that thermometers, lactometers, syringes, eye glasses, etc.
do not come within the meaning of the expression "glass ware" in Entry No. 38 in the Schedule to the relevant Notification issued under the first proviso to section 5(1) of the Orissa Sales Tax Act, 1947 was correct.
In our view counsel 's contention has considerable force and deserves acceptance.
It is well settled that in interpreting items in statutes like the Excise Tax Acts or Sales Tax Acts, whose primary object is to raise revenue and for which purpose they classify diverse products, articles and substances resort should be had not to the scientific and technical meaning of the terms or expressions used but to their popular meaning, that is to say, the meaning attached to them by those dealing in them.
If any term or expression has been defined in the enactment then it must be understood in the sense in which it is defined but in the absence of any definition being given in the enactment the meaning of the term in common parlance or commercial parlance has to be adopted.
In Ramavatar Budhiaprasad, etc.
vs Assistant Sales Tax Officer, Akola the question was whether 'betel leaves ' fell within item 'vegetable ' so as to earn exemption from sales tax and this Court held that word 'vegetable ' had not been defined in the Act, and that the same must be construed not in any technical sense nor from the botanical point of view but as understood in common parlance and so construed it denoted those classes of vegetable matter which are grown in kitchen garden and are used for the table and did not comprise betel leaves within it and, therefore, betel leaves were not exempt from taxation: In Commissioner of Sales Tax, Madhya Pradesh vs Jaswant Singh Charan Singh the question was whether the item 'coal ' under Entry 1 of Part III of Second Schedule to Madhya Pradesh General Sales Tax Act, 1958 included charcoal or not and this Court observed thus: "Now, there can be no dispute that while coal is technically understood as a mineral product, charcoal is manu 298 factured by human agency from products like wood and other things.
But it is now well settled that while interpreting items in statutes like the Sales Tax Acts, resort should be had not to the scientific or the technical meaning of such terms but to their popular meaning or the meaning attached to them by those dealing in them, that is to say, to their commercial sense.
" Viewing the question from the above angle this Court further observed that both a merchant dealing in coal and a consumer wanting to purchase it would regard coal not in its geological sense but in the sense as ordinarily understood and would include 'charcoal ' in the term "coal", and held that 'charcoal ' fell within the concerned Entry No. 1 of Part III of Schedule II of the Act.
Having regard to the aforesaid well settled test the question is whether clinical syringes could be regarded as "glass ware" falling within Entry 39 of the First Schedule to the Act ? It is true that the dictionary meaning of the expression "glass ware" is "articles made of glass" (See: Websters New World Dictionary).
However, in commercial sense glass ware would never comprise articles like clinical syringes, thermometers, lactometers and the like which have specialised significance and utility.
In popular or commercial parlance a general merchant dealing in "glass ware" does not ordinarily deal in articles like clinical syringes, thermometers, lactometers, etc.
which articles though made of glass, are normally available in medical stores or with the manufacturers thereof like the assessee.
It is equally unlikely that consumer would ask for such articles from a glass ware shop.
In popular sense when one talks of glass ware such specialised articles like clinical syringes, thermometers, lactometers and the like do not come up to one 's mind.
Applying the aforesaid test, therefore, we are clearly of the view that the clinical syringes which the assessee manufactures and sells cannot be considered as "glass ware" falling within Entry 39 of the First Schedule of the Act.
In our opinion, the view taken by the Orissa High Court in State of Orissa vs Janta Medical Stores (supra) is correct and the view of the Allahabad High Court in Commissioner of Sales Tax vs M/s S.S.R. Syringes and Thermometers (supra) is unsustainable.
In this view of the matter it is clear that the assessee 's turnover up to November 30, 1973 will fall under Entry 44 dealing with 299 "hospital equipment" and the same would be taxable at the rate of 4% and its turnover from December 1, 1973 to March 31, 1974 will be taxable at the rate 7% as an unclassified item and the assessment will have to be made accordingly.
In the result the appeal is allowed but there will be no order as to costs.
section R. Appeal allowed.
| Sub section 6 of section 5 of the U.P. Imposition of Ceiling on Land Holdings Act, 1960 as it stood at the relevant time provided that in determining the ceiling area any transfer of land made after January, 24, 1971 should be ignored and not taken into account.
Clause (b) of the proviso to sub section 6 which carves out an exception states that the sub section shall not apply to a transfer proved to the satisfaction of the Prescribed Authority to be in good faith and for adequate consideration under an irrevocable instrument.
Explanation II to this proviso places the burden of proof that a case fell within clause (b) of the proviso is on the party claiming its benefit.
On January 28, 1972 the donor gifted away certain lands in favour of his grand daughter, the appellant, daughter of a pre deceased son.
The gift having been made after the prescribed date, the Prescribed Authority ignored the gift for purposes of section 5 (6) of the Act.
On appeal, the District Judge gave a finding in favour of the appellant holding that the gift was bona fide having regard to the circumstances in which it was made and that it could not be held invalid merely because it was executed after the due date of January 24, 1971.
Purporting to follow one of its earlier decisions, the High Court held that a gift not being a transfer for consideration, had to be ignored under the provisions of the Act and that a gift being a gratuitous transfer made out of love and affection fell outside the purview of clause (b) of the proviso.
On behalf of the appellant it was contended that a gift could not be said to be a transfer without consideration because even love and affection may 240 provide sufficient consideration and hence the condition regarding adequate consideration would not apply to a gift.
Dismissing the appeal ^ HELD: It is a well settled rule of construction of statutes that where the definition of a word has not been given in an enactment it must be construed in its popular sense if it is a word of every day use, that is, the sense in which people conversant with the subject matter with which it deals would attribute to it.
Similarly if the language used is clear and explicit, the provision cannot be reduced to a nullity by reading into it a meaning which it does not carry.
[246B] In the instant case therefore, the word "transfer" being a term of well known legal significance with well ascertained incidents the legislature did not consider it necessary to define it separately.
It is used in the sense in which it is used in the Transfer of Property Act.
[245 G] C.I.T., Andhra Pradesh vs M/s. Taj Mahal Hotel, Secunderabad and Union of India vs Sankal Chand Himatlal Sheth and Anr. ; applied.
Keats vs Lewis referred to.
A conspectus of the meaning of the term "gift" is that it is a transfer which does not contain an element of consideration in any shape or form.
Where in respect of a gift there is a benefit measurable in terms of money the transaction ceases to be a gift and assumes a different colour.
Yet another salient feature of a gift is that love, affection and many other factors may constitute the motive for the gift and may enter into the intention of the donor making a gift, but none of these can be held to be legal consideration, as understood by law.
[251 G H; 252F] "Consideration" means a reasonable equivalent or other valuable benefit passed on by the promisor to the promisee or by the transferor to the transferee.
When the term consideration is qualified by the word "adequate" it makes it sufficient and valuable having regard to the facts, circumstances and necessities of the case.
[251 F] The word "transfer for adequate consideration" used in clause (b) of the proviso excludes a transaction, which is in the nature of a gift and which is without consideration.
[252 E] The argument that if the legislature intended to exclude gifts clause (b) of the proviso would have expressly said so and by not excluding it must be deemed to have included a gift is without force particularly in the face of the clear and unambiguous language of the proviso.
Every legislature has its own technical device to express its intendment.
Express exclusion is not the only method of conveying the legislative intent there may be other methods or devices by which a legislature expresses its intent; namely, by using expressions, which would exclude a particular transaction by necessary intendment.
This is what is done in enacting clause (b) of the proviso.
[252 G H] 241 The legislature has made its intention clear that a gift is excluded by qualifying the word "consideration" with the adjective "adequate".
[252 H] By using the word "adequate" to qualify the word "consideration" the legislature has ruled out gifts from the ambit of clause (b) of the proviso.
[253 C] The words "adequate consideration" clearly postulate that consideration must be capable of being measured in terms of money, having regard to the market price of the property, the value that it may fetch if sold, the value of similar lands situate in the vicinity and so on.
[253 B] The argument that since in the case of a gift there is no question of consideration, the words for "adequate consideration" in the 3rd part of clause (b) of the proviso are inapplicable and should, therefore, be ignored is opposed to the well known rule of interpretation that Courts, while interpreting statutes, must not legislate.
A legislature does not use words without any intention and every word used by the legislature must be given its due import.
The intention of the legislature in using the words "adequate consideration" is to exclude any transaction which is not for adequate consideration.
Even if a sale is bona fide if to but consideration is inadequate, the transaction would fall beyond the protection of clause (b) of the proviso.
[253 E F] Debi Saran Koiri and Anr.
vs Nandlal Chaubey and Ors.
A.I.R. 1929 Patna 591 and Kulasekaraperumal vs Pathakutty Thalevanar and Ors.
A.I.R. 1961 Madras 405 approved, The words "adequate consideration" carry a well known legal significance and, therefore, convey the same meaning and import in whichever statute they are used unless a contrary intention appears from the language employed by the legislature in a particular Act.
[256 E F] Tulsidas Kilachand vs The Commissioner of Income tax Bombay City I, ; , referred to Fateh Mohammed vs District Judge [Civil Writ Petition No. 915 of 1975, decided on 10 7 78] overruled.
An explanation merely widens the scope of the main section and is not meant to carve out a particular exception to the main section.
The words admission, acknowledgment, relinquishment or declaration used in Explanation I, do not absolve the party concerned from proving that the transfer should be executed in good faith and for adequate consideration.
[256 E F] However laudable the object of the donor in gifting the property to his grand daughter (particularly in the circumstances of this case) may be and whatever hardship might ensue to the donee by applying the provision, the gift fails if it does not fulfil the other essential requirements of the section.
The act was enacted to implement one of the Directives contained in Part IV of the Constitution and if in this process a few individuals suffer that cannot be helped, for, individual interests must yield to the larger interests of the community.
[258 D F] 242
|
Civil Appeal No. 2077 of 1972.
From the Judgment and Order dated 2 8 1971 of the Delhi High Court in Civil Writ No. 162 D of 1966.
E. C. Agarwala and R. N. Sachthey for the Appellants.
Lal Narain Sinha, K. K. Jain, section K. Gupta, Pramod Dayal and Bishamber Lal for the Respondent No. 1 455 Rameshwar Dial, Adarsh Fial, and A. D. Mathur for Respondents 2 3.
The Judgment of the Court was delivered by CHANDRACHUD, C. J.
This appeal by certificate raises an interesting controversy between the Sales Tax Authorities in the Union Territory of Delhi and those in Haryana, the question being as to which of the two authorities can assess respondent 1 to sales tax.
One of the reliefs sought by respondent 1 is that until the Sales Tax authorities of the two territories settle their differences, no sales tax should be levied or recovered from it since, it does not know to whom to pay the tax.
This controversy arises on the following facts.
Respondent 1 is a private limited company called K. G. Khosla & Co. (P) Ltd., having its head office in the Union Territory of Delhi at 1, Deshbandhu Gupta Road, New Delhi.
The company carries on business in Air Compressors and garage equipment which it manufactures in its factory at Faridabad, which was formerly in the State of Punjab and is now a part of the State of Haryana.
For the purposes of sales tax, respondent 1 is registered as a dealer both in the Union Territory of Delhi and in the State of Haryana.
It filed returns of sales tax with the sales Tax authorities in Delhi since, according to it, the sale of goods manufactured in the factory at Faridabad was being effected from Delhi by its head office.
The sales tax was being paid by the company under the Bengal Finance (Sales Tax) Act, 1941 as extended to Delhi, on the basis that the sales effected by the company were intra State sales within the territory of Delhi.
On November 24, 1965, however, the Sales Tax Assessing Authority at Gurgaon, which was then in the State of Punjab but which subsequently became a part of the State of Haryana, sent a notice to the company under sections 11 and 14 of the East Punjab Central Sales Tax Act, 1948 and rule 33 made thereunder that, in respect of the period commencing on April 1, 1961 and ending with the year 1964 65, the sales made by the company were liable to assessment in Haryana.
On March 13, 1968 an assessment was made by the Assessing Authority at Faridabad on the basis that the sales effected by the company were inter State sales liable to be assessed to sales tax under the Central Sales Tax Act, 74 of 1956.
An appeal against the order of assessment is said to be pending.
In the meanwhile, on February 14, 1966, the company filed a writ petition before the Punjab High Court Circuit Bench at Delhi which, after the recorganisation of States, was dealt with by the Delhi High 456 Court.
The Chief Commissioner of the Union Territory of Delhi and the Assessing Authority of the territory were impleaded as respondents 1 and 2 to the writ petition.
Respondent 3 was the State of Punjab and respondent 4 the Assessing Authority at Gurgaon.
Respondent 3 was later substituted by the State of Haryana.
The company contended by its writ petition that except the manufacturing of goods at the Faridabad factory, all of its activities, including those of booking of orders, sales, despatching of goods, billing and receiving of sale price were being done by and through the head office in Delhi and that no sales were effected by or from the factory.
Since, however, both the Sales Tax authorities, namely, at Delhi and Haryana, were demanding payment of sales tax on the same sale transactions, the company prayed by its writ petition that the High Court do resolve the controversy between the Sales Tax authorities of the two States and decide the question of their respective jurisdiction to assess its turnover.
The State of Haryana contended by its counter affidavit to the writ petition that the goods were manufactured by the company at Faridabad in pursuance of contracts of sale with outside purchasers, that those goods were appropriated to the various contracts of sale in the State of Haryana and that the movement of the goods from Faridabad to Delhi and onwards was caused as a necessary incident of the contracts of sale made by the company.
The sales, according to the State of Haryana had taken place at Faridabad during the course of inter State trade.
The Union of India, on the other hand, contended that the goods were brought from Faridabad to Delhi and were thereafter sold by the company to the various purchasers outside Delhi.
These sales according to the Union of India, were governed by the Bengal Finance (Sales Tax) Act, 1941 as extended to Delhi, their situs being the Union Territory of Delhi.
The Delhi High Court by its judgment dated August 2, 1971 allowed the writ petition and granted a declaration that the sales effected by respondent 1 which fell under section 3 (a) of the were liable to be assessed to inter State sales tax by the Sales Tax authorities at Faridabad since, those sales caused the movement of goods from Faridabad to Delhi.
The High Court added that the writ petition was confined to the goods manufactured at Faridabad in pursuance of pre existing contracts of sales and therefore, its judgment would have no application to the local sales 457 effected by respondent 1 at Delhi.
In the result, the High Court passed an order directing that the amount of tax which respondent 1 had wrongly paid to the sales tax authorities at Delhi on the inter State sales between 1.4.1961 to 30 9 1965 be transferred by the Sales Tax authorities at Delhi to the Sales Tax authorities at Faridabad.
The High Court has granted a certificate of fitness to the Union of India to file an appeal to this Court under Article 133, (1) (b) of the Constitution.
The question which arises for decision is whether the sales made by respondent 1 were made at Faridabad in the course of inter State trade as contended by the State of Haryana or whether they are intra State sales effected within the Union Territory of Delhi as contended by the appellant, the Union of India.
The answer to this question would depend upon the course and nature of transactions in relation to which the movement of goods was caused from Faridabad to Delhi and the terms of the contracts of sales which caused that movement.
But before adverting to those aspects of the matter, it would be necessary to notice the relevant provisions of the 74 of 1956 ("The Act").
Section 3 of the Act provides as follows: "3.
When is a sale or purchase of goods said to take place in the course of inter State trade or commerce: A sale or purchase of goods shall be deemed to take place in the course of inter State trade or commerce if the sale or purchase: (a) occasions the movement of goods from one State to another; or (b) is effected by a transfer of documents of title to the goods during their movement from one State to another.
" There are two Explanations to the section but they have no bearing on the appeal.
Section 9(1) of the Act provides as follows: 9.
"Levy and collection of tax and penalties (1) the tax payable by any dealer under this Act on sales of goods effected by him in the course of inter State trade or commerce, whether such sales fall within clause (a) or clause (b) of section 3, shall be levied by the Government of India and the tax so levied shall be collected by that Government 458 in accordance with the provisions of sub section (2), in the State from which the movement of the goods commenced.
" There is a proviso to section 9(1) to which it is unnecessary to refer since it has no application.
In the light of these provisions, what has to be considered is whether the sales effected by respondent 1 occasioned the movement of goods from one State to another State, which on the facts of the instant case would mean, from the State of Haryana to the Union Territory of Delhi.
It is only if a sale occasions the movement of goods from one State to another that it can be deemed to have taken place in the course of inter State trade or commerce within the meaning of section 3 (a) of the Act.
Clause (b) of section 3 is not relevant for our purpose.
The course and manner of its business have been set out by respondent 1 in paragraphs 3 and 27 of the writ petition in the following terms: "3.
Orders for the supply of goods from various parties are received by the petitioner 's company at its head office in Delhi.
The head office draws out a production programme and advises the factory to manufacture the goods in accordance therewith.
After the goods are so manufactured in the factory, the goods are collected by the head office and brought to its head office in Delhi.
From its head office the goods are despatched to various customers whether outside Delhi or in Delhi.
The price of goods is also received at the head office.
In short, the position is that excepting the manufacture of goods at the factory, all other activities including that of booking of orders, sales, despatching and billing and receiving of sale price are being carried out from the head office in Delhi." "27.
The goods manufactured in the factory are future goods within the meaning of the and the dispute does not relate to any ready goods.
" It is clear from these averments that goods were manufactured by respondent 1 in its factory at Faridabad, Haryana, in pursuance of specific orders received by its head office at Delhi.
The contracts of sales were made at Delhi and in pursuance of those contracts, goods were manufactured at Faridabad according to specifications mentioned in the contracts.
This, therefore, is not that type of case in which goods are manufactured in the general course of business for being 459 sold as and when offers are received by the manufacturer for their purchase.
Contracts of sales were finalised in the instant case at Delhi and specific goods were manufactured at Faridabad in pursuance of those contracts.
Those were "future goods" within the meaning of section 2(6) of the .
After the goods were manufactured to agreed specifications, they were despatched to the head office at Delhi for being forwarded to the respective customers at whose instance and pursuant to the contracts with whom the goods were manufactured.
The goods could as well have been despatched to the respective customers directly from the factory but they were sent in the first instance to Delhi as a matter of convenience, since there are better godown and rail facilities at Delhi as compared with Faridabad.
The despatch of the goods of Delhi was but a convenient mode of securing the performance of contracts made at Delhi.
Goods conforming to agreed specifications having been manufactured at Faridabad, the contracts of sale could be performed by respondent 1 only by the movement of the goods from Faridabad with the intention of delivering them to the purchasers.
Thus, the movement of goods was occasioned from Faridabad to Delhi as a result or incident of the contracts of sale made in Delhi.
It is true that in the instant case the contracts of sales did not require or provide that goods should be moved from Faridabad to Delhi.
But it is not true to say that for the purposes of section 3(a) of the Act it is necessary that the contract of sale must itself provide for and cause the movement of goods or that the movement of goods must be occasioned specifically in accordance with the terms of the contract of sale.
The true position in law is as stated in Tata Iron and Steel Co. Ltd., Bombay vs section R. Sarkar and others(1) wherein Shah, J. speaking for the majority observed that clauses (a) and (b) of section 3 of the Act are mutually exclusive and that section 3(a) covers sales in which the movement of goods from one State to another "is the result of a covenant or incident of the contract of sale, and property in the goods passes in either State" (page 391).
Sarkar, J. speaking for himself and on behalf of Das Gupta, J. agreed with the majority that clauses (a) and (b) of section 3 are mutually exclusive but differed from it and held that "a sale can occasion the movement of the goods sold only when the terms of the sale provide that the goods would be moved; in other words, a sale occasions a movement of goods when the contract of sale so provides" (page 407).
The view of the majority was approved by this Court in the Central 460 Marketing Co. of India vs State of Mysore,(1) State Trading Corporation of India vs State of Mysore(2) and Singareni Collieries Co. vs Commissioner of Commercial Taxes, Hyderabad.(3) In K. G. Khosla & Co. vs Deputy Commissioner of Commercial Taxes,(4) counsel for the Revenue invited the Court to reconsider the question but the Court declined to do so.
In a recent decision of this Court in Oil India Ltd. vs The Superintendent of Taxes & others(5) it was observed by Mathew, J., who spoke for the Court, that: (1) a sale which occasions movement of goods from one State to another is a sale in the course of inter State trade, no matter in which State the property in the goods passes; (2) it is not necessary that the sale must precede the inter State movement in order that the sale may be deemed to have occasioned such movement; and (3) it is also not necessary for a sale to be deemed to have taken place in the course of inter State trade or commerce, that the covenant regarding inter State Movement must be specified in the contract itself.
It would be enough if the movement was in pursuance of and incidental to the contract of sale (page 801).
The learned Judge added that it was held in a number of cases by the Supreme Court that if the movement of goods from one State to another is the result of a covenant or an incident of the contract of sale, then the sale is an inter State sale.
The decision in Tata Engineering & Locomotive Co. Limited vs The Assistant Commissioner of Commercial Taxes and Another(6) on which the Union of India relies, proceeds on a different consideration and is distinguishable.
The appellant therein carried on the business of manufacturing trucks in Jamshedpur in the State of Bihar.
The sales office of the appellant in Bombay used to instruct the Jamshedpur factory to transfer stocks of vehicles to the stockyards in various States after taking into account the production schedule and requirements of customers in different States.
The stocks available in the stockyards were distributed from time to time to dealers.
The transfer of the vehicles from the factory to the various stockyards was a continuous process and was not related to the requirement of any particular customer.
It was the stockyard incharge who appropriated the required number of vehicles to the contract of sale out of the stocks available with him.
Until such appropriation of vehicles was made, it was open 461 to the company to allot any vehicle to any purchaser or to transfer the vehicles from the stockyard in one State to a stockyard in another State.
At page 870 of the report, a statement occurs in the judgment of Grover, J., that it was not possible to comprehend how in the above situation it could be held that "the movement of the vehicles from the works to the stockyards was occasioned by any covenant or incident of the contract of sale.
" This statement is relied upon by the Union of India in support of its contention that the contract of sale must itself provide for the movement of goods from one State to another.
We are unable to read any such implication in the observation cited above.
At page 866 of the report, after referring to certain decisions, the Court observed that the principle admits of no doubt, according to the decisions of this Court, that the movement of goods "must be the result of a covenant or incident of the contract of sale.
" This decision may be usefully contrasted with another decision between the same parties, which is reported in State of Bihar & Anr.
vs Tata Engineering & Locomotive Co. Ltd.(1).
In that case the turnover in dispute related to the sales made by the company to its dealers of trucks for being sold in the territories assigned to them under the dealership agreements.
Each dealer was assigned an exclusive territory and under the agreement between the dealers and the company, they had to place their indents, pay the price of the goods to be purchased and obtain delivery orders from the Bombay office of the company.
In pursuance of such delivery orders trucks used to be delivered in the State of Bihar to be taken over to the territories assigned to the dealers.
Since under the terms of the contracts of sale the purchasers were required to remove the goods from the State of Bihar to other States, no question arose in the case whether it was or was not necessary for a sale to be regarded as an inter State sale that the contract must itself provide for the movement of goods from one State to another.
If a contract of sale contains a stipulation for such movement, the sale would, of course, be an inter State sale.
But it an also be an inter State sale, even if the contract of sale does not itself provide for the movement of goods from one State to another but such movement is the result of a covenant in the contract of sale or is an incident of that contract.
The decisions to which we have referred above show that in order that a sale may be regarded as an inter State sale, it is immaterial whether the property in the goods passes in one State or another.
The question as regards the nature of the sale, that is, whether it is an inter 462 State sale or an intra State sale, does not depend upon the circumstances as to in which State the property in the goods passes.
It may pass in either State and yet the sale can be an inter State sale.
The High Court was, therefore, right in holding that the sales in question are inter State sales and that the turnover of sales is assessable to sales tax under the at the instance of the Sales Tax authorities at Faridabad.
The amount of tax which respondent has wrongly paid to the Sales Tax authorities at Delhi on such inter State sales from 1 4 1961 to 30 9 1965 shall have to be transferred by the Sales Tax authorities at Delhi to the Sales Tax authorities at Faridabad, as directed by the High Court.
The appeal is accordingly dismissed but there will be no order as to costs.
N.K.A Appeal dismissed.
| A doctor and his brother riding a motor cycle were hit by a jeep driver and both were killed in November 1971, but the Motor Accident claims Tribunal delivered judgment on 5 9 1976 five years later awarding sums of Rs. 80,000/ and Rs. 73,500/ to the two sets of claimants.
The appeal in this case had to be filed on or before 19 1 77 but was actually filed 30 days later with an application for condonation under section 5 of the Limitation Act on the ground of Counsel 's mistake in the calculation of the period of limitation.
The High Court dismissed the appeal and the application.
Dismissing the special leave petitions, the Court ^ HELD: A company relies on its Legal Adviser and the Manager 's expertise is in company management and not in law.
There is no particular reason why when a company or other person retains a lawyer to advise it or him on legal affairs reliance should not be placed on such counsel.
Of course, if there is gross delay too patent even for layman or if there is in comprehensible indifference the shield of legal opinion may still be vulnerable.
If legal Adviser 's opinions are to be subjected by company managers to further legal scrutiny of their own, an impossible situation may arise.
Indeed Government, a large litigant in this country, may find itself in difficulty.
[697E F, 698 F G] This does not automatically secure a visa for the petitioner into this Court under article 136.
There must be manifest injustice or gross misappreciation or perversity in factual findings.
[698H] State of Kerala vs Krishna Kurup Madhava Kurup, A.I.R 1971 Kerala 211; approved.
State of West Bengal vs Howrah Municipal Corporation, ; ; referred to.
Observations 1.
The jurisprudence of compensation for motor accidents must develop in the direction of no fault liability and the determination of the quantum must be liberal, not niggardly since the law values life and limb in a free 695 country in generous scales.
Social justice, the command of the Constitution is being violated by the State itself by neglecting road repairs, ignoring deadly over loads and contesting liability after nationalising the bulk of bus transport and the whole of general insurance business.
[696C D] 2.
Medieval roads with treacherous dangers and total disrepair, explosive increase of heavy vehicles often terribly overloaded and without cautionary signals, reckless drivers crazy with speed and tipsy with spirituous potions, non enforcement of traffic regulations designed for safety but offering opportunities for systematised corruption and little else and, as a cumulative effect, mounting highway accidents, demand a new dimension to the law of torts through no fault liability and processual celerity and simplicity in compensation claims cases.
[696B C] 3.
If only no fault liability, automatic reporting by the police who investigate the accident in a statutory proforma signed by the claimants and forwarded to the tribunal as in Tamil Nadu and decentralised empowerment of such tribunals in every district coupled with informal procedures and liberation from court fees and the sophisticated rules of evidence and burden of proof were introduced easy and inexpensive, if the State has the will to help the poor who mostly die in such accidents law 's delays in this compassionate jurisdiction can be banished.
Social justice in action is the measure of the State 's constitutional sensitivity.
[696F G]
|
N: Criminal Appeal Nos.
642 656 of 1987.
From the Judgment and order dated 24.4.1987 of the High Court of Bombay in Criminal Appeal Nos. 495, 496, 497, 660, 635, 636 and 637 of 1986.
A.K. Sen, A.K. Goel, Ajit Pudussery and M.D. Rijhwani for the Appellants.
M.K. Banerjee, Solicitor General, A.K. Ganguli, Hemant Sharma, R.P. Srivastave, C. Ramesh and C.V. Subba Rao for the Respondents The Judgment of the Court was delivered by RAY, J.
Crl.
A. Nos. 644 45187 and Crl.
A. Nos.
642 43/87.
These appeals by special leave are against the judgment and order dated 24th April, 1987 passed by the High Court of Bombay dismissing criminal appeal No. 636 of 1986 filed by masters of two trawlers against their conviction and sentence and allowing appeal No. 496 of 1986 filed by Commander S.D. Baijal against the acquittal of accused Nos. 3 and 4, i.e. the charterer company and its managing Director and also releasing the trawlers.
The High Court convicted the accused Nos. 3 and 4 for contravention of sub section 6 of section 5 of the Maritime Zones of India Act, 1981 read with section 7 thereof and rule 16 of Maritime Zones of India Rules, 1982.
The High Court also ordered confiscation of the two trawlers and to vest the same in favour of Central Government under section 13 of the Maritime Zones of C, India Act The trawlers in questions which are foreign vessel are chartered by respondent Nos. 4 and 5 of this appeal for the purpose of fishing in Maritime Zone of India after obtaining permit under section 5 of Maritime Zones of India Act, in short M.Z.I. Act.
These two trawlers 11 along with three other pairs of trawlers were apprehended and seized 647 by Coast Guard Ship Vikram commanded by Commander S.D. Baijal for fishing operations in the exclusive economic zone of India in violation of the terms and conditions of permit and the letter of intent granted to that company by the Government of India under section 5(4) of M.Z.I. Act and in violation of Maritime Zones of India Rules, in short M.Z.I. Rules, 1982 as amended.
They were prosecuted by Additional Chief Metropolitan Magistrate, 8th Court Ballard Estate, Bombay on the complaint of Commander S.D. Baijal filed as authorised officer under section 19 of the M.Z.I. Act.
The masters of the two trawlers, the respondent Nos. 2 and 3 of this appeal were convicted and sentenced to pay a fine of Rs.60,000 and Rs.40,000 respectively and the other accused respondents Nos. 4 and 5 were acquitted and the trawlers and the fishes thereon were ordered to be released on payment of the detention charges.
Of the other three pairs of foreign trawlers chartered by Indian company for fishing in the Maritime Zone of India under permit granted under M.Z.I. Act which were seized and prosecuted, two pairs of trawlers with fishes thereon were ordered to be confiscated while one pair of these trawlers were directed to be released.
The masters of each pair of trawler were similarly convicted and sentenced to pay fine for violation of provisions of the said Act and the Rules framed thereunder.
The masters of the pair of trawlers filed criminal appeal No. 536 of 1986 against their conviction and sentence while the complaining Commander S.D. Baijal filed criminal appeal No. 496 of 1986 against the order of acquittal of respondent Nos. 4 and S i.e. the Managing Director of the Company and the Company and also against the release of the pair of trawlers in spite of conviction of the masters under section 12(b) of M.Z.I. Act by the Magistrate.
These two appeals were heard together and disposed of by a common judgment by the High Court, Bombay whereby criminal appeal No. 636 of 1986 was allowed in part by modifying the sentence of the masters of the trawlers from R.I. for one year to S.I. for 9 months and from R.I. for 9 months to S.I. for 6 months.
In criminal appeal No. 496 of 1986 the accused respondent Nos. 3 and 4 i.e. the Managing Director and the Company were convicted and sentenced to pay a fine of Rs.30,000 each and the trawlers were ordered to be confiscated with the fishes thereon or in case of sale of the same the proceeds thereof.
The High Court also held the masters of trawlers guilty under Rule 8(1)(q) and they were convicted under section 12(a) instead of section 12(b) of the M.Z.I. Act but maintained the sentence of penalty.
It is against this judgment and order the instant appeals on special leave have been filed.
648 Crl.
A. Nos.
646 47 of 87 and Crl.
A. Nos.
650 51 of 1987 arise out of a common judgment made by the High Court of Bombay on April 24, 1987 modifying in part the judgment and order made by the Additional Chief Metropolitan Magistrate, 38th Court, Ballard Estate, Bombay in Criminal Case No. 28 of 1984 passed in Criminal Appeal Nos. 497 and 637 of 1986.
The Additional Chief Metropolitan Magistrate convicted the masters of the trawlers i.e. accused Nos. 1 and 2 for contravening Rule 8(1)(G) read with Rule 16 and Section 20(b) of M.Z.I. Act and sentenced them to pay a fine of Rs.60,000 and Rs.40,000 respectively; in default of payment of fine to suffer R.I. for 1 year and 9 months respectively.
The Magistrate also made an order confiscating the trawlers JIANN TAI No. 301 and JIANN TAI No. 302 along with the fishing gear, equipments, stores, cargo and fish and directed that the same shall vest with the Central Government together with the proceeds of the sale of fish, if any, under order of the Court.
The Magistrate however.
acquitted accused Nos. 3 and 4, i.e the Charterer Company and its Managing Director.
A. No. 497 of 1986 filed by Cdr.
S.D. Baijal against the order acquitting accused Nos. 3 and 4, i.e. Charterer Company and its Managing Director was allowed by the High Court of Bombay and they were convicted and sentenced to pay a fine of Rs.30,000 each; in default to suffer S.I. for 4 months.
The order of confiscation of the two trawlers was also maintained.
A. No. 637/86 filed by the masters of the trawlers was dismissed with the modification that the conviction made u/s 12(b) was altered to 12(a) of M.Z.I. Act and the sentence of R.I. for 1 year and 9 months respectively in default payment of fine were modified as S.I. for h months and S months respectively.
A. Nos.
648 49 87 and Crl.
A. Nos. 652 53 of 1987 arise out of a common judgment passed in Criminal Appeal Nos. 495 and 634 of 1986 by the High Court of Bombay on 24th April, 1987 dismissing the appeals of the masters of the vessels and allowing the appeals filed on behalf of the prosecution.
All these aforesaid appeals were filed against the judgment and order passed by the Additional Chief Metropolitan Magistrate in Criminal Case No. 27 of 1984 wherein the Magistrate convicted and sentenced the masters of the trawlers with the imposition of fine of Rs.30,000 and Rs.40,000 on accused Nos. 1 and 2 respectively for contravening Rule 8(1)(g) and Rule 16 of the M Z I. Rules and also of the offence u/s 5 of the Act and imposing penalty u/s 12(b) of the M.Z.I. Act.
The Magistrate, however, acquitted the accused Nos. 3 and 4 i.e. the Charterer Company and its Managing Director and directed the release of the trawlers in favour of the masters of these trawlers.
The Crl.
A. No. 634 of 1986 filed by the 649 masters of the vessels was dismissed by the High Court of Bombay and the convinction and sentence u/s 12(b) of M.Z.I. Act was altered to one u/s 12(a) of the said Act.
A. No. 495 of 1986 filed on behalf of the prosecution was allowed and the accused Nos. 3 and 4 i.e. the Charterer Company as well as the Managing Director of the Company were convicted and sentenced to pay a fine of Rs.30,000.
The vessel as well as the fishing equipment were confiscated and the same were directed to vest in favour of the Central Government.
A. Nos.
654 55 of 87 and Crl.
A. No. 666 of 1987 arise out of a common judgment and order passed by the High Court of Bombay in Crl.
Appeal Nos. 660 and 635 of 1986.
These criminal appeals were filed against the judgment and order passed in criminal case No. 26 of 1984 made on 21st May, 1986 by the Additional Chief Metropolitan Magistrate, 38th Court, Ballard Estate.
The Magistrate convicted and sentenced the accused Nos. 1 and 2 i.e. the masters of the vessel to pay a fine of Rs.60,000 and Rs.40,000 respectively; in default to undergo R.I. for 1 year and 9 months respectively.
The Magistrate also made an order confiscating the trawlers BWA Sheng No. 21 and HQA Sheng No. 22 together with fishing gear, equipment, stores, cargo and fish therein.
A. No. 660/86 was filed by the Charterers.
A. No. 635 of 1986 was filed by the masters of the trawlers.
A. No. 635 of 1986 was dismissed with the modification that conviction and sentence passed u/s 12(b) of the M.Z.I. Act was altered to one u/s 12(a) of the said Act and Crl.
A. No. 660 of 1986 was dismissed with the modification that the imprisonment awarded in default of payment of fine imposed on the appellant was altered to S.l.
for 4 months instead of R.I for 6 months The order of confiscation of trawlers passed by the Magistrate was also confirmed.
The facts and issues involved in all these appeals being similar we dispose of these appeals by a common judgment.
It has been first contended on behalf of the appellant that at the time of apprehension of the trawlers no fish was found on board and the net was not wet.
There was no evidence that fish on board was seized nor there was any evidence to show what had happened to fish or who put the fish in the hold of the trawlers.
It has, therefore, been submitted that no presumption under section 22 of the said Act can be drawn that the trawlers were engaged in fishing within the exclusive economic zone of India in contravention of the provisions of the Act and the Rules framed thereunder.
This contention cannot be considered in this appeal under special leave as there has been concurrent findings 650 by the Chief Metropolitan Magistrate as well as by the High Court that there was fish on board which includes the hold of the trawlers.
The learned single Judge observed: "I am, however; unable to accept that for a minor omission to make entry of finding of the fish or the net in the officers ' diary can by itself negative the evidence of actual finding of the fish and the wet net on the deck and in my view the Authority quoted will have no application to the facts of this case." The High Court further held on a consideration of the evidence that the fishing trawlers were fishing in a depth within 40 fathoms and the finding of the Magistrate on this score is unassailable.
There has been violation of amended Rule 8(1)(q) of M.Z,.
I. Rules.
Condition 2(S) of the permit provides that any condition could be imposed which would be binding on the charterers, masters of the trawlers.
Rule 8(1)(q) requires the.
trawlers to fish at a depth of more than 40 fathoms.
This condition in the permit has been violated.
The masters and the charterers have been accordingly convicted under section 12(a) by the High Court as the violation is with regard to the area of operation specified in the permit and the penalty provided for the same is not exceeding Rs.5 lakhs.
As the Magistrate has exercised his discretion in sentencing the masters to pay lesser amount as penalty the High Court did not consider it proper to interfere with the same.
The main argument on behalf of the appellant was focussed on the vital question as to whether the words used in Section 13 of M.Z.I. Act "shall also be liable to confiscation" mandate that the foreign vessel used in connection with the commission of the offence as soon as the masters have been convicted under section 10 or 11 or 12 of the said Act, shall be confiscated or it is the discretion of the Court to order either for release of the vessel or for confiscation of the vessel together with the fish and other equipment, cargo and fishing gear considering the graveness of the offence.
It has been strenuously urged before us that the object of the M.Z.I. Act is to prevent poaching of fishes in the exclusive economic zone of India by foreign vessels without any licence or permit as required under the said Act.
Section 10 provides that where a vessel contravenes the provisions of Section 3.
the owner or master of the vessel shall be punishable for imprisonment for a term not exceeding 3 years or with a fine not exceeding Rs.15 lakhs; where the contravention takes place in an area within the exclusive economic zone of India, the punishment of fine will not exceed 651 rupees ten lakhs.
Similarly for contravention of licence the punishment of fine will not exceed rupees ten lakhs whereas in case of contravention of the provisions of the permit in respect of the area of operation or method of fishing, the punishment of fine will not exceed rupees five lakhs and in any other case the punishment of fine will not exceed rupees fifty thousand.
Referring to these provisions providing for different kinds of penalty, it has been urged that the confiscation of the vessel for contravention of the permit is not warranted in as much as the punishment provided for such contravention u/s 12 is much less than the punishment provided for in respect of contravention of licence as well as contravention of Section 3 of the said Act It has, therefore, been submitted that the provisions of Section 13 of the said Act are not mandatory but directory.
This leaves option to the Court to use its discretion to pass an order of confiscation of vessel in the facts and circumstances of the case.
The trawlers in question were chartered by the company and the company duly obtained permit under Section 5 of M.Z.I. Act, 1981 for fishing in economic zones of India at a depth of not less than 40 fathoms.
It has been submitted that it is not possible to fish at the said depth as depth varies from place to place and for such a minor infringement the penalty of confiscation of the vessel i.e. the fishing trawlers should not be awarded as the trawlers are fishing in the maritime zone of India under permit granted by the Government of India in favour of the Indian company which chartered those trawlers.
Moreover, different penalties are prescribed for different offences committed under sections 10, 11 and 12 of M.Z.I. Act according to the graveness of the offence.
The penalty of confiscation of the vessel under Section 13 if found to be imperative, the provisions will be arbitrary.
The words "shall also be liable to confiscation" in Section 13 of the said Act have to be interpreted as not mandatory in the context they have been used but discretionary.
It is left to the discretion of the Court to award this sentence of confiscation in case of commission of grave offences In support of this submission the decisions in State of Madhya Pradesh vs Azad Bharat Finance Co. & Anr., [1966] (Supp,) SCR 473; Indo China Steam Navigation Co. Ltd. vs Jasjit Singh, Addl.
Collector of Customs & Ors., ; and Superintendent and Legal Remembrancer of Legal Affairs to the Govt.
Of West Bengal vs Abani Maity, ; have been cited at the bar wherein similar words "shall also be liable to confiscation" have been used.
It is convenient to ascertain the legal position before deciding the question raised.
In the Statement of objects and Reasons of The Maritime Zones of India (Regulation of Fishing by Foreign Vessels) Act, 1981 it is stated: 652 "There has been an increase in poaching activities of foreign fishing vessels in our exclusive economic zone.
There have also been instances of foreign fishing vessels chartered by Indian parties indulging in such activities.
To prevent such activities and to protect our fishermen from the hardship caused by poaching vessels, it is necessary to regulate fishing activities by foreign fishing vessels and to provide for deterrent punishment by way of heavy fines and confiscation of foreign fishing vessels engaged in such activities.
Section 2(a) defines "exclusive economic zone of India" as meaning the exclusive zone of India in accordance with the provisions of section 7 of the Territorial Waters, Continental Shelf, Exclusive Economic Zone and other Maritime Zones Act, 1976.
According to Section 2(i) "owner" of vessel a includes any association of persons whether incorporated or not, by whom the vessel is owned or chartered; Section 2(j) defines "permit" meaning a permit granted or deemed to have been granted under section 5.
Section 3 states that subject to the provisions of the act, no foreign vessel shall, except under and in accordance with: (a) a licence granted under section 4; or (b) a permit granted under section 5, by the Central Government, be used for fishing within any maritime zone of India.
Section 4 provides for procedure for making application for licence by the owner of a foreign vessel for fishing within any maritime zone of India and grant of licence by Central Government.
Section 5 prohibits fishing by Indian citizens using foreign vessels within any maritime zone of India without obtaining permit and the procedure for grant of permit to charterer has been specified therein.
Sub section (6) of Section 5 of the Act provides: "A person holding a permit under this section shall ensure 653 that every person employed by him complies, in the course of such employment, with the provisions of this Act or any rule or order made thereunder and the conditions of such permit.
Section 10 says that for contravention of provisions of Section 3, the owner of master of the vessel: B (a) in case of contravention of territorial waters of India shall be punishable with imprisonment for a term not exceeding three years or with fine not exceeding rupees fifteen lakh or with both; and (b) in a case where contravention takes place in any area within the exclusive economic zone of India, shall be punishable with fine not exceeding rupees ten lakh.
Section 11 prescribes punishment of fine not exceeding rupees ten lakhs in case of contravention of licence.
Section 12(a) prescribes punishment of fine not exceeding rupees five lakhs where the contravention relates to the area of operation or method of fishing specified in the permit and; section 12(b) in any other case with fine not exceeding rupees fifty thousand.
Section 13 which is relevant for deciding these appeals is as under: "Confiscation of vessels, etc. (1) Where any person is convicted of an offence under section 10 or section 11 or section 12, the foreign vessel used in or in connection with the commission of the said offence, together with its fishing gear, equipment, stores and cargo and any fish on board such ship or the proceeds of the sale of any fish ordered to be sold under the second proviso to clause (a) or subsection (4) of section 9 shall also be liable to confiscation.
(2) the foreign vessel or other things confiscated under subsection (1) shall vest in the Central Government.
" Other provisions of the said Act are not necessary for our purpose and as such they are not stated herein.
Thus, it is crystal clear that the M.Z.I. Act has been enacted with 654 the object of preventing illegal poaching of fishes by foreign vessels including foreign vessels chartered by Indian parties by providing deterrent punishment to protect Indian fishermen.
The objects and reasons of the Act are to be taken into consideration in interpreting the provisions of the Statute and not the debates in Parliament on the Bill.
This has been observed by this Court in K.P. Varghese vs The Income tax officer, Ernakulam and another; , as under.
"Now it is true that the speeches made by the Members of the Legislature on the floor of the House when a Bill for enacting a statutory provision is being debated are inadmissible for the purpose of interpreting the statutory provision but the speech made by the Mover of the Bill explaining the reason for the introduction of the Bill can certainly be referred to for the purpose of ascertaining the mischief sought to be remedied by the legislation and the object and purpose for which the legislation is enacted.
This is in accord with the recent trend in juristic thought not only in western countries but also in India that interpretation of a statute being an exercise in the ascertainment of meaning, everything which is logically relevant should be admissible .
It is pertinent to mention that in interpreting a statute the Court has to ascertain the will and policy of the legislature as discernible from the object and scheme of the enactment and the language used therein.
Viewed in this context it is apparent that the said Act has been made with the sole purpose of preventing poaching of fishes by foreign vessels chartered by Indian citizens within the exclusive economic zone of India as specified in Rule 8(1)(q) of Maritime Zone of India Rules as amended in 1982 as well as in breach of the provisions of the said Act and the terms and conditions of permit issued under Section 5 of the said act.
Section 8 under the heading "Prohibition of fishing in Maritime zone of India by foreign vessels" expressly prohibits foreign vessels from fishing in maritime zone of India except under and in accordance with a licence or permit granted by Central Government and breach of the same has been made punishable under Section 10 of the said Act.
Similarly violation of the terms and conditions of licence and permit granted under Sections 4 or 5 is punishable under Sections 11 or 12 respectively of the said Act.
655 Section 13 of the said Act expressly says that besides conviction and sentence of the masters of the vessels and charterers, the vessel is little to be confiscated with fishes therein.
The contention on behalf of the appellants is that the words "shall also be liable to confiscation" as used in Section 13 of the said Act do not mean that it is mandatory to confiscate the vessel, i.e. the trawlers as the masters of the vessel have been convicted and sentenced to pay penalty under section 12 of the Act.
As various punishments have been provided for different types of offences, it is left to the discretion of the court to order confiscation of the vessel or to release the vessel In the case of Indo China Steam Navigation Co. Ltd. vs Jasjit Singh, Additional Collector of Customs & ors.
; , the foreign vessel 'Eastern Saga ' arrived at Calcutta from the Far East carrying a legitimate cargo.
On its arrival at the port the Custsoms officers on search found a hole in sailors ' accommodation which was covered with a piece of wood and over painted.
From the hole the Customs officers found out a large quantity of gold in bars valued at about Rs.23 lakhs.
The Additional Collector of Custom found that the vessel had clearly rendered itself liable to confiscation under section 167(12A) of because it had infringed the provisions of Section 52A of the said Act.
He also confiscated the gold bars under Section 167(8) read with Section 23A of the Foreign Exchange Regulations Act.
He also directed that 'Eastern Saga ' be confiscated u/s 167(12A) of the said Act and in lieu of confiscation he gave the owners of the ship an opportunity to pay a fine of Rs.25 lakhs within a period of 30 days of the despatch of the order.
This order was challenged in an appeal under special leave before this Court.
Section 167(12A) provides that if a vessel contravenes section 52A it "shall be liable to confiscation".
It was held: ".
The context seems to require that it is not open to the Customs to refuse to confiscate the vessel on the ground that there are any extenuating circumstances surrounding the contravention of Section 52A in a given case and that it would be unfair to impose the penalty of confiscation.
Two penalties are prescribed, one is the confiscation of the ship, and the other is a fine against the master.
In regard to the latter penalty it is within the discretion of the Customs Authority to decide what amount of penalty should be imposed; just as in the case of the first penalty it is not open 656 to it to say that it would not impose the penalty of confiscation against the offending ship, so in the case of the second penalty it is not open to it to say that it will not levy any penalty against the master .
It must be regarded as an elementary requirement of clause 12A that as soon as the offence referred to in column I of the said clause is proved, some penalty has to be imposed and clause 12A indicates that two penalties have to be imposed and not one there being discretion in regard to the penalty imposable against the master as regards the amount of the said penalty.
Therefore, we do not think it would be possible to take the view that if there are extenuating circumstances attending the contravention of Section 52A in a given case the Customs Authority can refrain from confiscating the vessel.
Confiscation of the vessel is the immediate statutory consequence of the finding that an offence under clause 12A is established, just as the imposition of some penalty against the master is another statutory consequence of the same contravention.
" Section 183 lays down that whenever an order of confiscation is made the Adjudicating Authority has to give the owner of the goods which includes the vessel, an opportunity to pay fine in lieu of confiscation.
Section 183 confers discretion on the Authority to determine what amount of fine should be imposed.
Section 11 of the M.P. Opium Act as amended where the words "shall be liable to confiscation" occurred came up for consideration before this Court in the case of State of Madhya Pradesh vs Azad Bharat Finance Co. Ltd . & Anr., [1966] (Supp) SCR 473 a truck hired by one Harbhajan Singh from the respondent company was found on search to have contained contraband opium.
Harbhajan Singh was tried for offences u/s 9A and 9B of the opium Act (10 of 1979).
The Magistrate while acquitting him on the ground that he had no knowledge, ordered for confiscation of the truck as the word "shall" occurring in Section 11 of the Act make it mandatory to confiscate.
Sessions Judge on revision affirmed the order of the Magistrate.
High Court on revision held that the words "shall be liable to confiscation" in section 11 did not mean that it was mandatory to confiscate.
It is the discretion of the Court whether to make an order for confiscation of the conveyance or not according to the facts and circumstances of the case.
This Court had observed that provisions of Section 11 of the Madhya Bharat Act are permissive and not obligatory.
Three factors 657 were taken into consideration in construing Section 11.
"First, it would be unjust to confiscate the truck of a person if he has no knowledge whatsoever that the truck was being used for transporting the opium.
Secondly, it is a penal statute and it should if possible be construed in such a way that a person who has not committed or abetted any offence should not be visited with a penalty.
Thirdly, if confiscation was obligatory under the section, the section may have to be struck down as imposing an unreasonable restriction under Article 19 of the Constitution .
Section 11 of the Madhya Bharat Act is not therefore to be construed as obligatory and it is for the court to consider in each case whether the articles in which the contraband opium is found or it being transported should be confiscated or not having regard to all the circumstances of the case.
" The earlier decision of this Court has not been referred to in this case.
Moreover what appears to have weighed with this court was that unless the owner of the truck knew that hirer used the truck in transporting contraband opium it would be unjust to confiscate the conveyance.
In the instant case the owner of the vessel has been defined in Section 2(i) of M.Z.I. Act as including any association of persons, whether incorporated or not, by whom the vessel is owned or chartered.
The charterer company and its Managing Director, have been convicted for contravention of Section S of the Act and Rule 8(1)(q) of the Rules framed thereunder and penalty has been awarded.
So the charterer who is deemed to be the owner of the trawler was held guilty of the offence of breach of terms of the permit.
In the case of Superintendent and Legal Remembrancer of Legal Affairs to the Govt.
Of West Bengal vs Abani Haity, ; the car belonging to Abani Haity was searched and contraband ganja was found concealed in the car owned by Abani Haity.
The Magistrate passed order of conviction and sentence against him but he did not make any order for confiscation of the car used for transporting the contraband article.
This matter ultimately came up before this Court in an appeal by special leave.
This Court held on an interpretation of Section 63(1) of the Bengal Excise Act, 1909 that the words "shall be liable to confiscaticn" as used in the context convey an absolute imperative to confiscate the vehicle used for transport of the contraband goods.
It was further held that it is incumbent on the Magistrate to pass, at the conclusion of the trial, in addition to the conviction and sentence.
an order of confiscation of the car by which such offence 658 has been committed.
The word "liable" occurring in many statutes, has been held as not conveying the sense of an absolute obligation or penalty but merely importing a possibility of attracting such obligation, or penalty even where this word is used along with the words "shall be".
Thus, where an American Revenue Statute declared that for the commission of a certain act, a vessel "shall be liable to forfeiture", it has held that "these words do not effect a present absolute forfeiture but only give a right to have the vessel forfeited under due process of law.
Similarly, it has been held that in Section 302, Indian Penal Code, the phrase, "shall also be liable to fine" does not convey a mandate but leave it to the discretion of the Court convicting an accused of the offence of murder to impose or not to impose fine in addition to the sentence of death or transportation for life.
" In the case of F.N. Roy vs Collector of Customs, Calcutta, ; the petitioner on the basis of a notification dated March 16, 1953 issued by the Government of India giving general permission to all persons to import into India from certain countries any goods of any of the description specified in the schedule annexed to the notification had placed an order with a company in Japan for supply of certain goods called in the trade Zip Chains.
The goods on arrival in Calcutta Port could not be cleared from the Port as a notice was issued by the Collector of Customs for Appraisement stating that the petitioner did not possess valid import licence for the goods and asked him to show cause why the same should not be confiscated and action taken against the petitioner u/s 167(8) of the .
The petitioner submitted a written answer stating that the Zip Chains imported by him were chains of the kind free import of which has been permitted and as such no licence to import them was necessary.
The petitioner was again asked by the Customs authorities whether he wanted a personal hearing.
The petitioner did not reply to the same.
The Collector of Customs made an order confiscated the goods and imposing a penalty of Rs.1,000 on the petitioner.
The petitioner thereafter filed an appeal which was dismissed on the ground that it was barred by limitation.
The petitioner thereafter made an application for quashing the order of confiscation of goods and imposing penalty on him.
This application was dismissed.
The petitioner thereafter filed an application under Article 32 of the Constitution challenging the validity of the order made against him.
The order of confiscation was questioned on the ground that it did not give the petitioner an option to pay a fine in lieu of confiscation, as provided in Section 183 of the .
The Imports and Exports (Control) Act, 1947 by Section 3(1) empowers the Central Government to make provisions for prohibiting, 659 restricting or otherwise controlling, in all cases or in specified classes of cases, the import, export, carriage coastwise or shipment as ships ' stores of goods of any specified description.
Sub section (2) of that Section provided that all goods to which any order under sub section (1) applies shall be deemed to be goods of which the import or export has been prohibited or restricted under section 19 of the Sea Customs, 1878, and all the provisions of that Act shall have effect accordingly, except that section 183 thereof shall have effect as if for the word "shall" therein the word "may" was substituted.
It was held that the goods imported into India contrary to the prohibition or restriction shall be liable to confiscation and any person concerned in such importation shall be liable to a penalty not exceeding three times the value of the goods or not exceeding one thousand rupees.
Under Section 167(8) of the the provisions of confiscation of goods illegally imported are mandatory.
The only question adjudicated before this Court was that as no option was given to pay fine in lieu of confiscation u/s 183 of the , the order should be held bad.
It was held that in view of the substitution of the word 'may ' in place of 'shall ' in Section 183 of the , it has been left to the discretion of the Customs Authorities to give or not to give the option to payfine.
It was held that it was obligatory on the part of the Customs Authorities to make an order confiscating the goods illegally imported in violation of the provisions of the Act.
The objects and reasons of the M.Z.I. Act are to prevent illegal poaching of fishes by foreign vessels chartered by Indian citizens in the exclusive economic zone of India at a depth less than 40 fathoms by providing deterrent punishment for contravention of the provisions of the Act in order to protect and safeguard the interests of India fishermen.
Chapter II of the Act deals with Regulation of fishing by foreign vessels.
The heading of Section 3 is "Prohibiting of Fishing in Maritime Zones of India by Foreign Vessels".
Thus Section 3 prohibits the use of foreign vessels for fishing within any maritime zone of India without licence or permit granted by the Central Government and also in accordance with the terms mentioned in the licence or permit.
Section 5 under the caption 'Prohibition of Fishing by Indian Citizens ' using foreign vessels clearly enjoins in sub section 6 that a person holding permit shall ensure that every person employed by him complies, in the course of such employment with the provisions of the act or any rule or order made thereunder and the conditions of such permit.
660 Rule 8(1) (q) inserted by M.Z.I Rules as amended in 1982 expressely prohibits fishing by foreign vessel chartered by Indian citizens in a depth less than 40 fathoms in any exclusive economic zone of India.
Infringement of this rule as well as violation of the provisions of Section 5 of the Act and the conditions of permit will make the masters of the vessel as well as the company and the Managing Director or Secretary of the Company chartering the vessel liable to conviction and sentence of penalty expressly provided in section 12 of the said Act.
Section 13 also in clear and unambiguous terms says that on the conviction of the person i.e. the master and the charterer of an offence under Sections 10 or 11 or 12 the vessel used in connection with the offence together with the fish on board such ship or the sale proceeds of the sale of such fish, stores, cargo shall also be liable to confiscation.
Viewed in the context the words "shall also be liable to confiscation" do not leave any discretion to the Magistrate or the court to make no order of confiscation of the vessel as soon as the masters of the vessel are convicted u/s 10 or 11 or 12 of the said Act.
The Legislative intent in making this provision is to provide deterrent punishment to prohibit fishing in exclusive economic zone of India by foreign vessel in infringement of the Act and the rules framed thereunder and the conditions of permit or licence.
Viewed in this context Section 13 mandates that on conviction of the master and charterer of an offence under Section 12 not only penalty of fine shall be imposed but the vessel used in or in connection with the commission of such offence has to be confiscated.
It is not open to the Court to consider the graveness of the offence and other extenuating circumstances and to make no order for confiscation of the offending vessel concerned.
Confiscation of the vessel is the immediate statutory consequence of the finding that an offence either under Section 10 or 11 or 12 has been proved and its master has been convicted.
Section 13 is thus mandatory and it is not open to the court as soon as the masters of the vessel is convicted of an offence under Section 12 and is awarded penalty to refrain from making an order confiscating the offending vessel.
For the reasons aforesaid we dismiss all these appeals and affirm the judgments and orders of the High Court.
The vessels have been detained in Bombay Port after apprehending them on July 26, 1984 and a huge amount has to be paid as port charges.
Considering the facts and circumstances of the case the Port Authorities at Bombay may consider if an application is made by the parties for exemption or partial exemption of the same favourably in view of the order of confiscation of the trawlers.
There will be no order for costs.
S.L. Appeals dismissed.
| % The suit premises consisting of lands and buildings were originally owned by Dewan Bishen Dass a former Prime Minister of the State of Jammu and Kashmir.
The appellants purchased the same from his successor in interest, Purnish Chandra by two sale deeds dated 12.7.1967 and 8.12.1967.
The State Government tried to resume the land for setting up a tonga and lorry stand, and for the purpose of development of the city, and eviction of the appellants was ordered by the Estate Officer under the provision of the Jammu and Kashmir (Public Premises Eviction of Unauthorised Occupants) Act, 1959 on January 5, 1968.
The Municipality took forcible possession of the land and demolished the buildings thereon on January 11, 1968.
The appellants filed a Writ Petition in the High Court assailing the action of the Municipality.
The High Court on 19.7.1969 allowed the writ petition and held that the appellants were not unauthorised occupants, possession can be taken only on payment of compensation and that Section 5 of the Jammu and Kashmir (Public Premises Eviction of Unauthorised Occupants) Act was ultra vires.
The State appealed to this Court and the judgment of the High Court was confirmed on the sole ground that as the Administrator of the Municipality had not complied with the provisions of section 238 and 239 of the Municipal Act the action taken by the Municipality in the matter of demolishing must be held to be entirely illegal and contrary to law, [State of Jammu and Kashmir vs 854 Haji Wali Mohammad & Ors., ; The Estate Officer thereafter issued a fresh notice under section 4(1) of the amended Jammu and Kashmir (Public Premises Eviction of Unauthorised Occupants) Act, 1959 intimating that the appellants were in unauthorised occupation of the public premises mentioned in the Schedule to the notice.
The appellants filed objections stating that they were not in unauthorised occupation of the said land nor have they encroached upon the same, and that the notice was wholly misconceived and illegal.
It was further contended that the land was purchased by the appellants from the legal heirs of Dewan Bishen Dass, that they had been in continuous possession, made various improvements on the land and built houses, and that the Estate Officer could not declare the person in possession as an unauthorised occupants after lapse of more than 80 years.
The Estate Officer rejected the objections and directed the appellants to handover possession of the premises including structures to the Administrator of the Minicipality.
The appellants preferred an appeal to the District Judge but the same was dismissed.
The order of the Estate Officer was also challenged in a writ petition by the appellants, but the same was dismissed by the High Court holding that the land being transferred by the legal heirs of Dewan Bishen Dass without obtaining prior permission of the Government or the competent authority in that behalf, the lease stood determined and that the notice under the Jammu and Kashmir (Public Premises Eviction of Unauthorised Occupants) Act, 1959 was in accordance with law.
In the appeal to this Court by Special Leave it was contended on behalf of the appellants: that the lands taken on lease by Dewan Bishen Dass cannot be deemed to have been taken under the provisions of Ailan No. 10 dated 7 Bhadon 1976 and as such section 12(A) and section 6 of the Land Grants Act 1960 are not applicable, that the lands could not be acquired without providing for adequate compensation to be paid to the Wasidar for the buildings, appurtenances and other improvements effected by him, that no compensation in fact was awarded and that the notice under section 4 of the Act was liable to be cancelled and quashed as being not in accordance with law.
855 The appeal was resisted by the State respondents, contending: that the appellants predecessor that is the original lessee was a Wasidar and that the lease was granted under Ailan No. 10 dated 7 Bhadon 1976, that section 12 A of the Jammu and Kashmir Lands Grants Act is applicable, that the transfer of the land had been made by the legal heirs of the original lessee Dewan Bishen Dass without the prior permission of the Government or any authority in that behalf, that the lease stood determined from the date of the transfer, the Government had the right of re entry on the land in accordance with the provisions of section 6 of the Land Grants Act, that the appellants are unauthorised occupants and consequently the notice under section 4(1) of the Jammu and Kashmir (Public Premises Eviction of Unauthorised Occupants) Act, 1959 is not illegal but is in accordance with the provisions of the said Act.
Allowing the Appeal, ^ HELD: 1.
Dewan Bishen Dass predecessor of the appellants was a Wasidar and the lands were wasidari lands leased out to him for the purpose of constructing buildings.
This lease was governed by Ailan No. 10 as well as by the Lands Grants Act, 1960.
[860F] 2.
The land was transferred by Purnish Chandra and others, legal representatives of the original lessee Dewan Bishen Dass, in favour of the appellants in contravention of the provisions of Section 12(A) of the Jammu and Kashmir Land Grants Act, 1960.
[860G] 3.
The notice under section 4(1) of the Jammu and Kashmir (Public Premises Eviction of Unauthorised Occupants) Act is in accordance with law and as such it is valid.
Under the Act as well as the rule the appellants are entitled to get compensation for the buildings and structures as well as of the improvements made on the land even though they are not entitled to get compensation in respect of the value of the land.
[860G H] 4.
The compensation in the instant case, has not been determined nor the same has been paid.
Appeal allowed.
Judgment and Order of High Court, set aside.
Matter remitted to the District Judge, who would expedite the determination of the compensation after determining the market value of the buildings, structures and all the improvements effected on the land.
[861A B]
|
Appeal No. 447(N) of 1973.
From the Judgment and Decree dated 18/19.4.1972 of the Gujarat High Court in First Appeal No. 184 of 1964.
V.A. Bobde and A.G. Ratnaparkhi for the Appellant.
S.C. Manchanda, Ms. A. Subhashini and K.C. Dua for the Respondents.
This appeal arises out of a certificate granted by this Court.
The facts necessary for the disposal of this appeal are that the respondent No. 1 Union of India fried a suit against the petitioner.
The petitioner is a public limited company.
Respondent No. 2 which is also a public limited company was the assessee company and the Union of India, respondent No. 1 had to recover a sum of Rs 1,32,400.87 p. from the said assessee company on account of arrears of income tax, excess profit tax, business profit tax.
To recover this amount a suit was filed on 15.2.58 impleading therein besides the present appellant said asses see company and others as defendants.
It was alleged that the assessee company by its letter dated 4.10.48 informed the plaintiff Union of 364 India that the arrears due from it be recovered from the petitioner on account of its commission.
It was alleged that for recovery of the said amount notice under Section 46(2) of the Income Tax Act was issued on two occasions, 9.11.48 and 30.3.51 and thereafter a notice under Section 46(5A) of the Act was issued against the appellant defendant No. 1 Kalyan Mills Ltd. on July 22, 1949.
It is alleged that the defendant No. 1 assessee company had informed the plaintiff Union of India by a letter dated October 11, 1948 that the tax dues recoverable from the assessee company be recovered from the amount which was owed by the appellant company to the assessee company.
It was inter alia asserted in the plaint that the debt due by the appellant company to the assessee company was shown to the credit of the assessee company in the accounts of the appellantcompany.
It is said that by two letters addressed by the appellant company on November 18, 1948 and December 3, 1948, it acknowledged and admitted its liability to the assessee company and had further more promised the plaintiff to pay the amount of tax dues against the debt due by the appellant company, to the assessee company.
The plaintiff proceeded to assert in view of the admissions made by the appellant company and the promise made by it to pay the tax dues from the debt due by it to the assessee company and having regard to the recovery proceedings undertaken by the competent authority under Sections 46(2) and 46(5A) of the Act, the plaintiff had priority over all other unsecured dues and that the appel lant company was under an obligation to pay the amount of Rs 1,32,400.87 p. under these circumstances.
It was also al leged by the plaintiff respondent (Union of India) that notwithstanding the fact that the debt due by the appellant company to the assessee company was shown to the credit of the assessee company in the books of accounts of the appellant company.
The appellant company had subsequent ly set up a false theory that the assessee company itself was liable to the appellant company and that the appellant company was not liable to pay dues of the assessee.
was in terms asserted that the version set up by the appellant company that it had a claim against the assessee company was a got up version and that it had been created merely with a view to defeat or delay the dues of the plaintiff.
It was contended that the appellant company had made a false coun ter claim against the assessee company with this end in view viz. to defeat and delay the claim of the plaintiff though it had taken no action in regard to the alleged counter claim.
A reference was made to a resolution passed by the appellant company on December 9, 1949 to transfer the debt due to the assessee company to the Managing Agents ' commis sion and suspense account.
No action was ever taken by the appellant company against the assessee company for the alleged claim arising in the context of damages in connec tion with the alleged malfeasance and misfeasance of the assessee company in the course of discharge of their func tions as the Managing Agents of the appellant company.
As admittedly the assessee company was functioning as the Managing Agents of the appellant company, it was contended that no action was taken for more 365 than three years and that no steps have been taken in this connection because the counter claim was a sham one.
It was further contended by the plaintiff respondent (Union of India) that the appellant company and the assessee company were colluding with each other with the object of defeating or delaying the payment to the plaintiff and that the adjustment entries made by the appellant company in its books of accounts were a step in this direction.
Such en tries or adjustments were illegal and they were not binding on the plaintiff in as much as the recovery proceedings had already been initiated against the assessee company and that the adjustments and entries were false as was evident from the admissions made by the appellant company in its letter to the plaintiff.
A charge of fraud and collusion has been levelled against the. appellant company, the assessee compa ny and the other defendants.
With these facts the respondent Union of India instituted the present suit seeking a decree against defendants 1 to 5 i.e. the present appellant and other defendants for an amount of Rs 1,32,400.87 p. with interest and a prayer also was made for appointment of receiver for recovery of the amount due from defendant No. 5 and its nominees other defendants.
Various defences were raised.
The suit was decreed by the trial court and the trial court held that the plaintiff respondent was not entitled to a money decree against the appellant company.
It also recorded a finding that the contention of the appellant company that it had a genuine and valid counter claim against the assessee company and that it had been adjusted was unfounded.
In the opinion of the learned trial court it was a unilateral act of the appellant company of adjusting the sum due to the assessee company against the alleged claim in respect of damages for malfeasance and misfeasance against the assessee company was invalid and was not binding on the plaintiff respondent.
It also held that the sum in ' excess of the tax claimed by the plaintiff from the assessee company was due to the assessee company against the appel lant and it held that the plaintiff was entitled to a decree for appointment of receiver to realise the dues of the plaintiff from the appellant company having regard to the fact that appellant company was indebted to the assessee company for a sum in excess of tax dues claimed by the plaintiff, and to that extent the suit was decreed.
The appellant preferred an appeal and a Division Bench of the Gujarat High Court by their judgment dated April 19, 1972 dismissed the appeal and maintained the decree passed by the trial court and on certificate against that judgment that the present appeal is filed in this Court.
The main contention advanced on behalf of the appellant was that a suit was filed by the respondent and the decree granted by the trial court was not permissible in law as it was con tended that such proceedings for appointment of receiver can only be contemplated in execution proceedings of a decree against the original debtor.
Facts are not in dispute.
The learned Judges of the High Court maintained the 366 decree by coming to the conclusion that the amount of com mission earned by the assessee company was admittedly with the appellant.
It was withheld by the appellant under the pretext that it had a counter claim against the assessee.
It is also not in dispute that under Sec.
46(2) a prohibitory order attaching the said money of the assessee company was issued.
It is also not in dispute that the machinery under Sec.
46(5A) of the Income Tax Act was no longer effective as the appellant set up a counter claim against the assessee company and there was no option for the Union of India but to obtain adjudication from the civil court and in this view of the matter the learned Judges of the Gujarat High Court maintained the decree passed by the trial court.
An objection was also taken about the form of the decree passed by the trial court which only was for the appointment of a receiver.
Admittedly no money decree could be passed against the appellant company except for the money lying in the deposits with them of the assessee company and it is for that purpose that the decree for appointment of receiver was made so that the amount be recovered and paid to the plain tiff Union of India.
Having considered the question and heard the learned counsel for the appellant, we see no error in the judgment passed by the learned High Court of Gujarat.
The appeal is therefore dismissed with costs.
A.P.J. Appeal dismissed.
| The appellant who was residing at House No. 546 situated at Dhantoli area at Nagpur was evicted from the said prem ises on the ground of bona fide requirement of its landlord.
Therefore he became an "evicted person" within the meaning of section 2(2) of the Central Province and Berar Letting of House and Rent Control Order, 1949.
Being a Government employee he applied to the House Allotment Officer that he may be allotted House No. 406/1 under clause 24A of the said Control Order simultaneously indicating that he was an "evicted person" also.
The premises came to his occupation on the orders passed by the House Allotment Officer in 1960.
The appellant retired from service on 1.5.1978.
On 10.9.1979 one Vijay Mude, one of the respondents, moved an application before the House Allotment Officer for vacating the appel lant from the premises on the ground that he has retired.
The said application under clause 25 of the Rent Control Order was contested by the appellant that it was not ap plicable as he was an "evicted person" under clause 2(2) of the Control Order.
Having lust before all courts, the appel lant came by way of special leave.
Allowing the appeal, the Court, HELD: 1.1 On the scheme of the different clauses it was only when a person was granted an allotment as a government servant, then and then only can clause 25 be invoked for his eviction.
In other cases, the clause 13 will be relevant.
The summary procedure of clause 25 could only be available in case of recovery of possession given to a person as a government servant on his retirement.
Indeed the provisions are peculiar.
Even if a government servant goes on earned leave or is transferred even then he becomes disentitled to remain in possession of the premises in question and would be liable to be evicted by virtue of clause 25 of the said Rent Control Order.
Being drastic in nature, therefore, one who seeks allotee 's eviction has to establish that the allotment to the person whose eviction is sought was made in the capacity 403 contemplated under clause 25.
Clauses 23, 24A and 25 of the Rent Control Order deal with three independent categories of persons and the summary procedure on proper construction of clause 25 was applicable only where allotment is given to a tenant as a tenant.
Clause 25 would not operate, if a Gov ernment servant happened to be an evictee and an allotment is made in that capacity.
In the instant case, on a con struction of the various documents and the evidence adduced in this appeal under these proceedings, it is clear that allotment was given to the appellant as an evictee who happened to be at the relevant time a government servant.
Therefore, on his retirement from the government service, he did not cease to be an evictee and did not come within the mischief of clause 25 of the said Control Order.
[408G 409 A 409H 410B] 1.2 Even if allotment is made to a person who is both an evictee as well as a government servant then if one of the grounds of the order namely, that he was a government serv ant ceases to exist on retirement, the other reason operates i.e. he was an evictee and still continues to be an evictee then the allotment would continue.
In this case even if it be held that it cannot be conclusively determined that the order of allotment was made in favour of the appellant only on the ground that the appellant was an evictee but it was made also on the ground that the appellant was a government servant, and after his retirement the other ground namely the allottee still being an evictee remained valid it can be sustained.
[410 C, F] State of Maharashtra & Anr.
B.K. Takkamore & Ors., ; , applied.
|
ppeals Nos.1367 and 1368 of 1966.
Appeals from the judgment and order dated April 19, 1966 of the Assam High Court in Civil Rules Nos. 171 and 236 of 1965.
Purshottam Trikamdas, A. K. Sen, Naunit Lal and Vineet Kumar,for the appellant (in both the appeals).
Sarjoo Prasad, Vinoo Bhagat and section N. Prasad, for respondent No. 4 (in both the appeals).
The Judgment of the Court was delivered by Hidayatullah, J.
These are two appeals by certificate against a common judgment of the High Court of Assam & Nagaland at Gauhati, dismissing two writ petitions filed by one Ranga Mahammad against D. N. Deka and B. N. Sarma, District & Sessions Judges respectively of Lower and Upper Assam Districts questioning the transfer of the former from Jorhat to Gauhati and the appointment and posting of the latter at Jorhat.
The petitioner had asked that the relevant notifications by the Government be quashed on the ground that the High Court alone could make the transfers and, in any event, the High Court had to be consulted and was not consulted before making the orders.
The petitions were heard and disposed of by a Divisional Bench consisting of Chief Justice Mehrotra and Mr. Justice section K. Dutta.
456 The Chief Justice held that there was no consultation with regard to the posting of Deka, that the transfer of Deka to Gauhati was irregular as the High Court alone could have ordered it, and that the transfer of B. N. Sarma was for a like reason also irregular.
Holding, however, that none of the District Judges could be said to occupy wrongly the office of District & Sessions Judge the High Court declined the writ of quo warranto.
The petitions ,were accordingly dismissed but without cost to the State Government.
In a separate but concurring judgment Dutta J. passed some scathing remarks on the action of the Government which he described as mala fide and actuated by some ulterior motive.
The High Court on being moved by the State Government granted certificates under article 132 of the Constitution on the ground that the judgment involved the interpretation of articles 233 and 235 of the Constitution.
By these appeals the State Government seeks the reversal of the opinion of the High Court on the interpretation of articles 233 and 235 of the Constitution.
The main contention is that the High Court was, in fact, consulted and, alternatively, that the power to transfer District Judges lies with the State Government and not with the High Court.
The State Government also asks for the expunction of the remarks of Mr. Justice Dutta above mentioned.
The State of Assam consists of only three Sessions Divisions.
They are : The Upper Assam Districts, the Lower Assam Districts and the Cachar Districts with Jorhat, Gauhati and Silchar respectively as the Headquarters of the three District Judges.
The Government of Assam with the concurrence of the High Court has made the Assam Judicial Service (Senior) Rules and rule 5 deals with recruitment.
In the Senior Judicial Service of the State there are two grades Senior Grade 1 and Senior Grade 11.
Grade I has four posts earmarked for Registrar, and three District Judges, and Grade 11 consists of the Additional District Judges.
The other posts are filled up by promotion from Grade II of the cadre or Grade I of the Assam Judicial Service (Junior) respectively.
On December 6, 1962 the Chief Justice appointed A. Rahman, District Judge, Gauhati, as Registrar and recommended that D. N. Sarma, Additional District & Sessions Judge be promoted and appointed District Judge, Gauhati, and in B. N. Sarma 's 457 place D. C. Sharma should be appointed as Additional District & Sessions Judge.
This proposal was accepted by Government.
It appears, however, that one Medhi, District Judge, was retiring and there was a vacancy.
It also appears from the correspondence which has been placed in our hands that there was some conversation on the telephone between the Chief Justice and the Finance Minister regarding R. C. Choudhury (Joint Secretary Legal Department) whom the Minister suggested for officiation in that vacancy and the Chief Justice expressed his willingness to receive him.
Later by a D. O. letter of January 5, 1963 the Chief Justice pointed out that the Rules did not permit this to be done.
He observed that not more than one third of the District Judges could be recruited from the Bar and as Choudhury could only be recruited as a member of the Bar there was no vacancy for direct recruitment.
The Minister who had accepted the telephone conversation as final and was about to issue the necessary notification replied that as Sharma was to continue for a year, Sharma 's post could be given to Choudhury and suggested reconsideration of the case.
The Chief Justice replied that .
the question was not of filling Sharma 's vacancy but Medhi 's and that Choudhury could not be transferred from the Legal Department to the Judicial Service because appointments as District & Sessions Judges must be made in accordance with article 233 of the Constitution.
He explained that an appointee had to be either a person in the Judicial Service of the Union or the State or an Advocate of 7 years ' standing and that persons from other services could not be transferred and appointed as District Judges.
He ended by saying that he could have taken Choudhury as a member of the Bar if the High Court recommended him, but Rule 5(ii) of the Assam Judicial Service (Senior) Rules, which reserved two out of the three posts for promotees, was in the way.
He declined to take Choudhury directly from the Legal Department and recommended D. N. Deka 'section name for promotion as District Judge to hold the charge at Jorhat.
This letter apparently nettled the Minister for his letter of the 24th January was worded somewhat strongly.
It seems that the Minister thought that the Chief Justice was retreating from a position previously accepted by him.
He traced the history of the correspondence and the conversations and expressed his amazement at the change of opinion.
He pointed out that the intention was not to transfer Choudhury but to give him judicial experience and observed that the constitutional provisions could not be invoked when Choudhury had put in seven years ' practice at the Bar and was qualified.
He concluded by saying "I am sorry, that I have to write all this but you will understand that I have no other alternative in view of the embarrassing situation created by your letter.
The Chief Justice wrote on February 7, 1963 observing that there 'was no question of adopting any non cooperating or embarrassing attitude and that all the points raised by the Minister could be ,explained satisfactorily.
He, however, saw no point in saying more as Choudhury 's name was to be dropped.
He enquired why Rahman was not released although it had no connection with the other matter and the appointment of the Registrar was entirely ,a matter for the Chief Justice.Facts
He requested that Ralunan be released soon and recommended the appointment of B. N. Sarma as District Judge in his place.
He also suggested section C. Barua 's transfer from Cachar to Gauhati.
In the vacancy of Medhi he recommended D. N. Deka 's promotion and recommended his transfer to Jorhat.
A notification was issued on June 22, 1963 appointing Deka as District Judge with Headquarters at Jorhat.
Nothing was done regarding the other recommendations.
On September 7, 1963, this is to say, exactly seven months after the ,last letter of the Chief Justice, the Secretary to the Government of Assam wrote to the Registrar that the State Government after careful consideration could not accept the suggestion about the transfer of Barua and proposed the transfer of B. N. Sarma to Jorhat and of Deka to Gauhati immediately as Jorhat was without a District Judge for months.
The Registrar, in reply, wrote back to say that the matter had become stale and the High Court would like to reconsider the matter.
Some letters were exchanged but they arc not on the file of this Court.
To this a final reply was given by the Government on February 19, 1964 informing the High Court that the recommendations were not acceptable except as to Deka 's transfer from Jorhat to Gauhati.
One Ranga Mahammad of Gauhati then filed two petitions in the High Court of Assam under articles 226 and 227 of the Con stitution questioning the jurisdiction of Deka, District & Sessions Judge, Jorhat.
He averred that the High Court was not consulted regarding Deka 's appointment and posting at Gauhati.
By the second petition he questioned the transfer of B. N. Sarma 459 to Jorhat.
On rule being issued in the two petitions, Government put in a detailed return pointing out that it had acted within its powers and had also consulted the High Court.
The High Court did not accept the submissions of the State Government.
The state Government now appeals.
Three questions arise and they are : (a) who is to order transfer of a District Judge the State Government or the High Court;(b) is the provision regarding consultation in articles 233 and 235 mandatory or directory and if the former, whether the High Court was not in fact consulted; and (c) should the remarks of Mr. Justice Dutta about the State Government be expunged ? The answer to the first question depends on a true construc tion of articles 233 and 235 of the Constitution.
The text of these articles is set out below.
* The question we have posed resolves itself into a question of a very different but somewhat limited form,, namely, whether the power to transfer District Judges is included in the 'control ' exercisable by the High Court over District Courts under article 235, or in the power of "appointment of persons to be and the posting and promotion, of district judges" which is to be exercised by the Governor under article 233, albeit in consultation with the High Court.
If the sense of the matter be the former, then the High Court and if the latter, the Governor, would possess.
that power.
The right approach is, therefore, to enquire what is meant by "posting" and whether the term does not mean the initial posting of a District Judge on appointment or promotion to a vacancy in the cadre, permanent or temporary
If this be the meaning, as the High Court holds, then the transfer of District Judges already appointed or promoted and posted in the cadre must necessarily be outside the power of the Governor and fall to be made by the High Court as part of the control vested in it by article 235.
"233.Appointment of district Judges.
(1) Appointments of persons to be, and the posting and promotion of, district Judges in any State shall be made by the Governor of the State in consultation with the High Court exercising jurisdiction in relation to such State.
(2) A person not already in the service of the Union or of the State Shall only be eligible to be appointed a district judge if he has been for not less than seven years an advocate or a pleader and is recommended by the High Court for appointment" "235.
Control over subordinate Courts.
The control over district courts and courts subordinate thereto including the posting and promotion of, and the grant of leave to, persons belonging to the judicial service of a State and holding any post inferior to the post of district Judge shall be vested in the High Court; but nothing in this Article shall be construed as taking away from any Such person any right of appeal which he may have under the law regulating the conditions of his service or as authorising the High Court to deal with him otherwise than in accordance with the conditions of his service prescribed under such law.
" 460 The history of the articles 233 237 in Chapter VI (Subordinate Courts) of Part VI of the Constitution, was considered elaborately in the State of West Bengal & Anr.vs Nripendranath Bagchi(1) and it was pointed out that the articles were intended to make the High ,Court the sole custodian of control over the judiciary except in so far as exclusive jurisdiction was conferred upon the Governor in regard to the appointment and posting and promotion of District ,Judges.
Therefore, unless the transfer of a District Judge can be said to be a "posting" of a District Judge the High Court must ,obviously enjoy the exclusive power.
In its ordinary dictionary meaning the word 'to post ' may denote either (a) to station some one at a place, or (b) to assign someone to a post, i.e. a position or a job, especially one to which a person is appointed.
See Webster 's New Word Dictionary (1962).
The dispute in this case has arisen because the State Government applies the first of the two meanings and the High Court the second.
In article 233 the word 'posting ' clearly bears the second meaning.
This word occurs in association with the words "appointment ' and 'Promotion ' and takes its colour from them.
These words indicate the stage when a person first gets a position or job ,and 'posting ' by association means the assignment of an appointee or promotee to a position in the cadre of district Judges.
That a special meaning may be given to a word because of the collocation of words in which it figures, is a well recognised canon of construction.
Maxwell ("On Interpretation of Statutes" 11th Edn.
p. 321 and the following pages) gives numerous examples of the application of this principle, from which one may be given here.
The words 'places of public resort ' assume a very different meaning when coupled with 'roads and streets ' from that which the same words would have if they were coupled with 'houses '.
In the same way the word 'posting ' cannot be understood in the sense of 'transfer ' when the idea of appointment and promotion is involved in the combination.
In fact this meaning is quite out of place because 'transfer ' operates at a stage beyond appointment and promotion.
if 'Posting ' was intended to mean 'transfer ' the draftsman would have hardly chosen to place it between "appointment" and "promotion" and could have easily used the word 'transfer ' itself.
It follows, therefore, that under article 233, the Governor is only concerned with the appointment, promotion and posting to the cadre of district Judges but not with the transfer of district Judges already ,appointed or promoted and posted to the cadre.
The latter is obviously a matter of control of district Judges which is vested in the High Court.
The word 'post ' used twice in the article clearly means the position or job and not the station or place and 'posting ' must obviously mean the assignment to a position or job and not placing in charge of a station or Court.
The association of words in article 235 is much clearer but as the word 'posting ' in the earlier article deals with the same subject matter, it was most certainly used in the same sense and this conclusion is thus quite apparent.
This is, of course, as it should be.
The High Court is in the day to day control of courts and knows the capacity for work of individuals and the requirements of a particular station or Court.
The High Court is better suited to make transfers than a Minister.
For however well meaning a Minister may be he can never possess the same intimate knowledge of the working of the judiciary as a whole and of individual Judges, as the High Court.
He must depend on his department for information.
The Chief Justice and his colleagues know these matters and deal with them personally.
There is less chance of being influenced by secretaries who may withhold some vital information if they are interested themselves.
It is also well known that all stations are not similar in climate and education, medical and other facilities.
Some are good stations and some are not so good.
There is less chance of success for a person seeking advantage for himself if the Chief Justice and his colleagues, with personal information, deal with the matter, than when a Minister deals with it on notes and information supplied by a secretary.
The reason of the rule and the sense of the matter combine to suggest the narrow meaning accepted by us.
The policy displayed by the Constitution has been in this direction as has been explained in earlier cases of this Court.
The High Court was thus right in its conclusion that the powers of the Governor cease after he has appointed or promoted a person to be a district Judge and assigned him to a post in cadre.
Thereafter, transfer of incumbents is a matter within the control of District Courts including the control of persons presiding there as explained in the cited case.
As the High Court is the authority to make transfers, there was no question of a consultation on this account.
The State Government was not the authority to order the transfers.
There was, however, need for consultation before D. N. Deka was promoted and posted as a District Judge.
That such a consultation is mandatory has been laid down quite definitely in the recent decision of this Court in Chandra Mohan vs U. P.(1) On this part of the case it is sufficient to say that there was consultation.
(1) 462 This brings us to the question whether the remarks of Mr. Justice Dutta should be expunged.
There is no doubt that the State Government and the High Court were working together till Choudhury 's name was suggested.
This is not the first time when cordiality was ruined because a Secretary 's name was suggested by the Minister and was not acceptable to the High Court.
The Assam High Court 's stand has been completely vindicated by Chandra Mohan 's case cited above.
In such matters the opinion of the High Court is entitled to the highest regard.
We have considered very carefully the question of expunging Mr. Justice Dutta 's remarks, The power to expunge is an extraordinary power and can be exercised only when a clear case is made out.
That another Judge in Mr. Justice Dutta 's place would not have made those comments is not the right criterion The question is whether Mr. Justice Dutta can be said to have acted with impropriety.
Although we think that Mr. Justice Dutta need not have made the remarks we cannot say that in making them he acted with such impropriety that the extraordinary powers should be exercised.
The appeals accordingly fail and are dismissed but there will be no order about costs.
| Held (Per MEHR CHAND MAHAJAN C. J., MUKHERJEA, VIVIAN BOSE and GHULAM HASAN JJ., section R. DAS J. dissenting) that the effect of the declaration in the case of The State of Bombay and Another vs F. N. Balsara(1) that clause (b) of section 13 of the Bombay Prohibition Act (XXV of 1949) is void under article 13(1) of the Constitution in so far as it affects the consumption or use of liquid medicinal or toilet preparations containing alcohol, is to render part of section 13(b) of the Bombay Prohibition Act inoperative, ineffective and ineffectual and thus unenforceable.
In view of the constitutional invalidity of a part of section 13(b) of the Bombay Prohibition Act having been declared void by the Supreme Court, that part of the section ceased to have legal effect in judging cases of citizens and must be regarded as null and void in determining whether a citizen was guilty of an offence.
The clear enactment of article 141 of the Constitution leaves no scope in India for the application of the American doctrine that "the declaration by a court of unconstitutionality of a statute which is in conflict with the Constitution affects the parties only and there is no judgment against the statute and it does not strike the statute from the statute book.
" In India, on the other hand, once a law has been struck down as unconstitutional by the Supreme Court, no notice can be taken of it by any Court because after it is declared as unconstitutional it is no longer law and is null and void.
The bare circumstance that a citizen accused of an offence under section 66(b) of the Bombay Prohibition Act is smelling of alcohol is compatible both with his innocence as well as his guilt.
The smell of alcohol may be due to the fact that the accused had contravened the enforceable part of section 13(b) of the Bombay Prohibition Act or it may well be due to the fact that he had taken alcohol which fell under the unenforceable and inoperative part of the section.
Therefore the onus was laid on the prosecution to prove that the (I) ; 79 614 alcohol of which he was smelling came under the category of prohibited alcohol within the meaning of the enforceable part of section 13(b).
Per section R. DAS J. : The declaration in the case of The State of Bombay and Another vs F. N. Balsara gives a citizen who has consumed or used liquid medicinal or toilet preparations a defence to a charge under section 66(b) read with section 13(b) of the Bombay Prohibition Act and it is for the accused person to prove the facts on which that declaration of law is based.
The State of Bombay and Another vs F. N. Balsara ([1951] S.C.R. 682) explained.
Kesava Madhava Menon vs The State of Bombay ([1951] S.C.R. 228) followed.
rangarao Bala Maize vs The State ([19511 54 Bom.
L. R. 325), In re Kanakasabai Pillai (A.I.R. 1940 Mad. 1) and Norton vs Shelby County ; referred to.
|
Civil Appeal No. 136 of 1958.
Appeal by special leave from the decision dated April 30,1956, of the Labour Appellate Tribunal of India at Lucknow in Appeeal No. III 45 of 1956, lip 919 arising out of the award dated February 6, 1956 of the State Industrial Tribunal, Allahabad, in reference No. 96 of 1955.
Ram Lal Anand, I.M. Lal and section section Sukla, for the appellants.
B. D. Sharma, for respondents Nos.
1 to 5.
C.P. Lal and G. N. Dikshit, for respondent No. 6. 1960.
February 9.
The Judgment of the Court was delivered dy SUBBA RAO, J.
This is an appeal by special leave against the order of the Labour Appellate Tribunal of India setting aside the award of the Industrial Tribunal, Allahabad, and directing the reinstatement of the workers in Kundan Sugar Mills at Amroha.
" Kundan Sugar Mills " is a partnership concern and owns a sugar mill at Amroha.
The respondents I to 4 were employed by the appellant as seasonal masons in the year 1946.
In 1951 the partners of the appellant Mills purchased the building machinery and other equipment of another sugar mill at Kiccha in the district of Nainital.
They closed the said mill at Kiccha and started it at Bulandshahr.
The new factory was named Pannijee Sugar & General Mills, Bulandshahr.
On January 19, 1955, the General Manager of the appellant Mills ordered the transfer of the respondents I to 4 from the appellant Mills to the new mill at Bulandshahr.
The said respondents through their representative, the fifth respondent, protested to the General Manager against the said transfer.
But the General Manager, by his letter dated January 22/24, 1955, insisted upon their joining the new mill at Bulandshabr.
But the said respondents did not accede to his request.
On January 28, 1955, the General Manager served a notice on the respondents 1 to 4 stating that they had disobeyed his orders and thereby committed misconduct under Standing Order No. L(a).
They were asked to submit their explanation as to why action should not be taken against them under the Standing Order.
The Labour Union, by its letter dated January 31, 1955, denied the charges.
On February 2, 1955, the General Manager made an order dismissing the respondents 1 to 4 from service on the ground that 117 920 they had disobeyed his order of transfer and thus they were guilty of misconduct under Standing Order No. LI(a).
The Labour Union thereafter raised an industrial dispute and the Government of U.P. by its notification dated November 7, 1955, referred the following issue for decision to the State Industrial Tribunal for U, P. at Allahabad: " Whether the employers have wrongfully and/or unjustifiably terminated the services of Sarva Shri Zia Uddin, Raisuddin, Shafiquddin and Ahmed Bux for refusal to obey the orders of tranfer to M/s. Pannijee Sugar and General Mills Co., Bulandshahr.
If so, to what relief are the workmen entitled.
" The State Industrial Tribunal by its order dated February 6, 1956, made its award holding that the management was within its rights and that, as the respondents 1 to 4 had disobeyed the order of the management, they were properly dismissed by the management.
The said respondents through their Union, respondent No. 5, perferred an appeal to the Labour Appellate Tribunal of India and the said Appellate Tribunal held that the management had no right to transfer the respondents 1 to 4 to the new factory and therefore the order dismissing them was illegal.
The management has preferred the present appeal against the said order of the Labour Appellate Tribunal.
Learned counsel for the appellant raised before us the following two questions: (1) The right to transfer an employee by an employer from one of his concerns to another is implicit in every contract of service; (2) the State Industrial Tribunal having held that both the concerns, i.e., the mills at Amroha and the mills at Bulandshahr, formed one unit, the Appellate Tribunal had no jurisdiction to set aside that finding under section 7(1) of the Industrial Disputes (Appellate Tribunal) Act, 1950.
To appreciate the first contention, it is necessary to notice the undisputed facts in this case.
It is true that the partners of the Sugar Mills at Amroha own also the Sugar Mills at Bulandshahr; but they were proprietors of the former Mills in 1946 whereas they purchased the latter mills only in the year 1951 and 921 started the same in Bulandshahr in or about 1955.
The respondents 1 to 4 were employed by the owners of the appellant Mills at the Sugar Mills at Amroha at a time when they were not proprietors of the Sugar Mills at Bulandshahr.
It is conceded that it was not an express term of the contract of service between the appellant and the respondents I to 4 that the latter should serve in any future concerns which the appellant might acquire or start.
It is also in evidence that though the same persons owned both the Mills they were two different concerns.
In the words of the Appellate Tribunal, the only connection between the two is in th identity of ownership and, but for it, one has nothing to do with the other.
It is also in evidence that an imported workman at Amroha is entitled to house rent, fuel, light and travelling expenses both ways, while at Bulandshahr the workmen are not entitled to any of these amenities.
The workmen at Amroha are entitled to benefits under the Kaul Award while those at Bulandshahr are not so entitled.
The General Manager, E.W.1, in his evidence stated that the interim bonus of the Bulandshahr factory as ordered by the Government in November 1955 was Rs. 1 1,000 while for Amroha it: was nearly 1 1/2 lacs ".
He also stated that "the bonus for last year at Amroha would be probably equal to II months ' wages and at Bulandshahr equal to about 4 or 5 days ' wages.
" It is also in evidence that apart from the disparity in the payment of bonus, the accounts are separately made up for the two mills.
It is clear that the two mills are situated at different places with accounts separately maintained and governed by different service conditions, though they happened to be under the common management; therefore, they are treated as two different entities.
The question of law raised in this case must be considered in relation to the said facts.
The argument of the learned counsel for the appellant that the right to transfer is implicit in every contract of service is too wide the mark.
Apart from any statutory provision, the rights of an employer and an employee are governed by the terms of contracts between them or by the terms necessarily implied therefrom.
It is 922 conceded that there is no express agreement between the appellant and the respondents where under the appellant has the right to transfer the respondents to any of its concerns in any place and the respondents the duty to join the concerns to which they may be transferred.
If so, can it be said that such a term has to be necessarily implied between the parties ? When the respondents 1 to 4 were employed by the appellant, the latter was running only one factory at Amroha.
There is nothing on record to indicate that at that time it was intended to purchase factories at other places or to extend its activities in the same line at different places.
It is also not suggested that even if the appellant had had such an intention, the respondents I to 4 had knowledge of the same.
Under such circumstances, without more, it would not be right to imply any such term between the contracting parties when the idea of starting new factories at different places was not in contemplation.
Ordinarily the employees would have agreed only to serve in the factory then in existence and the employer would have employed them only in respect of that factory.
The matter does not stop there.
In the instant case, as we have indicated, the two factories are distinct entities, situated at different places and, to import a term conferring a right on the employer to transfer respondents I to 4 to a different concern is really to make a new contract between them.
The decisions cited at the Bar do not in the least sustain the appellant 's broad contention.
In Alexandre Bouzourou vs The Ottoman Bank (1) the appellant was an employee of the respondent bank.
The bank transferred him from one branch to another branch of the bank situated in different towns.
As he refused to comply with the order of transfer, he was dismissed.
Thereafter, he filed a suit to recover damages from the bank for wrongful dismissal.
It was argued before the Judicial Committee that under the terms of his contract of service the sphere of his employment included only the head office and not the branches of the bank.
The evidence in that case showed that transfer was one of the ordinary incidents of the bank 's employment, being usually concurrent with an (1) A.T.R. , 119.
923 increase of salary and responsibility, and suggest no more than that the bank considered their officials convenience where possible.
Indeed the appellant therein did not even suggest in his correspondence thatthe transfer was a breach of his contract.
On these circumstances the Judicial Committee observed as follows at p. 119: " From the point of view of proper organization of their staff it is difficult to assume that the Bank would willingly agree that their employees should not be bound to serve outside the place where the contract was made except with their consent, and, in their Lordships ' opinion such a condition of the contract would require to be clearly established.
" The essential distinction between that case and the present one is that there the bank with its branches was one unit and the records clearly indicated that transfer was one of the ordinary incidents of service in the Bank.
In such circumstances when a person joined such a service, the Privy Council found it easy to imply a term of transfer.
That decision is therefore not of any relevancy to the present case.
In Mary (Anamalai Plantation 'Workers ' Union) vs Seliparai estate (2), labour was recruited in the plantations without any differentiation being made between factory and field workers and it had been the common practice prevailing for several years to transfer the factory workers to the field and vice versa, according to the exigencies of work.
A worker who had been appointed in such a plantation was transferred, owing to mechanisation in the factory, from the factory to the field.
The Labour Appellate Tribunal of India held that in the circumstances of the case the liability to be so transferred must be deemed to be an implied condition of service.
So too in Bata Shoe Company, Ltd. vs Ali Hasan (Industrial Tribunal, Patna & Ors.) (3) transfer of an employee in the circumstances of that, case from one post to another was held not to be an alteration of any service condition within the meaning of section 33 of the Industrial Disputes Act.
That was a case of a management employing a worker in one concern and transferring him from one post to (2) [1956] I.L.L.J. 343.
(3) 924 another.
In such a case it was possible to imply the condition of right of the management to transfer the employee from one post to another.
section N. Mukherjee vs Kemp & Co. Ltd. (4) was a case arising out of section 23 of the Industrial Disputes (Appellate Tribunal) Act, 1950.
The complaint there was that an employee was transferred by the management with a view to victimize him and that it amounted to alteration in the conditions of employment.
It was held that if an employer employed a person it was implicit in the appointment that he could be transferred to any place where the business of the employer in the same line was situated, unless there was an express condition to the contrary in the contract of employment.
In that case the worker was employed by Kemp & Co., Limited, which had branches in different places.
The decision assumed that the business was one unit and that the only question raised was that he should not be transferred to a place different from the place where he was actually discharging his duties.
These observations must be limited to the facts of that case.
It is not necessary to multiply the citation, for the other decisions relied on by the learned counsel for the appellant pursue the same reasoning followed in the aforesaid cases.
We have referred to the decisions only to distinguish them from the present case, and not to express our opinion as to the correctness of the decisions therein.
It would be enough to point out that in all the said decisions the workers had been employed in a business or a concern and the question that arose was whether in the circumstances of each case the transfer from one branch to another was valid or amounted to victimization.
None of these decisions deals with a case similar to that presented in this appeal, namely, whether a person employed in a factory can be trans ferred to some other independent concern started by the same employer at a stage subsequent to the date of his employment.
None of these cases holds, as it is suggested by the learned counsel for the appellant, that every employer has the inherent right to transfer his employee to another,place where he chooses to start (4) 925 a business subsequent to the date of the employment.
We, therefore, hold that it was not a condition of service of employment of the respondents either express or implied that the employer has the right to transfer them to a new concern stared by him subsequent to the date of their employment.
The respondents also relied upon a Government Order No. 6122 (ST)/XXXVI A 640(S) T 1953 in support of their contention that the order of transfer was bad.
By this Order the Government of U. P. had directed that the employment of seasonal workmen in all vacuum pan sugar factories in the Uttar Pradesh should be governed by the rules contained in the annexure thereto.
Rule I in the said annexure is to the following effect: " A worker who has worked or but for illness or any other unavoidable cause would have worked in a factory during the whole of the second half of the last preceding season will be employed in this season in such factory.
" This rule has no relevancy to the question raised in the present case.
This rule only enjoins upon an employer to employ a worker in the circumstances mentioned therein in the same factory in which he was working in the previous season during the next season also.
This does not prevent the employer to transfer an employee if he has the right to do so under the contract of service or under any statutory provisions.
We have already held that the employer in the present case has no such right.
Lastly it is said that the Appellate Tribunal had no jurisdiction to set aside the finding of the State Industrial Tribunal, as it did not give rise to any substantial question of law within the meaning of section 7(1) of the Industrial Disputes (Appellate Tribunal) Act, 1950.
The question raised was one of law, namely, whether the appellant had the right to transfer the respondents 1 to 4 from one concern to another.
A substantial question of law involved between the parties and that raised also an important principle governing the right of an employer to transfer his employees from one concern to another of his in the circumstances of this case.
We, therefore, hold that 926 a substantial question of law arose in the case and that it was well within the powers of the Labour Appellate Tribunal to entertain the appeal.
In the result the appeal fails and is dismissed with costs.
Appeal dismissed.
| A mortgage was executed by several persons on the 28th July, 1931.
The term of the mortgage, namely six years, expired in July 1937, the mortgagees instituted a suit in May 1938 and a decree was passed in March 1939.
An applica tion for relief under the U.P. Debt Redemption Act (XIII of 1940) was made on 11th April, 1942, and this application was resisted on the ground that S, one of the mortgagors, had been assessed to income tax and was therefore not an agri culturist, and the suit was not consequently "a suit to which the Act applied.
" The evidence showed that S was earning a monthly salary of Rs. 90 and that from February 1932 he had been assessed to income tax till the year 1936.
The High Court held, relying on the Full Bench ruling in Ketki Kunwar vs Ram Saroop (I.L.R. 1943 All. 35), that under sec.
21 of the Act the mortgage money could be recovered only from the mortgaged property and not personally and that the proviso to sec.
2 (9) of the Act had therefore no application and the question whether S was an agriculturist on the date of the mortgage was immaterial.
As S was admit tedly an agriculturist on the date of the suit, the High Court held that the judgment debtors were entitled to relief under the Act.
On appeal Held, that, assuming that the proviso to sec.
2 (9) applied and that in order to be a "loan" within the meaning of the Act it must be shown that the advance was made to one who at the date of the advance was an agriculturist, S was not an agriculturist on the 28th.
July, 1931, as the Indian Finance (Supplementary and Extending)Act of 1931 which reduced the taxable minimum from Rs. 2,000 to Rs. 1,000 was passed only in November 1931 and income tax was first deducted from his salary only in February, 1932.
Quaere: Whether the Full Bench decision in Ketki Kuwar vs Ram Saroop (I.L.R. 1943 All. 35) is correct.
|
Appeal No. 564 of 1967.
Appeal by special leave from the judgment and order dated August 9, 1966 of the Allahabad High Court in S.T.R. No. 563 of 1962.
P. Rana, for the appellant.
The respondent did not appear.
The Judgment of the Court was delivered by Grover, J.
The only point for decision in this appeal by special leave is whether the cloth manufactured by means of 942 looms worked by power can be regarded as "cloth manufactured by mills" for which sales tax was payable at the rate of 6 pies in a rupee in terms of the notification dated June 8, 1948 issued under section 3A of the U.P. Sales Tax Act, 1948.
The general rate of tax on sale of cloth otherwise was 3 pies per rupee.
The High Court on a reference made under the relevant provisions of the Act held that cloth manufactured by means of power looms could not fall under the term "cloth manufactured by the mills".
The approach of the High Court was that since the word "mills" had not been defined either by the Act or by the notification mentioned before the meaning of the words "cloth manufactured by the mills" must be considered according to the common understanding of mankind.
Reference was made to the dictionary meaning as given in Webster ' New International Dictionary, Vol. 2.
According to the dictionary two things were required (1) a building and (2) a machinery, in order to constitute a "mill".
The meaning of the word "machine", according to the dictionary in a popular and mechanical sense is. . . . more or less complex combination of mechanical parts, as levers, gears sprocket wheels, pulleys, shafts and spindles, ropes, chains, and bands, cams and other turning and sliding pieces, springs, confined fluids etc., together with the frame work and fastenings, supporting and connecting them, as when it is designed to operate upon material to change it in some pre conceived and definite manner. . .
According to the High Court looms which are merely worked by power would hardly fall within the meaning of the word "ma chine".
It has been pointed out that looms worked by hand or by power have not been shown by any evidence to be different.
It does not appear to have been disputed before the High Court that a building having looms worked by manual labour would not be a mill.
The court found no difference between building containing looms worked by manual labour or by power.
According to Words and Phrases, Vol.
27 the term "mill" in modem usage, includes various machines or combinations of machinery, as cotton mills, fulling mills, powder mills, etc., to some of which the term "manufactory" or "factory" is also applied.
In our judgment although the dictionary meaning may be of considerable assistance in deciding the point before us but what has to be seen is the context in which the word "mills" is used in the notification.
It is common ground that if cloth was manufactured by looms worked by manual labour the notification was not applicable and the rate of tax per rupee was 3 pies but if he cloth was manufactured by mills then the rate was to be 6 pies.
Thus cloth has been divided broadly into two categories, mill made and loom made.
It is quite obvious that loom made cloth would include all cloth manufactured on looms.
It is difficult to understand how the energy by which the looms are worked 943 would make any difference.
In other words whether the energy is supplied manually or by power cannot convert the essential character of the cloth, namely, its manufacture on looms.
As regards mill made cloth the actual process of weaving Is more or less automatic, preconceived and definite and it involves the functioning of machinery.
Ramchandra Iyer J., in Sri Dhandapani Power loom Factory, Erode vs Commercial Tax Officer, Coimbatore and Anr.(1), was right in observing that mill cloth is a familiar variety of cloth and everybody knows what a am is.
In popular language, a power loom cloth is never associated with a mill cloth.
According to Mcnaghten J., in Ellerker vs Union Cold Storage Co. Ltd., (2) a mill is building where goods are subjected to treatment or processing of some sort and where machinery is used for that purpose.
The illustrations given were: "The miller in his corn mill grinds wheat into flour, ,or oats into oatmeal.
So too, at a scutching mill the miller scutches the flax, to prepare it for spinning.
The saw mill, the rolling mill, the flatting mill, the puffing mill and the cotton mill are all buildings where goods are treated or subjected to some process.
" It must be remembered that the meaning of the word "mill" ,or "mills" would vary according to the context in which that word is used.
In the above case a company carried on a large ,cold storage business.
In some of the cold stores part of the building was used for the manufacture of ice for sale; others were ,only used for the purpose of storage.
It was held that all the premises fell within the meaning of the words in Schedule D Cases 1 and 11, r. 5(2) of the Income tax Act which were : Mills factories or other similar premises.
Counsel for the appellant has sought to argue that once the looms worked by power are used In a building the essential characteristics of "mills" would be satisfied and if any cloth is manufactured on those looms it would be cloth manufactured by " mills" within the meaning of the notification.
The falacy (1) 12 section T. C. 304.
(2) 944 in this argument is that by the same reasoning a building in which looms worked by manual labour are to be found would also have to be regarded as "mills".
This would be contrary to the accepted and popular meaning of handloom or power loom cloth and mill made cloth.
We are satisfied that the distinction which was kept in view when the notification was promulgated was between the aforesaid two categories or types of cloth involving essentially a difference in the process by which it was manufactured.
We would accordingly uphold the view of the High Court and dismiss the appeal.
There will be no order as to costs.
K. B.N. Appeal dismissed.
| The appellants were accused of an offence under, section 302 read with section 34 of the Indian Penal Code.
Apart from P who was injured in the incident there were, according to the prosecution, two other eye witnesses M and D who.
knew the appellants from before.
The names of the appellants were mentioned in the First Information Report but not their parentage.
The appellants, at the stage of inquiry, made an application to the Additional District Magistrate (Judicial) requesting that a test identification parade be held.
According to the appellants P knew them from before but not the other two alleged eye witnesses.
The Magistrate rejected the application on the ground that the charge sheet had, already been filed.
The same request made at the trial stage to the Sessions Judge was again rejected on the ground it was not bona fide.
The trial court, believing the eye witnesses, convicted the appellants.
The High Court upheld their conviction and did not accept their plea that the trial had been vitiated because they had been denied a test identification parade.
In appeal to this Court by special leave, HELD: As laid down by this Court in Perkash Chand Sogani 's case the absenceof test identification in all cases is not fatal, andif the accused person is well known by sight it would be waste of time to put him up for identification.
But if there is any doubt in the matter the prosecution should hold an identification parade specially if an accused says that the alleged eyewitnesses did not know him previously.
It may be that there is no express provision in the Code of Criminal Procedure enabling an accused to insist on an identification parade but if the accused ' does make an application and that application is turned down and it transpires during the course of the trial that the witnesses did not know the accused previously, the prosecution will, unless there is some evidence,, run the risk of losing the case on this point.
[924 G 925 C] Perkash Chand Sogani vs State of Rajasthan, Cr.
92/1956 dt.
15 1 1957, applied.
Sajjan Singh vs Emperor, A.I.R. 1945 Laj. 48, State of U.P. vs Jagnoo, A.I.R. 1962 All.
333, In re Sangish, A.I.R. 1948 Mad. 113, Awadh Singh & Ors.
vs Patna State, A.I.R. 1954 Pat 483, Provash Kumar Bose vs The King, A.I.R. 1951 Cal.
475, Kanta Prasad vs Delhi Administration ; 1221, referred to.
In the present case it could be said about D that his knowledge of the accused was very scant.
The claim of the other witness M that he had known the accused for about four years was not challenged in crossexamination.
Therefore on the facts of the case the trial of the appellants.
918 Could not be held to be vitiated because of the denial of test identification although the reason given by the Magistrate for refusing it, namely, that the cbarge sheet had already been filed, was wrong.
[925 G 926 C]
|
Appeal No. 347 of 1966.
Appeal by special leave from the judgment and order dated December 11, 1963 of the Allahabad High Court in second Appeal No, 3809 of 1958.
1008 C. B. Agarwala, O. P. Rana and Ravindra Rana, for the appellants.
Denial Latifi and M. 1.
Khowaja, for respondent No. 1.
The Judgment of the Court was delivered by Grover, J.
This is an appeal by special leave from a judg ment of the Allahabad High Court in which the principal question for determination is whether section 9 of the Indian , hereinafter called the "Act", which came into force on December 30, 1955, would be applicable to a suit which was pending on that date.
Respondent No. 1 was born on July 3, 1934.
He went to Pakistan in October 1950.
In March 1953 he obtained a visa from the Indian High Commission in Pakistan for coming to India.
He came to India on July 22, 1953.
On July 20, 1954 the period of authorised stay expired and respondent No. 1 applied for permanent settlement in India.
He, however. filed a writ petition in the High Court on July 15, 1954 but the same was dismissed on February 10, 1955 and respondent No. 1 was directed to file a suit.
He instituted a suit on May 6, 1955.
He claimed that he was born in India of parents who were residing here and that he was a minor when he was persuaded by two muslim youths to accompany them on a trip to Pakistan.
He went there without any intention to settle there permanently.
Later on he made efforts to return but due to certain restrictions he was unsuccessful.
He had no alternative but to obtain a passport from the Pakistan authorities in order to come to India.
He had thus never changed his nationality and continued to remain a citizen of India.
He sought a permanent injunction res training the Union of India, the State of U.P., District Magistrate, Kanpur and the Superintendent of Police.
Kanpur.
who were impleaded as defendants from deporting him.
The suit was contested and on the, pleadings of the parties the appropriate issues were framed.
The learned Munsif held that respondent No. 1 had gone to Pakistan for settling there permanently and had ceased to be an Indian citizen.
The suit was dismissed.
Respondent No. 1 appealed to the First Additional Civil Judge, Kanpur.
The Teamed Judge was of the view that respondent No. 1 had gone to Pakistan when he was a minor and when his father, who was his guardian, was in India.
By his departure to Pakistan, respondent No. 1 could not change his nationality.
Even on a consideration of the evidence it could not be held that he had shifted to Pakistan with the intention of settling there permanently.
His appeal was allowed and a permanent injunction as prayed was issued.
The Union of India and other appellants preferred an appeal to the High 1009 Court.
Before the High Court a preliminary objection was taken that the civil court had no jurisdiction to try the question whether respondent No. 1 had acquired the citizenship of Pakistan which matter had to be referred to the Central Government under Rule 30 of the Citizenship Rules framed under the Act.
This objection was repelled in view of another decision of the High Court according to which section 9 of the Act and Rule 30 could not operate retrospectively and affect pending litigation.
Before the High Court the finding that respondent No. 1 did not go to Pakistan with the intention of settling there permanently was not challenged by the appellants.
The High Court was inclined to agree with the lower appellate court that so long as respondent No. 1 was a minor he could not change his Indian domicile because his parents were domiciled in this country.
The High Court proceeded to say that since respondent No. 1 had spent one year in Pakistan after he had ' obtained majority it was necessary to investigate whether he had acquired, during that period, the citizenship of Pakistan.
An appropriate issue was framed and remitted to the lower appellate court for its determination.
The appellate court held that respondent No. 1 had not acquired the citizenship of Pakistan since it was not legally possible for him to do so for the reason that according to laws of Pakistan he could become a major only on attaining the age of twenty one.
On December 11, 1963 the High Court disposed of the appeal of the present appellants by dismissing it in view of the findings which were in favour of respondent No. 1.
Learned counsel for the appellants had contended before us that the civil court had no jurisdiction to decide the question of citizenship after the enforcement of the Act towards the end of the year 1955 in view of the provisions of Rule 30 of the Citizenship Rules 1956 promulgated in exercise of the Dower conferred by section 1 8 (2) (h) of the Act.
Section 9 is in the following terms "section 9(1) Any citizen of India who by naturalisation, registration or otherwise voluntarily acquires, or has at any time between the 26th January 1950 and the commencement of this Act, voluntarily acquired the citizenship of another country, shall upon such acquisition or, as the case may be, such commencement, cease to be a citizen of India : Provided that nothing in this sub section shall apply to a citizen of India who during any war in which India may be engaged, voluntarily acquires the citizenship of another country, until the Central Government otherwise directs.
1010 (2) If any question arises as to Whether, when or how any person has acquired the citizenship of another country, it shall be determined by such authority in such manner and having regard to such rules of evidence, as may be prescribed in this behalf.
" Rule 30 provides: "Authority to determine acquisition of citizenship of another country. (1) If any question arises as to whether, when or how any person has acquired the citizenship of another country, the authority to determine such question shall, for the purpose of section 9(2) by the Central Government.
The Central Government shall in determining any such question have due regard to the rules of evidence.
specified in Schedule III.
" The validity of the provisions of the Act and the Rules is no longer open to challenge. 'It has not been disputed by learned counsel for respondent No. 1 that after the enforcement of the Act and promulgation of Rule 30 the only authority which is competent to determine whether citizenship of Pakistan has been acquired by him is the Central Government.
But it has been strenuously urged that the suit in the present case had been instituted prior to the date of enforcement of the Act and therefore respondent No. 1 was entitled to get this question determined by the Courts and not by the Central Government.
In other words section 9 of the Act cannot be given 'retrospective operation so as to be made applicable to pending proceedings.
Thus the first point which has to be decided is whether section 9 either expressly or by necessary implication has been made applicable to or would govern pending proceedings.
The language of sub section
(1) is clear and unequivocal and leaves no room for doubt that it would cover all cases where an Indian citizen has acquired foreign nationality between January 26, 1950 and its commencement or where he acquires such nationality after it ; commencement.
The words "or has at any time between the 26th January 1950 and the, commencement of this Act.
voluntarily acquired the citizenship of another country" would become almost redundant if only prospective operation, is given to section 9 (1) of the Act.
This according to the settled rules of intepretation cannot be done.
It must be remembered that Article 9 of the Constitution provides that no person shall be a Citizen of India by virtue of article 5 or be deemed to be a citizen of India by virtue of article 6 or article 8 if he has voluntarily acquired the citizenship of any foreign State.
, This. means that if prior to the commencement of the Constitution a person ' had voluntarily acquired the citizenship of any foreign State he was not entitled ' to ' 'claim the citi 1011 zenship of India by virtue of articles 5 and 6 or 8.
This article thus deals with cases where the citizenship of a foreign State had been acquired by an Indian citizen prior to the commencement of the Constitution (vide Izhar Ahmed Khan vs Union of India) (1).
Article 11, however, makes it clear that Parliament has the power to make any provision with respect to the acquisition and termination of citizenship and all other matters relating to citizenship.
The Parliament could thus regulate the right of citizenship by law.
As pointed out in the above decision of this Court it would be open to the Parliament to affect the rights of citizens and the provisions made by the Parliamentary statute cannot be impeached on the ground that they are inconsistent with the provisions contained in other Articles, in Part II of the Constitution.
The Act has been enacted under the powers of the Parliament preserved by article 11 in express terms.
The Parliament had also legislative competence under Entry 17, List I of Seventh Schedule.
It could thus make a provision about the forum where the question as to whether a person had acquired citizenship of another country could be determined and this is what has been done by Rule 30.
The cases that would ordinarily arise about loss of Indian citizenship by acquisition of foreign citizenship would be of three kinds: (1) Indian citizens who voluntarily acquired citizenship of a foreign State prior to the commencement of the Constitution; (2) Indian citizens who voluntarily acquired the citizenship of another State or country between January 26, 1950 and December 30, 1955 i.e. the date of commencement of the Act and (3) Indian citizens who voluntarily acquired foreign citizenship after the date of commencement of the Act i.e. December 30, 1955.
As regards the first category they were dealt with by article 9 of the Constitution.
The second and the third categories would be covered by the provisions of section 9 of the Act.
If a question arises as to whether, when or how an Indian citizen has, acquired the citizenship of another country that has to be determined by the Central Government by virtue of the provisions of sub section
(2) of section 9 read with Rule 30 of the Citizenship Rules.
Counsel for respondent No. 1 has relied on a decision of a learned Single Judge of the Allahabad High Court in Abida Khatoon & Another vs State of U.P. & Ors.
(2) which was followed in the present case.
There it was observed that a litigant, after filing a suit, acquired a vested right to have all questions determined by the court in which the suit was filed and that the institution of the suit carried with it all the rights of appeal then in force.
Referring to the normal principle that an Act is ordinarily not retrospective, that vested rights are not disturb (1) [1962] Supp 3 section R. 235, 244, 245, (2) A.I.R. 1963 All.
1012 ed and that the jurisdiction of the civil courts in pending cases is not taken away by the creation of a new tribunal for the determination of a particular question, the learned judge held that there was nothing in the language or the scheme of the Act to suggest that Parliament wanted to depart from these principles.
We are unable to agree.
In our judgment from the amplitude of the language employed in section 9 which takes in persons in category (2) mentioned above the intention has been made clear that all cases which come up for determination where an Indian citizen has voluntarily acquired the citizenship of a foreign country after the commencement of the Constitution have to be dealt with and decided in accordance with its provisions.
In this view of the matter the entire argument which prevailed with the Allahabad court can have no substance.
It has next been contended that retrospective operation should not be given to section 9 of the Act because loss of Citizenship is a serious and grave matter and it involves loss of personal liberty.
Under article 21 no person can be deprived of his life or personal liberty except according to procedure established by law.
The procedure established by law before the commencement of the Act was the ordinary procedure of determination by civil courts whenever a question arose about loss of Indian citizenship by acquisition of citizenship of a foreign country or State.
It is suggested by learned counsel for respondent No. 1 that by giving retrospective operation to section 9 so as to make it applicable to pending proceedings the provisions of article 21 win be contravened or violated.
This would render section 9 of the Act unconstitutional.
It is somewhat difficult to appreciate the argument much less to accede to it.
If the Parliament was competent under article 11, which is a constitutional provision read with the relevant Entry in List 1, to legislate about cases of persons belonging to categories 2 and 3 referred to at a previous stage it could certainly enact a legislation in exercise of its sovereign power which laid down procedure different from the one which obtained before.
The new procedure would itself become the "procedure established by law" within the meaning of article 21 of the Constitution.
Therefore even on the assumption that loss of Indian citizenship with consequent deportation may involve loss of personal liberty within the meaning of article 21, it is not possible to hold that by applying section 9 of the Act and Rule 30 of the Rules to a case in which a suit had been instituted prior to the commencement of the Act there would be any contravention or violation of that Article.
In conclusion it may be mentioned that this could, in several cases, has consistently held that questions falling within section 9(2) have to be determined to the extent indicated therein by the 1013 Central Government and not by the courts.
Such matters as are not covered by that provision have, however, to be determined by the courts; (see Akbar Khan Alam Khan & Anr.
vs The Union of India & Ors.
(1) and lzhar Ahmed Khan vs Union of India) (2) and The Government of Andhra Pradesh vs Syed Mohd. Khan) (3).
In the present case the High Court ought not to have called for a decision of the lower appellate court on the issue of the plaintiff having acquired or not acquired the citizenship of Pakistan between July 3, 1952 and the date of his return to India.
The appeal is, consequently, allowed and the order of the High Court is hereby set aside.
It will be for the High Court now to make appropriate orders for determination of the aforesaid question by the Central Government after which alone the High Court will be in a position to dispose of the appeal finally.
Costs will abide the result.
G.C. Appeal allowed.
(1) [1962] 1 S.C.R.779.
(2) [1962] Supp. 3 S.C.R. 235.
(3) (1962] Supp. 3 S.C.R. 288.
LlISup C.1/69 2,500 31 3 70 GIPF.
| Applications, in which the claim of the workmen of the appellant for computation of their benefit in respect of over time work and work done on weekly off days, were entertained by the Labour Court, under section 33C(2) of the .
The Labour Court computed the amounts due to the various workmen and directed the appellant to make the payments.
Writ petitions filed by the appellant in the High Court challenging the decision of the Labour Court were dismissed.
In appeal to this Court, it was contended that : (1) The jurisdiction of the Labour Court to proceed with the applications was barred by the provisions of the ; and (2) Even if the applications were competent and not barred by the , they were time barred under article 137 of the .
HELD : (1) The is concerned with the fixing of rates rates of minimum wages, overtime rates, rates for payment of work on a day of rest and is not intended for enforcement of payment of wages.
Under section 20(1) of the, , in which provision is made for seeking remedy in respect of claims arising out of payment of less than minimum rates, or in respect of remuneration for days of rest, or for work on such days, or of wages at the overtime rates, the Authority is to exercise jurisdiction for deciding claims which relate to rates of wages, rates for payment of work done on days of rest and overtime rates.
The power under section 20(3) of the given to the Authority dealing with an application under section 20(1) to direct payment of the actual amount found due, is only an incidental power for working out effectively the directions under section 20(1) fixing various rates under the Act.
That is, if there is no dispute as to rates between the employer and the employee and the only question is whether a particular payment at the agreed rate is due or not, then section 20(1) of the would not be attracted at all, and the appropriate remedy would only be either under section 15(1) of the , or under section 33C(2) of the .
[59 D G; 60 B C] In the present case, there was no dispute by the appellant about the rates put forward by the workmen; and a pleading by the, appellant in one ' of the applications that the State Government had not prescribed any rates under the , did not mean that there was a dispute as to the rates claimed by the workmen.
Therefore, the remedy under section 20(1) of the could not have been sought by the workmen, and hence, the question of the jurisdiction of the Labour Court to entertain the applications under section 33C(2) of the industrial Disputes Act being barred because of the, provisions of the , could not arise.[61 A D] 52 (2) (a) Though the question of limitation under article 137 of the 1963Act was not raised either in the Labour Court or the High Court, it could be allowed to be raised in this Court, because, a question of limitation raises a plea of want of jurisdiction and is a pure question of law, when it could be decided on the basis of the facts on the record, and the respondents had sufficient notice of the question.
[55 G H] (b) Article 137 of the governs only applications presented to courts under the Civil and Criminal Procedure Codes.
The use of the word 'other ' in the first column of the article giving the description of the application as 'any other application for which no period of limitation is provided elsewhere in this division ', indicates that the Legislature wanted to make it clear that the interpretation put by this Court in Mulchand vs Gopal Bhiva; , , 722 723 on article 181 of the 1908 Act on the basis of ejusdem generis should be applied to article 137 of 1963 Act also, the language of which, is only slightly different from that of article 181 of the 1908 Act.
That is, in interpreting article 137 of the 1963 Act regard must be had to the provisions contained in the earlier articles.
These articles refer to applications under the Code of Civil Procedure, to two cases of applications under the Arbitration Act, and to two cases of applications under the Code of Criminal Procedure.
This Court in Mulechand & Co. Ltd. case held that the reference to applications under the Arbitration Act had no effect on the interpretation of article 181 of the 1908 Act and that, that article applied only to applications under the Code of Civil Procedure.
On the same principle, the further alteration made in, the articles in 1963 Act containing reference to applications under the Code of Criminal Procedure could not alter the scope of article 137 of the 1963 Act.
Moreover even the applications under the Arbitration Act were to be presented to courts whose proceedings are governed by the Code of Civil Procedure.
The further amendment including applications governed by the Criminal Procedure Code still shows that the applications must be to courts.
The alterations in the 1963 Act, namely, the inclusion of the words 'other proceedings ' in the long title to the 1963 Act, the omission of the, preamble and change in the, definition so as to include 'petition ' in word 'application ', do not show an intention to make article 137 applicable to proceedings before bodies other than courts such as quasi judicial tribunals and executive bodies.
[63 D H; 64 A G; 65 B F] In the present case, since the applications were presented to the Labour Court, a tribunal which is not a court governed by the Civil or Criminal Procedure Codes, the applications are not governed by article 137 of 1963 Act.
[65 G H] Manager Mls.
P. K. Porwal vs The Labour Court at Nagpur, 70 B.L.R. 104, overruled.
|
ivil Appeal No. 2041 of 1972.
From the Judgment and Decree dated 5.11.1971 of the Gujarat High Court in First Appeal No. 693 of 1964.
Harish N. Salve, S.A. Shroff, S.S. Shardul and R. Sasi prabhu for the Appellant.
S.T. Desai and M.N. Shroff for the Respondent.
The Judgment of the Court was delivered by SEN, J.
This appeal on certificate brought from the judgment and order of the High Court of Gujarat dated July 3, 1972 raises a question whether the High Court was justi fied in reversing the decision of the District Judge, Suren dranagar dated March 19, 1964 and restoring the order of the Charity Commissioner, Ahmedabad, State of Gujarat dated February 1, 1962 upholding that of the Deputy Charity Com missioner, Ahmedabad holding that the two temples of Sri Dwarkadhishji and Sri Trikamrayji at Patadi were temples as defined in section 2(17) of the Bombay Public Trusts Act, 1950 and therefore they fell within the purview of the expression 'public trust ' within the meaning of section 2(13) of the Act.
The facts giving rise to the appeal may be shortly stated.
The appellant is a former ruler of the semi juris dictional State of Patadi, one of the 17 States which en tered into a covenant for the formation of the United State of Kathiawad which on the reorganisation of the States became part of the former State of Bombay and now forms part of the State of Gujarat.
The Bombay Public Trusts Act, 1950 was extended to the Saurashtra region including the area that formed part of the erstwhile State of Patadi in the year 1952.
In Patadi, which was the seat of the former Ruler, there exist two temples known as Sri Dwarkadhishji Mandir or Haveli which is the main temple and adjacent to it there is the smaller temple known as Sri Trikamrayji Mandir.
Both these temples were constructed in the years 1872 and 1875 respectively by the then ruler of Patadi and the cost of construction was met from the Patadi State Treasury.
The temples are situated on the main road in Patadi and do not form part of the Darbargadh or the palace wherein the ruler and the members of the royal family used to reside, although there exists a passage leading to the public road presumably meant for the use of the ladies of the royal family.
In the Gram Panchayat records Sri Dwarkadhishji Mandir or Haveli stands in the name of the deities and the appellant is merely shown as a Vahivatdar.
Similarly, Sri Trikamrayji Mandir is shown as the property of the deities and the appellant as a Vahivatdar.
The two temples were exempted from payment of municipal as well as other taxes including the land revenue presumably because they were public tem ples.
This is one of the decisive factors in determining whether a temple is a private or a public one.
It appears that the management of the temples remained throughout with the successive ruler of Patadi but that circumstance would not afford an indicia of ownership of the temples being vested in the rulers.
On the contrary, the evidence shows that the temples were throughout treated as places of public religious worship and the public in general and members of the Vaishnava sect in particular were regu larly worshipping in the temples as a matter of right ever since the installation of the deities and also taking part in the ceremonial festivals like 'Hindola ' and 'Annakut ' and making cash offerings of bhends, gifts of ornaments etc.
The evidence also discloses that nobody was required to take permission from the darbar before entering into the temples for darshan and worship, nor was there any obstruction made at any point of time except after the initiation of the proceedings from the appellant or the manager and/or his servants to the use of the temples by the public as of right.
The cash offerings or 914 bhents, gifts or ornaments etc.
made by the general public and members of the Vaishnava sect were kept in a golak at Sri Dwarkadhishji Mandir under the exclusive control of the Vaishnava sect and remittances were made to Goswami Maharaj, Acharya of the Vaishnava sect at Ahmedabad.
Even after the Act was extended to the erstwhile State of Patadi, the public in general and the members of the Vaishnava sect in particular had unrestricted right of worship at the temples.
Sometime in the year 1958 the inhab itants of Patadi made a complaint to the Charity Commission er that there were several items of public religious and charitable endowments under the possession and control of the appellant and he was appropriating the income and prof its thereof.
Thereupon the Deputy Charity Commissioner suo motu initiated proceedings under section 19 of the Act and issued show cause notice to the appellant.
In answer to the show cause notice the appellant filed a reply admitting the existence of some public trusts and agreed to get them registered as such under section 18 of the Act and thereafter made an application.
He however pleaded that the two temples in question and the properties appurtenant thereto as well as a public library were private properties of the ruler and the members of the royal family and were not public trusts.
During the inquiry, several wit nesses were examined on behalf of the public as well as by the appellant.
The appellant however did not enter the witness box but examined his chief darbari NatwarIal Ranch hodlal.
The Deputy Charity Commissioner by his order dated January 29, 1960 on the totality of the evidence came to the conclusion that the shrines had been dedicated as places of public religious worship and were therefore temples within the meaning of section 2(17) of the Act and these temples togeth er with the properties appurtenant thereto have constituted public religious trusts within the meaning of section 2(13).
The appellant being dissatisfied carried an appeal to the Chari ty Commissioner who by his order dated February 1, 1962 upheld the finding reached by the Deputy Charity Commission er.
Aggrieved, the appellant made an application under section 72 of the Act before the District Judge, Surendranagar for setting aside the order of the Charity Commissioner.
The learned District Judge disagreed with the finding reached by the Charity Commissioner and held that there was no clear, cogent or satisfactory evidence of the existence of a public endowment.
He held that the question as to whether the temples in question were dedicated to the public depends upon inferences which could legitimately be drawn from facts not in 915 dispute and observed that a dedication to the public may be inferred from a long course of conduct of the founders and descendants.
However, it was abundantly clear that the temples which undoubtedly have been constructed by the then ruler of Patadi adjacent to the Darbargadh were meant for the worship of the family deities of the founder and his family.
The temples were constructed by the then ruler of Patadi, the management of which exclusively remained with the ruler for the time being, and there was nothing to show that they were intended for the use of the public at large for an indeterminate though restricted class of the Hindu community in general.
According to the learned District Judge, the mere fact that the public was allowed access to the temples was not conclusive as to the nature of the endowments and that the Department had failed to discharge the burden of showing that they were public endowments.
Thereupon, the Deputy Charity Commissioner preferred an appeal under section 72(4) of the Act to the High Court.
Disa greeing with the learned District Judge the High Court has come to the conclusion following the decision of this Court in Goswami Shri Mahalaxmi Vahuji vs Rannchhoddas Kalidas & Ors., ; that the two temples were places of public religious worship used as of right by the Vaishnavas and observed: "The circumstance that the public or a section thereof have been regularly worshipping in the temples as a matter of course and they could take part in the festivals and ceremonies conducted in that temple as appears from the record, apparently as a matter of right, is a strong piece of evidence to establish the public character of the temple.
" ** ** ** "There is nothing on record to indicate that in the long past in Patadi, any ruler had put any restriction on the use of the temples for Darshan over a fairly long period during which the members of the public have visited the temples as if they were their temples and this establishes their right.
Such a consistent and unobstructed user must be taken as of right.
It is well known that those who go for 'Dar shan ' and/or 'Puja ' do not and generally have no occasion to assert their right.
It is not shown that the right was ever obstructed.
" ** ** ** "Although there was a sort of private passage running from 916 the Darbargadh leading to the public road, presumably meant for the use of the 'Pardana shin ' ladies of the royal family, this would not indicate that the temples were attached to the Darbargadh or were reserved for the exclu sive use of the ruler and the members of the royal family.
" The High Court on a consideration of the evidence brought out two circumstances, namely, (1) The general public and particularly the members of the Vaishnava sect had unre stricted right of worship at the temples as a matter of course and participated in the festivals of 'Hindola ' and 'Annakut ' functions and sewa at Sri Dwarkadhishji Temple and daily darshan and worship at the other temple which, by itself, was a strong piece of evidence to establish the public character of the temples.
And (2) The cash offerings or bhents, gifts of ornaments etc.
On consideration of the evidence in the case, particularly the two circumstances adverted to read in conjunction with the evidence as to the way in which the temple endowments had been dealt with and the evidence as to the public user of the temples, the High Court came to the conclusion that they were temples within the meaning of section 2(17) of the Act which clearly fell within the ambit of the expression 'public trust' under section 2(13) It repelled the contention of the appellant that the temples were the pri vate temples of the ruler and members of the royal family, observing: "These two relevant circumstances go to show that the two temples which were places of public religious worship were used as of right by the Vaishnavas.(supra).
There is no evidence on record to show that the temples were treated as private property and that the income from the offerings made at the temples was merged with the State funds, much less treated as the private income of respondent No. 1 (ex Ruler).
There is also no evidence to show that the temples were at any time closed down on any occasion so as to exclude the public from worship when the members of the Ruler 's family visited the temple or temples on any other family occasion." 917 "The mere management of the temples being with the successive rulers of Patadi would not afford an indicia to show the ownership of temples as having been vested in the Rulers.
It is well known that in the princely regimes, a citizen would not ordinarily interfere with the management of such properties being made by the then Ruler.
His evidence that the darbar if it thinks fit can obstruct any person from entering into the temples introduced in the examination in chief is not dependable.
He has in his cross examination admitted that prior to the enquiry proceed ings, nobody was required to take permission before entering the 'Haveli ' and the Mandir for 'Darshan ' and worship.
This would go to show that there was no obstruction made at any point of time by the Darbar and his manager and/or his servants to the use of the temples by the public as of right.
" ** ** ** "Even if it be assumed that the temples had originated as private temples, although the case as urged by Mr. Chhaya is that the origin is unknown or lost in antiquity, there is good evidence to show that the temples were being used as public temples.
Taking an inte grated view of the circumstances aforesaid, as appear from the relevant evidence on record, in our opinion, it must be held that the Vaishnavas were regularly worshipping in the temples as a matter of course and they took part in the festivals and ceremonies conducted in the temples and outside apparently as a matter of right." ** ** ** "The mere fact that the successive Darbars of the rulers were the managers of the temples would not go to show that the temples were private trust properties.
The circumstances aforesaid lead to a reasonable inference that although the origin of the temples was at the instance of 918 then Ruler of the Patadi State, the funds which went for the construction of the temples were the funds of the State and, at least gradually in course of time, there was dedica tion of the temples for the benefit of the Vaishnav community as places of public wor ship.
" We thought that on the overwhelming evidence on record both oral and dOcumentary no other conclusion than the one reached by the High Court was possible.
The question whether the temples had been dedicated to the public or were the private property of the appellant was essentially a matter of inference to be drawn from the other facts on record and the findings arrived at by the High Court as well as the Charity Commissioner were clearly unassailable.
Where in a case like the present, the creation of the trust is not lost in antiquity or shrouded in obscurity, the temples having admittedly been constructed by the appellant 's ancestor must, in the absence of a formal document of endowment, be regarded as the private temples of the founder and the members of the royal family, from the fact that the appel lant and his predecessors have throughout been in management of the same.
The findings reached by the High Court and the Charity Commissioner that the temples were places of public religious worship and were temples within the meaning of section 2(17) of the Act and fell within the purview of the expression 'public trust ' as defined in section 2(13), are therefore vitiated due to misplac ing of that burden.
(3) The High Court was in error in holding that the temples were constructed by the appellant 's ancestor for the benefit of the community at large and that the general public or a particular section thereof, had an unrestricted right of worship at the temples merely because of the circumstance that there was proof of long user of the temples by the public particularly by the members of the Vaishnava sect without any let or hinderance or the fact that in the revenue records and the register of the gram panchayat the temples were recorded in the names of 919 the deities with the appellant shown as a mere Vahivatdar and that separate accounts were kept in respect of the temples.
According to the learned counsel, these circum stances were non sequitur.
He relied upon Mulla 's Hindu Law, 15th edn., para 424 at pp.
544 545, Mukherjea 's Hindu Law of Religious & Charitable Trusts, 5th edn., paras 4.36 to 4.40 at pp.
185 190, Nar Hari Sastri & Ors.
vs Shri Badrinath Temple Committee, ; ; Goswami Shri Mahalaxmi Vahuji vs Rannchhoddas Kalidas & Ors., ; Bihar State Board Religious Trust, Patna vs Mahant Sri Biseshwar Das, and Radhakanta Deb & Anr.
As to the first, there is very strong and clear evidence to establish that there was dedi cation of the temples by the appellant 's ancestor for the use or benefit of the public.
"Endowment" is dedication of property for purposes of religion or charity having both the subject and object certain and capable of ascertainment.
Hindu piety found expression in gifts to idols and images consecrated and installed in temples, to religious institutions of every kind and for all purposes considered meritorious in the Hindu social and religious system.
Under the Hindu law the image of a deity of the Hindu pantheon is, as has been aptly called, a `juristic entity ', vested with the capacity of receiving gifts and holding property.
The Hindu law recognises dedica tions for the establishment of the image of a deity and for maintenance and worship thereof.
The property so dedicated to a pious purpose is placed extra commercium and is enti tled to special protection at the hands of the Sovereign whose duty it is to intervene to prevent fraud and waste in dealing with religious endowments.
Dedication need not always be in writing and can be inferred from the facts and circumstances appearing.
It would be a legitimate inference to draw that the founder of the temple had dedicated it to the public if it is found that he had held out the temple to be a public one: Pujari Lakshmana Goundan vs Subramania Ayyar, AIR 1924 PC 44.
In view ' of this, the contention that there is no evi dence to establish that there was dedication of the temples by the appellant 's ancestor for the benefit or use of the public or a section thereof, cannot therefore prevail.
On the contrary, the evidence discloses that although the temples had been constructed by the appellant 's ancestor, the cost of their construction was met from out of the public 920 exchequer and that the income from the offerings made by the worshippers at the shrine in the form of bhents and gifts of ornaments etc.
That evidence clearly establishes that the temples were intended and meant by the founder for the benefit and use of the public.
As to the second, undoubtedly the burden was on the Charity Commis sioner to establish the existence of a public endowment and that burden the Charity Commissioner has discharged by unimpeachable evidence of long and uninterrupted user of the temples by the general public and particularly by members of the Vaishnava sect.
The finding reached by the High Court and the Charity Commissioner that the temples were places of public religious worship within the meaning of section 2(17) read with section 2(13) of the Act is not vitiated by displacing of that burden but the finding reached by them is based on a proper appreciation of the evidence.
As to the third conten tion, we would presently deal with the circumstances brought out in the evidence which lead to no other conclusion than the one arrived at by the Charity Commissioner and the High Court, that the temples constructed 'by the appellant 's ancestor were for the benefit of the community at large and the members of the Vaishnava sect in particular and that they had an unrestricted right of worship.
In the absence of a written grant, the question whether an endowment made by a private individual is a public endow ment or a private one is a mixed question of fact and law and the scope of dedication must be determined on the appli cation of legal concepts of a public and private endowment to the facts found in each particular case.
Facts and cir cumstances, in order to be accepted as proof of dedication of a temple as a public temple, must be considered in their historical setting viz. the origin of the temple, the manner in which its affairs are managed, the nature and extent of the gifts received, the rights exercised by the devotees in regard to worship therein, etc.
In the present case, the temples were constructed at public expenditure by meeting the cost of construction from the public exchequer and the upkeep and maintenance of the temples was met by public subscription and therefore the High Court and the Charity Commissioner rightly inferred existence of a public endow ment.
Such an inference was strengthened by the fact of user of the temples by the public or a section thereof, as of right for over a century.
The general effect of the evidence is that the appellant as well as his predecessors although in management, had throughout treated the temples as public temples of which they were mere Vahivatdars.
921 The essence of a public endowment consists in its being dedicated to the public; and in the absence of any document creating the endowment, long user is the material factor from which an inference of dedication may arise.
The dis tinction between a private and public endowment is that whereas in the former the beneficiaries are specific indi viduals, in the latter they are the general public or a class thereof.
The distinction is succinctly brought out in Mula 's Hindu Law in para 424 at pp.
544 545 in these words: "Religious endowments are either public or private.
In a public endowment the dedication is for the use or benefit of the public.
The essential distinction between a public and a private endowment is that in the former the beneficial interest is vested in an uncertain and a fluctuating body of persons, either the public at large or some considerable portion of it answering a particular description; in a private endowment the beneficiaries are defi nite and ascertained individuals or who within a definite time can be definitely ascertained.
The fact that the fluctuating and uncertain body of persons is a section of the public following a particular religious faith or is only a sect of persons of a certain religious persuasion would not make it a private endow ment.
The essence of a public endowment con sists in its being dedicated to the public; and in the absence of any document creating the endowment, long user is the material factor from which an inference of dedication may arise.
Besides user by the public, conduct of the founder and his descendants is also relevant, and if they in fact held out the temple to be a public one a very strong pre sumption of dedication would arise.
" It therefore follows that the principles are well settled.
When property is dedicated for the worship of a family idol, it is a private and not a public endowment, as the members who are entitled to worship at the shrine of the deity can only be the members of the family i.e. an ascertained group of individuals.
But where the beneficiaries are not the members of a family or specified individuals but the public at large of a specified portion thereof, then the endowment can only be regarded as public intended to benefit the general body of worshippers.
We do not think that it would serve any purpose to refer to all the 922 well known decisions except a few.
In Pujari Lakshmana Goundan vs Subramania Ayyar (supra), the temple was not an ancient one and there was no deed of endowment.
The question was whether the temple was a public temple or a private temple.
Although the temple was a private temple, the evi dence disclosed that the Pujari Lakshmana Goundan, the founder of the temple had held out and represented to the Hindu public in general that the temple was a public temple at which all Hindus might worship.
Sir John Edge, in deliv ering the judgment of the Privy Council held that on that evidence the Judicial Committee had no hesitation in drawing the inference that the founder had dedicated the temple to the public, as it was found that he had held out the temple as a public temple.
Another Privy Council decision to which we need refer is that of Babu Bhagwan Din vs Gir Har Saroop, LR 1939 67 IA 1 where the grant was made to one Daryao Gir and his heirs in perpetuity and the evidence showed that the temple and the properties attached thereto had throughout been treated by the members of the family as their private property appropriating to themselves the rents and profits thereof.
Sir George Rankin, delivering the judgment of the Privy Council held that the fact that the grant was made to an individual and his heirs in perpetuity was not reconcila ble with the view that the grantor was in effect making a wakf for a Hindu religious purpose.
That very distinguished Judge referred to the earlier decisions in Pujari Lakshar nana Goundan 's case, and observed: "Their Lordships do not consider that the case before them is in general outline the same as the case of the Madras temple, , in which it was held that the founder who had enlarged the house in which the idol had been installed by him, constructed circular roads for processions, built a rest house in the village for worshippers, and so forth, had held out and represented to the Hindu public that it was a public temple." The true test as laid down by this Court speaking through Venkatarama Ayyar, J. in Deoki Nandan vs Murlidhar, ; in determining whether a temple is a private or a public temple, depends on whether the public at large or a section thereof, 'had an unrestricted right of worship ' and observed: "When once it is understood that the true beneficiaries of religious endowments are not the idols but the worshippers, and that the purpose of the endowment is the maintenance of that worship for the benefit of worshippers, the 923 question whether an endowment is private or public presents no difficulty.
The cardinal point to be decided is whether it was the intention of the founder that specified indi viduals are to have the right of worship at the shrine, or the general public or any specified portion thereof." The learned Judge distinguished the decision of the Privy Council in Babu Bhagwan Din vs Gir Har Saroop, (supra) on the ground that properties in that case were granted not in favour of an idol or temple but in favour of the founder who was maintaining the temple and to his heirs in perpetuity, and said: "But, in the present case.
the endowment was in favour of the idol itself, and the point for decision is whether it was private or public endowment.
And in such circumstances, proof of user by the public without interfer ence would be cogent evidence that the dedica tion was in favour of the public.
" It was also observed while distinguishing the Privy Council decision in Babu Bhagwan Din 's case that it was unusual for rulers to make grant to a family idol.
In Deoki Nandan 's case the Court referred to several factors as an indicia of the temple being a public one viz. the fact that the idol is installed not within the precincts of residential quarters but in a separate building constructed for that purpose on a vacant site, the installation of the idols within the temple precincts, the performance of pooja by an archaka appointed from time to time for the purpose, the construction of the temple by public contribution, user of the temple by the public without interference, etc.
The next important decision is that of Tilkayat Shri Govindlalji Maharaj vs State of Rajasthan & Ors., [1964] 1 SCR 561 where a Constitution Bench of this Court had to consider whether the famous Nathdwara Temple which is held in great reverence by the Hindus in general and members of the Vaishnava followers of the Vallabha Sampradaya in par ticular was a public temple.
It was held that neither the tenets nor the religious practice at the Vallabha School necessarily postulate that the followers of the denomination must worship in a private temple.
The Court observed that the question whether a Hindu temple is private or public must necessarily be considered in the light of the relevant facts relating to it as well as the accepted principles laid down by several judicial decisions, and it was said: 924 "A temple belonging to a family which is a private temple is not unknown to Hindu law.
In the case of a private temple it is also not unlikely that the religious reputation of the founder may be of such a high order that the private temple rounded by him may attract devotees in large number and the mere fact that a large number of devotees are allowed to worship in the temple would not necessarily make the private temple a public temple.
On the other hand, a public temple can be built by subscriptions raised by the public and a deity installed to enable all the members of the public to offer worship.
In such a case, the temple would clearly be a public temple." "Where evidence in regard to the foundation of the temple is not clearly avail able, sometimes, judicial decisions rely on certain other facts which are treated as relevant.
Is the temple built in such an imposing manner that it may prima facie appear to be a public temple? The appearance of the temple of course cannot be a decisive factor; at best it may be a relevant factor.
Are the members of the public entitled to an entry in the temple? Are they entitled to take part in offering service and taking Darshan in the temple? Are the members of the public entitled to take part in the festivals and ceremonies arranged in the temple? Are their offerings accepted as a matter of right?" It was then laid down that the participation of the members of the public in the Darshan in the temple and in the daily acts of worship or in the celebrations of festival occasions would be a very strong factor in determining the character of the temple.
Another significant decision is that of Goswami Shri Mahalaxmi Vahuji vs Rannchhoddas Kalidas & Ors.
(supra) where the question arose whether the Haveli of Nadiad where the idol of Sri Gokulnathji was installed which is wor shipped by the Vaishnava devotees of the Vallabha cult is a private or public temple on the ground of dedication, and it was laid down: "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 925 character of the temple are factors that go to establish whether a temple is a public temple or a private temple.
" See also: Bihar State Board Religious Trust, Patna vs Mahant Sri Biseshwar Das, ; Dhaneshwarbuwa Guru Purshottambuwa owner of Shri Vithal Rukhamai Sansthan vs The Charity Commissioner, State of Bombay, 18 and Radhakanta Deb & Anr.
vs Commissioner of Hindu Religious Endowments, Orissa, ; ; Hari Bhanu Maharaj ofBaroda vs Charity Commissioner, Ahmedabad, [1986] 4 SCC .162 and Heir of deceased Maharaj Purshottamlalji Maha raj, Junagad vs Collector of Junagad District & Ors.
, ; We have carefully gone through the evidence of the witnesses examined by the Deputy Charity Commissioner as also the finding reached by him as well as by the Charity Commissioner which finding has been upheld by the High Court while reversing the decision of the learned District Judge.
We find no substance in the contention advanced.
There are overwhelming circumstances brought out in the order of the Charity Commissioner as well as in the judgment of the High Court and no other conclusion is possible than the one reached by them that the temples in question were public religious trusts within the meaning of section 2(17) read with section 2(13) of the Act.
The learned District Judge in interfering with the order was largely influenced by the fact that the management of the temples throughout remained with the ruler for the time being and while adverting to the other circumstances held that there was no evidence that the temples were dedicated to the public at large or to a sec tion thereof and that the other circumstances brought out in the evidence viz. public user for the past over 100 years without any let or hinderance, the fact that the members of the Hindu community in general and members of the Vaishnava sect in particular were allowed to visit the temples for worship and make their offerings, or that the temples stand recorded in the names of the deities in the revenue records and the register of the gram panchayat with appellant shown as a Vahivatdar, were not sufficient to draw an inference that the temples were places of public religious worship.
In coming to that conclusion he relied upon the decision 926 of the Privy Council in Babu Bhagwan Din 's case (supra) as also of this Court in Goswami Shri Mahalaxmi Vahuji 's case.
The underlying fallacy in the judgment of the learned District Judge is that he proceeds on the assumption that there was no dedication of the temples express or implied by the founder for the benefit or use of the pub lic.
Several circumstances are brought out by the Charity Commissioner and the High Court showing that the temples were public temples, namely: (1) Although the temples were constructed by the appellant 's ancestor way back in 1872 and 1875, there was positive evidence showing that the entire cost of construction was met from the public exchequer i.e. Patadi State Treasury.
(2) The general public and particu larly the members of the Vaishnava sect had an unrestricted right of worship at the temples and participated in the festivals and ceremonies conducted in the temples right from the very inception, as it appears from the record, apparent ly as a matter of right without any let or hinderance on the part of the appellant or his predecessors.
(3) The Hindu worshippers at the temples in general and members of the Vaishnava sect in particular made cash offerings of bhents into the golak kept at Sri Dwarkadhishji Mandir or Haveli which was under the exclusive control of the members of the Vaishnava sect and the remittances of it used to be made to Goswami Maharaj, Acharya of Vaishnava sect at Ahmedabad.
(4) The public records showed that the temples stand recorded in the names of the deities, the appellant and his predecessors shown as mere Vahivatdars.
It was an undisputed fact that separate accounts being maintained in respect of the income and expenditure of the temples i.e. the cash offerings, gifts of ornaments etc.were not intermingled with the monies belonging to the appellant or the members of the royal family and the incomes from the temples were utilised for their upkeep and maintenance and also for acquisition of properties attached to the temples (5) The State used to keep apart a share of vaje i.e. Darbar 's share of the crops grown by the cultivators and also used to impose and collect tola, a cess from the cultivators for the upkeep and mainte nance of the temples.
That evidence shows that the public at large and members of the Vaishnava sect had been worshipping at the temples as of right for the last over 100 years and that the temples had all along been primarily maintained by the contributions made by the public particularly by the devotees belonging to the Vaishnava sect.
In course of time the tem 927 ples particularly Sri Dwarkadhishji Mandir or HaveIi at tracted a large number of worshippers and they used to participate in the religious festivals and ceremonies per formed there.
The evidence of the witnesses also shows that the deities were taken out in a palanquin by members of the Vaishnava sect and it was joined by the general public.
The temples though adjacent to the Darbargadh were not in the precincts of the palace but were constructed facing a public road allowing access to the general public.
All these cir cumstances clearly support the finding reached by the Chari ty Commissioner and the High Court that the temples were public temples and therefore public religious trusts within the meaning of section 2(17) read with section 2(13) of the Bombay Public Trusts Act, 1950 and the temples with the properties attached thereto were not the private properties of the appellant or the members of his family.
The only factor relied upon by the learned District Judge was that the management of the temples remained with the ruler for the time being but then the Court has to come a conclusion not on one single factor alone but on a conspectus of all the relevant factors i.e.1 upon an appreciation of all the facts and circumstances appearing.
In the result, the appeal must fail and is dismissed with costs.
N.P.V. Appeal dis missed.
| At Patadi in the erstwhile State of Patadi in the Sau rashtra region of Gujarat State there were two temples known as Sri Dwarkadhishji Mandir and Sri Trikamrayji Mandir, which were constructed in the years 1872 and 1875 respec tively by the then ruler with funds from the State Treasury.
In the Gram Panchayat records the temples stood in the name of the deities, and the appellant, the former ruler of the State, was shown as a Vahivatdar.
The temples were exempted from payment of municipal and other taxes including land revenue.
The Bombay Public Trusts Act, 1950 was extended to the Saurashtra region of Gujarat State in the year 1952.
The Deputy Charity Commissioner, sometime in 1958, suo motu initiated proceedings under section 19 of the above named Act, and issued show cause notice to the appellant, who was Vahivatdar of the temples.
The appellant pleaded that the temples and the properties appurtenant thereto were private properties of the ruler and the members of the royal family, and were not public trusts.
After examining witnesses, the Deputy Charity Commissioner came to the conclusion that the shrines had been dedicated as places of public religious worship and were, therefore, temples within the meaning of section 2(17) of the Act, and that the temples together with the properties appurtenant thereto constituted public religious trust within the meaning of section 2(13).
These findings were upheld by the Charity Commissioner.
On an application under section 72 of the Act, the District Judge held 910 that there was no clear, cogent or satisfactory evidence of the existence of a public endowment, that the question whether the temples were dedicated to the public may be inferred from a long course of conduct of the founders and the descendants, and that the mere fact that the public was allowed access to the temples was not conclusive as to the nature of the endowment and that the department had failed to discharge the burden of showing that they were public endowments.
The department appealed to the High Court which held that the temples fell within the meaning of section 2(17) of the Act and were, therefore, within the ambit of the expression "public trust" under section 2(13).
In the appeal to this Court, it was contended that there was no evidence to establish that there was dedication of the temples by the appellant 's ancestor for the use and benefit of the public, that the findings reached by the High Court and the Charity Commissioner were vitiated due to misplacing of the burden to establish the existence of public endowment, and that the High Court was in error in holding that the temples were constructed by the appellant 's ancestor for the benefit of the community at large and that the general public or a particular section thereof, had an unrestricted right of worship at the temples, merely because there was proof of long user by the members of the Vaishnava sect without any let or hinderance, that in the revenue records and the register of the gram panchayat, the temples were recorded in the names of the deities with the appellant shown as a mere Vahivatdar, and that separate accounts were kept in respect of the temples.
Dismissing the appeal, this Court, HELD: 1.
The findings arrived at by the High Court as well as the Charity Commissioner that the temples were 'public temples ' and, therefore, 'public religious trusts ' within the meaning of section 2(17) read with section 2(13) of the Bombay Public Trusts Act, 1950, and not the private proper ties of the appellant or the members of his family are unassailable.
[927C] 1.2 The question whether the temples had been dedicated or were the private property of the appellant was essential ly a matter of inference to be drawn from the other facts on record.
There is clear, consistent, reliable and unimpeacha ble evidence to establish that although the temples in question were constructed by the appellant 's ancestor, he had intended and meant that they were for the use and bene fit of the 911 public, that the public at large and members of the Vaishna va sect had been worshipping at the temples as of right for the last over 100 years and that the temples had all along been primarily maintained by contributions made by the public particularly devotees belonging to the Vaishnava sect.
[918C, 926G H] 2.1 The essence of a public endowment consists in its being dedicated to the public; and in the absence of any document creating the endowment, long user is the material factor from which an inference of dedication may arise.
The distinction between a private and public endowment is that whereas in the former the beneficiaries are specific indi viduals, in the latter they are the general public or a class thereof.
[921A B] 2.2 When property is dedicated for the worship of a family idol, it is a private and not a public endowment, as the members who are entitled to worship at the shrine of the deity can only be members of the family.
But where the beneficiaries are not the members of a family or specified individuals but the public at large or a specified portion thereof, then the endowment can only be regarded as public intended to benefit the general body of worshippers.
[921G] 2.3 Dedication need not always be in writing and can be inferred from the facts and circumstances appearing.
In the absence of a written grant, the question whether an endow ment made by a private individual is a public endowment or a private one is a mixed question of fact and law and the scope of dedication must be determined on the application of legal concepts of public and private endowment.
Facts and circumstances, in order to be accepted as proof of dedica tion must be considered in their historical setting viz. the origin of the temple, the manner in which its affairs are managed, the nature and extent of the gifts received, the rights exercised by the devotees in regard to worship there in, etc.
[919F, 920E F] In the instant case, the temples were constructed at public expenditure by meeting the cost of construction from the public ex chequer and the upkeep and maintenance of the temples was met by public subscription.
The High Court and the Charity Commissioner therefore, rightly inferred exist ence of a public endowment.
Such an inference was strength ened by the fact of user by the public as of right for over a century.
The appellant as well as his predecessors al though in management, have throughout treated the temples as public temples of which they were mere Vahivatdars.
The finding reached by the High Court and the Charity Commis sioner is based on a proper appreciation of the 912 evidence.
All the circumstances clearly support the finding.
[920G H, C, 927B] Shri Mahalaxmi Vahuji vs Rannchhoddas Kalidas & Ors., ; ; Nar Hari Sastri & Ors.
vs Shri Badrinath Temple Committee, ; ; Bihar State Board Religious Trust, Patna vs Mahant Sri Biseshwar Das, ; Radhakanta Deb & Anr.
vs Commissioner of Hindu Religious Endowments, Orissa, ; ; Pujari Lakashmana Goundan vs Subramania Ayyar, AIR 1924 PC 44; Babu Bhagwan Din vs Gir Har Saroop, LR 1939 67 IA 1; Deoki Nandan vs Murlidhar, ; ; Tilkayat Shri Govindlalji Maharaj vs State of Rajasthan & Ors., [1964] 1 SCR 561; Bhaneshwarbuwa Guru Purshottambuwa, owner of Shri Vithal Rukhamai Sansthan vs The Charity Commissioner, State of Bombay, ; ; Hari Bhanu Maharaj of Baroda vs Charity Commissioner, Ahmedabad, ; Heir of deceased Maharaj Purshottamlalji Mahara], Junagad vs Collec tor of Junagad District & Ors., ; and Mulla 's Hindu Law, 15th edn., para 424 at pp.
544 545, Mukherjea 's Hindu Law of Religious & Charitable Trusts, 5th edn.
paras 4.36 to 4.40 at pp.
185 190, referred to.
|
etition Nos. 90 & 312 of 1992.
Under Article 32 of the Constitution of India. , D.D. Thakur, Tapash Ray, M.L. Verma, Gauray Jain, and Ms. Abha Jain for the Petitioner in W.P. No. 90 of 1992.
R.P. Gupta for the Petitioner in W.P. No. 312/92.
G. Ramaswamy, Attorney General, D.P. Gupta, Solicitor General, B. Parthasarthy, C.V.S. Rao, A.S. Bhasme and Chava Badri Nath Babu for the Respondent.
R. K. Jain, and Rajan Mukherjee for the customs, Excise & Gold (Control) Appellate Tribunal.
K.K. Venugopal, Ms. Pallav Shisodia and C.S.S. Rao for the Respondent.
The Judgments of the Court were delivered by AHMADI, J. We have had the benefit of the industry, erudition and exposition of the constitutional and jurisprudential aspects of law on the various questions urged before us in the judgment of our esteemed Brother K. Ramaswamy, J.
But while concurring with the hereinafter mentioned conclusions recorded by him we would like to say a few words to explain our points of view.
Since the facts have been set out in detail by our learned Brother we would rest content by giving an abridged preface which we consider necessary.
It all began with the receipt of a letter dated December 26, 1991, from Shri R.K. Jain, Editor, Excise Law Times, addressed to then Chief Justice of India, Shri M.H. Kania, J., complaining that as the Customs, Excise and Gold Control Appellate Tribunal (for short 'the CEGAT) was without a President for the last over six months the functioning of the Tribunal was adversely affected, in that, the Benches sit for hardly two hours or so, the sittings commence late at about 10.50 818 a.m., there is a tendency to adjourn cases on one pretext or the other so much so that even passing of interim orders, like stay orders, etc., is postponed and inordinately delayed, and the general tendency is to work for only four days in a week.
The work culture is just not there and the environmental degradation that has taken place is reflected in the letter of Shri G. Sankaran dated June 3, 1991 who prematurely resigned as the President of the CEGAT.
Lastly, he says that there were nearly 42,000 appeals and approximately 2000 stay petitions pending in the CEGAT involving revenue worth crores of rupees, which will remain blocked for long.
Three directions were sought, namely, "(i) the immediate appointment of the President to the CEGAT, preferably a senior High Court Judge , (ii) order an enquiry into the mal functioning of the CEGAT; and (iii) issue all other directions as your Lordship may deem fit and necessary.
" This letter was directed to be treated as Public Interest Litigation and notice was issued to the Union of India restricted to relief No. (i) i.e. in regard to the appointment of the President of the CEGAT.
On April 29, 1992, the learned Additional Solicitor General informed the Court that the appointment of the President was made.
On the next date of hearing the relevant file on which the decision regarding appointment was made was produced in a sealed envelope in Court which we directed to be kept in safe custody as apprehension was expressed that the file may be tempered with.
The focus which was initially on the working of the CEGAT and in particular against the conduct and behaviour one of its Members now shifted to the legality and validity of the appointment of respondent No. 3 as its President.
Serious allegations were made against respondent No. 3 and his competence to hold the post was questioned.
It was contended that his appointment was made in violation of the Rules and convention found mentioned in the message of Shri Y.V. Chandrachud, the then Chief Justice of India, dated October 5, 1992 forwarded on the occasion of the inauguration of the CEGAT.
The further allegation made is that even though High Court Judges were available no serious attempt was made to requisition the services of one of them for appointment as President of the CEGAT.
To put a quietus to the entire matter at an early date we called the file from the Registry on May 4,1992 but when we were about to peruse the same the learned Additional Solicitor General contended 'that the Court cannot inspect it because he desired to claim privilege '.
We, therefore, directed that a formal application may be made in that behalf before the next date of hearing and returned the file to enable the making of such an application.
819 Accordingly, the then Finance Secretary filed an affidavit claiming privilege under sections 123 and 124, Evidence Act, and Article 74(2) of the Constitution.
The Minister of State in the Finance Department was also directed to file an affidavit in support of the claim for privilege which he did.
It is in this context that the question of privilege arose in the present proceedings.
Our learned Brother Ramaswamy, J. dealt with this question elaborately.
After referring to the provisions of the relevant Statutes and the Constitution as well as the case law of both foreign and Indian courts, the authoritative text books.
he has concluded as under: "Having perused the file and given our anxious consideration we are of the opinion that on the facts of the case. . it is not necessary to disclose the contents of the records of the petitioner or his counsel.
" We are in respectful agreement with this conclusion recorded by our learned Brother though not entirely for in the reasons which have weighed with him.
On the question of appointment of respondent No. 3 as the President of the CEGAT we must notice a few provisions contained in the CEGAT Members (Recruitment anti Conditions of Service).
Rules, 1997 (hereinafter called 'the Rules ').
Rule 2(c) defines a member, to include the President of the CEGAT also; Rule 3 prescribes the qualifications for appointment and Rule 6sets out the method of recruitment of 'a member through a Selection Committee consisting of a Judge of the Supreme Court of 'India nominated by the Chief Justice of India.
Rule 10 provides for the appointment of the President.
It says that the Central Government shall appoint one of the members to be the President.
Sub rule (2) then provides as under "(2) Notwithstanding anything contained in rule 6.
a sitting or retired judge of a High Court may also he appointed by the Central Government as a member and President simultaneously.
" Sub rule (4) and the proviso thereto bear reproduction "(4) Where a serving judge of a High Court is appointed as a member and President, he shall hold office as President for a period of three years from the date of his appointment or till he attains the age of 62 years, whichever is earlier: 820 Provided that where a retired judge of a High Court above the age of 62 years is appointed its President.
he shall hold office for such period not exceeding three years as may be determined by the Central Government at the time of ' appointment or re appointment.
" It will thus he seen that the rules empower the Central Government to appoint any member as the President of the CEGAT.
It is true that under sub rule (4), a serving judge and under the proviso thereto, a retired judge, can also be appointed a Member and President simultaneously.
In the case of a serving judge his age of superannuation is fixed at 02 years but in the case of a retired judge he may be appointed for it period of three years at the most.
Insofar as a serving High Court Judge is concerned, he holds office until he attains the age of 62 years, vide Article 217 of the Constitution.
It therefore, heats common sense why a sitting Judge of he High Court would opt to serve as the President of tile CEGAT if lie is to retire At the same age without any benefit.
On tile contrary he would lose certain perks which are attached to tile office of a High Court Judge.
Even status wise lie would suffer as his decisions would he subject to the writ jurisdiction of the High Court under Articles 226/227 of tile Constitution.
He may agree to accept the offer only if he had an extended tenure of at least three years.
We are, therefore, in agreement with our learned Brother that sub rule (4) of Rule 10 of the Rules needs a suitable change to make it sufficiently attractive for sitting High Court Judges to accept appointment as the President of the CEGAT.
We also agree with our learned brother that to instill the confidence of the litigating public in the CEGAT.
the Government must make a sincere effort to appoint a sitting Judge of the High Court is a President of the CEGAT in consultation of the Chief Justice of India and it a sitting Judge is not available the choice must fall on a retired Judge as far as possible.
This would he consistent with the assurance given by the Finance Department as is reflected in the letter of Shri Chandrachud, extract wherefrom is reproduced by our learned Brother in his judgment.
Shri Harish Chandra was a Senior Vice President when the question of ' filling, up the vacancy of the President came up for consideration.
He was fully qualified for the post under the Rules.
No challenge is made on that count.
Under Rule 10(1) the Central (Government is conferred the power to appoint one of the Members to be the President.
Since the validity of the Rule is not questioned there can be no doubt that the Central Government was entitled to appoint respondent No. 3 as the President.
But it was said that the track record of respondent No. 3 was poor and he was hardly fit to hold the post of the President of the CEGAT.
It has been averred that respondent No. 3 had been in the past proposed for appointment 821 as a Judge of the Delhi High Court but his appointment did not materialise due to certain adverse reports.
Assuming for the sake of argument that these allegations are factually accurate, this Court cannot sit in judgment over the choice of the person made by the Central Government for appointment as a President if the person chosen is qualified and eligible for appointment under the Rules.
We, therefore, agree with our learned Brother that this Court cannot sit in judgment over the wisdom of the Central Government in the choice of the person to be appointed as a President so long as the person chosen possesses the prescribed qualification and is otherwise eligible for appointment.
therefore, cannot interfere with the appointment of respondent No. 3 on the ground that his track record was poor or because of adverse reports on which account his appointment as a High Court Judge had not materialised.
The allegations made by Shri R.K. Jain in regard to the working of the CEGAT are rave and the authorities can ill afford to turn a Nelson 's eve to those allegations made by a person who is fairly well conversant with the internal working of the Tribunal.
Refusal to inquire into such grave allegations, some of which are capable of verification, can only betray indifference and lack of a sense of urgency to tone up the working of the tribunal.
Fresh articles have appeared in the Excise Law Times which point to the sharp decline in the functioning of the CEGAT pointing to a serious management crises.
It is high time that the administrative machinery which is charged with the duty to supervise the working of the CEGAT wakes up from its slumber and initiates prompt action to examine the allegations by appointing a high level team which would immediately inspect the CEGAT, identify the causes for the crises and suggest remedial measures.
This cannot brook delay.
Lastly, the time is ripe for taking stock of the working of ' the various Tribunals set up in the country after the insertion of Articles 323A 323B in the Constitution.
A sound justice delivery system is a sine qua non for the efficient governance of a country wedded to the rule of law.
An independent and impartial justice delivery system in which the litigating public has faith and confidence alone can deliver the goods.
After the incorporation of these two articles,Acts have been enacted whereunder tribunals have been constituted for dispensation of justice.
Sufficient time has passed and experience gained in these last few years for taking stock of the situation with a view to finding out if they have serve the purpose and objectives for which they were constituted.
Complaints have been heard in regard to the functioning, of other tribunals as well and it is time that a body like the Law Commission of India has comprehensive look in with a view to 822 suggesting measures for their improved functioning.
That body can also suggest changes in the different statutes and evolve a model on the basis whereof tribunals may be constituted or reconstituted with a view to ensuring greater independence.
An intensive and extensive study needs to be undertaken by the Law Commission in regard to the constitution of tribunals under various statutes with a view to ensuring their independence so that the public confidence in such tribunals may increase and the quality of their performance may improve.
We strongly recommend to the Law Commission of India to undertake such an exercise on priority basis.
A copy of this judgment may be forwarded by the Registrar of this Court to the Member Secretary of the Commission for immediate action.
We have thought it wise to clarify the extent of our concurrence with the views expressed by our learned Brother in his judgment to avoid possibility of doubts being raised in future.
We accordingly agree with our learned Brother that the writ petitions should stand disposed of accordingly with no order as to costs.
K.RAMASWAMY, J.: The same facts gave birth to the twin petitions for disposal.
by a common judgment.
On October 11, 1982, the Customs Central Excise and Gold (Control) Appellate Tribunal for short 'CEGAT ' came into existence with Justice F.S. Gill as its President.
After he retired in 1985 no Judge was appointed as President.
In letter dated December 26, 1991, addressed to the Chief Justice of India, the petitioner highlighted the mal functioning of the CEGAT and the imperative to appoint a sitting or retired judge of the High Court as President to revitalise its functioning and to regenerate warning and withering faith of the litigant public of the efficacy of its adjudication.
Treating it as writ petition on February 25, 1992 this court issued rule nisi to the first respondent, initially to make immediate appointment of the President of the CEGAT, prefer ably a senior High Court Judge.
On March 30, 1992 when the Union 's counsel stated that the matter was under active consideration of the government, having regard to the urgency, this court hoped that the decision would he taken within two weeks from that date.
On April 20, 1992 the learned Addl.
Solicitor General reported that the appointment of the President had been made, however.
the order was not placed on record.
In the meanwhile die petitioner filed writ petition No. 312 of 1992 impugning the appointment of Sri Harish Chander, as President and sought to quash the same being in violation of the direction issued by this ( 'our( on February 25, 1992 and to strike down Rules 10(1), (3) and (4) of the CEGAT Members (Recruitment and Conditions of Service) Rules 1987, for short the 'Rule ' as violative of article 43 of the Constitution.
Rule nisi was also issued to the respondents in that writ petition on May 4, 1992.
The tile in a sealed cover was produced.
The first and the third respondents were directed to file their counters 823 within four weeks.
This court also directed the first respondent "to reflect in the counter what was the actual understanding in regard to the convention referred to in the letter of the then Chief Justice of India dated October 5, 1982"; "What procedure was followed at the time of the appointment by first respondents" and "whether Chief Justice of India was consulted or whether the first respondent was free to choose a retired or a sitting Judge of the High Court as President of the Tribunal with or without consultation of the Chief Justice of India".
"It should also point out what procedure it had followed since then in the appointment of the President of the Tribunal".
It should also clarify whether "before the third respondent was appointed as the President, "any effort or attempt was made to ascertain if any retired or a sitting Judge of the High Court could be appointed as the President of the Tribunal" and directed to post the cases for final disposal on July 21, 1992.
At request, to enable to government to file a counter, the rile was returned.
The Solicitor General though brought the file on July 21, 1992.
objected to our inspecting the file and desired to claim privilege.
The file was directed to be kept in the custody of the Registrar General till further orders.
The union was directed to file written application setting out the grounds on which the claim for privilege is founded and directed the Registry to return the sealed envelop as the Solicitor General expressed handicap to make precise claim of the privilege for want of file.
Thereafter an application was filed supported by the affidavit of the Secretary, Finance and the State Minister also filed his affidavit.
Counter affidavits and rejoinders were exchanged in the writ petitions.
The Attorney General also appeared on behalf of the Union.
The government 's claim for privilege is founded upon section 123 of the and article 74 (2) of the Constitution of India.
Later on the Solicitor General modified the stand that the government have no objection for the court to peruse the file but claimed privilege to disclose the contents of the file to the petitioner.
Section 123 of the postulates that "no one shall be permitted to give any evidence derived from unpublished official records relating to any affairs of State, except with the permission of the officer at the head of the department concerned, who shall give or withhold such permission as he thinks fit.
Section 124 provides that no public officer shall be compelled to disclose communications made to him in official confidence, "when he considers that the public interests would suffer by the disclosure".
section 162 envisages procedure on production of the documents that a witness summoned to produce a document shall, if it is in his possession or power, bring it to the court, notwith standing any objection which there may be to its production or to its admissibility.
824 "The validity of any such objection shall be decided by the court.
" The court, if it deems fit, may inspect the documents, unless it refers to matters of State, or take other evidence to enable it to determine on its admissibility.
The remedy under article 32 of the Constitution itself is a fundamental right to enforce the guaranteed rights in Part 111.
This court shall have power to issue writ of habeas corpus, mandamus, certiorari, quowarranto or any other appropriate writ or direction or order appropriate to the situation to enforce any of the fundamental right (power of High court under article 226 is wider).
Article 144 enjoins that all authorities, civil and judicial, in the territory of India shall act in aid of this Court.
Article 142 (1) empowers this Court to make such orders as is necessary for doing complete justice in any cause or matter pending before it.
Subject to the provisions of any law made in this behalf by the Parliament, by Clause 2 of article 142.
this 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.
" When this Court was moved for an appropriate writ under article 32, rule nisi would be issued and for doing complete justice in that cause or matter, it has been invested with power to issue directions or orders which includes ad interim orders appropriate to the cause.
All authorities, constitutional, civil judicial, statutory or persons in the territory of India are enjoined to act in aid of this court.
This court while exercising its jurisdiction, subject to any law, if any, made by Parliament consistent with the exercise of the said power, has been empowered by Cl. 2 of article 142 with all and every power to make any order to secure attendance of any person, to issue "discovery order nisi" for production of any documents, or to order investigation .
Exercise of this constituent power is paramount to enforce not only the fundamental rights guaranteed in Part III but also to do complete justice in any matter or cause, presented or pending adjudication.
The power to issue "discovery order nisi" is thus express as well as inherent as an integral power of Judicial review and process in the court to secure the attendance of any person or discovery or production of any document or to order investigation in that behalf.
However.
in an appropriate case, depending on facts on hand, court may adopt such other procedure as would be warranted.
The petitioner must make strong prima facie case to order discovery order nisi, etc.
and it must not be a hunting expedition to fish out some facts or an attempt to cause embarrassment to the respondents nor for publicity.
But on issuance of rule nisi by this Court under article 32 or a discovery order nisi the government or any authority, constitutional, civil, judicial.
statutory or otherwise or any person, must produce the record in their 825 custody and disobedience thereof would be at the pain of contempt.
Section 123 of the Evidence Act gives right to the government, in other words, to the minister or in his absence head of the department, to claim privilege, in other words immunity from disclosure of the unpublished official state documents in public interest.
In a democracy, governed by rule of law State is treated at par with a person by article 19(6) in commercial/industrial activities.
It possessed of no special privileges.
This Court in State of U.P. vs Raj Narain & Ors.
at 349 held that an objection claiming immunity should be raised by an affidavit affirmed by the head of the department.
The court may also require a Minister to affirm an affidavit.
They must state with precision the grounds or reasons in support of the public interest immunity.
It is now settled law that the initial claim for public interest immunity to produce unpublished official records for short "state documents" should be made through an affidavit generally by the Minister concerned, in his absence by the Secretary of the department or head of the Department.
In the latter case the court may require an affidavit of the Minister himself to be filed.
The affidavit should indicate that the documents in question have been carefully read and considered and the deponent has been satisfied, supported by reasons or grounds valid and germane, as to why it is apprehended that public interest would be injured by disclosure of the document summoned or called for.
If the court finds the affidavit unsatisfactory a further opportunity may be given to file additional affidavit or be may be summoned for cross examination.
If the court is satisfied from the affidavit and the reasons assigned for withholding production or disclosure, the court may pass an appropriate order in that behalf.
The Court though would give utmost consideration and deference to the view of the Minister, yet it is not conclusive.
The claim for immunity should never be on administrative routine nor be a garb to avoid inconvenience, embarrassment or adverse to its defence in the action, the latter themselves a ground for disclosure.
If the court still desires to peruse the record for satisfying itself whether the reasons assigned in the affidavit would justify withholding disclosure, the court would, in camera, examine the record and satisfy itself whether the public interest subserves withholding production or disclosure or making the document as part of the record.
On the one side there is the public interest to be protected; on the other side of the scale is the interest of the litigant who legitimately wants production of some documents, which he believes will support his own or defeat his adversary 's case.
Both are matters of public interest, for it is also in the public interest that justice should be done between litigating parties by production of all relevant documents for which public interest immunity has been claimed.
They must be weighed one 826 competing public interest in the balance as against another equally competing public administration of justice.
The reasons are: there is public interest that harm shall not be done to the nation or the public service by disclosure of the document in question and there is public interest that the administration of justice shall not be frustrated by withholding the document which must be produced, if justice is to be done.
The court also should be satisfied whether, the evidence relates to the affairs of the State under sec.
123 or not; evidence is relevant to the issue and admissible.
As distinct from private interest, the principle on which protection is given is that where a conflict arise between public and private interest, private interest must yield to the public interest.
In S.P. Gupta & Ors.
etc vs Union of India & Ors.
[1982] 2 SCR 365, this court by seven Judges ' bench held that the court would allow the objection to disclosure if it finds that the document relates to affairs of State and its disclosure would be injurious to public interest, but on the other hand, if it reaches the conclusion that the document does not relate to affairs of State or that the public interest does not compel its non disclosure or that the public interest in the administration of justice in the particular case before it overrides all other aspects of public interest, it will overrule the objection and order disclosure of the document.
When an objection was raised against disclosure of a particular document that it belongs to a class which in the public interest ought not to be disclosed, whether or not it would be harmful to disclose that class document or the contents of that particular document forming part of the class would be injurious to the interest of the state or the public service, it would be difficult to decide in vacuum the claim because it would almost invariably be supported by an affidavit made either by the Minister or head of the department and if he asserts that to disclose the contents of the document would or might do to the nation or the public service a grave injury, the court out of deference will be slow to question his opinion or to allow any interest, even that of justice, to prevail over it unless there can be shown to exist some factors suggesting either lack of good faith or an error of judgment on the part of the minister or the head of the department or the claim was made in administrative routine without due consideration or to avoid inconvenience or injury to their defence.
However, it is well settled law that the court is not bound by the statement made by the minister or the head of the department in the affidavit and it retains the power to balance the injury to the State or the public service against the risk of injustice.
The real question which the court is required to consider is whether public interest is so strong to override the ordinary right and interest of the litigant that he shall be able to lay before a court of justice of the relevant evidence.
In balancing the competing interest it is the duty of the court to see that there is the public interest that harm shall not be done to the nation or the 827 public service by disclosure of the document and there is a public interest that the administration of justice shall not be frustrated by withholding documents which must be produced if justice is to he done.
It is, therefore, the paramount right and duty of the court not of the executive to decide whether a document will be produced or may he withheld.
The court must decide which aspect of public interest predominates or in other words whether the public interest which requires that the document should not be produced out weighs the public interest that a court of justice in performing its functions should not be denied access to relevant evidence.
In some cases, therefore, the court must weight one competing aspect of the public interest against the other, and decide where the balance lies.
If the nature of the injury to the public interest is so grave a character then even private interest or any other interest cannot be allowed to prevail over it.
The basic question to which the court would.
therefore, have to address itself for the purpose of deciding the validity of the objection would be, whether the document relates to affairs of State or in other words, is it of such a character that its disclosure would be against the interest of the State or the public service and if so, whether the public interest in it ; non disclosure is so strong that it must prevail over the private interesting the administration of justice and on that account, it should not be allowed to be disclosed.
By operation of Sec. 162 of Evidence Act the final decision in regard to the validity of an objection against disclosure raised under section 123 would always be with the court.
The contention, therefore, that the claim of public interest immunity claimed in the affidavit of the State Minister for Finance and the Secretary need privacy and claim for immunity of state documents from disclosure is unsustainable.
The same is the law laid down by the Commonwealth countries, see Conway vs Rimmer. ; ; D. vs National Society for the Prevention of Cruelty to Children ; ; Burmah Oil Co. Ltd. vs Governor and Company of the Bank of England, ; ; Butters Gas and Oil Co. vs
Hammer ; Air Canada vs Secretary of State for Trade ; and Council of Civil Service Unions vs Minister for the Civil service, ; Pursuant to the law laid down in Conway 's, case the Administration of Justice Act, 1970 was made enabling the court to order disclosure of the documents except where the court, in exercise of the power under sections 31 to 34, considered that compliance of the order would be injurious to the public interest consistent with the above approach is the principle laid by this court in S.P. Gupta 's case.
In United States of America the Primacy to the executive privilege is given only where the court is satisfied that disclosure of the evidence will expose military 828 secrecy or of the document relating to foreign relations.
In other respects the Court would reject the assertion of executive privilege.
hi United States vs Reynolds [1935] 1 ; , Environment Protection Agency vs Patsy T. Mink [410] U.S. ; 11; Newyork Times vs U. section ; Pentagan Papers case and U. section vs Richard M. Nixon ; = ; 1035.
What is known as Watergate Tapes case, the Supreme Court of U.S.A. rejected the claim of the President not to disclose the conversation he had with the officials.
The Administrative Procedure Act 5, Art 552 was made.
Thereunder it was broadly conceded to permit access to official information.
Only is stated hereinbefore the President is to withhold top secret documents pursuant to executive order to be classified and stamped as "highly sensitive matters vital to our national defence and foreign policies".
In other respects under the Freedom of Information Act, documents are accessible to production.
In the latest Commentary by McCormick on Evidence, 4th Ed. by John W. Strong in Chapter 12, surveyed the development of law on the executive privilege and stated that at p. 155, that "once we leave the restricted area of military and diplomatic secrets, a greater role for the judiciary in the determination of governmental claims of privilege becomes not only desirable but necessary. . .
Where these privileges.
are claimed, it is for the judge to determine whether the interest in governmental secrecy is out weighed in the particular case by the litigant 's interest in obtaining the evidence sought.
A satisfactory striking of this balance will, on the one hand, require consideration of the interests giving rise to the privilege and an assessment of the extent to which disclosure will realistically impair those interests.
On the other hand, factors which will affect the litigant 's need will include the significance of the evidence sought for the case.
the availability of the desired information from other sources, and in some instances the nature of the right being, asserted in the litigation." In Robinson vs State of South Australia, PC, Shankey vs Whitlan [1979] 53 ALR p.1; FAI Insurances Ltd. vs The Hon.
Sir, Henry Arthus Winneke and ors; , , whitlan vs Australian Consolidated Press Ltd.,[1985] 60 ALR p.7; Minister for Arts Heritage and Environment and Ors.
vs Pekoi Wallsend Ltd and Ors.
and Commonwealth of Australia vs Northern Land Council, and Anr.
, Australian Courts consistently rejected the executive privilege and exercise the power to determine whether the documents need immunity from disclosure in the public interest.
The same view was endorsed by the Supreme Court of 'Canada in R. vs Shinder and Gagnon vs Quebec, Securities Commission ; The Supreme Court of Victoria in Bruce vs Waldron.
[1963] VLR p.3; The Court of Appeal of New south Wales in Re Tunstall.
exhibit P. Brown, [1966] 84 W.N. (Pt.
2) 829 [N.S.W.] 13.
The Court of Appeal of the New Zealand in Corbett vs
Social Security Commission , Creednz Inc vs Governor General [1981] 1 N.L.R. p. 172; The Supreme Court of Ceylon in Apponhamy vs Illangaretute, [1964] 66 C.L.W. 17.
The Court of Appeal of Jamaica in Allen vs By field [No.2] at page 71 and The Court of Session in Scotland in Glasqow Corporation vs Central Land Board, [1956] Scotland Law Time p.4.
The learned Solicitor General contended that a Cabinet sub committee constituted under Rules of Business approved the appointment of Harish Chander as President of CEGAT.
The President accordingly appointed him.
By operation of article 77 (3) and 74(1), the appointment was made by the President.
The file constitutes Cabinet documents forming part of the Preparation of the documents leading to the formation of the advice tendered to the President.
Noting of the officials which lead to the Cabinet note and Cabinet decision and all papers brought into existence to prepare Cabinet note are also its part.
Section 123 of the Evidence Act and Article 74(2) precludes this court from inquiring into the nature of the advice tendered to the President and the documents are, therefore, immuned from disclosure.
The disclosure would cause public injury preventing candid and frank discussion and expression of views by the bureaucrats at higher level and by the Minister/Cabinet Sub committee causing serious injury to public service.
Therefore, Cabinet papers, Minutes of discussion by heads of departments; high level documents relating to the inner working of the government machine and all papers concerned with the government policies belong to a class documents which in the public interest they or contents thereof must be protected against disclosure.
The executive power of the Union vested in the President by Operation of article 53(1) shall be exercised by him either directly or through officers subordinate to him in accordance with the Constitution.
By operation of article 73(1), subject to the provisions of the constitution, the executive power of the Union shall extend to the matters with respect to which Parliament has power to make laws.
Article 75(1) provides that the Prime Minister shall be appointed by the President and the other Ministers shall be appointed by the President on the advice of the Prime Minister; article 75(3) posits that the Council of Ministers shall be collectively responsible to the House of the People; article 75(4) enjoins that before a Minister enters upon his office, the President shall administer to him the oaths of office and of secrecy according to the forms set out for the purpose in the Third Schedule to the Constitution.
Article 74(1) as amended by section 11 of the Constitution 42nd Amendment Act, 1976 with effect from January 3, 1977 postulates that there shall be a Council of Ministers with the Prime Minister as the head to aid and advise the President who shall, in the exercise of his functions, act in accordance with such 830 advice.
The proviso thereto added by section 11 of the Constitution 44th Amendment Act, 1978 which came into effect from June 20, 1979 envisages that "provided that the President may require the Council of Ministers to reconsider such advice, either generally or otherwise, and the President shall act in accordance with the advice tendered after such reconsideration.
" Clause (2) declares that "the question whether any, and if so what, advice was tendered by Minister to the President shall not be inquired into in any court.
" In Satwant Singh Sawhney vs D. Ramarathnam.
Asstt.
Passport Officer , and in Maganbhai Ishwarbhai Patel vs Union of India and anr.
; , this Court held that the Ministers are officers subordinate to the President under article 53 (1) or 'the Governor under article 154 (1),.
as the case may be.
The President exercises his executive power under Art: 74 (1) through the Council of Ministers with the Prime Minister as its head who shall be collectively responsible to the House of People.
The exercise of the power would be as per the rules of business for convenient transaction of the Govt.
administration made under article 77(3), viz., the Govt.
of India (Transaction of Business) Rules, 1961 for short the 'Business Rules '.
The Prime Minister shall be duty bound under article 78 to communicate to the President all decisions of the Council of Ministers relating to the administration of the affairs of the Union and proposals for legislation etc.
The details whereof are not material.
Article 77(1) prescribes that "all executive actions of the Govt.
of India shall be expressed to be taken in the name of the President and shall be authenticated in the manner specified in the Rules made by the President.
The President issued business rules and has allocated diverse functions to the Council of Ministers, its committees and the officers subordinate to them.
In Shamsher Singh vs State of Punjab ; , a Bench of seven Judges, speaking through Ray, C.J., held that the executive power is generally described as the residue which does not fall within legislative or judical power but executive power also partakes of legislative or judicial, actions.
All powers and functions of the President, except his legislative powers, are executive powers of the Union vested in the President under article 53(1).
The President exercises his functions, except conferred on him to be exercised in his discretion, with the aid and advice of the Council of Ministers as per the business rules allocated among his Ministers or Committees.
Wherever the constitution requires the satisfaction of the President, the satisfaction required of him by the Constitution is not the personal satisfaction of the President, but is of the Cabinet System of Govt.
The Minister lays down the policies.
The Council of Ministers settle the major policies.
The civil servant does it on behalf of the Govt.
as limb of the Govt.
The decision of any Minister or officer under the rules is the decision of the President.
831 Cabinet is a constitutional mechanism to ensure that before important decisions are reached many sides of the question are weighed and considered which would mean that much work must be done beforehand in interdepartmental discussions and in the preparation of papers for Cabinet Committees.
Political decisions of importance are in their nature complies and need sufficient time and considerate thought.
Equally, the decisions relating to public service need probity and diverse consideration.
The Cabinet system is extremely well adapted to making considered decisions with all due speed and expedition.
The principle of ministerial responsibility has a verity of meanings precise and imprecise, authentic and vague.
Parliament rarely exercises direct control over Ministers.
Though the floor of the House is the forum for correcting excesses of the government but rarely a place where a Minister can be expected to keep the information secret.
Therefore, the Minister is answerable for his decision to the Parliament is fanciful.
Sir Ivor Jennings,in his Cabinet Government, stated that the Cabinet is the supreme directing authority.
It integrates what would otherwise be a heterogeneous collection of authorities exercising a vast variety of functions.
Neither the Cabinet nor the Prime Minister, as such, claims to exercise any powers conferred by law.
They take the decision, but the acts which have legal effect are taken by others the Privy Council, a Minister, a statutory commission and the like.
At page 81, it is stated, that the existence and activities of these coordinating ministers does not impair or diminish the responsibility to Parliament of the departmental ministers whose policies they co ordinate.
The ministers are fully accountable to Parliament for any act of policy or administration within their departmental jurisdiction.
It does not follow that the coordinating ministers are non responsible.
Having no statutory powers as coordinating ministers, they perform in that capacity no formal acts.
But they share in the collective responsibility of the Govt.
as a whole, and, as Minister they are accountable to Parliament.
At page 233, he stated that the Cabinet has to decide policy matters.
Cabinet is policy formulating body.
When it has determined on a policy, the appropriate department carries it out, either by administrative action within the law or by drafting a bill to be submitted to Parliament so as to change the law.
The Cabinet is a general, controlling body.
It neither desires, nor is able to deal with all the numerous details of the Govt.
It expects a minister to take all decisions which are not of real political importance.
Every Minister must, therefore, exercise his own discretion as to what matters arising in his department ought to receive cabinet sanction.
At page 35 1, he stated that civil servants prepare memorandum for their Ministers.
Ministers discuss in Cabinet.
Proposals are debated in the House of Commons.
At the, persons involved are peculiar people and nobody knows what the man in the back street thinks of it all, though the politician often thinks he does.
On the Cabinet 832 Minister 's responsibility at page 449, he stated that when it is said that a Minister is responsible to Parliament, it is meant that the House of Commons (in our constitution Lok Sabha) may demand an explanation.
If that explanation is not considered satisfactory and the responsibility is collective, the House will vote against the Govt.
and so compel a resignation or a dissolution.
If the responsibility is not collective, but the act or advice was due to the negligence of or to an error of judgment by a Minister and the House disapproves, the Minister will resign.
In Halsbury 's Laws of England, Fourth Ed., Vol. 8, para 820, it is stated that the Cabinet control of legislative and executive functions, the "modern English system of government is the concentration of the control of both legislative and executive functions in a small body of men, presided over by the Prime Minister, who are agreed on fundamentals and decide the most important questions of policy secretly in the Cabinet.
The most important check on their power is the existence of a powerful and organised parliamentary opposition, and the possibility that measures proposed or carried by the government may subject them to popular disapproval and enable the Opposition to defeat them at the next general election and supplant them in their control of the executive.
In Great Britain, Cabinet system is based on conventions.
Patrick Gordon Walker in his 'The Cabinet ' 1973 Revised Ed.
at p. 178 stated that basically Cabinet is a constitutional mechanism to ensure that before important decisions are reached many sides of the question are weighed and considered.
This means that much work must be done beforehand in interdepartmental discussions and in the preparation of papers for Cabinet Committees and the Cabinet.
Cabinet that acts without briefs or over hastily ' think for themselves ' usually, in my experience, make mistaken decisions.
Political decisions of importance are in their nature complex and need some time and thought.
The cabinet system is extremely well adapted to making considered decisions with all due speed.
Cabinet discussions as distinct from Cabinet decisions must, from their nature, be kept secret.
At page 184 he maintained that the main effective change towards less secrecy would be for the Cabinet to share with Parliament and public more of the factual information on which the government makes some of their decisions.
Moves in this direction have begun to be taken.
In his "the British Cabinet" John P. Mackintosh, 2nd Edn.
at p. 11 stated that if there is dissension between Ministers, matters may be thrashed out in private and the contestants plead in turn with the Prime Minister, but it is in the Cabinet that the conflict must be formally solved, the minority either accepting the decision and assuming joint responsibility or, if they cannot tolerate it, tender their resignations.
At p.529, he stated that some decisions are taken by the Prime Minister alone, some in consultation between him and the senior Ministers, while others are left to heads of departments, to the full Cabinet, to the concerned Cabinet Committee, or to the 833 permanent officials.
Of these bodies the Cabinet holds the central position because, thou oh it does not often govern in that sense, it is the place where disputes are settled, where major policies are endorsed and where the balance of the forces emerge if there is disagreement.
In the end, most decisions have to be reported to the Cabinet and Cabinet Minister are the only ones who have the right to complain, if they have not been informed or consulted.
Hood Phillips and Paul Jackson in their Constitutional and Administrative Law, 7th Ed.
at p.301 stated that the duties of Cabinets are: "(a) the final determination of the policy to be submitted to Parliament ', (b) the supreme control of the national executive in accordance with the policy prescribed by the Parliament, and (c) the continuous coordination and delimitation in the interests of the several departments of State.
" The Cabinet, giving collective . advice" to the Sovereign through the Prime Minister, was said to exercise under Parliament, supreme control over all departments of State, and to be the body which coordinate the work on the one hand of the executive and the legislature, and on the other hand of the organs of the executive among themselves.
At p.307, they stated that "committee system has increased the efficiency of the Cabinet, and enables a great deal more work to be done by Ministers".
The Cabinet itself is left free to discuss controversial matters and to make more important decisions, and its business is better prepared.
The system also enables non Cabinet Ministers to be brought into discussions.
At p.309 it is stated that "the responsibility of Ministers is both individual and collective".
The individual responsibility of a Minister for the performance of his official duties is both legal and conventional: it is owed legally to the sovereign and also by convention to Parliament.
Responsibility is accountability or answerability.
The responsible Minister is the one under whose authority an act was, done, or "who must take the constitutional consequences of what has been done either by himself or in his department".
In 'the Cabinet Walker, at page 183 stated that the feeling is widespread that the Cabinet shrouds its affairs in too much secrecy and that Parliament, Press and public should be able to participate to a greater degree in formulation of policy.
With few exceptions Cabinet decisions have to be made public in order to he made effective, although a small number that do not need to be executed, do not become known, for instance talks with a foreign country or a decision not to take some action.
All other cabinet decisions are necessarily disclosed and are subject to public scrutiny.
Cabinet discussions as distinct from Cabinet decisions must, from their nature, be kept secret.
Cabinet discussions often depend upon confidential advice from civil servants or reports from Ambassadors.
If those are disclosed and thus become subject to public attack, it would be extremely difficult for the cabinet 834 to secure free and frank advice.
In Rai Sahib Ram Jawaya Kapur & Ors.
vs The State of Punjab at 236, this Court held that the existence of the law is not a condition precedent for the exercise of the executive power.
The executive power connotes the residual government function that remain after legislative and judicial functions are taken away, subject to the provisions of the Constitution or the law.
It would thus be held that the Cabinet known as Council of Ministers headed by Prime Minister under article 75(3) is the driving and steering body responsible for the Governance of the country.
They enjoy the confidence of the Parliament and remain in office so long as they maintain the confidence of the majority.
They are answerable to the Parliament and accountable to people.
They bear collective responsibility and shall be bound to maintain secrecy.
Their executive function comprises of both the determination of the policy as well as carrying it into execution, the initiation of legislation, the maintenance of order, the promotion of social and economic welfare, direction of foreign policy.
In short the carrying on or supervision of the general administration of the affairs of Union of India which includes political activity and carrying on all trading activities, the acquisition, holding and disposal of property and the making of contracts for any purpose.
In short the primary function of the Cabinet is to formulate the policies of the Govt.
in confirmity with the directive principles of the Constitution for the Governance of the nation; place before the Parliament for acceptance and would carry on the executive function of the State as per the provisions of the Constitution and the laws.
Collective responsibility under article 75(3) of the Constitution inheres maintenance of confidentiality as enjoined in oaths of office and of secrecy set forth in Schedule III of the Constitution that the Minister will not directly or indirectly communicate or reveal to any person or persons any matter which shall be brought under his/her consideration or shall become known to him/her as Minister except as may be required for the "due discharge of his/her duty as Minister".
The base and basic postulate of its significance is unexceptionable.
But the need for and effect of confidentiality has to be nurtured not merely from political imperatives of collective responsibility envisaged by article 75(3) but also from its pragmatism.
Bagehot in his 'The English Constitution ', 1964 Edition at p. 68 stated that the most curious point about the Cabinet is that so very little is known about it.
The meetings are not only secret in theory, but secret in reality.
By the present practice, no official minute in all ordinary cases is kept of them.
Even a private note is discouraged and disliked. .
But a Cabinet, though it is a committee of the legislative assembly,is a committee with a power which no assembly would unless 835 for historical accidents, and after happy experience have been persuaded to entrust to any committee.
It is a committee which can dissolve the assembly which appointed it; it is a committee with a suspensive veto a committee with a power of appeal.
In Commonwealth of Australia vs Northern Land Council & Anr.
[1991] 103 Australian Law Reports, p. 267, the Federal Court of Australia General Division, was to consider the scope of confidentiality of the cabinet papers, collective responsibility of the Council of Ministers and the need for discovery of the Cabinet note books and dealt with the question thus : "The conventional wisdom of contemporary constitutional practice present secrecy as a necessary incident of collective responsibility.
But historically it seems to have derived from the 17th century origins of the cabinet as an inner circle of Privy Councillors, sometimes called the Cabinet Council who acted as advisors to the monarch. .
However, that basis for confidentiality has to be assessed in the light of the political, imperatives of collective responsibility.
" Confidentiality has been described as ' the natural correlative of collective responsibility.
It is said to be difficult for Ministers to make an effective defence in public of decisions with which it is known that they have disagreed in the course of Cabinet discussions.
The Cabinet as a whole is responsible for the advice and conduct of each of its members.
If any member of the Cabinet seriously dissents from the opinion and policy approved ' by the majority of his colleagues it is his duty as a man of honour to resign.
Cabinet secrecy is an essential part of the structure of government which centers of political experience have created.
To impair it without a very strong reason would be vandalism the wanton rejection of the fruits of civilisation.
By operation of article 75 (3) and oaths of office and of secrecy taken, the" individual Minister and the Council of Ministers with the Prime Minister as its head, as executive head of the State as a unit, body or committee are individually and collectively responsible to their decisions or acts or policies and they should work in unison and harmony.
They individually and collectively maintain secrecy of the deliberations both of administration and of formulating executive or legislative policies.
Advice tendered by the Cabinet to the President should be unanimous.
The Cabinet should stand or fall together.
Therefore, the Cabinet as a whole is collectively responsible for the advice tendered to the President and for the conduct of business of each of his/her department.
They require to maintain secrecy and confidentiality in the performance of that duty of office entrusted by the Constitution and the laws.
Political promises or aims as per manifesto of the political party are necessarily broad; in their particular applications, when voted to power, may be the subject of disagreement among the members of the Cabinet.
836 Each member of the Cabinet has personal responsibility to his conscience and also responsibility to the Government.
Discussion and persuasion may diminish disagreement, reach unanimity, or leave it unaltered.
Despite persistence of disagreement, it is a decision, though some members like it less than others.
Both practical politics and good Government require that those who like it less must still publicly support it.
If such support is too great a strain on a Minister 's conscience or incompatible to his/her perceptions of commitment and find it difficult to support the decision, it would be open to him/her to resign.
So the price of the acceptance of Cabinet office is the assumption of the responsibility to support Cabinet decisions.
The burden of that responsibility is shared by all.
Equally every member is entitled to insist that whatever his own contribution was to the making of the decision, whether favourable or unfavourable, every other member will keep it secret.
Maintenance of secrecy of an individual 's contribution to discussion, or vote in the Cabinet guarantees most favourable and conducive atmosphere to express views formally.
To reveal the view, or vote, of a member of the Cabinet, expressed or given in Cabinet, is not only to disappoint an expectation on which that member was entitled to rely, but also to reduce the security of the continuing guarantee, and above all, to undermine the principle of Collective responsibility.
Joint responsibility supersede individual responsibility; in accepting responsibility for joint decision, each member is entitled to an assurance that he will be held responsible not only for his own, but also as member if the whole Cabinet which made it; that he will be held responsible for maintaining secrecy of any different view which the others may have expressed.
The obvious and basic fact is that as part of the machinery of the Government, Cabinet secrecy is an essential part of the structure of the government.
Confidentiality and collective responsibility in that scenario are twins to effectuate the object of frank and open debate to augment efficiency of public service or effectivity of collective decision to elongate public interest.
To hamper and impair them without any compelling or at least strong reasons, would be detrimental to the efficacy of public administration.
It would tantamount to wanton rejection of the fruits of democratic governance, and abdication of an office of responsibility and dependability.
Maintaining of top secrecy of new taxation policies is a must but leaking budget proposals a day before presentation of the budget may be an exceptional occurrence as an instance.
Above compulsive constraints would give rise to an immediate question whether the minister is required to disclose in the affidavit the reasons or grounds for public interest immunity of disclosure and the oath of secrecy is thereby whether breached or whether it would be a shield for non production of unpub 837 lished state documents or an escape route to acts impugned as fondly pleaded and fervently argued by Attorney General.
It is already held that on issuance of rule nisi or discovery order nisi" every or, ,an of the State or the authority or a person is enjoined to act in aid of this court and pursuant thereto shall be required to produce the summoned documents.
But when a claim for public interest immunity has been laid for non disclosure of the state documents, it is the Minister 's "due discharge of duty" to state on oath in his affidavit the grounds on which and the reasons for which he has been persuaded to claim public interest immunity from disclosure of the state papers and produce them.
The oath of secrecy the Minister had taken does not absolve him from filing the affidavit.
It is his due discharge of constitutional duty to state in the affidavit of the grounds or reasons in support of public interest immunity from producing the state documents before the Court, In Attorney General vs Jonathan Cape Ltd. [1976] Queen 's Bench, 752, Lord Widgery, C.J., repelled the contention that publication of the diaries maintained by the Minister would be in breach of oath of secrecy.
In support of the plea of secrecy reliance was placed on the debates on cabinet secrecy, that took place on December 1, 1932 in the House of Lords.
An extract from the official report of House of Lords, at Column 520 Lord Hailsham 's speech emphasised the imperative to maintain secrecy and the limitation which rigidly hedged around the position of a Cabinet Minister thus: "having heard that oath read your Lordships will appreciate what a complete misconception it is.
to suppose, as some people seem inclined to suppose, that the only obligation that rests upon a Cabinet Minister is not to disclose what are described as the Cabinet 's minutes.
He is sworn to keep secret all matters committed and revealed unto him or that shall be treated secretrly in council".
He went on to point out that: "I have stressed that because, as my noble and learned friend Lord Halsbury suggested and the noble Marquis, Lord Salisbury, confirmed, Cabinet conclusions did not exist until 16 years ago.
The old practice is set out in a book which bears the name of the noble Earl 's father, Halsbury 's Laws of England, with which I have had the honour to be associated in the present edition.
" Then in column 532 of the speech Lord Hailsham, stated that the oath of secrecy should be maintained.
"Upon matters on which it is their shorn duty to express, their. opinions.
with complete frankness and to give all information, without any haunting fear that what happens may hereafter by publication create difficulties for themselves or, what is far more grave, may create complications for the king and country that they are trying to serve.
For those reasons I hope that the inflexible rule which has hitherto prevailed will be maintained in its integrity, and that if there has been any relaxation or misunderstanding, of which I say nothing, 838 the debate in this House will have done something to clarify the position and restate the old rule in all its rigour and all its inflexibility." As a Council of Minister, his duty is to maintain the sanctity of oath and to keep discussions and information he had during its course as secret.
Lord Widgery after considering the evidence of a former Minister examined in that case who did not support the view of Lord Hailsham, held thus: "that degree of protection, afforded to cabinet papers and discussions cannot be determined by single rule of thumb.
Some secrets require a high standard of protection for short time, other requires protection till a new political generation has taken over.
In the Present action against the literary executors, "the perpetual injunction against them restraining from their publication was not proper".
It was further held that the draconian remedy when public interest demands it would be relaxed.
In Sankey vs Whitlan 1979 153 Australian Law Journal Reports, 11, while considering the same question, Gibbs, A.,C.J., at p.23, held that the fact that members of the Executive Council are required to take a binding oath of secrecy does not assist the argument that the production of State papers cannot be compelled.
The plea of privilege was negatived and the Cabinet papers were directed to be produced.
The contention that the Minister is precluded to disclose in his affidavit the grounds or the reasons as to how he dealt with the matter as a part of the claim for public interest immunity is devoid of substance.
It is already held that it is the duty of the Minister to file an affidavit stating the grounds or the reasons in support of the claim from public interest immunity.
He takes grave risk on insistence of oath of secrecy to avoid filing an affidavit or production of State documents and the court may be constrained to draw such inference as are available at law.
Accordingly we hold that the oath of office of secrecy adumberated in Article 75(4) and Schedule III of the Constitution does not absolve the Minister either to state the reasons in support of the public interest immunity to produce the state documents or as to how the matter was dealt with or for their production when discovery order nisi or rule nisi was issued.
On the other hand it is his due discharge of the duty as a Minister to obey rule nisi or discovery order nisi and act in aid of the court.
The next limb of the argument is that the Cabinet Sub committee 's decision is a class document and the contents of state documents required to be kept in confidence for efficient functioning of public service including candid and objective expression of the views on the opinion by the Ministers or bureaucrats etc.
The prospects of later disclosure at a at a litigation would hamper and dampen 839 candour causing serious incursion into the efficacy of public service and result in deterioration in proper functioning of the public service.
This blanket shielding of disclosure was disfavoured right from Robinson vs State of South Australia [1931] Appeal Cases, (P.C.), p. 704 Lord Warrington speaking for the Board held that the privilege is a narrow, one and must sparingly be exercised.
This court in Raj Narain 's case considering green book, i.e., guidelines for protecting VVIPs on tour, though held to be confidential document and be wihheld from production, though part of its contents were already revealed, yet it was held that confidentiality itself is not a head of privilege.
In S.P. Gupta 's case, Bhagwati, J., speaking per majority, reviewing the case law and the privilege against disclosure of correspondence exchanged between the Chief Justice of the Delhi High Court, Chief Justice of India and the Law Minister of the Union concerning extension of term or appointment of Addl.
Judges of the Delhi High Court, which was not dissented, (but explained by Fazal Ali,J.) held that in a democracy, citizens are to know what their Govt.
is doing.
No democratic Govt.
can survive without accountability and the basic postulate of accountability is that the people should have information about the functioning of the Govt.
It is only if the people know how the Govt.
is functioning and that they can fulfill their own democratic rights given to them and make the democracy a really effective participatory democracy.
There can be little doubt that exposure to public scrutiny is one of the surest means of running a clean and healthy administration.
Disclosure of information in regard to the functioning of the Govt.
must be the rule and secrecy can be exceptionally justified only where strict requirements of public information was assumed.
The approach of the court must be to alleviate the area of secrecy as much as possible constantly with the requirement of public interest bearing in mind all the time that the disclosure also serves an important ' aspect of public interest.
In that case the correspondence between the constitutional functionaries was inspected by this court and disclosed to the opposite parties to formulate their contentions.
In Conway 's case, the speech of Lord Reid is the sole votery to support the plea of confidentiality emphasising that, "the business of Govt.
is difficult enough as it is no Govt.
could contemplate with equanimity the inner workings of the Govt.
machine being exposed to the gazes of those ready to criticise without adequate knowledge of the background and perhaps with some axe to grind".
Other Law Lords negated it.
Lord Morris of Borth y Gest referred it as "being doubtful validity".
Lord Hodson thought it "impossible to justify the doctrine in its widest term.
Lord Pearce considered that "a general blanket protection of wide classes 840 led to a 0complete lack of common sense".
Lord Upjohn found it difficult to justify the doctrine "when those in other walks of life which give rise to equally important matters of confidence in relation to security and personal matters as in the public service can claim no such privilege".
In Burmah Oil Co 'section case House of Lords dealing with the cabinet discussion laid that the claim for blanket immunity "must now be treated as having little weight, if any".
It was further stated that the notion that "any competent and conscientious public servant would be inhibited at all in the candour of his writings by consideration of the off chance that they might have to be produced in a litigation as grotesque".
The plea of impairment of public service was also held not available stating "now a days the state in multifarious manifestations impinges closely upon the lives and activities of individual citizens.
Where this was involved a citizen in litigation with the state or one of its agencies, the candour argument is an utterly insubstantial ground for denying his access to relevant document".
The candour doctrine stands in a different category from that aspect of public interest which in appropriate circumstances may require that the "Sources and nature of information confidentially tendered" should be with held from disclosure.
In Reg vs, Lewes Justices, Ex Parte Secretary of state for the Home Department [1973] A.C. 388 and D.V National Society ,for the Prevention of Cruelty to Children ; , are cases in point on that matter and needs no reiteration.
It would, therefore, be concluded that it would be going too far to lay down that no document in any particular class or one of the categories of cabinet papers or decisions or contents thereof should never, in any circumstances, be ordered to be produced.
Lord Keith in Burnnah Oil 's case considered that it would be going too far to lay down a total protection to cabinet minutes.
The learned Law Lord at p. 1134 stated that "something must turn upon the subject matter, the persons who dealt with it, and the manner in which they did so.
In so far as a matter of government policy is concerned, it may be relevant to know the extent to which the policy remains unfulfilled, so that its success might be prejudiced by disclosure of the considerations which led to it.
In that context the time element enters into the equation.
Details of an affair which is stale and no longer of topical significance might be capable of disclosure without risk of damage to the public interest. .
The nature of the litigation and the apparent importance to it of the documents in question may in extreme cases demand production even of the most sensitive communications to the highest level." Lord Scarman also objected total immunity to Cabinet documents on the plea of candour.
In Air Canada 's case, Lord Fraser lifted Cabinet minutes front the total immunity to disclose, although same were entitled to a hi oh degree of protection . ." 841 In Jonathan Cape Ltd. 's case, it was held that, "it seen is that the degree of protection afforded to Cabinet papers and discussions cannot be determined by a single rule of thumb.
Some secrets require a high standard of protection for a short time.
Others require protection until new political generation has taken over.
Lord Redcliff Committee, appointed pursuant to this decision, recommended time gap of 15 years to withhold disclosure of the cabinet proceedings and the Govt.
accepted the same.
Shanky 's case ratio too discounted total immunity to the Cabinet document as a class and the plea of hampering, freedom and candid advice or exchange of views and opinions was also rejected.
It was held that the need for protection depends on the facts in each case.
The object of the protection is to ensure the proper working of the Govt.
and not to shield the Ministers and servants of the crown from criticism however, intemperate and unfairly based.
Pincus J. in Harbour Corp. of Queensland vs Vessey Chemicals Ply Ltd. ; Wilcox J. in Manthal Australia Pty Ltd. vs Minister for industry, Technology and commerce 11987171 ALR 109; Koowarta vs Bjelke Petersen [1988] and took the same view.
In Australia, the recognised rule thus is that the blanket immunity of all Cabinet documents was given a go bye.
In United States vs Richard M. Nixon ; = 41 Lawyers Ed., 2nd Ed., 1039, a grand jury of the United States District Court for the District of Columbia indicted named individuals, charging them with various offences, including conspiracy to defraud the United States and to obstruct justice; and Mr Nixon, the President of United States was also named as an unindicted coconspirator.
The special prosecutor issued a third party subpoena duces tecum directing the President to produce at the trial certain tape recordings and documents relating to his conversations with aides and advisors known as Watergate rapes.
The President 's executive privilege again st disclosure of confidential communications was negatived holding that the right to the production of all evidence at a criminal trial has constitutional dimensions under sixth amendment.
The fifth amendment guarantees that no person shall be deprived of liberty without due process of law.
It was, therefore, held that it is the manifest duty of the court to vindicate those guarantees, and to accomplish that, it is essential that all relevant and admissible evidence be produced.
Though the court must weigh the importance of the general privilege of confidentiality of Presidential communications in performance of his responsibilities, it is an inroad on the fair administration of criminal justice.
In balancing between the President 's generalised interest in confidentiality and the need for relevant evidence in the litigation, civil or criminal and though the interest in preserving confidentiality is weighty indeed "and entitled to great respect.
" Allowing privilege to withhold evidence that is demonstrably relevant in a criminal trial would cut deeply into the guarantee of due process of law and gravely impair the basic function of the courts.
A President 's acknowledged need for 842 confidentiality in the communications of his office is general in nature, whereas constitutional need for production of relevant evidence in a criminal proceeding is specific, and central to the fair adjudication of a particular criminal case in the administration of justice.
Without access to specific facts a criminal prosecution may be totally frustrated.
The President 's broad interest in confidentiality of communications will not be vitiated by disclosure of a limited number of conversations preliminarily shown to have some bearing on the pending criminal cases.
If the privilege is based only on the generalized interest in confidentiality, it cannot prevail over the fundamental demands of due process of law in the fair administration of criminal justice.
The generalized assertion of privilege must yield to the demonstrated, specific need for evidence in a pending criminal trial.
Exemptions were engrafted only to the evidence relating to "the security of the State, diplomatic relations and defence".
It was held that "the importance of this confidentiality is too plain to require further discussion.
Human experience teaches that those who expect public dissemination of their remarks may well temper candor with a concern for appearances and for their own interest to the detriment of the decision making process.
Whatever the nature of the privilege of confidentiality of Presidential communications in the exercise of article 11 powers, the privilege can be said to derive from the supremacy of each branch within its own assigned area of constitutional duties.
Certain powers and privileges flow from the nature of enumerated powers, the protection of the confidentiality of Presidential communications has similar constitutional underpinnings.
However, neither the doctrine of separation of powers, nor the need for confidentiality of high level communications, without more, can sustain an absolute, unqualified Presidential privilege of immunity from judicial process under all circumstances.
The President 's need for complete candor and objectivity from advisers calls for great deference from the courts.
However, when the privilege depends solely on the broad, undifferentiated claim of public interest in the confidentiality of such conversations, a confrontation with other values arises.
Absent a claim of need to protect military, diplomatic, or sensitive national security secrets, we find it difficult to accept the argument that even the very important interest in confidentiality of Presidential communications is significantly diminished by production of such material for in camera inspection with all the protection that a district court will be obliged to provide.
In a clash of public interest that harm shall be done to the nation or the public service by disclosure of certain documents and the administration of justice shall not be frustrated by withholding the document which must be produced if justice is to be done, it is the courts duty to balance the competing interests by weighing in scales, the effect of disclosure on the public interest or injury to administration 843 of justice, which would do greater harm.
Some of the important considerations in the balancing act are thus: "in the interest of national security some information which is so secret that it cannot be disclosed except to a very few for instance the state or its own spies or agents just as other counters have.
Their very lives may be endangered if there is the slighest hint of what they are doing.
In Mark Hosenball.
R. vs Home Secretary.
ex parte Hosenball , in the interest of national security Lord Denning, M.R. did not permit disclosure of the information furnished by the security service to the Home Secretary holding it highly confidence The public interest in the security of the realm was held so great that the sources of the information must not be disclosed nor should the nature of the information itself be disclosed.
There is a natural temptation for people in executive position to regard the interest of the department as paramount forgetting that there is yet another Greater interest to be considered, namely, the interest of justice itself.
Inconvenience and justice are often not on speaking terms.
No one can suppose that the executive will never be guilty of the sins common to all people.
Sometimes they may do things which they on which they on ought not to do or will not do things they ought to do.
The court must be alive to that possibility of the executive committing illegality in its process, exercising its powers, reaching a decision which no reasonable authority would have reached or otherwise abuse its powers, etc.
If and when such wrongs are suffered or encountered injustice by an individual what would be the remedy? Just as shawl is not suitable for winning the cold, so also mere remedy of writ of mandamus, certiorari, etc.
or such action as is warranted are not enough, unless necessary foundation with factual material, in support thereof, are laid.
Judicial review aims to protect a citizen from such breaches of power, non exercise of power or lack of power etc.
The functionary must be guided by relevant and germane considerations.
If the proceeding, decision or order is influenced by extraneous considerations which ought not to have been taken into account, it cannot stand and needs correction, no matter of the nature of the statutory body or status or stature of the constitutional functionary though might have acted in good faith.
Here the court in its judicial review, is not concerned with the merits of the decisions, but its legality.
It is, therefore, the function of the court to see that lawful authority is not abused.
Every communication that passes between different departments of the Govt.
or between the members of the same department interse and every order made by a Minister or Head of the Department cannot, therefore, be deemed to relate to the affairs of the state, unless it related to a matter of vital importance, the disclosure of which is likely to prejudice the interest of the state.
Confidentiality, candour and efficient public service often bear common 844 mask.
Lord Keath in Burmah Oil 's case, observed that the notion that any ' competent or conscientious public servant would be inhibited in the candour of his writings by consideration of the off chance that they might have to be produced inlitigationisgrotesque.
The possibility that it impairs the public service was also nailed.
This court in section P. Gupta 's case also rejected the plea of hampering candid expression of views or opinion by constitutional functionaries and bureaucrats.
In Whitlam vs Australian Consolidated Press [1985] 60 ALR p. 7, the Supreme Court of Australia Capital territory in a suit for damages for defamation, the plaintiff, the former Prime Minister of Australia was called upon to answer certain interrogatories to disclose discussions and words uttered at the meeting of the Cabinet or of the Executive Council at which the plaintiff had been present.
The commonwealth intervened and claimed privilege prohibiting the plaintiff to disclose by answering those interrogatories.
The claim was based on two grounds: (i) the oath taken by the plaintiff as a member of the Executive Council; and also immunity from disclosing of the Cabinet meetings and both were public policies.
It was also contended that it would be in breach of the principle of collective Cabinet responsibility.
The court held that the oath taken by the plaintiff did not in itself provide a reason for refusing to answer the interrogatories whether immunity from disclosure would be granted depends upon the balancing of two competing aspects, both of public policy, on the one hand the need to protect a public interest which might be endangered by disclosure, and on the other the need to ensure that the private rights of individual litigants are not unduly restricted.
The disclosure of the meeting of the Cabinet or of the Executive Council would not be a breach of the principle of other two responsibilities.
Bagehot stated, protection from disclosure is not for the purpose of shielding them from criticism, but of preventing the attribution to them of personal responsibility.
It was stated that "I am not required to lay down a precise test of when an individual opinion expressed in Cabinet becomes of merely historical interest".
The Cabinet minutes and minutes of discussion are a class.
They might in very special circumstances be examined.
Public interest in maintaining Cabinet secrecy easily outweighs the contrary public interest in ensuring that the defendant has proper facilities for conducting its case, principally because of the enormous importance of Cabinet secrecy by comparison with the private rights of an individual and also because of the relative unimportance of these answers to the defendant 's case.
Answers to interrogatories 87 (vii), (viii) and (ix) were restrained to be disclosed which relates to the members of the Council who expressed doubts as to whether the borrowing was wholly for temporary purpose and to identify such purpose.
In Jonathan Cape Ltd. case, Lord Widgery CJ.
held that publication of the Cabinet discussion after certain lapse of time would not inhibit free discussion in the Cabinet of today, even though the individuals involved are the same, and the national problems have a distressing similarity with those of a decade ago.
It is difficult to say at what point the material 845 loses its confidential character.
on the ground that publication will no longer undermine the doctrine of joint Cabinet responsibility.
The doctrine of ' joint Cabinet responsibility is not undermined so long as the publication would not "inhibit free discussion in the Cabinet and the court decides the issue '.
In Minister for Arts Heritage and Environment and Ors.
vs Peko Wallsend Ltd. and Ors.
11987175 ALR 218, Federal Court of Australia General Division, the respondent had mining lease under the existing law.
In 1986 the Cabinet decided that portion of the same land covered by KNP Kakadu National Park in the Northern Territory (State 2) was earmarked for inclusion in the World Heritage List (the List) which had been established under the World Heritage Convention (the Convention) and to submit to Parliament aplan of management for the national park which differed from a previous plan "which enabled exploration and mining to take place outside pre existing leases with the approval of the Governor General".
Under the Convention on listing, could be made without the "consent" of the State party concerned.
The respondents laid the proceedings to restrain the appellants from taking further steps to have Stage 2 nominated for inclusion on the list on the basis that Cabinet was bound by tile rules of natural justice to afford the man opportunity to be heard and that it failed to do so.
The Single Judge declared the action as void.
Thereafter the National Park and Wildlife conservation Amendment Act, 1987 came into force adding sub section
(IA) to section 10 of that Act which provides that "No operations for the recovery of ' minerals shall be carried on in Kakadu National Park".
While allowing the appeal, the full court held that the Executive action was not immune from judicial review merely because it was carried out in pursuance of a power derived from the prerogative rather than a statutory source.
The decision taken for the prerogative of the Cabinet is subject to judicial review.
In Commonwealth of Australia vs Northern Land Council and Anr.
[1991] 103 ALR p.267, in a suit for injunction for Northern Land Council (NLC) against the Commonwealth sought production of certain documents including 126 Cabinet notebooks.
A Judge of the Federal Court ordered the Commonwealth to produce the notebooks for confidential inspection on behalf of NLC.
On appeal it was held that information which may either directly or indirectly enable the party requiring them either to advance his own case or to damage the case of his advisory are necessary.
The class of Cabinet papers do not afford absolute protection against disclosure and is not a basis for otherwise unqualified immunity from production.
The Commonwealth cannot claim any immunity for public interest immunity from production.
The court should decide at the threshold balancing of the public interest in the administration of justice.
The court does not have to be satisfied that, as a matter of likelihood rather than mere speculation, the materials would contain evidence for tender at trial.
846 In a democracy it is inherently difficult to function at high governmental level without some degree of secrecy.
No Minister, nor it Senior Officer would effectively discharge his official responsibilities if every document prepared to formulates sensitive policy decisions or to make assessment of character rolls of coordinate officers at that level if they were to be made public.
Generally assessment of honesty and integrity is a high responsibility.
At high co ordinate level it would be a delegate one which would furthered compounded when it is not backed up with material.
Seldom material will be available in sensitive areas.
Reputation gathered by an officer around him would form the base.
If the reports are made known, or if the disclosure is routine, public interest grievously would suffer.
On the other hand, confidentiality would augment honest assessment it) improve efficiency and integrity in the officers.
The business of the Govt.
, when transacted by bureaucrats, even in personal level, it would be difficult to have equanimity if the inner working of the Govt.
machinery is needlessly exposed to the public.
On such sensitive issues it would hamper the expression of frank and forthright views or opinions.
Therefore, it may be that at that level the deliberations and in exceptional cases that class or category of documents get protection in particular, on policy matters.
Therefore.
the court would he willing to respond to the executive public interest immunity to disclose certain documents where national security or high policy, high sensitivity is involved.
In Asiatic Petroleium vs Anglo Persian Oil , the court refused production of the letter concerning the Govt.
plans relating to Middle Estern campaigns of the First World was.
as claimed by the Board of Admiralty.
Similarly, in Duncan vs Cammell Laired, ; , tile House of lords refused disclosure of the design of sub marine.
The national defence as a class needs protection in the interest of security of the State.
Similarly to keep good diplomatic relations the state documents or official or confidential documents between the Govt.
and its agencies need immunity from production.
In Council of Civil Service Union vs Minster for Civil Service the Govt.
Communications headquarters (GCHQ) functions were to ensure the security of military and official communications and to provide the Govt.
with signals intelligence.
They have to handle secret information vital to national security.
The staff of CCHQ was permitted to be members of the trade union, but litter on instructions were issued, without prior consultation, amending the Staff rules and directed them to dissociate from tile trade union activities.
The Previous practice of prior consultation before amendment was not followed.
Judicial review 847 was sought of the amended rules pleading that failure to consult the union before amendment amounts to unfair act and summoned the records relating to it.
An affidavit of the cabinet Secretary was filed explaining the disruptive activities, the national security, and the union actions designed to damage Govt.
agencies.
Explaining the risk of participation by the members in further disruption, the House held that executive action was not immune from judicial review merely because it was carried out in pursuance of a power derived from a common law, or prerogative, rather than a statutory source and a minister acting under a prerogative power might, depending upon its subject matter, whether under the same duty to act fairly as in the case of action under a statutory power.
But, however, certain information.
on consideration of national security, was withheld and the failure of prior consultation of the trade union or its members before issue the amended instruction or amending the rules was held not infracted.
In Burmah Oil Co 'section case.
at an action by the Oil Company against the Bank for declaration that the sale of units in British Petroleum held by the company at 2.30 Pounds per unit was unconscionable and inequitable.
The oil company sought production of the cabinet decision and 62 documents in possession and control of the bank.
The state claimed privilege on the basis of the certificate issued by the Minister.
House of Lords per majority directed to disclose certain documents which were necessary to dispose of the case fairly.
Lord Scarman laid that they were relevant, but their significance was not such a:, to override the public interest objections to their production.
Lords Wilberforce dissented and held that public interest demands protection of them.
In The Australian Communist Party & Ors.
vs Commonwealth & Ors.
[1950 51] 83 C.L.R. p. 1, at p. 179, Dixon, J. while considering the claim of secrecy and non availability of the proclamation or declaration of the Governor General in Council based on the advice tendered by the Minister rejected the privilege and held that the court would go into the question whether the satisfaction reached by the Governor General in Council was justified.
The court has ,one into the question of competence to dissolve a voluntary or corporate association i.e. Communist Party as unlawful within the meaning of Sec.
5(2) of the Constitutional Law of the Commonwealth.
In The Queen vs Toohey ; , the Northern Territory (Self Government) Act, 1978 provides appointment of an Administrator to exercise and perform the functions conferred under the Act.
The Town Planning Act, 1979 regulates the area of land to be treated as towns.
The Commissioner exercising powers under the Act held that part of the peninsula specified in the schedule was not available for town Planning Act.
When it was challenged.
there was a change in the law and the Minister filed an affidavit 848 claiming the privilege of certain documents stating that with a view to preserve the land to the original, the Govt. have decided to treat that the land will continue to be held by or on behalf of the originals.
Gibbs,.
held that under modern conditions, a responsible Govt., Parliament could not always be relied on to check excesses of power by the Crown or its Ministers.
The court could ensure that the statutory power is exercised only for the purpose it is granted.
The secrecy of the counsel of the Crown is by no means complete and if evidence is available to show that the Crown acted for an ulterior purpose, it is difficult to see why it should not be acted upon.
It was concluded thus: "In my opinion no convincing reason can be suggested for limiting the ordinary power of the courts to inquire whether there has been a proper exercise of a statutory power by giving to the Crown a special immunity from review.
If the statutory power is granted to the Crown for one purpose, it is clear that it is not lawfully exercised if it is used for another.
The courts have the power and duty to ensure that statutory powers are exercised only in accordance with law".
The factors to decide the "public interest immunity would include" (a) where the contents of the documents are relied upon, the interests affected by their disclosure; (b) where the class of documents is invoked, where the public interest immunity for the class is said to protect; (c) the extent to which the interests referred to have become attenuated by the passage of time or the occurrence of intervening events since the matters contained in the documents themselves came into existence; (d) the seriousness of the issues in relation to which production is sought; (e) the likelihood that production of the documents will affect the outcome of the case; (f) the likelihood of injustice if the documents are not produced.
In President Nixon 's case, the Supreme Court of the United States held that it is the court 's duty to construe and delineate claims arising under express powers, to interpret claims with respect to powers alleged to derive from enumerated powers of the Constitution.
In deciding whether the matter has in any measure been committed by the Constitution to another branch of Government, or whether the action of that branch exceeds whatever authority has been committed, is itself a delicate exercise in constitutional interpretation, and is the responsibility of the court as ultimate interpreter of the Constitution.
Neither the doctrine of separation of powers, nor the need for confidentiality of high level communications, without more, can sustain an absolute, unqualified Presidential privilege of immunity from judicial process under all circumstances.
The separation of powers given in the Constitution were not intended to operate with absolute independence when essential criminal statute would upset the constitutional balance of "a workable government" and gravely impair the role of the courts under article III.
The very integrity of the judicial system and public confidence in the system depend on full 849 disclosure of all the facts, within the framework of the rules of evidence.
To ensure that justice is done, it is imperative to the function of courts that compulsory process be available for the production of needed evidence.
The afore discussion lead to the following conclusions.
The President while exercising the Executive power under Art.73 read with article 53, discharges such of those Powers which are exclusively conferred to his individual discretion like appointing the Prime Minister under article 75 which are not open to judicial review.
The President exercises his power with the aid and advice of the Council of Ministers with the Prime Minister at the head under article 74 (1).
They exercise the power not as his delegates but as officers subordinate to him by constitutional mechanism envisaged under article 77 and express in the name of President as per Rules of Business made under Art.77(3).
They bear two different facets (i) the President exercise his power on the aid and advice; (ii) the individual minister or Council of Minister with the Prime Minister at the head discharge the functions without reference to the President.
Undoubtedly the Prime Minister is enjoined under article 78 to communicate to the President all decisions of the Council of Minister relating to the administration of the affairs of the Union and proposals for legislation and to furnish such information relating to the administration or reconsideration by the Council of Ministers if the President so requires and submit its decisions thereafter to the President.
That by itself is not conclusive and does not get blanket public interest immunity from disclosure.
The Council of Ministers though shall be collectively responsible to the House of the People, their acts are subject to the Constitution, Rule of law and judicial review are parts of the scheme of the Constitution as basic structure and judicial review is entrusted to this Court (High Court under Art.226).
When public interest immunity against disclosure of the state documents in the transaction of business by Council of Ministers of the affairs of State is made, in the clash of those interests, it is the right and duty of the court to weigh the balance in the scales that the harm shall not be done to the nation or the public service and equally of the administration of justice.
Each case must be considered on its backdrop.
The President has no implied authority under the Constitution to withhold the documents.
On the other hand it is his solemn constitutional duty to act in aid of the court to effectuate judicial review.
The Cabinet as a narrow centre of the national affairs must be in a possession of all relevant information which is secret or confidential.
At the cost of repetition it is reiterated that information relating to national security, diplomatic relations.
internal security or sensitive diplomatic correspondence per se are class documents and that public interest demands total immunity from disclosure.
Even the slightest divulgence would endanger the lives of the personnel engaged in the services etc.
The maxim Salus Popules Cast Supreme Lax which means that regard 850 for public welfare is the highest law, is the basic postulate for this immunity.
Political decisions like declaration of emergency under article 356 are not open to judicial review but it is for the electorate at the polls to decide the executive wisdom.
In other areas every communication which preceded from one officer of the State to another or the officers inter se does not necessarily per se relate, to the affairs of the State.
Whether they so relate has got to be determined by reference to the nature of the consideration, the level at which it was considered, the contents of the document or class to which it relates to and their indelible impact on public administration or public service and administration of justice itself.
Article 74(2) is not a total bar for production of the records.
Only the actual advice tendered by the Minister or Council or Ministers to the President and the question whether any, and if so, what ad ice was tendered by the Minister or Council of ministers to the President, shall not be enquired into by the court.
In other words the bar of judicial review is confined to the factum of advice, its extent, ambit and scope but not the record i.e. the material on which the advice is founded.
In S.P. Gupta 's case (his court held that only the actual advice tendered to the President is immuned from enquiry and the immunity does not extend to other documents or records which form part of the advice tendered to the President.
There is discernible modern trends towards more open government than was prevalent in the past.
In its judicial review the court would adopt in camera procedure to inspect the record and evaluate the balancing act between the competing public interest and administration of justice.
It is equally the paramount consideration that justice should not only be done but also would be publicly recognised as having been done.
Under modern conditions of responsible government, Parliament should not always he relied on as a check on excess of power by the Council of Ministers or Minister.
Though the court would not substitute its views to that of the executive on matters of policy, it is its undoubted power and duty to see that the executive exercises its power only for the purpose for which it is granted.
Secrecy of the advice or opinion is by no means conclusive.
Candour, frankness and confidentiality though are integral facets of the common genus i.e. efficient governmental functioning, per se by no means conclusive but be kept in view in weighing the balancing act.
Decided cases how that power often was exercised in excess thereof or for an ulterior purpose etc.
Sometimes the public service reasons will be decisive of the issue, but they should never prevent the court from weighing them against the injury which would be suffered in the administration of justice if the documents was not to be disclosed, and the likely injury to the cause of justice must also be assessed and weighed.
Its weight will very according to the nature of the proceedings in which disclosure is sought, level at which the matter was considered , the subject matter of ' consideration, the 851 relevance of the documents and the degree of likelihood that the document will be of importance in the litigation.
it striking the balance, the court may always, if it thinks it necessary, itself inspect the documents.
It is therefore the constitutional, legitimate and lawful power and duty of this court to ensure that powers constitutional statutory or executive are exercised in accordance with the constitution and the law.
This may demand though no doubt only in limited number of cases yet the inner workings of government may be exposed to public gaze.
The contentions of Attorney General and Solicitor General that the inner workings of the government would be exposed to public gaze, and that some one who would regard this as an occasion without sufficient material to ill informed criticism is no longer relevant.
Criticism, calculated to improve teh nature of that working as affecting the individual citizen is welcome.
In so far as unpublished government policy is concerned, it may be relevant to know the extent to which the policy remains unfulfilled, so that its success might be prejudiced by disclosure of the considerations which led to it.
In that context the time element becomes relevant.
Details of affairs which are stale and no longer of significance might be capable of disclosure without risk of damage to the public interest .But depending on teh nature of he litigation and the apparent importance to it of the documents in question may in extreme case demand production even of the most be considered on its backdrop.
President has no implied authority to withhold the document.
On the other hand it is his solemn constitutional duty to act in aid of the court to effectuate judicial review.
The Cabinet as a narrow centre of the national affairs must be in possession of all relevant information which is secret or confidential.
Decided cases on comparable jurisdiction referred to earlier did held that executive had no blanket immunity to withhold cabinet proceedings or decisions.
We therefore hold that the communication decisions or policy to teh President under article 74(1) gives only protection by article 74(2) of judicial review of the actual advice tendered to the president of India.
The rest of the file and all the records forming part thereof are open to in camera inspection by this court.
Each case must be considered on its own facts and surrounding scenario and decision taken thereon.
In Jyoti Prokash Mitter vs Chief Justice Calcutta High Court ; the question was whether the President exercised the powers under article 217(3) of the Constitution was his discretionary one or acts with the aid and advice of Council of Ministers.
The Constitution Bench held that the dispute as be decided by the President.
The satisfaction on the correctness of age is that of he President.
Therefore the matter has to be placed before the President.
The 852 President has to give an opportunity to the judge to place his version, before teh President considers and decides the age of the judge.
Accordingly it would be the personal satisfaction of the President and not that of the Council of Ministers.
In the latter judgement sequential to this judgement in Union of India vs Jyoti Prakash [1971] 3SCR 4831, it was held that the mere fact that the President was assisted by teh machinery of Home Affaris Ministry in serving notices or receiving communications addressed to the learned judge cannot lead to an inference that he was guided review, this court upheld the decision of the President.
In this context it was held that the orders of the president, even though made final can be set aside by court in an appropriate case though the Court will not sit in appeal over order and will not substitute its own opinion to that of the president by weighing the evidence placed before the president.
The third category of case namely the decision taken at level of the minister or by the authorised Secretary at the Secretary level though expressed in the name of the President is not immured from judicial scrutiny and are to be produced and inspected by the court.
If public interest immunity under article 74(2) or Sec 123 of Evidence ACt is claimed, the court would first consider it in camera and decide the issue as indicated above.
Teh immunity must not be claimed on administrative route and it must be for valid, relevant and strong grounds or reasons stated in the affidavit filed in that behalf.
Having perused the file and given our anxious considerations.
We are of the view that on th facts of the case and in the light of the view we have taken, it is not necessary to disclose the contents of the records to the petitioner or his counsel.
The first schedule of the business rules provide constitution of Cabinet Standing committees with function specified therein.
Item 2 is "Cabinet Committee on appointments".
Which is empowered to consider in item 1 all recommendations and to take decisions on appointments specified in the Annexure to the first Schedule.
Therein under the residuary heading all other appointments item 4 provides that all other appointments which are made by the Govt.
of India or which required the approval of the Govt.
of India carrying a salary excluding allowances or a maximum salary excluding allowances of less than Rs. 5, 300 require the approval of the Cabinet Sub Committee.
As per item 37 of the Third Schedule read with Rule 8 of the business Rules it shall be submitted to the Prime Minister for appointment.
Mr. Harish Chander was appointed as judicial Member on October 29, 1982.
He was later on appointed on january 15, 1991 as Senior Vice President of 853 CEGAT after the direction were issued by this Court, he was appinted as the President Mr. Jain assailed the validity of his appointment on diverse grounds.
It was pleaded and Sri Thakur, his learned senior counsel, argued that as per the convention, a sitting or a retired judge of the High JCourt should have beenappointed as president of the CEGAT in consultation with the Chief Jusftice ofIndia and Harish Chander has been appointed in disregafrd of the express directions of this Court, It was, therefore, contended that it was in breach jof the judicial orderpassed by this Court.
It was therefore, contended that it was in breach of the judicial orderpassed by this Court under Art, 32 Secondly it was contended that before the Actwas made a positive commitment was made time and again by the Govt.
on the floor of the House that judicial independence of CEGAT is sifne qua non to sustain the confidence of the litigant public.
The appointment of any person other thansitting or a retired judge of the High Court as President would be in its breach.
Inits support it was cited the instance of Mr. Kalyansundaram as being the seniormost member, his claim should have been considered before Harish Chander was appointed.
Sri Thakur further argued that when recommendations of HarishChander for appointment as a Judge of the Delhi High Court was turned down by the Chief Justice of India doubting his integrity, the appointment of such personof doubtful integrity as President would erode the independence of the judiciary and undermine the confidence of the litigant public in the efficacy of judicial adjudication, even though the rules may permit such an appointment.
The rules are ultra vires of the basic structure, namely, independence of judiciary, Sri Thakur, to elaborate these conditions, sought permission to peruse the record.
Sri Venugopal , the learned Senior Counsel for Harish Chander argued that his client being the senior Vice President was fvalidly appointed as President of the CEGET.
Harish Chander has an excellent and impeccable record of service without any adverse remarks.
His recommendation for appointment as a judge of the Delhi High Court, was "apparently dropped" which would not be construed to be adverse to Harish Chander.
On behalf ofCentral Govt.
it was admitted in thecounter affidavit that since rules do not envisage consultation with the Chidf Justice consultation was not done.
It was argued that the Govt.
have prerogative to appoint any member or Vice Chairman or Senior Vice President as President of CEGAT.
Harish Chander being the senior Vice President, his case was considered and was recommended by the cabinet sub Committee for appointment.
Accordingly he was appointed.
Under section 129 of the Customs Act 52 of 1962 for short the Act.
The Central Govt.
shall constitute the CEGAT consisfting of as many judicial and technical members as it thinks fit to exercise the powers and discharge the functions conferred by the Act.
Subject to making the statement of the case for 854 decision on any question of law arising out of orders of the CEGAT by the High Court under section 130: it) resolve conflict of decisions by this Court under section 130A, the orders of the CEGAT by operation of sub sectiton (4) of Section 129B. "shall be final".
The President of CEGAT is the controlling authority as well as Presiding authority of the tribunals constituted at different places.
Constitution of the CEGAT came to be made pursuant to the 5th Schedule of the Finance Act 2 of 1980 with effect from October 11, 1982.
The President of India exercising the power under proviso it) article 309 of the Constitution made the Rules.
Rule 2(c) defined "member" means a member of the Tribunal and unless the context otherwise requires, includes the President, the Senior Vice President, a Vice President, a judicial member and a technical member.
2(d) defines "President" means the President of the Tribunal.
Rule 6 prescribes Method of Recruitment.
Under Sub rule (1) thereof for the purpose of recruitment to the Post of member, there shall be a Selection Committee consisting of (i) a judge of the Supreme Court of India as nominated by the Chief Justice of India to preside over as Chairman; (ii) the Secretary to the Govt.
of India in the Ministry of Finance, (Department of Revenue); (iii) the Secretary to the Govt.
of India in the Ministry of Law (Department of legal Affairs); (iv) the President; (v) such other persons, not exceeding two, as the Central Govt.
may nominate.
Sub Rule (4) Subject to the provisions of Section 10, the Central Govt.
shall, after taking into consideration the recommendations of the Selection Committee.
make a list of persons selected for appointment as members.
Rule 10 provides thus: (1) The Central Govt.
shall appoint one of the member to be the President.
(2) Notwithstanding anything contained in rule 6 a sitting, or retired judge of a High Court may also be appointed by the Central Government use member and President simultaneously.
(3) Where a member (other than a sitting or retired judge of a High Court is appointed as President, he shall hold the office of the President for a period of three years or till he attains the age of 67 years, whichever is earlier.
(4) Where a serving judge of a High Court is appointed as a member and President, he shall hold office as President for a period of three years from the date of his appointment or till he attains the age of 62 years.
whichever is earlier.
Provided that where a retired judge of a High Court above the age of 62 years is appointed as President.
he shall hold office for such period not exceeding, three 855 years as may he determined by the Central Govt.
At the time of appointment or reappointment.
The Jha Committee in its report in para 16(22) recommended to constitute an independent Tribunal for excise or customs taking away the appellate powers from the Board.
The Administrative Inquiry Committee in its report 1958 59 in para 4.15 also recommended that every effort should be made to enhance the prestige of the appellate tribunal in the eyes of the public which could be achieved by the appointment of a High Court Judge as the President.
They, therefore, recommended to appoint the serving or retired High Court Judge as President of the Tribunal for a fixed tenure.
In Union of India vs Pares Laminates Pvt.
Ltd. Court), this Court held that GEGAT is a judicial body and functions as court within the limits of its jurisdiction.
As a fact the Minister time and again during the debates when the Bill was under discussion assured both the Houses of Parliament that the CEGAT would be a judicial body presided over by a High Court Judge.
In Keshwa nand Bharti vs Union of India [1973] Supp.
SCR 1, Mathew and Chandrachud, JJ.
held that rule of law and judicial review are basic features of the Constitution.
It was reiterated in Waman Rao vs Union of India ; , As per directions therein the Constitution Bench reiterated in Sri Raghunathrao Ganpatrao vs Union of India ; In Krishna Swami vs Union of India at 649 para 66 one of us (K.R.S.J.) held that judicial review is the touchstone and repository of the supreme law of the land.
Rule of law as basic feature permeates the entire constitutional structure Independence of Judiciary is sine quo non for the efficacy, of the rule of law.
This court is the final arbiter of the interpretation of the constitution and the law.
In S.P. Sampat Kumar vs Union of India & Ors.[1987] 1 SCR 435.
this Court held that the primary duty of the judiciary is to interpret the Constitution and the laws and this would preeminently be a matter fit to be decided by the judiciary, as judiciary alone would be possessed of expertise in this field and secondly the constitutional and legal protection afforded to the citizen would become illusory, if it were left to the executive to determine the legality of its own action.
The Constitution has, therefore created an independent machinery i.e. judiciary to resolve the disputes which is vested with the power of judicial review to determine the legality of the legislative and executive actions and to ensure compliance with the requirements of law on the part of the executive and other authorities.
This function is discharged by the judiciary by exercising the power of judicial review which is a most potent weapon in the hands of the judiciary for maintenance of the rule of law.
The power of judicial review is an integral part of our constitutional system and without it, there will be no government of laws and the rule of law would become a teasing illusion and a promise of unreality.
The judicial review, therefore, is a basic and essential feature of the Constitution and it cannot be 856 abrogated without affecting the basic structure of the Constitution.
The basic and essential feature of judicial review cannot be dispensed with but it would be within the competence of Parliament to amend the Constitution and to provide alternative institutional mechanism or arrangement forjudicial review, provided it is no less efficacious than the High Court.
It must, therefore, be read as implicit in the constitutional scheme that the law excluding the jurisdiction of the High Court under articles 226 and 227 perrmissible under it, must not leave a void but it must set up another effective institutional mechanism or authority and vest the power of judicial review in it which must be equally effective and efficacious in exercising the power of judicial review.
The Tribunal set up under the Administrative Tribunal Act, 1985 was required to interpret and apply articles 14, 15, 16 and 311 in quite an large number of cases.
Therefore, the personnel manning the administra tive tribunal in their determinations not only require judicial approach but also knowledge and expertise in that particular branch of constitutional and administrative law.
The efficacy of the administrative tribunal and the legal input would undeniably be more important and sacrificing the legal input and not givino it sufficient weityhtage would definitely impair the efficacy and effectiveness of the Administrative Tribunal.
Therefore, it was held that the appropriate rule should be made to recruit the members; and consult the Chief Justice of India in recommending appointment of the Chairman, Vice Chairman and Members of the Tribunal and to constitute a committee presided over by judge of the Supreme Court to recruit the members for appointment.
In M.B. Majiundar vs Union of lndia ; , when the members of CAT claimed parity of pay and superannuation as is available to the Judges of the High Court, this court held that they are not on par with the judges but a separate mechanism created for their appointment pursuant to article 323 A of the Constitution.
Therefore, whatwas meant by this court in Sampath Kumar 's ration is that the Tribunals when exercise the power and function, the Act created institutional alternative mechanism or authority to adjudicate the service disputations.
It must be effective and efficacious to exercise the power of judicial review.
This court did not appear to have meant that the Tribunals are substitutes of ' the High Court under articles 226 and 227 of the Constitution.
J.B. chopra vs Union of lndia , merely followed the ratio of Sampath Kumar.
The Tribunals set up under articles 323A and 323B of the Constitution or under an Act of legislature are creatures of the Statute and in no case can claim the status as Judges of the High Court or parity or as substitutes.
However, the personnel appointed to hold those oft7ices under the State are called upon to dischargee judicial or quasi judicial power.
So they must have judicial approach and also knowledge 857 and expertise in that particular branch of constitutional, administrative and tax laws.
The legal input would undeniably be more important and sacrificing the legal input and not giving it sufficient weightage and teeth would definitely impair the efficacy and effectiveness of the judicial adjudication.
It is, therefore, necessary that those who adjudicate upon these matters should have legal expertise, judicial experience and modicum of legal training as on many an occasion different and complex questions of law which baffle the minds of even trained judges in the High Court and Supreme Court would arise for discussion and decision.
In Union of India vs Sankal Chand Himatlal Sheth & Anr. ; at 442, this court at p. 463 laid emphasis that, "independence of the judiciary is a fighting faith of our Constitution.
Fearless justice is the cardinal creed of our founding document.
It is indeed a part of our ancient tradition which has produced great judges in the past.
In England too, judicial independence is prized as a basic value and so natural and inevitable it has come to be reorded and so ingrained it has become in the life and thought of the people that it would be regarded an act of insanity for any one to think otherwise.
" At page 471 it was further held that if the beacon of the judiciary is to remain bright, court must be above reproach, free from coercion and from political influence.
At page 491 it was held that the independence of the judiciary is itself a necessitous desideratum of public interest and so interference with it is impermissible except where other considerations of public interest are so strong, and so exercised as not to militate seriously against the free flow of public justice.
Such a balanced blend is the happy solution of a delicate, complex, subtle, yet challenging issue which bears on human rights and human justice.
The nature of the judicial process is such that under coercive winds the flame of justice flickers, faints and fades.
The true judge is one who should be beyond purchase by threat or temptation, popularity or prospects.
To float with the tide is easy, to counter the counterfeit current is uneasy and yet the Judge must be ready for it.
By ordinary obligation for written reasoning, by the moral fibre of his peers and elevating tradition of his profession, the judge develops a stream of tendency to function 'without fear or favour, affection or ill will ', taking care, of course, to outgrow his prejudices and weaknesses, to read the eternal verities and enduring values and to project and promote the economic, political and social philosophy of the Constitution to uphold which his oath enjoins him.
In Krishnaswaini 's case in para 67 at p. 650, it was observed that "to keep the stream of justice clean and pure the judge must be endowed with sterling character, impeccable integrity and upright behaviour.
Erosion thereof would undermine the efficacy of rule of law and the working of the constitution itself.
In Krishna Sahai & Ors.v.
State of U.P. & Ors.[1990] 2 SCC 673, this court 858 emphasised its need in constitution the U.P. Service Tribunal that it would he appropriate for the State of Uttar Pradesh to change it manning and a sufficient number of people qualified in law should he on the Tribunal to ensure adequate dispensation of justice and to maintain judicial temper in the functioning of the Tribunal".
In Rajendra Singh Yadav & Ors vs State of U.P. & Ors.
[1990] 2 SCC 763, it was further reiterated that the Services Tribunal mostly consist of Administrative Officers and the judicial element in the manning part of the Tribunal is very small.
The disputes require judicial handling and the adjudication being, essentially judicial in character it is necessary that adequate number of judges of the appropriate level should man the Services Tribunals.
This would create appropriate temper and generate the atmosphere suitable in an adjudicatory Tribunals and the institution as well would command the requisite confidence of the disputants.
In Shri Kumar Padma Prasad vs Union of India & Ors. , this court emphasised that, "Needless to say that the independence, efficiency and integrity of the judiciary can only he maintained by selecting the best persons in accordance with the procedure provided under the Constitution.
The objectives enshrined in the constitution cannot be achieved unless the functionaries accountable for making appointments act with meticulous care and utmost responsibility".
In a democracy governed by rule of law surely the only acceptable repository of absolute discretion should be the courts.
Judicial is the basic and essential feature of the Indian constitutional scheme entrusted to the judiciary.
It cannot he dispensed with by creating tribunal under article 323A and 323B of the Constitution.
Any institutional mechanism or authority in negation of judicial review is destructive of basic structure.
So long as a the alternative institutional mechanism or authority set up by an Act is not less effective than the High court, it is consistent with constitutional scheme.
The faith of the people is the bed rock on which the edifice of judicial review and efficacy of the adjudication are founded.
The alternative arrangement must, therefore, be effective and efficient.
For inspiring confidence and trust in the litigant public they must have an assurance that the person deciding their causes is totally and completely free from the influence or pressure from the Govt.
To maintain independence and imperativity it,is necessary that the personnel should have at least modicum of legal training, learning and experience.
Selection of competent and proper people instill people 's faith and trust in the office and help to build up reputation and acceptability.
Judicial independence which is essential and imperative is secured and independent and impartial administration of justice is assured.
Absence thereof only may get both law and procedure wronged and wrong headed views of the facts and may likely to give rise to nursing grievance of injustice.
Therefore, functional fitness, 859 experience at the liar and aptitudinal approach are fundamental for efficient judicial adjudication.
Then only as a repository of the confidence.
as its duty, the tribunal would properly and efficiently interpret the law and apply the law to the given set of facts.
Absence thereof would be repugnant or derogatory to the constitution.
The daily practice in the courts not only gives training to Advocates to interrect the rules but also adopt the conventions of courts.
In built experience would play vital role in the administration of justice and strengthen and develop the qualities, of intellect and character, forbearance and patience, temper and resilience which are very important in the practice of law.
Practising Advocates from the Bar generally do endow with those qualities to discharge judicial functions.
Specialised nature of work gives them added advantage and gives benefit to broaden the perspectives.
"Judges " by David Pannick (1987 Edition), at page 50, stated that, "we would not allow a man to perform a surgical operation without a thorough training and certification of fitness.
Why not require as much of a trial judge who daily operates on the lives and fortunes of others".
This could be secured with the initial training given at the Bar and later experience in judicial adjudication.
No one should expect expertise in such a vast range of subjects, but famliarity with the basic terminology and concept coupled with knowledge of trends is essential.
A premature approach would hinder the effective performance of judicial functions.
Law is a serious matter to be left exclusively to the judges, because judges necessarily have an important role to play in making and applying the law There is every reason for ensuring that their selection, training and working practice facilitate them to render their ability to decide the cases wisely on behalf of the community.
If judges acts in injudicious manner, it would often lead to miscarriage of justice and a brooding sense of injustice rankles in an agrieved person.
The CEGAT is a creature of the statute.
yet intended to have all the flavour of judicial dispensation by independent members and President.
Sri Justice Y.V. Chandrachud, Chief Justice of India, in his letter dated October 5, 1982 stated that "Govt. had Created a healthy convention of providing that the Tribunals will be headed by a President who will be a sitting or a retired judge of the High Court.
Added to that is the fact that selection of the members of the Tribunal is made by a Committee headed by a judge of the Supreme Court.
I am sure that the Tribunal will acquire higher reputation in the matter of its decision and that the litigants would look upon it as an independent forum to which they can turn in trust and confidence".
This court to elongate the above objective directed the Govt.
to show whether the convention is being followed in appointment of the President of 860 CEGAT and further directed to consider appointment of a Sr. Judge or a retired Chief Justice of the High Court as its President.
Admittedly Chief justice of India was not consulted before appointing Sri harish Chander as President.
Several affidavits filed on behalf of the Govt.
do not also bear out whether the directions issued by this court were even brought to the notice of the Hon 'ble Prime Minister before finalising the appointment of Sri Harish Chander.
The solemn assurance given to the Parliament that the Tribunal bears a judicious blend by appointment of a High Court Judge as President was given a go bye.
While making statutory rules the executive appears to have made the appointment of it sitting or retired High Court Judge as President unattractive and directory frustrating the legislature animation.
A sitting Judge when is entitled to continue in his office upto 62 years would he he willing to opt to serve as President, if his superannuation as President is conterminous with 62 years.
He would be attracted only it he is given extended three years more tenure after his superannuation.
But Rule 10(3) says that the total period of the tenure of the President by a sitting, or retired judge is "a period of three years or till he attains the age of 62 years, whichever is earlier", i.e. coterminus with superannuation as a Judge of the High Court.
The proviso is only discretionary at the whim of the executive depleting independence and as an exception to the rule.
Thereby practically tile spirit of the Act, the solemn assurance given by the Govt.
to the Parliament kindling hope in the litigant public to have a sitting or a retired judge appointed as President has been frustrated deflecting the appointment of a judicially trained judge to exercise judicial review.
We are constrained to observe that the rules, though statutory, were so made as to defeat the object of the Act.
The question then is: can and if yes, whether this court would interfere with the appointment made of Flarish Chander as President following the existing, rules.
Judicial review is concerned with whether the incumbent possessed of qualification for appointment and the manner in which the appointment came to be made or the procedure adopted whether fair, just and reasonable.
Exercise of judicial review is to protect the citizen from the abuse of the power etc.
by an appropriate Govt.
or department etc.
In our considered view granitic the compliance of the above power of appointment was conferred on the executive and confided to be exercised wisely.
When a candidate was found qualified and eligible and was accordingly appointed by the executive to hold an office as a Member or Vice President or President of a tribunal.
we cannot sit over the choice of the selection, but it be left to tile executive to select the personnel as per law or procedure in this behalf.
In Sri Kumar Prasad case K.N. Srivastava, M.J.S., Legal Remembrance, Secretary to law and Justice.
of Mozoram did not possess the requisite qualifications for appointment as a Judge of the High Court prescribed under Art.217 of the Constitution, namely, that he was not a District Judge for 10 years in State Higher Judicial Service, which is a mandatory 861 requirement for a valid appointment.
Therefore, this Court declared that he was not qualified to be appointed as a judge of the High Court and quashed his appointment accordingly.
The facts therein are clearly glaring and so the ratio is distinguishable.
Sri Harish Chander, admittedly was the Sr. Vice President at the relevant time.
The contention of Sri Thakur of the need to evaluate the comparative merits of Mr. Harish Chander and Mr. Kalyansundaram a senior most Member for appointment as President would not be one into in a public interest litigation.
Only in a proceedings initiated by an aggrieved person it may be open to be considered.
This writ petition is also not a writ of quo warranto.
In service jurisprudence it is settled law that it is for the aggrieved person i.e. non appointee it) assail the legality of the offending action.
Third party has no locus stand it to canvass the legality or correctness of the action.
Only public law declaration would be made at the behest of the petitioner, a public spirited person.
But this conclusion does not give quietus at the journey 's end.
There are persistent allegations against malfunctioning of the CEGAT and against Harish Chander himself.
Though we exercised self restraint to assume the role of an Investigator to charter out the ills surfaced, suffice to say that the union Govt.
cannot turn a blind eye to the persistent public demands and we direct to swing into action, an indepth enquiry made expeditiously by an officer or team of officers to control the mal functioning of the institution.
It is expedient that the Govt.
should immediately take action in the matter and have fresh look.
It is also expedient to have a sitting or retired senior Judge or retired Chief Justice of a High Court to be the President.
The rules need amendment immediately.
A report on the actions taken in this behalf be submitted to this court.
Before parting with the case it is necessary to express our anguish over the ineffectivity of the alternative mechanism devised for judicial reviews.
The Judicial review and remedy are fundamental rights of the citizens.
The dispensation of justice by the tribunals is much to be desired.
We are not doubting the ability of the members or Vice Chairmen (non Judges) who may be experts in their regular service.
But judicial adjudication is a special process and would efficiently be administered by advocate Judges.
The remedy of appeal by special leave under article 136 to this Court also proves to be costly and prohibitive and far flung distance too is working as constant constraint to litigant public who could ill afford to reach this court.
An appeal to a Bench of two Judges of the respective High Courts over the orders of the tribunals within its territorial jurisdiction on questions of law would as usage a growing feeling of injustice of those who can ill effort to approach the Supreme Court.
Equally the need for recruitment of members of the Bar to man 862 the Tribunals as well as the working system by the tribunals need fresh look and regular monitoring is necessary.
An expert body like the Law Commission of India would make an indepth study in this behalf including the desirability to bring CEGAT under the control of Law and Justice Department in line with Income tax Appellate Tribunal and to make appropriate urgent recommendations to the Govt.
of India who should take remedial steps by an appropriate legislation to overcome the handicaps and difficulties and make the tribunals effective and efficient instruments for making Judicial review efficacious, inexpensive and satisfactory.
The writ petitions are disposed of with the above direction, but in the circumstances with no order as to costs.
T.N.A. Petitions disposed of.
| By a letter dated December 26, 1991 addressed to the Chief Justice of India, the petitioner, Editor, Excise Law Times, complained that ever since the retirement of president of the Customs, Excise and Gold control Appellate Tribunal (CEGAT) in 1985 no appointment of President was made as a result of which the functioning of the Tribunal was adversely affected.
He also alleged malfunctioning in the CEGAT and sought directions for immediate appointment of the President as well as an enquiry into the mal functioning of CEGAT.
The letter was treated as a Writ Petition in public interest litigation and on February 25,1992, this Court issued Rule Nisi to Union of India to make immediate appointment of the President of CEGAT, preferably a senior High Court Judge.
After the directions were issued by this Court, Respondent No. 3, who was initially appointed as judicial Member and subsequently as Senior Vice President of the Tribunal, was appointed as President.
The petitioner filed another petition challenging the appointment of President and sought to quash the same on the grounds that (1) the appointment was in breach of judicial order passed by this Court on February 25, 1992 because as per the convention a sitting or retired Judge of the High Court should have been appointed as President in consultation with the Chief Justice of India; even though High Court Judges were available no serious attempt was made to requisition the services of one of them for appointment as President; (2) before the Act was made a positive commitment was made time and again by the Government on the floor of the House that judicial independence of CEGAT is sine qua non to sustain the confidence of the 804 litigant public.
The appointment of any person other than sitting or a retired judge of the High Court as President would be in its breach; and (3) the appointment of Respondent No. 3 as a Judge of the Delhi High Court was turned down by Chief Justice of India doubting his integrity, therefore appointment (of such a person as President of CEGAT would undermine the confidence of the litigant public in the efficacy of judicial adjudication.
even though Rules may permit such appointment.
The petitioner also prayed that Rules 10(1)(3) and (4) of the CEGAT Members (Recruitment and Conditions of Service) Rules, 1987 should be struck down as violative of Article 43 of the Constitution.
the rules were ultra vires of the basic structure of the Constitution, namely independence of Judiciary.
On May 4,1992 this Court issued Rule Nisi and on the next date of bearing the relevant rile on which decision regarding the appointment of President was made produced in the Court but on behalf of the Union of India an objection was taken by the Additional Solicitor General that this Court cannot inspect the rile as he intended to claim privilege`.
Accordingly, pursuant to the directions given by this Court that a formal application may be made setting out the grounds on which the claim for privilege was founded, the Finance Secretary and the Minister of State for Finance filed affidavits claiming privilege under Sections 123 and 124 of the and Article 74 (2) of the Constitution stating that the Government had no (objection for the Court to peruse the rile but claimed privilege to disclose the contents of the rile to the petitioner.
On behalf of the Union of India it was contended that a Cabinet SubCommittee approved the appointment of Respondent No. 3 as President of CEGAT and by operation of Article 77(3) and 74(1), the appointment was made by the President.
The rile constitutes Cabinet documents forming part of the preparation (if the documents leading to the formation of the advice tendered to the President.
Section '123 of the Evidence Act and Article 74 (2) precluded this Court from enquiring into the nature of the advice tendered to the President and the documents were, therefore, immune from disclosure.
The disclosure would cause public injury preventing candid and frank discussion and expression of views by the bureaucrats at higher level and by the Minister/Cabinet Sub Committee causing serious injury to public service.
On behalf of Respondent No.3 it was contended that (1) he had an excellent and impeccable record of service without any adverse remarks and dropping of his recommendation for appointment as a Judge of Delhi High 805 Court could not be construed adverse 'to him; (2) the Government had prerogative to appoint any member, or Vice Chairman or Senior Vice President as President and Respondent No.3 being the Senior Vice President, was considered and recommended by the Cabinet Committee for appointment.
Hence he was validly appointed as President.
Disposing the petitions, this Court, HELD: Per Ramaswamy, J. 1.The claim in the affidavits of the State Minister for Finance and the Secretary for immunity of state documents from disclosure is unsustainable.
However, having perused the file and given anxious considerations,the Court is of the view that on the facts and circumstances of the case and in the light of the view taken, it is not necessary to disclose the contents of the records to the petitioner or his counsel.
1.1.Section 123 of the Evidence Act gives right to the Government to claim privilege, in other words immunity from disclosure of the unpublished official state documents in public interest.
The initial claim for immunity should be made through an affidavit generally by the Minister concerned, in his absence by the Secretary of the department or head of the Department indicating that the documents in question have been carefully read and considered and the deponent has been satisfied, supported by reasons or grounds valid and germance, as to why it is apprehended that public interest would be injured by disclosure of the document summoned or called for.
The claim for immunity should never he on administrative routine nor be a garb to avoid in convenience, embarrassment or adverse to its defence in the action, the latter themselves a ground for disclosure.
1.2.When a claim for public interest immunity has been laid for nondisclosure of the State documents, it is the Minister 's due discharge of duty to state on oath in his affidavit the grounds on which and the reasons for which he has been persuaded to claim public interest immunity from disclosure of the State papers and produce them.
He takes grave risk on insistence of oath of secrecy to avoid filing an affidavit or production of State documents and the Court may be constrained to draw such inferences as are available at law.
Accordingly the oath of office of secrecy adumbrated in Article 75(4) and Schedule III of the Constitution does not absolve the Minister either to state the reasons in support of the public interest immunity to produce the State documents or as to how the matter was dealt with or for their production when discovery order nisi or rule nisi was issued.
On the other hand it is his due 806 discharge of the duty as a Minister to obey rule nisi or discovery order nisi and act in aid of the Government.
Attorney General vs Jonathan Cape Ltd., ; Sankey vs Whitlan, and Whitlam vs Australian Consolidated Press, , referred to.
If the Court is satisfied from the affidavit and the reasons assigned for withholding production or disclosure, the Court may pass an appropriate order in that behalf If the Court still desired to peruse the record for satisfying itself whether the reasons assigned in the affidavit would justify withholding disclosure, the court would, in camera, examine the record and satisfy itself whether the public interest subserves withholding production or disclosure or making the documents as part of the record.
By operation of Section 162 of Evidence Act the final decision in regard to the validity of an objection against disclosure raised under Section 123 would always be with the Court.
The Court is not bound by the statement made by the Minister or the Head of the Department in the affidavit and it retains the power to balance the injury to the State or the public service against the risk of injustice.
The real question which the Court is required to consider is whether public interest is so strong to override the ordinary right and interest of the litigant that he shall he able to lay before a Court of justice the relevant evidence.
In balancing the competing interests it is the duty of the court to see that there is the public interest that harm shall not be done to the nation or the public service by disclosure of the document and there is a public interest that the administration of justice shall not be frustrated by withholding documents which must he produced if justice is to be done.
The basic question to which the court would, therefore, have to address itself for the purpose of deciding the validity of the objection would be, whether the document relates to affairs of State or the public service and if so, whether the public interest in its non disclosure is so strong that it must prevail over the private interest in the administration of justice and on that account, it should not be allowed to be disclosed.
State of U.P. vs Raj Narain & Ors., ; S.P. Gupta Ors.
807 etc.
vs Union of India & Ors. etc.
etc., 1982 (2) S.C.R. 365; relied on.
Conway vs Rimmer, ; ; D. vs National Society for the Prevention of Cruelty to Children, 1978 A.C. 171 (H.L.); Burmah Oil Co. Ltd. vs Governor and Company of the Bank of England, ; ; Butters Gas and Oil Co. vs Hammer, ; Air Canada vs Secretary of State for Trade, ; Council of Civil Service Unions vs Minister for the Civil Service, ; United State vs Reynolds, ; ; Environmental Agency, vs Pats), T Mink, ; (35) L. Ed.
2nd 11 9; Newyond Times vs U.S., ; ; U.S. vs Richard M. Nixon, ; = ; 1035; Robindon vs State of South Australia, ; Shankey vs Whitlan, ; ; FAI Insurances Ltd. vs The Hon Sir, Henn, Arthur Winneke and Ors., ; ; Whitlan vs Australian Consolidated Press Ltd., ; Minister for Arts Heritage and Environment and Ors.
vs Peko Wallsend Ltd. and Ors.
; Commonwealth of Australia vs Northern Land Council and Anr. ; R. vs Shinder, Gagnon vs Ouebec Securities Commission, ; Bruce vs Waldron, ; Re Tunstall, exhibit
P. Brown, [19661 84 W.N. (Pt2) (N.S.W.); Corbett vs Social Security Commission, ; Greednz Inc. vs Governor General, Apponhamy vs Illangarutute, [1964] 66 C.L.W. 17; Jamaica in Allen vs Byfields (No.2) [1964] 7 W.I.R.69 and Scotland in Glasgow Corporation vs Central Land Board, [1956] Scotland Law Time 4, referred to.
Mecormic on Evidence, 4th Edn.
by John w. Strong, referred to.
1.7.Every communication which proceeded from one of ricer of the State to another or the officers inter se does not necessarily per se relate, to the affairs of the State.
Whether they so relate has got to be determined by reference to the nature of the consideration, the level at which it was considered, the contents of the document or class to which it relates to and their indelible impact on public administration or public service and administration of justice itself.
The power to issue 'discovery order nisi ' is express as well as inherent as an integral power of judicial review and process in the Court to secure the attendance of any person or discovery or production of any document or to order investigation in that behalf.
However, in an appropriate case, depend 808 ing on facts on hand.
Court may adopt such other procedure as would be warranted.
The petitioner must make a strong prima facie case to order discovery order nisi, etc.
and it must not be a haunting expedition to fish out some facts or an attempt to cause embarrassment to the respondents nor for publicity.
But on issuance of rule nisi by this Court under Article 32 or a discovery order nisi the Government or any authority, constitutional, civil, judicial, statutory or otherwise or any person, must produce the record in their custody and disobedience thereof would be at the pain of contempt.
The Cabinet known as Council of Ministers headed by Prime Minister under Article 75 (3) is the driving and steering body responsible for the governance of the country.
Collective responsibility under Article 75(3) of the Constitution inheres maintenance of confidentiality as enjoined in oaths of office and of secrecy set forth in Schedule III of the Constitution that the Minister will not directly or indirectly communicate or reveal to any person or persons any matter which shall be brought under his consideration or shall become known to him as Minister except as may be required for the 'due discharge of his duty as Minister '.
The base and basic postulate of its significance is unexceptionable.
But the need for and effect of confidentiality has to be nurtured not merely from political imperatives of collective responsibility envisaged by Article 75(3) but also from its pragmatism.
Satwant Singh Sawhney vs D. Ramarathnam Asstt.
Passport Officer, ; Magnbhai Ishwarbhai Patel vs Union of India and Anr., ; ; Shamsher Singh vs State of Punjab, ; ; Rai Sabhib Ram Jawaya Kapur & Ors.
vs State of Punjab, and Commonwealth of Australia vs Northern Land Council & Anr., , referred to.
Sir Ivor Jennings, Cabinet Government; Patrick Gordon Walker, The Cabinet, 1973 Revised Ed.
P. 178; John P. Mackintosh, The British Cabinet, 2nd Edn. p.1 1; 0 Hood Phillips and Paul Jackson, Constitutional and Administrative Law, 7th Edn.
P. 301; Walker, The Cabinet, p. 183; Halsbury Laws of England, 4th Edn.
8 para 820; Bagehot and The English Constitution, 1964 Edn., referred to.
The Court would be willing to respond to the executive public interest immunity to disclose certain documents where national security or high policy, high sensitivity is involved.
Information relating to national security, diplomatic relations, internal security or sensitive diplomatic corre 809 spondence per se are class documents and that public interest demands total immunity from disclosure.
Even the slightest divulgence would endanger the lives of the personnel engaged in the services etc.
The maxim Salvs Populs Cast Suprema Lax which means that regard for public welfare is the highest law, is the basic postulate for this immunity.
Asiatic Petroleum vs Anglo Persian oil, ; Duncan vs Cammell Laird, 1942 A.C. 624; Council of Civil Service Union vs Minister for Civil Service, and Mark Hosemball R. vs Home Secretary exparte Hosenball, , referred to.
But it would be going too far to lay down that no document in any particular class or one of the categories of Cabinet papers or decisions or contents thereof should never, in any circumstances, be ordered to he produced.
Robinson vs State of South Australia, ; S.P. Gupta vs Union of India & Ors., [1982] 2 S.C.R. 365; State of U. P. vs Raj Narain & Ors., [1975] 2 S.C.R.333; Conway vs Rimmerl968A.C.910 (HL);Burmah Oil Co. Ltd. vs Governor and Company of the Bank of England, ; ; Reg.
vs Lewes Justices, Ex Parte Secretary of State for the Home Department, and D. V. National Society for the Prevention of Cruelty to Children; , ; Air Canada vs Secretary of State for Trade, [1983] 2 A.C. 394 (HL); Shankey vs Whitlan, [1979] 53 A.L.R. 1; Harbour Corp of Queensland vs Vessey Chemicals Pvt. Ltd., ; Manthal Australia Pvt. Ltd. vs Minister for Industry, Technology and Commerce, ; Koowarta vs Bjelke Petersen, ; United States vs Richard M. Nixon, ; Lawyers Ed.
2nd Ed. 1039; Attorney General vs Jonathan Cape Ltd. ; Minister for Arts Heritage and Environment and Ors.
vs Pekowallsend Ltd. and Ors., (1987) 75 A.L.R. 218; Commonwealth of Australia, vs Northern Land Council and Anr., ; Australian Community Party & Ors.
vs Commonwealth & Ors.
, ; and Queen vs Tohey, ; , referred to.
Undoubtedly, the Prime Minister is enjoined under Article 78 to communicate to the President all decisions of the Council of Minister relating to the administration of the affairs of the Union and proposals for legislation and to furnish such information relating to the administration or reconsideration by the Council of Minister if the President so requires and submit its 810 decisions thereafter to the President.
That by itself is not conclusive and does not get blanket public interest immunity from disclosure.
The Council of Ministers though shall be collectively responsible to the House of the people, their acts are subject to the Constitution; Rule of law and judicial review are parts of the scheme of the Constitution as basic structure and judicial review is entrusted to this Court (High court under Article 226).
3.3.1.The communication of cabinet decisions or policy to the President under Article 74(1) gives only limited protection by Article 74(2) of judicial review of the actual tendered to the President of India.
The rest of the file and all the records forming part thereof are open to in camera inspection by this Court.
Each case must be considered on its own facts and surrounding scenario and decision taken thereon.
Jyoti Prakash Mitter vs Chief Justice Calcutta High Court, ; and Union of India vs Jyoti Prakash, ; , referred to.
3.3.2.Article 74(2) is not a total bar for production of the records.
Only the actual advice tendered by the Minister or Council of Ministers to the President and the question whether any, and if so, what advice was tendered by the Minister or Council of Ministers to the President, shall not be enquired into by the Court.
In other words, the bar of judicial review is confined to the factum of advice, its extent, ambit and scope, but not the record i.e. the material on which the advice is founded.
S.P. Gupta vs Union of India & Ors., [1982] 2 S.C.R. 365, referred to.
4.Judicial review is concerned with whether the incumbent possessed of qualification for appointment and the manner in which the appointment came to made or the procedure adopted whether fair, just and reasonable.
Exercise of Judicial Review is to protect the citizen from the abuse of the power etc.
by an appropriate Government or department etc.
In Court 's considered view granting the compliance of the above power of appointment was conferred on the executive and confided to be exercised wisely.
When a candidate was found qualified and eligible and was accordingly appointed by the executive to hold an office as a Member or Vice President or President of Tribunal, this Court cannot sit over the choice of the selection, but it be left to the executive to select the personnel as per law or procedure in this behalf.
Shri Kumar Padma Prasad vs Union of India & Ors., , 811 distinguished.
In service jurisprudence it is settled law that it is for the aggrieved person i.e. non appointee to assail the legality of the offending action.
Third party has not locus standi to canvass the legality or correctness of the action.
Only public law declaration would be made at the behest of the petitioner, a public spirited person.
Therefore, the contention that there was need to evaluate the comparative merits of Respondent and the senior most Member for appointment as President would not be gone into in a public interest litigation.
Only in a proceedings initiated by an aggrieved person it may be open to be considered.
It is expedient to have a sitting or retired senior Judge or retired Chief Justice of a High Court to be the President.
The rules need amendment immediately.
Government had created a healthy convention of providing that the Tribunals will be headed by a President who will be a sitting or a retired judge of the High Court This Court to elongate the above objective directed the Government to show whether the convention is being followed in appointment of the President of CEGAT and further directed to consider appointment of a Senior Judge or a retired Chief Justice of the High Court as it President Admittedly Chief Justice of India was not consulted before appointing Respondent No.3 as President of CEGAT The solemn assurance given to the Parliament that the Tribunal bears a judicious blend by appointment of a High Court Judge as President was given a go bye.
6.1.While making statutory rules the executive appears to have made the appointment of a sitting or retired High Court Judge as President unattractive and Directly frustrating the legislative animation.
A sitting Judge, when he is entitled to continue in his office upto 62 years, would not he willing to opt to serve as President, if his superannuation as President is co terminus with 62 years.
He would he attracted only if he is given extended three years more tenure after his superannuation.
But Rule 10 (3) says that the total period of the enure of the President by a sitting or retired Judge is 'a period of three years or till he attains the age of 62 years, whichever is earlier ', i.e. co terminus with superannuation as a Judge of the High Court.
The, proviso is only discretionary at the whim of the executive depleting independence and is an exception to the rule.
Thereby, practically the spirit of the Act, the solemn assurance given by the Government to the Parliament kindling hope in the litigant public to have a sitting or a retired Judge appointed as President has been frustrated deflecting the appointment of a 812 judicially trained judge to exercise judicial review.
Court is constrained to observe that the rules, though statutory, were so made as to defeat the object of the Act.
7.There are persistent allegations against mal functioning of the CEGAT and against Respondent No. 3 himself.
Though this Court exercised self restraint to assume the role of an investigator to charter out the ills surfaced, suffice to say that the Union Government cannot turn a blind eve to the persistent public demands and 'the Court directs to swing into action, an indepth enquiry made expeditiously by an officer or team of officers to control the malfunctioning of the institution.
It is expedient that the Government should immediately take action in the matter and have fresh look.
The Tribunals set up under Articles 323A and 323B of the Constitution or under an Act of legislature are creatures of the Statute and in no case can claim the status as Judges of the High Court or parity or as substitutes.
However, the personnel appointed to hold the office under the State are called upon to discharge judicial or quasi judicial powers.
So they must have judicial approach and also knowledge and expertise in that particular branch of constitutional, administrative and tax laws.
The legal input would undeniably be more important and sacrificing the legal input and not giving it sufficient weightage and teeth would definitely impair the efficacy and effectiveness of the judicial adjudication.
It is, therefore, necessary that those who adjudicate upon these matters should have legal expertise, judicial experience and modicum of legal training as on many an occasion different and complex questions of law which baffle the minds of even trained judges in the High Court and Supreme Court would arise for discussion and decision.
M.B. Majumdar vs Union of India, ; ; Union of India vs Paras Laminates Ltd., ; Krishna Sahai & Ors.
vs State of U. P. & Ors.
, ; , and Rajendra Singh Yadav & Ors.v.
State of U.P. & Ors. [1990] 2 S.C.C. 763, referred to.
8.1.Equally the need for recruitment of members of the Bar to man the Tribunals as well as the working system by the Tribunals need fresh look and regular monitoring is necessary.
An expert body like the Law Commission of India should make an in depth study in this behalf including the desirability of bringing CEGAT under the control of Law and Justice Department in line with Income tax Appellate Tribunal and make appropriate urgent recommendations to the Government of India who should take remedial steps by an 813 appropriate legislation to overcome the handicaps and difficulties and make the Tribunals effective and efficient instruments for making judicial review efficacious, inexpensive and satisfactory.
For inspiring confidence and trust in the litigant public they must have an assurance that the person deciding their causes is totally and completely free from the influence or pressure from the Government.
To maintain independence imperativity it is necessary that the personnel should have at least modicum of legal training, learning and experience.
Selection of competent and proper people instill people 's faith and trust in the office and help to build up reputation and acceptability.
Judicial independence which is essential and imperative is secured and independent and impartial administration of justice is assured.
Absence thereof only may get both law and procedure wronged and wrong headed views of the facts and may likely to give rise to nursing grievance of injustice Therefore, functional fitness, experience at the Bar and aptitudinal approach are fundamental for efficient judicial adjudication.
Then only as repository of the confidence, as its duty, the Tribunal would properly and efficiently interpret the law and apply the law to the given set of facts.
Absence thereof would be repugnant or derogatory to the Constitution.
Union of India vs Sankal Chand Himatlal Sheth & Anr. ; , referred to.
Judicial review is the basic and essential feature of the Indian constitutional scheme entrusted to the judiciary.
It cannot be dispensed with by creating Tribunal under Articles 323A and 323B of the Constitution.
Any institutional mechanism or authority in negation of judicial review is destructive of basic structure, So long as the alternative institutional mechanism or authority set up by an Act is not less effective than the High Court, it Ls consistent with constitutional scheme.
The faith of the people is the bed rock on which the edifice of judicial review and efficacy of the adjudication are founded.
The alternative arrangement must, therefore, be effective and efficient.
Keshwanand Bharati vs Union of India, ; Waman Rao vs Union of India, ; Raghunathrao Ganpatrao vs Union of India ; ; Krishna Swathi vs Union of India, 1199214 S.C.C. 605; S.P. Sampat Kumar vs Union of India & Ors., ; and J.B. Chopra vs Union of India, , referred to.
814 9.1.
It is necessary tip express Court 's anguish over the ineffectivity of the alternative mechanism devised for judicial review.
The judicial review and remedy are fundamental rights of the citizens.
The dispensation of justice by the Tribunals is much to be desires.
Court is not doubting the ability of the members or Vice Chairman (non judges) who may be experts in their regular service.
But judicial adjudication is a special process and would efficiency be administered by advocate Judges.
The remedy of appeal by special leave under Article 136 to this Court also proves to be costly and prohibitive and far flung distance too is working as a constant constraint to litigant public who could ill afford to reach this Court.
An appeal to a Bench of two Judges of the respective High Courts over the orders of the Tribunals within its territorial jurisdiction on questions of law would assuage a growing feeling of iNjustice of those who can ill afford to approach the Supreme Court.
No one can suppose that the executive will never be guilty of the sins common to all people.
Sometimes they may do things which they ought not to do or will not do things they ought to do.
The Court must be alive to that possibility of the executive committing illegality in its process, exercising its powers, reaching a decision which no reasonable authority would have reached or otherwise abuse its powers, etc.
If the proceeding, decision (or order is influenced extraneous considerations which ought not to have been taken into account, it cannot stand and needs correction, no matter of the nature of the statutory body or status or stature of the constitutional functionary though might have acted in good faith.
It is, therefore, the function of the Court to see that lawful authority is not abused.
Under modern conditions of responsible Government, Parliament should not always be relied on as a check on excess of power by the Council (of Ministers or Minister.
Though the Court would not substitute its views to that of the executive on matters of policy, it is its undoubted power and duty to see that the executive exercises its power only for the purpose for which it is granted.
It is the constitutional, legitimate and lawful power and duty of this Court to ensure that powers, constitutional statutory or executive are exercised in accordance with the Constitution and the law.
This may demand, though no doubt only in limited number of cases, Yet the in networkings of government may be exposed to public gaze.
Per Ahmadi J. (For himself and Punchhi J.) (Concurring) 1.
This Court cannot sit in judgment over the wisdom of the Central 815 Government in the choice of the person to be appointed as a President so long as the person chosen possesses the prescribed qualification and is otherwise eligible for appointment.
Respondent No. 3 was a Senior Vice President when the question of filling up the vacancy of the President came up for consideration.
He was fully qualified for the post under the Rules.
No challenge is made on that count.
Under Rule 10 (1), the Central Government is conferred the power to appoint one of the Members to be the President.
Since the validity of the Rule is not questioned there can be no doubt that the Central Government was entitled to appoint Respondent No. 3 as President.
This Court cannot interfere with the appointment of Respondent No. 3 on the ground that his track record was poor or because of adverse reports on which account his appointment as a High Court Judge had not materialised.
Assuming that the allegations against Respondent No. 3 are factually accurate, this Court cannot sit in judgment over the choice of the person made by the Central Government over the choice of the person made by the Central Government for appointment as a President if the person chosen is qualified and eligible for appointment under the Rules.
However, to instill the confidence of the litigating public in the CEGAT, the Government must make a sincere effort to appoint a sitting Judge of the High Court as a President of the CEGAT in consultation with the Chief justice of India and if a sitting Judge is not available the choice must fall on a retired Judge as far as possible.
Sub rule (4) of Rule 10 of the CEGAT Members (Recruitment and Conditions of Service) Rules, 1987 needs a suitable change to make it sufficiently attractive for sitting High Court judges to accept appointment as the President of the CEGAT.
The rules empower the Central Government to appoint any member as the President of the CEGAT.
It is true that under subrule (4), a serving Judge and under the proviso thereto, a retired Judge, can also be appointed a Member and President simultaneously.
In the case of a serving Judge his age of superannuation is fixed at 62 years but in the case of the retired Judge he may be appointed for a period of three years at the most.
Insofar as a service High Court Judge is concerned, he holds office until he attains the age of 62 years, vide Article 217 of Constitution.
It, therefore, beats common sense why a sifting Judge of tile High Court would opt to serve as the President of the CEGAT if he is to retire at the same age without any benefit.
On the contrary, he would lose certain 816 perks which are attached to the office of a High Court Judge.
Even status wise he would suffer as his decisions would he subject to the writ jurisdiction of the High Court under Article 226,227 of the Constitution.
He may agree to accept the offer only if he had an extended tenure of at least three years.
The allegations made by Petitioner in regard to the working the CEGAT are grave and the authorities can ill aford to turn a Nelson 's eye to those allegations made by a person who is fairly well conversant with the internal working of the Tribunal.
Refusal to inquire into such grave allegations, some of which are capable of verification, can only betrays indifference and lack of a sense of urgency to tone up the working of the Tribunal.
It is high time that the administrative machinery which is charged with the duty to supervise the working of the CEGAT wakes up from its slumber and initiates prompt action to examine the allegations by appointing a high level team which would immediately inspect the CEGAT, identify the causes for the crises and suggest remedial measures.
This cannot brook delay.
The time is ripe for taking stock of the working of the various Tribunals set up in the country after the insertion of Articles 323A and 323B in the Constitution.
A sound justice delivery system is a sine qua non for the efficient governance of a country wedded to the rule of law.
An independent and impartial justice delivery system in which the litigating public has faith and confidence alone can deliver the goods.
After the incorporation of these two articles, Acts have been enacted where under Tribunals have been constituted for dispensation of justice.
Sufficient time has passed and experience gained in these last few years for taking stock of the situation with a view to finding out if they have served the purpose and objectives for which they were constituted.
Complaints have been heard in regard to the functioning of other Tribunals as well and it is time that a body like the Law Commission of India ha, a comprehensive look in with a view to suggesting measures for their improved functioning.
That body can also suggest changes in the different statutes and evolve a model on the basis where of Tribunals may be constituted or reconstituted with a view to ensuring greater independence.
An intensive and extensive study needs to be undertaken by the Law Commission in regard to the constitution of Tribunals under various statutes with a view to ensuring their independence so that the public confidence in such Tribunals may increase and the quality of their performance may improve.
It is strongly recommended to the Commission of India to undertake such an exercise 817 on priority basis.
On the facts of the case it is not necessary to disclose the contents of the records to the petitioner or his counsel.
|
minal Appeal No. 183 of 1966.
Appeal by special leave from the judgment and order dated March 30, 1966 of the Mysore High Court in Criminal Revision Petition No. 384 of 1965.
R.B. Datar, for the appellants.
The respondent did not appear.
The Judgment of the Court was delivered by Grover, J.
This is an appeal by special leave from a judgment of the Mysore High Court in which the only point involved is whether a private complaint could be entertained for the commission of an offence under section 220 of the Mysore Village Panchayats & Local Boards Act, 1959, hereinafter called the "Act".
The appellants who were the Vice Chairman and the Chairman of the Keladi village panchayat were convicted under the aforesaid section and sentenced to pay a fine of Pa. 50 and Pa. 40 and in default to undergo 7 days and 5 days ' simple imprisonment respectively.
A private complaint was filed against the appellants alleging that they gave bids at an auction held at the village panchayat and appellant No. 1 purchased a radio belonging to the panchayat for Pa. 35/ .
Appellant No. 2 also bid at the same auction for the radio.
According to section 220 of the Act no member or an employee of a panchayat shah directly or indirectly bid for or acquire interest in any movable or immovable property sold at such sale in connection therewith.
if any person contravenes this provision he is to be punished, on conviction, with a fine which may extend to Rs. 500/ .
Under Rule 16 of the Mysore Panchayat Secretaries ' Powers and Duties Rules, 1961 promulgated under the provisions of the Act, only the Secretary of the Panchayat has the power to file a complaint on behalf of the Panchayat.
The High Court was of the view that this Rule did not ' preclude persons 935 other than the Secretary from filing a complaint but it only debarred complaints being, made by others on behalf of the Panchayat.
Now Rule 16 may be reproduced.
: "The Secretary shall have power to file complaints and suits on behalf of the Panchayat and to conduct the proceedings on its behalf under the orders of the Panchayat." In K.M. Kanavi vs The State of Mysore(1) the appellant Kanavi, who was the president of Municipal Borough of Gadag Betgeri had been removed from Presidentship.
He refused to hand over the charge of all the papers and property which were in his possession relating to the Borough to the new President in spite of an order made by the Government under section 23A of the Bombay Municipal Boroughs Act 1925, hereinafter called the "Bombay Act" to that effect.
Pursuant to orders made by the Divisional Commissioner and the Deputy Commissioner the new President filed a complaint against Kanavi for an offence punishable under section 23A(3) of the Bombay Act.
The appellant was convicted and sentenced to pay a fine of Rs. 50/ .
A question arose whether the complaint filed by the new President was competent as it was not filed in accordance with the procedure laid down in that Act.
Section 200 of the Bombay Act provided that the Standing Committee and subject to the provisions of sub section
(3) the Chief Officer may order proceedings to be taken for the recovery of any penalties and for the punishment of any persons offending against the provisions of the aforesaid Act.
This Court was of the opinion that the complaint which had been filed by the new President was for initiating the proceedings for the punishment of Kanavi who had offended against the provisions of sub section
(2) of section 23A and as the new President was not the Chief Officer and he had not filed the complaint under any direction made by the Standing Committee the complaint could not be entertained.
In that case also the High Court had taken the view that section 200(1) was only an enabling section which gave the power to the Standing Committee and the Chief Officer to make a direction for taking of proceedings and it could not be held to be exhaustive of the authorities who could make directions for initiation of proceedings.
The High Court had taken notice of the fact that there was no provision in that Act forbidding cognizance of offences being taken except on a complaint made under a direction of the Standing Committee or the Chief Officer.
, This is what was observed by this Court : "We are unable to accept the interpretation put by the High Court on section 200(1) of the Act.
It is true that there is no specific provision in the Act laying down that ; 936 cognizance of an offence under the Act is not to be taken except on a Complaint filed in accordance with a direction made under section 200(1), but the scheme of the Act and the purpose of this provision in section 200(1) makes it clear that the legislature intended that such proceedings.
should only be instituted in the manner laid down m that sub section.
The word "may" was used only because the legislature could not have enacted a mandatory provision requiring the Standing Committee or the Chief Officer to make a direction for institution of proceedings in all cases.
This word was intended to give a discretion to the Standing COmmittee or the Chief Officer to make directions for taking proceedings only when they considered it appropriate that such a direction should be made and to avoid compelling the Standing Committee or the Chief Officer to make such direction in all cases.
The use of this word "may" cannot be interpreted as laying down that, if a proceeding for punishment of any person for contravention of any of the provisions of the Act is to be instituted, it can be instituted in any manner without complying with the requirements of section 200(1) of the Act.
If the interpretation put by the High Court on this provision is accepted, it would mean that this provision was totally unnecessary, because there would be no need to confer power on the Standing Committee or the Chief Off icer to make such directions if such directions could be made or proceedings instituted at the instance of any private individual.
We cannot accept the submission that this provision was made in the Act simply by way of abundant caution.
In fact, if the provision had been made with such an object in view, there is no reason why the power should have been expressed to be conferred on the Standing Committee and the Chief Officer only and not on the President of the Municipality.
We, consequently, hold that, if any proceeding for punishment of any person for contravention of any of the provisions of the Act is to be instituted, it must be instituted in the manner laid down in section 200(1) of the Act and in that manner only.
" It may be mentioned that the expression of the above opinion was based on a consideration of the previous decisions of this Court.
Following the ratio of the above decision it would be legitimate to hold that the complaint, in the present case, could be filed under Rule 16 only by the Secretary of the Panchayat and by no one else.
It may be.pointed out that in the Act section 213(3) is analogous to section 23A(3) of the Bombay Act.
On a parity of reasoning it could not be suggested that if there had been any 937 contravention of section 213(3) any voter or member of the public could have filed a complaint in the matter.
The other provisions also of the Act which follow, namely sections 214 to 219 indicate that it was never contemplated that a complaint for _infringe.me.at or contravention of the prohibition contained therein could be lodged before a magistrate having jurisdiction under section 233 by any private individual in the presence of a specific rule that the Secretary shall have the power to file a complaint on behalf of the Panchayat.
Most of these sections i.e. sections 217 and 218 postulate infraction of orders of the Panchayat for which the Panchayat alone would be interested in filing a complaint.
We axe satisfied that the scheme of the Act also supports the view which we are taking that a complaint could be flied only under Rule 16 of the Mysore Panchayat Secretaries ' Powers and Duties Rules, 1961 and could not have been filed by a private complainant.
The High Court seems to have relied on section 236 of the Act which deals with powers of police officers.
This section provides that any police officer may arrest any person committing in his presence any offence against any of the provisions of the Act or of any rule, regulation or bye law made thereunder.
The person arrested has to be produced before the nearest magistrate within a period of 24 hours of arrest.
The police officer effecting the arrest must give immediate information to the Chairman or the Secretary of the Panchayat of the commission of such offence and give all assistance in the exercise of his lawful authority.
The High Court was of the view that under the provisions of this section the police officer could submit a charge sheet under section 173 of the Criminal Procedure Code after necessary investigation for offences committed under the Act.
Chapter of the Act relates to establishment and constitution of Panchayats.
There are certain sections in it which by express words make offences committed under them cognizable but in the same Chapter there are other sections which do not contain any such provision; for instance, sections 15, 17,.
21 and 22 expressly provide that the offences committed under them would be cognizable but sections 16, 18, 19 and 20 do not contain any such provision.
In other words the offences committed under them must be deemed to be not cognizable.
Section 23 in the same Chapter says that no court shall take cognizance of an offence punishable under section 16 or section 17 or under section 19(2)(a) unless there is a complaint made by an order of or under authority from the Deputy Commissioner.
The High Court was, therefore, not right in saying that all offences committed under the various provisions contained in the Act would be cognizable owing to the general powers conferred on police officers by section 236.
Indeed that section gives only a limited power to the police officer to effect arrest if an offence is committed in his presence.
There is authority for the view that this will not make an offence cognizable within the meaning of section 4(f) 938 of the Criminal Procedure Code; vide Public Prosecutor(1) vs A.V. Ramiah.
In the absence of any express provision in section 220 with which we are concerned we doubt whether the offence committed under it would be cognizable and a police officer could carry on investigation in respect of it under Chapter XIV of the Criminal Procedure Code and finally submit a charge sheet under section 173 of that Code.
It may also be pointed out that in the present case we are not concerned with the powers which a police officer can exercise in respect of an offence committed under section 220 of the Act.
What has to be seen is whether a private person or an individual could file a complaint.
In the presence of Rule 16 and for the reasons given in K.M. Kanavi vs State of Mysore(2) we are of the opinion that it was the Secretary of the Panchayat who alone was competent to file the complaint.
It must be remembered that it would be the panchayat that would be largely interested in taking action against any of its members and employees for the contravention of section 220.
The Secretary would, therefore, be entitled to file a complaint on behalf of the panchayat.
The difficulty felt by the High Court that a Secretary who is subordinate to the Chairman may find it embarrassing to file a complaint against him can hardly be accepted as a serious hurdle in the way of coming to the conclusion at which we have arrived.
The Secretary has to act on behalf of the panchayat and it is the panchayat that would be vitally interested in preventing and stopping any contravention of provisions like section 220 of the Act.
The Secretary acts on behalf of the panchayat and the question of his subordination to any of its office bearers is of no consequence.
In the view we have taken the appeal is allowed and the conviction and sentence imposed on each of the appellants is set aside.
G.C. Appeal allowed.
(1) A.I.R. 1958 A.P. 392.
| A private complaint was lodged against the appellants for an offence under section 220 of the Mysore Village Panchayats and Local Boards Act, 1959.
Rule 16 of the Mysore Panchayat Secretaries ' Powers and Duties Rules, 1961 provided that the Secretary shall have power to file complaints and suits on behalf of the Panchayat, and to conduct the proceedings on its behalf and on the orders of the Panchayat.
On their conviction the appellants went to the High Court and contended that in view of Rule 16 they could not be prosecuted on a private complaint.
The High Court decided against them on the view that the said Rule did not preclude persons other than the Secretary from filing a complaint but it only debarred complaints being made by others on behalf of the Panchayat.
Against the High Court 's judgment appeal by special leave was filed in this Court.
HELD: (i) In the presence of r. 16 and for the reasons given by this Court in R. M. Kanavi 's case which dealt with similar provisions.
under the Bombay Municipal Borough Act, 1925, it must be held that it was the Secretary of the Panchayat who alone was competent to file the, complaint.
Section 213(3) of the Mysore Act is analogous to section 23A(3) of the ' Bombay Act under which the offence fell in Kanavi 's case.
On a parity of reasoning it could not be suggested that if there had been any contravention of section 213 ( 3 ) any voter or member of the public could have filed a complaint in the matter.
The other provisions.
also of the Act which follow, namely, as.
214 to ' 219 indicate that it was never contemplated that a complaint for an infringement or contravention of the prohibition contained therein could be lodged before a Magistrate having jurisdiction under section 233 by any private individual in the presence of specific rule that the Secretary shall have the power to file a complaint on behalf of the Panchayat.
Most of these sections i.e. sq. 217 and 218 postulate infraction of orders of the Panchayat for which the Panchayat alone would be interested in filing a complaint.
Thus the scheme of the Act also supports the view that a complaint could be filed only under r. 16 of the Mysore Panchayat Secretaries ' Powers and Duties Rules, 1961 and could not have been filed by a private complaint.
[936 H 937 C] K.M. Kanavi vs State of Mysore, ; , followed and ' (ii) The High Court was not fight in saying that all offences committed under the various provisions contained in the Act would be cognizable owing to the general powers conferred on police officer by section 236 of the Act.
The section gives Only a limited power to the police 934 officer to effect arrest if an offence is committed In his presence.
The present case moreover did not relate to the powers which a police officer could exercise in respect of an offence under section 220 of the Act but to the question whether a private complaint could be filed.
[937 G 938 C] Public Prosecutor vs A. V. Ramiah, A.I.R. 1958 A.P. 392 referred to.
(iii) The difficulty felt by the High Court that a Secretary who is subordinate to the Chairman may find it embarrassing to file a complaint against him can hardly be accepted as serious.
The Secretary has to act on behalf of the Panchayat and it is the panchayat that would be vitally interested in preventing and stopping any contravention of the provisions of section 220 of the Act. 'The ' Secretary acts on behalf of the Panchayat and the question of his subordination to any one of its office bearers is of no consequence.
[938 D]
|
Appeal No. 274 of 1964.
494 Appeal by special leave from the award dated May 31, 1963 of the Industrial Tribunal, Maharashtra in Reference (I.T.) No. 59 of 1963.
section B. Naik and K. R. Chaudhury, for the appellants.
section V. Gupte, Solicitor General, G. B. Pal, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for respondent No. 1.
A. section R. Chari, K. Raiendra Chaudhury, M. section K. Aiyangar and M. R. K. Pillai, for respondent No. 2.
A. section R. Chari, M. K. Ramamurthi, for interveners.
The Judgment of the Court was delivered by Wanchoo, J.
The only question raised in this appeal by spe cial leave is the propriety of a service condition in the respondent concern by which unmarried women in a particular department have to resign on their getting married.
A dispute was raised about this condition by the appellant union on behalf of the workmen and was referred to the Industrial Tribunal, Maharashtra, in the following terms "The existing bar on ladies that on their getting married they have to leave the service of the company should be removed.
" The respondent is a pharmaceutical concern.
It appears that there is a rule in force in the respondent concrn according to which if a lady workman gets married, her services are treated as automatically terminated.
It appears that such a rule is in force in other pharmaceutical concerns in that region and the matter came up on two occasions before industrial tribunals for adjudication with reference to other pharmaceutical concerns, and on both occasions the challenge by the workmen to such a rule failed.
On the first occasion the dispute was between the Boots Pure Drug Co. (India) Limited vs Their Workmen(1) and a similar rule was upheld in 1956.
On the second occasion the dispute was between Sandoz (India,) Limited vs Workmen employed under it(2).
There was agitation in the respondent concern in connection with this rule and the present reference was eventually made in February 1963.
The tribunal followed its earlier decision in Sandoz Limited case(2 ) and rejected the contention that the rule be abrogated.
The appellant obtained special leave to appeal from this Court; and that is how the matter has come up before us.
(1) B.G.G. Part I L, dated Jan. 26,1966.
(2) (1962) Industrial Court Reporter 22.
495 Ordinarily we see no reason for such a rule requiring un married women to give up service on marriage, particularly when it is not disputed that no such rule exists in other industries.
It is also not in dispute that no such rule exists in other departments of the respondent concern itself and it is only in one department that the rule is in force.
It can only be upheld if the respondent shows that there are good and convincing reasons why in this particular department of the pharmaceutical industry it is necessary to have such a rule.
The only reason given for enforcement of this rule in this department of the respondent concern is that the workmen have to work in teams in this department and that requires that they should be regular and that this cannot be expected from married women for obvious reasons, and that there is greater absenteeism among married women than among unmarried women or widows against whom there is no bar of this kind.
We are not impressed by these reasons for retaining a rule of this kind.
The work in this department is not arduous for the department is concerned with packing, labelling, putting in phials and other work of this kind which has to be done after the pharmaceutical product has been manufactured.
Nor do we think that because the work has to be done as a team it cannot be done by married women.
We also feel that there is nothing to show that married women would necessarily be more likely to be absent than unmarried women or widows.
If it is the presence of children which may be said to account for greater absenteeism among married women, that would be so more or less in the case of widows with children also.
The fact that the work has got to be done as a team and presence of all those workmen is neces sary, is in our opinion no disqualification so far as married women are concerned.
It cannot be disputed that even unmarried women or widows are entitled to such leave as the respondent 's rules provide and they would be availing themselves of these leave facilities.
The only difference in the matter of absenteeism that we can see between married women on the one hand and unmarried women and widows on the other is in the matter of maternity leave which is an extra facility available to married women.
To this extent only, married women are more likely to be absent than unmarried women and widows.
But such absence can in our opinion be easily provided for by having a few extra women as leave reserve and can thus hardly be a ground for such a drastic rule as the present which requires an unmarried woman to resign as soon as she marries.
We have been unable to understand how it can be said that it is necessary in the interest of efficient ope 496 ration and in the company 's economic interest not to employ married women.
So far as efficient operation is concerned, it can hardly be said that married women would be less efficient than unmarried women or widows so far as pure efficiency in work is concerned, apart of course from the question of maternity leave.
As to the economic interest of the concern, we fail to see what difference the employment of married women will make in that ,connection for the emoluments whether of an unmarried woman ,or of a married woman are the same.
The only difference between the two as we have already said is the burden on account ,of maternity leave.
But as to that the respondent contends that the reason for having this rule is not the respondent 's desire to avoid the small burden to be placed on it on account of maternity leave.
If that is so, we fail to see any justification for a rule ,of this kind which requires an unmarried woman to give up service immediately she marries.
We are therefore of opinion that there is no good and convincing reason why such a rule should continue in one department of the pharmaceutical industry.
The fact that such a rule exists in other such concerns is no justification, if the rule cannot be justified on its own merits.
Then it is urged that the employer was free to impose any condition in the matter of employment when he employs a now workman and that industrial adjudication should not interfere with this right of the employer.
AR that need be said in this connection is that it is too late in the day now to stress the absolute freedom of an employer to impose any condition which he likes on labour.
It is always open to industrial adjudication to consider the conditions of employment of labour and to vary them if it is found necessary, unless the employer ran justify an ,extraordinary condition like this by reasons which carry conviction.
In the present case the reasons which the respondent has advanced and which were the basis of the two decisions referred to earlier do not commend themselves to us as sufficient for such a rule.
We are therefore of opinion that such a rule should be abrogated in the interest of social justice.
Lastly it is urged that a similar rule exists in certain government services and in this connection our attention is drawn in particular to r. 5(3) of the 1954 Indian Administrative Service (Recruitment) Rules.
That rule reads as follows : "No married woman shall be entitled as of right to be appointed to the Service, and where a woman appointed to the Service subsequently marries, the Central Government may, if the maintenance of the 497 efficiency of the Service so requires, call upon her to resign.
" It will be seen that this rule for the Indian Administrative Service is not unqualified like the rule in force in the respondent 's concern.
It only lays down that where an unmarried woman marries subsequently, the Central Government may, if the maintenance of the efficiency of the Service so requires call upon her to resign.
Therefore this rule does not compel unmarried women to resign on marriage as a matter of course as is the case in the respondent concern.
It is only when the Central Government considers that marriage has impaired the efficiency of the woman concerned that the Central Government may call upon her to resign.
The rule which is in force in the respondent concern however assumes that merely by marriage the efficiency of the woman employee is impaired and such an assumption in our opinion is not justified.
At any rate this rule for the Indian Administrative Service which has been brought to our notice only for purposes.
of comparison does not justify the drastic rule that we have in the present case where an unmarried woman is compelled to resign immediately she marries without regard to her continued efficiency.
On a careful consideration of the reasons advanced on behalf of the respondent in support of the existing rule we are of opinion that the reasons do not justify such a drastic rule.
We therefore allow the appeal and direct that the rule in question in the form in which it exists at present be abrogated.
The abrogation shall take effect from the date of this judgment.
The appellants will get their costs from the respondent company.
Appeal allowed.
| The respondents, who were the workmen of the appellant, applied to the Second Labour Court, Bombay, under section 33C(1) of the , claiming compensation for lay off during a certain period.
The appellant contended that : (i) the Labour Court had no jurisdiction as the dispute fell to be tried under the C.P. and Berar Industrial Disputes (Settlement) Act, 1947; and (ii) the application under section 33C was incompetent, because, it was not a claim for money due and calculations had to be made for ascertaining the money due.
The Labour Court, as well as the High Court under articles 226 and 227 of the Constitution.
rejected the contentions.
In the appeal to this Court.
HELD : (i) The argument that the controversy was wrongly before Labour Court was entirely erroneous.
Chapter V A of the , which was inserted by section 3 of the Industrial Disputes (Amendment) Act, 1953, is the only Chapter in which there is provision regarding lay off or compensation for lay off.
Though the C.P. and Berar Act applies to the textile industry, it contain* no provision either for recovery of money or for compensation for lay off and they are not matters over which the C.P. and Berar Act has any jurisdiction.
Therefore, if a workman has a claim for lay off, it can only come up for decision under the .
Even if sections 31 and 25J save the application of the C.P. and Berar Act, they do so, subject to the condition that the question of lay off must be decided in accordance with Chapter V A. Since section 33C provides that a dispute for any money due under Chapter V A has to go before the appropriate Government or its delegate, and since the delegate is the Second Labour Court, the respondents were entitled to go before the Labour Court to realise due from the appellant under Chapter V A. [769 F] (ii) It is not essential that the claim which can be brought before the Government or its delegate under section 33C(1) most always be for a predetermined sum.
[769 G H] Kays Construction Co. (P) Ltd. vs State of U P. & Ors.
; , followed.
|
iminal Appeal No. 6 of 1962.
Appeal by special leave from the judgment and order dated June 1, 1961 of the Judicial Commissioner 's Court for Manipur in Criminal Appeal Case No. 7 of 1961.
O. P. Rana and R. N. Sachthey, for the appellant.
section C. Agarwal, for the respondent.
March 11, 1964.
The judgment of the Court was delivered by AYYANGAR, J.
This appeal which comes before us by special leave is directed against the judgment and order of the Judicial Commissioner of Manipur acquitting the respondent and setting aside the conviction and sentence passed against him by the learned Sessions Judge.
This appeal was originally heard before a Bench of two Judges but has been directed to be placed before this Bench by reason of the learned Counsel for the appellant seeking 125 to question the correctness of the judgment of this Court in the case of Pritam Singh vs The State of Punjab(1) in view of the decision of the English Court of Criminal Appeal in R. vs Connelly(2) and the subsequent decision of this Court in Gurcharan Singh vs State of Punjab(3).
The facts giving rise to the appeal are in brief as follows:There was an agitation by certain political parties and groups in Manipur in April, 1960 for establishing res ponsible Government in the Manipur area.
The agitation took the form of picketing of Government offices and the residences of Government servants and blocking roads in order to paralyse the administration.
After this form of agitation continued for some time, the District Magistrate of Manipur promulgated orders under section 144, Criminal Proce dure Code on the morning of April 25, 1960 banning public meetings and processions and these orders were proclaimed and communicated to the public through loudspeakers.
Not withstanding this order, crowds continued to collect and move on the streets shouting slogans.
Bira Singh the res pondent was said to have been leading this mob.
A lathi charge by the police took place but it is stated that because of this the crowd moved a little away and began to pelt stones.
The crowd was thereupon directed to disperse, its attention being drawn to the promulgation of the order under section 144, Criminal Procedure Code and to the fact that the gathering in a public place in violation of the order made it an unlawful assembly; but this command was not heeded and the stone throwing continued.
There was firing by the police which resulted in injuries to certain persons including some of the police personnel.
The first information report in regard to the incident and the offences committed during its course was lodged at the Imphal Police station at about 7 p.m. that day in which the informant specified the name of the respondent Bira Singh as the leader of this mob.
On this a case was registered under sections 114/149/332/342 and 307 of the Indian Penal Code and section 7 of the Criminal Law Amendment Act, and a few days later the respondent was arrested.
Charges were framed against the respondent who was placed before the Magistrate and the charge sheet stated that the respondent was in the crowd between 3 and 5 p.m. on that day, that the crowd was an unlawful assembly, that he was among those who pelted stones which caused grievous hurt to one person and simple hurt to others and also caused damage to the Inter State Police Wireless Station.
Along with (1) A.I.R. 1956 S.C. 415.
( 2) (3) ; 126 the respondent certain others were included as accused but we are now concerned only with the respondent.
The learned Sessions Judge convicted all of them of the offences with which they were charged and sentenced them to varying terms of imprisonment but into the details of these it is not necessary to enter.
The question of law that arises in this case is by reason of a prior prosecution of the respondent in which he was acquitted.
That prosecution was founded on a complaint against him filed on May 12, 1960 under section 188, Indian Penal Code in connection with his participation is a member of the same crowd in regard to which the charge which is the sub ject matter of the present proceedings is concerned.
In that complaint the District Magistrate alleged that the respondent had disobeyed the order passed under section 144 by forming himself along with 2,000 other persons into an unlawful assembly between the hours of 3 and 5 p.m. on April 25, 1960 by shouting slogans and pelting stones at police officers and this was stated to be oil the road in front of the Police Wireless station.
This complaint by the District Magistrate was registered and taken cognizance of by the Magistrate.
The respondent pleaded in his defence that he was not present at the scene of the occurrence at all and that he had been falsely implicated by the police.
The Magistrate rejected the defence and accepting the prosecution case that the respondent was present as the head of the mob on that occasion convicted him of the offence charged and sentenced him by his order dated July 8, 1960 to rigorous imprisonment for six months.
Ten days thereafter on July 18, 1960 the charge sheet in the present case was filed.
During the pendency of the prosecution from which the present appeal arises the respondent appealed to the learned Sessions judge against his conviction by the Magistrate on the charge under section 188, Indian Penal Code.
The learned Sessions Judge allowed the appeal holding that the prosecu tion had not established that the respondent was present at the place and at the time where the occurrence took place at which he was said by the prosecution to have been present or that he disobeyed the order under section 144, Criminal Procedure Code.
In the course of his judgment delivered on July 30, 1960 the learned Sessions Judge observed after referring to the delay in the filing of the complaint after the occur rence: "This delay: in the filing of the complaint and in the naming of the appellant. . . throws con siderable doubt on the presence of the appellant among the agitators on 25 4 60. . . if the P. Ws. did not know the appellant from before no 127 reliance can be placed on their identification of the appellant during the trial because that identification was not tested in a test identification parade.
This also confirms my suspicion that the appellant might not have been present in the incident of 25 4 60. .
The important position which the appellant had in organising the agitation in my opinion, afforded sufficient motive for the P.Ws. to come to a conclusion that the appellant might have been present in the agitation.
But that erroneous impression on conclusion would not prove the presence of the appellant among the agitators on 25 4 60. .
For reasons given above the appeal is allowed and the conviction and sentence of the appellant under section 188 I.P.C. are set aside and he is acquitted.
" This acquittal was confirmed by the Judicial Commissioner on April 29, 1961.
Meanwhile, to proceed with the narrative of the proceedings which has given rise to the present appeal, the learned Magistrate committed the respondent and 5 others to take their trial before the Sessions Judge, Manipur on a charge in respect of the offences we have set out earlier.
Before the learned Sessions Judge an objection was raised on behalf of the respondent that the trial was barred by section 403, Criminal Procedure Code by reason of the acquittal of the accused under section 188, Indian Penal Code on July 30, 1960.
The learned Sessions Judge, however, held, that the terms of the section were not satisfied, in that the ingredients of the two offences with which the accused was charged in the two prosecutions were different and rejected that submission.
On the evidence adduced before him be found that it had been established to his satisfaction that the respondent as well as the others were present at the scene of the occurrence and held the accused guilty of the offences under sections 333, 323 and 440 all read with section 149, Indian Penal Code and sentenced him to 4 years R.I.
All the six accused filed appeals against their conviction and sentences before the Judicial Commissioner, Manipur and the learned Judicial Commissioner after making some variations in the sentences as regards certain of the accused directed the acquittal of the respondent on the ground that the finding of fact recorded by the learned Sessions Judge in his trial for the offence under section 188, Indian Penal Code that he was not present at the scene of the occurrence on April 25, 1960 between the hours of 3 and 5 p.m. was final and conclusive and binding upon the prosecution and that no evidence could be led to 128 establish a contrary state of affairs in the present proceedings.
In so holding the learned the Judicial Commissioner followed the decision of this Court in Pritam Singh vs State of Punjab(1) and certain other decisions and held that the principle of res judicata applicable to criminal proceedings was not confined to cases falling within the bar of section 403, Criminal Procedure Code but was of wider application.
It is the correctness of this view of the law that calls for consideration in this appeal.
Before referring to the decision of this Court in Pritam Singh vs State of Punjab(1) it would be convenient to refer to and put aside one point for clearing the ground.
Section 403, Criminal Procedure Code embodies in statutory form the accepted English rule of autre fois acquit.
This section runs: "403 (1) A person who has been once tried by a Court of competent jurisdiction for an offence and convicted or acquitted of such offence shall, while such conviction or acquittal remains in force, not be liable to be tried again for the same offence, nor on the same facts for any offence for which a different charge from the one made against him might have been made under section 236, or for which he might have been convicted under section 237.
(2) A person acquitted or convicted of any offence may be afterwards tried for any distinct offence for which a separate charge might have been made against him on the former trial under section 235, sub section (1).
(3) A person convicted of any offence constituted by any act causing consequences which, together with such act, constituted a different offence from that of which he was convicted may be afterwards tried for such last mentioned offence, if the consequences had not happened, or were not known to the Court to have happened, at the time when he was convicted.
(4) A person acquitted or convicted of any offence constituted by any acts may, notwithstanding such acquittal or conviction, be subsequently charged with, and tried for, any other offence constituted by the same acts which he may have committed if the Court by which he was first tried was not competent to try the offence with which he is subsequently charged.
(1) A.T.R. (5) Nothing in this section shall affect the provisions of section 26 of the , or section 188 of this Code.
129 Explanation The dismissal of a complaint, the stopping of proceedings under section 249, the discharge of the accused or any entry made upon a charge under section 273, is not an acquittal for the purposes of this section.
" Section 26 of the which is referred to in section 403 enacts: "26.
Where an act or omission constitutes an offence under two or more enactments, then the offender shall be liable to be prosecuted and punished under either or any of those enactments, but shall not be liable to be punished twice for the same offence.
" We might also, in this connection, refer to article 20(2) of the Constitution since it makes provision for a bar against a second prosecution in an analogous case.
That provision reads: "20(2).
No person shall be prosecuted and punished for the same offence more than once.
" As has been pointed out by this Court in State of Bombay vs section L. Apte(1), both in the case of article 20(2) of the Consti tution as well as section 26 of the to operate as a bar the second prosecution and the consequential punishment thereunder, must be for "same offence" i.e., an offence whose ingredients are the same.
It has been pointed out in the same decision that the V Amendment of the American Constitution which provides that no person shall be subject, for the same offence, to be twice put in jeopardy of life or limb, proceeds on the same principle.
It is common ground that the respondent cannot bring his case within the provisions of sub section
(1) of section 403 and it was also common ground that the trial of the respondent would be permitted by sub section
It should, however, be noticed that sub sections
(1) to (3) of this section deal with the trial of an accused for an offence and his conviction therefor.
The question raised for decision in Pritam Singh 's(2) case however was different and was whether where an issue of fact has been tried by a competent court on a former occasion and a finding has been reached in favour of an accused, such a finding would constitute an estoppel or res judicata against the prosecution not as a bar to the trial and conviction of the accused for a different or distinct offence but as (1) ; (2) A.I.R. 1956 S.C. 415.
L/P(D)1SCI 5 130 precluding the reception of evidence to disturb that finding of fact when the accused is tried subsequently even for a different offence which might be permitted by the terms of section 403(2).
As Pritam Singh 's(1) case was based wholly on the decision of the Privy Council in Sambasivam vs Public Prosecutor, Federation of Malaya(2) it would be necessary to examine the basis of the latter decision.
The appellant an Indian Tamil was travelling on foot in the company of two Chinese.
They met a party of three Malays.
A fight ensued between the two groups in the course of which one of the Chinese was killed.
The Malays alleged that they had been fired on by the Chinese and that the appellant had with him a revolver which he had held out and pointed at one of them.
In connection with this incident the appellant was charged with carrying a fire arm and being in possession of ten rounds of ammunition.
Two charges were framed against the appellant: (1) of carrying a fire arm, and (2) of being in possession of ammunition.
He was acquitted of the second charge of being in possession of ammunition and that acquittal became final.
He was, later convicted of the offence of carrying a fire arm and the appeal before the Privy Council related to the legality of this conviction.
Diverse objections branching into several fields of law were raised before the Privy Council in support of the appeal but what is, however, of relevance now, is the one which related to the admissibility of the evidence of the prosecution witnesses who spoke of the revolver carried by the appellant being loaded with bullets and of the appellant carrying four more bullets in a bag.
Their Lordships rejected all the other contentions raised on behalf of the appellant but allowed the appeal on the ground that this evidence regarding the revolver being loaded and of the appellant carrying a bag containing some bullets was inadmissible in law.
In dealing with this Lord MacDermott speaking for the Board said: "The effect of a verdict of acquittal pronounced by a competent court on a lawful charge and after a lawful trial is not completely stated by saying that the person acquitted cannot be tried again for the same offence.
To that it must be added that the verdict is binding and conclusive in all subsequent proceedings between the parties to the adjudication." After pointing out that the prosecution witnesses were permitted to depose regarding the possession of ammunition by the appellant and that it was not possible to exclude the (1) A.I.R. 1956 S.C. 415. (2) 131 effect of this evidence on the prosecution case, their Lord ships held that the appellant was seriously prejudiced by the reception of this evidence and therefore allowed the appeal and directed his acquittal.
The point in regard to which the observations in Sambasivam 's(1) case was applied by this Court related to the use of the recovery of a revolver from the accused to sustain his conviction of the offence of murder.
Previous to the prosecution for an offence under section 302, Indian Penal Code the appellant before this Court had been tried before the Additional Sessions Judge, Faridpur under section 19(f) of the Indian Arms Act `of an offence for possession of that revolver and had been acquitted.
This Court speaking through Bhagwati, J. extracted the observations we have quoted from the judgment of Lord MacDermott and pointed out that on the basis of this decision the evidence relating to the recovery of the revolver from the accused should have been excluded.
It was not contended by learned Counsel for the appellant that if the principle laid down by this decision was correct, the acquittal of the respondent by the learned Judicial Commissioner by the order now under appeal was erroneous.
The argument, however, was that the observations in Pritam Singh 's(2) case required reconsideration.
This submission was rested on two separate lines of reasoning: (1) That the rule in Sambasivam 's(1) case on which Pritam Singh IS (2) case was based had been dissented from by the English Court of Criminal Appeal in R. vs Connelly(3) and that, similarly that principle had been departed from by this Court in Grcharan Singh vs State of Punjab(4).
(2) That the principle of Common law which was applied by the Privy Council in Sambasivam 's(1) case could have no application in a jurisdiction like ours where the principle of autre fois acquit is covered by a statutory provision framed on the lines of section 403 occurring in a Code which is exhaustive.
As regards the first ground, it must be pointed out that learned Counsel for the State admitted that there was noth ing a Gurcharan Singh 's(4) case which militated against the acceptance of the rule laid down in Pritam Singh 's (2) case.
Coming next to the point made regarding the decision of the English Court of Criminal Appeal in R. vs Connelly(3), we should make it clear that the decisions of the English Courts being merely of persuasive authority, decisions of such a (1) (2) (3) A.I.R. 1956 S.C. 415.
(4) ; L/P(D)1 SCI 5(a) 132 court even if at variance with one of this Court do not by themselves justify an application to reconsider an earlier decision of this Court.
Besides, a close examination of the judgment in R. vs Connelly(1) through which learned Counsel for the State has taken us, does not disclose any dissent from the principle stated by Lord MacDermott.
The entire case before the Court turned upon whether there had been a specific finding on an issue of fact an issue directly raised regarding an ingredient of the offence charged at the later trial, when the accused was acquitted by the Court of Criminal Appeal in the former proceeding.
Except that the Court did not expressly rule that the principle of issue estoppel applied in England, no exception was taken to its soundness and the decision proceeded on the basis of the facts not justifying the application of the principle, the conditions not being fulfilled.
Learned Counsel is, therefore, not well founded in his submission that the principle underlying Sambasivam 's(2) case was dissented from in R. vs Connelly(1).
Besides, it should be pointed out that the principle underlying the decision in Pritam Singh 's(3) case did come up for consideration before this Court on several occasions, but it was never dissented from though in some of them it was distinguished on facts.
(See Banwari Godara vs The State of Rajasthan(4), Mohinder Singh vs State of Punjab(5) and Kharkan vs The State of Uttar Pradesh(6).
These two decisions in R. vs Connelly(1) and Gurcharan Singh vs State of Punjab(7) being out of the way, we shall address ourselves to the question as to whether what is termed "issue estoppel" which has been held by this Court in Pritam Singh 's(3) case to be applicable to criminal proceedings is excluded by reason of the provisions of the Criminal Procedure Code.
For this purpose learned Counsel invited our attention to section 5(1) which enacts: "All offences under the Indian Penal Code shall be investigated, inquired into, tried, otherwise dealt with according to the provisions hereinafter contained.
" This, however, in our opinion, does not afford any assistance to the argument because Pritam Singh 's(3) case did not introduce any variation in the Code as regards either (3) A.I.R. 1956 S.C. 415.
(4) G.A. No. 141 of 1960, d/February 7, 1961.
(5) A.I.R. 1965 S.C. 79.
(6) A.I.R. 1965 S.C. 83.
(7) ; 133 investigation, enquiry or trial.
As we have pointed out earlier, issue estoppel does not prevent the trial of any offence as does autre fois acquit but only precludes evidence being led to prove a fact in issue as regards which evidence has already been led and a specific finding recorded at an earlier criminal trial before a court of competent jurisdiction.
Learned Counsel next drew our attention to the observations of the Privy Council in Yusofalli Mulla vs The King(1) at page 169 where the following observations occur: "The last point urged by Mr. Page was that even if the case did not fall within the terms of section 403 of the Code of Criminal Procedure the appellant could nonetheless rely on the common law rule that no man should be placed twice in jeopardy." After stating that even for the application of the Common Law rule of double jeopardy the earlier order had to be by a court competent to pass a valid order of acquittal or conviction the judgment proceeded: "This argument therefore fails on the facts, and it is not necessary for their Lordships to consider whether section 403 of the Code of Criminal Procedure constitutes a complete code in India on the subject of autre fois acquit and autre fois convict, or whether in a proper case the common law can be called in aid to supplement the provisions of the section." As we have pointed out, we are not now concerned with any extension of the principle of autre fois acquit but as to the admissibility of evidence which is designed to upset a finding of fact recorded by a competent court at a previous trial.
The reasoning of Lord MacDermott in Sambasivam 's(2) case was not the first occasion when this rule as to issue estoppel in a criminal trial was formulated or given effect to.
That it is not the same as the plea of double jeopardy or autre fois acquit is also clear from the statement of the law by Lord MacDermott himself.
The distinction between autre fois acquit and the objection to the reception of evidence to prove an identical fact which has been the subject of an earlier finding between the parties is brought out in the following passage from the judgment of Wright, J. in The Queen vs Ollis(3): "The real question is whether this relevant evidence of the false pretence on July 5 or 6 ought to have been excluded on the ground that it was part of (1) 176 I.A. 158.
( 2 ) (3) , 768 769.
134 the evidence given for the prosecution at the former trial, at which the prisoner was charged with having obtained money from Ramsey on that false pretence, and was acquitted of that charge.
" The learned Judge then went on to point out that if the acquittal at the first trial was based on the negativing of this fact the evidence would be inadmissible but if that acquittal was based on other circumstances the evidence would be admissible.
That is why he said: "An objection in the nature of a plea of "autre fois acquit" cannot of course be maintained, because on either indictment the prisoner could not have been convicted of the offences, or any of them, which were alleged in the other indictment.
Nor can there be an estoppel of record or quasi of record, unless it appears by record of itself, or as explained by proper evidence, that the same point was determined on the first trial which was in issue on the second trial.
" Speaking of this type of estoppel Dixon, J. said in The King vs Wilkes(1): "Whilst there is not a great deal of authority upon the subject, it appears to me that there is nothing wrong in the view that there is an issue estoppel, if it appears by record of itself or as explained by proper evidence, that the same point was determined in favour of a prisoner in a previous criminal trial which is brought in issue on a second criminal trial of the same prisoner.
That seems to be implied in the language used by Wright, J. in R. vs Ollis which in effect I have adopted in the foregoing statement. . .
There must be a prior proceeding determined against the Crown necessarily involving an issue which again arises in a subsequent proceeding by the Crown against the same prisoner.
The allegation of the Crown in the subsequent proceeding must itself be inconsistent with the acquittal of the prisoner in the previous proceeding.
But if such a condition of affairs arises I see no reason why the ordinary rules of issue estoppel should not apply.
Such rules are not to be confused with those of res judicata, which in criminal proceedings are expressed in the pleas of autre fois acquit and autre fois convict.
They are pleas which are (1) C.L.R. 511 at pp.
518 519.
135 concerned with the judicial determination of an alleged criminal liability and in the case of conviction with the substitution of a new liability.
Issue estoppel is concerned with the judicial establishment of a proposition of law or fact between parties.
It depends upon well known doctrines which control the relitigation of issues which are settled by prior litigation.
" This decision was rendered in 1948.
The matter was the subject of consideration by the High Court of Australia after the decision in Sambasivam 's(1) case in Marz vs The Queen (2) .
The question concerned the validity of a convic tion for rape after the accused had been acquitted on the charge of murdering the woman during the commission of the act.
In an unanimous judgment by which the appeal of the accused was allowed, the court said: "The Crown is as much precluded by an estoppel by judgment in criminal proceedings as is a subject in civil proceedings. .
The law which gives effect to issue estoppels is not concerned with the correctness or incorrectness of the finding which amounts to an estoppel, still less with the process of reasoning by which the finding was reached in fact. .
It is enough that an issue or issues have been distinctly raised or found.
Once that is done, then, so long as the finding stands, if there be any subsequent litigation between the same parties, no allegations legally inconsistent with the finding may be made by one of them against the other.
" It is, therefore, clear that section 403 of the Criminal Proce dure Code does not preclude the applicability of this rule of issue estoppel.
The rule being one which is in accord with sound principle and supported by high authority and there being a decision of this Court which has accepted it as a proper one to be adopted, we do not see any reason for discarding it.
We might also point out that even before the decision of this Court this rule was applied by some of the High Courts and by way of illustration we might refer to the decision of Harries, C. J. in Manickchand Agarwala vs The State(3).
Before parting, we think it proper to make one observation.
The question has sometimes been mooted as to whether the same principle of issue estoppel could be raised (1) (2) ; , 68 69.
(3) A.I.R. 1952 Cal.
136 against an accused, the argument against its application being that the prosecution cannot succeed unless it proves to the, satisfaction of the Court trying the accused by evidence led before it that he is guilty of the offence charged.
We prefer to express no opinion on this question since it does not arise for examination.
As stated earlier, if Pritam Singh 's(1) case was rightly decided, it was conceded that the decision of the Judicial Commissioner was right.
The appeal, therefore, fails and is dismissed.
Appeal dismissed (1) A.I.R. 1956 S.C. 415.
| In the present case.
the trial court held the respondent guilty of the offences under sections 333, 323 and 440 all read with section 149, Indian Penal Code.
It was alleged by the prosecution that 'the respondent Bira Singh was a member of the unlawful assembly which was formed between 3 and 5 p.m. on 25th April 1960, in contravention of the promulgation of the order under section 144 of the Code of Criminal Procedure.
As a member of the mob he was alleged to have pelted Stones at police officers.
The respondent pleaded, in his defence that the present trial was barred by section 403, Criminal Procedure Code by reason of the acquittal of the accused under section 188, Indian Penal Code on July 30, 1960.
The Trial court did not accept his defence and convicted him.
On appeal, the Judicial Commissioner accepted the defence of the respondent and acquitted him on the bases of the decision of this court in Pritam Singh vs State of Punjab.
Before the trial of the present case, a complaint was filed against the respondent on May 12, 1960 under section 188 I.P.C.
In that complaint the District Magistrate alleged that the respondent had disobeyed the order passed under section 144 by forming himself alongwith other persons into an unlawful assembly between the hours of 3 and 5 p.m. on April 25, 1960.
In that case the trial court convicted him of the offence charged and sentenced him to rigorous imprisonment for 6 months.
On appeal the Sessions Judge by his judgment dated July 30, 1960 acquitted the respondent, on the ground that the prosecution had failed to establish that the respondent was present at the place and at the time where the occurrence took place.
This acquittal was confirmed by the Judicial Commissioner.
Held Sub sections
(1) to (3) of section 403 of the Code of Criminal Procedure deal with the trial of an accused for an offence and his conviction therefor.
The question raised for decision in Pritam Singh 's case however was different and was whether where an issue of fact has been tried by a competent court on a former occasion and a finding has been reached in favour of an accused, such a finding would constitute an estoppel or res judicata against the prosecution not as a bar to the trial and conviction of the accused for a different or distinct offence but as precluding the reception of evidence to disturb that finding of fact when the accused is tried subsequently even for a different offence which might be permitted by the terms of section 403 (2).
It would not be correct to say that the principle underlying in Sambasivan 's case was dissented from in R. vs Connelly.
Besides, it should be pointed out that the principle 124 underlying the decision in Pritam Singh 's case did come up for consideration before this Court on several occasions, but it was never dissented from though in some of them it was distinguished on facts.
Pritam Singh vs State of Punjab, A.I.R. 1956, S.C. 415, R. vs Connelly, and Sambasivam vs Public Prosecutor, Federation of Malaya, , relied on.
Gurcharan Singh vs State of Punjab, A.I.R., , referred to.
State of Bombay vs section L. Apte, ; , Banwari Godara vs The State of Rajasthan, Cr. A. No. 141 of 1960 dated February 7, 1961, Mohinder Singh vs State of Punjab, A.I.R. 1965 S.C. 79, Kharkan vs The State of Uttar Pradesh, A.I.R. 1965 S.C. 83, Yusofalli mulla vs The King.
76 I.A. 158, referred to.
(ii) The rule of issue estoppel does not prevent the trial of an offence as does author fois acquit but only precludes evidence being led to prove a fact in issue as regards which evidence had already been led and a specific finding recorded at an earlier criminal trial before a court of competent jurisdiction.
The rule of issue estoppel is not the same as the plea of double jeopardy or autre fois acquit is also clear from the statement of the law by Lord Mac Dermott in Sambasivam 's case.
(iii) It is clear that section 403 of the Criminal Procedure Code does not preclude the applicability of this rule of issue estoppel.
The rule being one which is in accord with sound principle and supported by high authority and there being a decision of this court in Pritam Singh 's case which has accepted it as a proper one to be adopted, there is no reason for discarding it.
The Queen vs Ollis, The King vs Wilkes, ; , Marz vs The Queen, ; and Manick chand Agarwall vs The State, A.I.R. 1952 Cal.
730 relied on.
|
: Criminal Appeal No. 76 of 1976.
T. C. Raghavan and N. Sudhakaran for the appellant.
Debabrata Mookerjee and R. N. Sachthey for respondent No. 1.
The Judgment of the Court was delivered by SARKARIA, J.
This appeal by special leave is directed against an order, dated July 1, 1975, of the High Court of Kerala, dismissing 533 the Criminal Revision Petition filed by the appellant.
It raises questions with regard to the scope and interpretation, inter alia, of sections 399 (3) and 484(2) (a) of the Code of Criminal Procedure, 1973 (hereinafter referred to as the New Code).
The facts are these: On February 2, 1971 the Director of Enforcement, New Delhi made a complaint against four accused persons.
alleging the commission of offences under section 120 B, Penal Code and section 5(1) (aa) and B; 5(1) (c) of the Foreign Exchange Regulation Act, 1947 (for short, called the Act) in the Court of the District Magistrate, Ernakulam.
The appellant herein was accused No. 2 in that complaint.
By an application he raised two objections to the maintainability of the complaint and prayed for its dismissal.
First, the opportunity as required under the proviso to section 23 (3) of the Act was not given to the accused for showing that he had permission from the Reserve Bank of India for doing the alleged acts.
Second, that the complainant did not comply with the conditions in the proviso to section 23D (1) of the Act, in as much as there was on additional material before him to come to the conclusion that the penalty which he is empowered to impose under section 23, would not be adequate and that consequently, it was necessary to file a complaint in Court.
Dr By an order dated September 5, 1973, the trial court dismissed the application holding inter alia "that the points raised here will be considered after recording the evidence".
On the same day, against this order dated September 5, 1973, accused No. 2 (P. Philip) filed Cr.
Revision Petition No. 27 of 1973 under section 435 of the Code of Criminal Procedure, 1898 (hereinafter called the old Code) before the Sessions Judge, Ernakulam, who dismissed the same by an order dated August 6, 1974.
Aggrieved by the order of the Sessions Judge, P. Philip preferred Cr. Revision Petition No. 393 of 1974 to the High Court.
This Revision was heard by a Division Bench along with two other Revisions (Cr. Rev. Petns.
Nos. 409 and 411 of 1974) and dismissed, without going into the merits, on the ground that it was not maintainable in view of section 399(3) of the New Code.
Mr. Raghavan, learned Counsel for the appellant contends that the order under appeal is manifestly erroneous because at the time when the revision petition was filed before the Sessions Judge, the old Code was in force, and in view of section 484 of the New Code, it had to be disposed of in accordance with the old Code.
As against this, Mr. D. Mukherji submits that the word "application" in section 484(2) (a) of the Code of 1973 is a word of limited import.
According to the Counsel only those applications which could be finally disposed of by the Sessions Judge would be covered by this word.
Since the revision application, in the instant case proceeds the argument was one for reference to the High Court under section 438 of the Code of 1878, and could not be finally disposed of by the Sessions Judge at his level, it would not be an "application" within the contemplation of section 484(2) (a) of the Code of 1973.
It is pointed out that procedural rights are not vested rights, that whereas a right of 534 appeal is a substantive right, the procedural facility to move in revision does not involve such a right.
On these premises it is maintained that the saving clause in section 484 should be very strictly construed, with the result that the Code of Criminal Procedure, 1973 will govern all revisions which were pending on April 1, 1974 when it came into force.
We are unable to accept the interpretation of section 484(2) (a) of the new Code suggested by the learned Counsel for the respondents.
The language of this provision is clear.
Its material part runs as under.
"(1) The Code of Cr.
Procedure 1898 (V of 1898) is hereby repealed.
(2) Notwithstanding such repeal: (a) If, immediately before the date on which this Code comes into force, there is any appeal, application, trial, inquiry or investigation pending, then, such appeal, application, trial, inquiry or investigation shall be disposed of, contained, held or made, as the case may be, in accordance with the provisions of the Code of Criminal Procedure, 1898 (V of 1898) as in force immediately before such commencement . as if this Code has not come into fore. " It will be seen that the word "application" in the saving provision contained in clause (a) of sub section (2) of section 484 immediately follows the term "appeal".
It therefore takes some colour from the collocation of words in which it occurs.
It is synonymous with the term "petition" which means a written statement of material facts, requesting the court to grant the relief or remedy based on those facts.
It is a peculiar mode of seeking redress recognised by law.
Thus considered there can be no doubt that the word "application" as used in clause (a) of section 484 of the Code of 1973 will take in a revision application made under section 435 of the old Code.
Such a revision application does not cease to be an "application" within the purview of the aforesaid clause (a) merely because in the event of the application being allowed, the Sessions Judge was required to make a reference to the High Court under section 438.
Whether such an application is granted or dismissed by the Sessions Judge, he finally disposes of the matter so far as his court is concerned.
May be that a purely interlocutory application in a pending action, which by itself is not an independent mode of seeking redress recognised by law is not covered by the word 'application ' as used in the aforesaid clause (a).
But it is not necessary to express any final opinion on that point because a revision application of the kind before us is not by any recokning, such an interlocutory application.
In the present case, the revision application made by P. Philip was pending before the Sessions Judge when the New Code came into force.
In view of section 484(2) (a) of the New Code, this revision was required to be disposed of in accordance with the provisions of the old Code.
535 The above being the position, the learned Judges of the High Court were clearly in error in holding that in view of section 399(3) of the New Code, the appellant was not competent to maintain a revision in the High Court against the order dated August 6, 1974 of the Sessions Judge.
For these reasons we allow this appeal, set aside the order of the High Court and send the appellant 's revision petition (No. 393 of 1974) back of it for disposal with utmost expedition in accordance with law.
Appeal allowed and R. P. 393/74 remitted.
| In February, 1971 the Director of Enforcement made a complaint against 4 accused for violation of certain provisions of the Foreign Exchange Regulations Act, read with section 120 B of the Indian Penal Code.
The appellant herein who was accused No. 2 made an application before the Trial Court raising two preliminary objections to the maintainability of the complaint and prayed for its dismissal.
The Trial Court by its judgment dated 5 9 1973 dismissed the application holding that the points raised would be considered after recording the evidence.
The appellant filed a Revision Application to the Sessions Court under section 435 of the Code of Cr.
Procedure 1898, which was dismissed in August, 1974.
The appellant filed a Revision Application to the High Court which was dismissed by the High Court on the ground that it was not maintainable in view of section 399(3) of the new Code.
In an appeal by Special Leave, the appellant contended: At the time when the Revision petition was filed before the Sessions Judge the old Code was in force and in view of section 484 of the new Code the application had to be disposed of in accordance was the old Code.
The respondents on the other hand, contended that the word 'application ' in section 484(2) of the new Code is a word of limited import and that it would include only those applications which could be finally disposed of by the Sessions Judge.
^ HELD: The word 'application ' in the saving provision immediately follows the term 'appeal '.
It, therefore, takes some colour from the collection of words in which it occurs.
It is synonymous with the term 'petition ' which means a written statement of material facts, requesting the Court to grant the relief or remedy based on those facts .
is a peculiar mode of seeking redress recognised by law.
There is no doubt that the word 'application ' as used in clause (a) of section 484 of the new Code will take in a revision application made under section 435 of the old Code.
The Revision Application made by the appellant was pending before the Sessions Judge when the new Code came into force.
Therefore it was required to be disposed of in accordance with the provisions of the old Code.
[534D F, G H]
|
ION: Criminal Appeal No. 194 of 1960.
Appeal by special leave from the Judgment and Order dated January 20, 1960, of the Punjab High Court in Criminal Revision No. 1485 of 1959.
Porus A. Mehta, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for the appellants.
H. R. Khanna and P. D. Menon, for the respondent.
November 13.
The Judgment of the Court was delivered by AYYANGAR, J.
The three appellants were convicted by the First Class Magistrate of Jullundur of an offence under section 167 (81) of the for "having acquired possession of smuggled gold and for carrying, keeping and concealing the said gold with intent to defraud the Government knowing that the gold had been smuggled into India from a foreign country and that no duty had been paid thereon," and were sentenced to terms of imprisonment.
Appeals were filed by the accused to the Sessions Judge, Jullundur but the convictions were upheld though the sentence was reduced in the case of the third appellant.
A revision petition preferred therefrom to the High Court of Punjab was dismissed and thereafter the appellants obtained leave from this Court under article 136 of the Constitution and filed the appeal which is now before us.
A few facts are necessary to be stated to appreciate the point raised for decision.
The City Inspector of Police, Jullundur is stated to have 366 received information that some smugglers were on the point of transporting gold from Amritsar into Jullundur and at about mid night on July 16, 1958, further information that some of these had actually come and were present in the house of Gian Chand the first appellant.
A raid party was accordingly orgainsed and the house of the first appellant was cordoned and raided at about 3 A.M. on the early morning of July 17,1958.
In the course of the search certain bars of gold were found on the person of some of the inmates of the house and in the house itself, as also a large amount of cash.
Thereafter the first appellant, his wife the third appellant and her brother the second appellant were arrested, the gold found was seized and a complaint filed charging the three accused of offences under sections 411 and 414 of the Indian Penal Code.
This charge of receiving stolen property preferred against the three appellants was, however, not proceeded with and the Police Inspector made a report to the Court on January 7, 1959, that no case had been made out against them, and the case was thereupon dropped.
Meanwhile, the Assistant Collector of Customs contacted the City Police at Jullundur and made an application to the Court of the First Class Magistrate, Jullundur for the delivery of these gold bars to the Customs authorities obviously under section 180 of the to the terms of which we shall refer later, and they were delivered to the Customs authorities on January 7, 1959, this being the date on which the case against the appellants under sections 411 and 414 of the Indian Penal Code was dismissed.
Very soon thereafter a notice was issued to the appellants to show cause why the gold in the possession of the Customs authorities should not confiscated under section 167 (8) of the , and after considering the explanations of the appellants the Collector passed an order directing the confiscation of the gold.
That order has 367 become final and this appeal is not concerned with the correctness of the order of confiscation of the gold under section 167 (8).
During the proceedings before the Customs authorities for confiscation, sanction was accorded to prosecute the appellants for an offence under section 167 (81) which runs in these terms: "167.
The offences mentioned in the first column of the following schedule shall be punishable to the extent mentioned in the third column of the same with reference to such offences respectively: Section of this Act to Offences which off Penalties ence has reference.
If any person General such person knowingly, and with shall on con intent to defraud the viction before Government of any duty a Magistrate payable thereon, or to be liable to evade any prohibition or imprisonment restriction for the time for any term being in force under or not exceeding by virtue of this Act with two years, or respect thereto acquires to fine, or to possession of, or is in both.
any way concerned in carrying, removing, depo siting, harbouring, keep ing or concealing or in any manner dealing with any goods which have been unlawfully removed from a ware house or which are chargeable with a duty which has not been paid or with respect 368 to the importation or exportation of which any prohibition or restriction is for the time being in force as aforesaid; or If any person is in relation to any goods in any way knowingly con cerned in any fraudulent evasion or attempt at evasion of any duty chargeable thereon or of any such prohibition or restriction as aforesaid or of any provision of this Act applicable to those goods," and it is the correctness of the conviction in the prosecution that followed which is the subject matter of the appeal now before us.
It will be seen from the terms of section 167 (81) that there are two distinct matters which have to be established before a person could be held guilty of the offence there set out: (1) that the goods in this case (gold) were smuggled, i.e., imported into the country either without payment of duty or in contravention of any restriction or prohibition imposed as regards the entry of those goods, and (2) that the accused knowing that the goods were of that character did the acts specified in the latter part of the provision.
It is clear that in the absence of any valid statutory provision in that behalf the onus of establishing the two ingredients necessary to bring home the offence to an accused is on the prosecution.
In regard to the first of the above matters the position stands thus: With a view to conserve the foreign exchange resources of this country, in line with provisions framed for a like object by 369 several other Governments, the Foreign Exchange Regulation Act, 1947, was enacted which came into force on March 25, 1947.
Section 8(1) of the Act enacted: "8.
(1) The Central Government may, by notification in the Official Gazette, order that, subject to such exemptions, if any, as may be contained in the notification, no person shall, except with the general or special permission of the Reserve Bank and on payment of the fee, if any, prescribed bring or send into India any gold or silver or any currency notes or bank notes or coin whether Indian or foreign.
Explanation.
The bringing or sending into any port or place in India of any such article as aforesaid intended to be taken out of India without being removed from the ship of conveyance in which it is being carried shall nonetheless be deemed to be a bringing, or as the case may be sending, into India of that article for the purposes of this section.
" On the same day on which the Act came into force a notification was issued under this section reading: "(1) Restrictions on import of gold and silver.
In exercise of the powers conferred by sub section 1 of section 8 of the Foreign Exchange Regulation Act, 1947 (Act 7 of 1947) and in supersession of the notification of the Government of India in the late Finance Department No. 12 (11) FI/47, dated the 25th March, 1947, the Central Government is pleased to direct that except with the general or special permission of the Reserve Bank no person shall bring or send into India from any place outside India (a) any gold coin, gold bullion, gold sheets or gold ingot whether refined or not; " 370 Virtually therefore a ban was imposed on the import of gold into the country.
This prohibition naturally resulted in the rise of the internal price of gold compared to its external price, i.e., its price in the international markets and this gave a great incentive to smuggling in the commodity.
As a result Parliament enacted a provision (section 178 A of the ) reading: "178 A. (1) Where any goods to which this section applies are seized under this Act in the reasonable belief that they are smuggled goods, the burden of proving that they are not smuggled goods shall be on the person from whose possession the goods were seized.
shifting the onus of proof in respect of particular commodities seized under the Act in stated circumstances that the goods were not smuggled, on the person from whose possession they were taken.
Sub section (2) set out the commodities to which the section applied and gold was specified as one such.
The details of the circumstances in which this provision found its place in the statute book as well as its construction have been dealt with in Collector of Customs, Madras vs Nathella Sampathu Chetty and need not here be repeated.
Suffice it to say that if the terms of the section were satisfied the gold seized in the present case would be presumed to be smuggled and the burden of proving that they are not, would be on the person from whom they were seized.
Without much of a discussion or a consideration of the several provisions the learned First Class Magistrate held that section 178 A of the was applicable to the case and that accordingly the onus was properly on the accused.
Before considering his reasoning it is necessary to refer to a few other provisions of the 371 which have a bearing on the point now under discussion.
Section 178 of the Act which empowers Customs Officers to effect a seizure of goods suspected by them to be smuggled, enacts: "178.
Any thing liable to confiscation under this Act may be seized in any place in India either upon land or water, or within the Indian customs waters by any officer of Customs or other person duly employed for the prevention of smuggling.
" Section 180 under the provisions of which the gold seized by the police as a result of their search on July 17, 1958, came into the possession of the Customs authorities, runs in these terms: "180.
When any things liable to confiscation under this Act are seized by any Police officer on suspicion that they have been stolen, he may carry them to any police station or Court at which a complaint connected with the stealing or receiving of such things has been made, or an enquiry connected with such stealing or receiving is in progress, and there detain such things until the dismissal of such complaint or the conclusion of such enquiry or of any trial thence resulting.
In every such case the Police officer seizing the things shall send written notice of their seizure and detention to the nearest custom house; and immediately after the dismissal of the complaint or the conclusion of the enquiry or trial, he shall cause such things to be conveyed to, and deposited at, the nearest custom house, to be there proceeded against according to law.
" The question that now arises is whether the possession obtained by the Customs department by goods being "conveyed to and deposited at the nearest Custom house" within the last words of the second 372 paragraph of section 180 are goods which have been seized under the Act within the opening words of section 178A.
In the first place, it would be seen that these three sections which have to be read together draw a distinction between seizure under the Act and a seizure under provisions of other laws.
A seizure under the Act is one for which the authority to seize is conferred by the Act and in the context it could be referred to as a seizure under section 178.
The seizure from the owner of the property under section 180 is not a seizure under the Act but by a police officer effecting the seizure under other provisions of the law, for instance the Criminal Procedure Code.
And that is made clear by appropriate language in the first paragraph of section 180.
Learned Counsel for the respondent State has urged that "the conveyance and deposit" in the office of the Customs authority under the second paragraph of section 180 also involves a seizure under the Act and for this purpose relied on the meaning of the word 'seize ' given in Ballantyne 's Law Dictionary where it is equated to "taking a thing into possession".
This however might be the meaning in particular contexts when used in the sense of the cognate Latin expression "Seized" while in the context in which it is used in the Act in section 178A it means 'take possession of contrary to the wishes of the owner of the property '.
No doubt, in cases where a delivery is effected by an owner of the goods in pursuance of a demand under legal right, whether oral or backed by a warrant, it would certainly be a case of seizure but the idea that it is the unilateral act of the person seizing is the very essence of the concept.
There is another matter to which reference should be made which, in our opinion, conclusively establishes that the delivery of the goods to the Customs authorities under the latter part of section 180 is not seizure under the Act within the meaning of section 178A.
The last part of sub section
(1) of section 178A lays 373 the burden of proving that the goods are not smuggled on "the person from whose possession the goods are taken".
Assuredly when the goods are delivered to the Customs authorities by the Magistrate they are not taken from the possession of the persons accused in criminal case so as to throw the burden of proof on them and it would lead to an absurdity to hold that the section contemplated "proof to the contrary" by the Magistrate under whose orders the delivery was effected.
For the purpose of deciding the point arising in this case we do not think it necessary to enter into the philosophy or refinements of the law as to the nature of possession.
When the goods were seized by the police they ceased to be in the possession of the accused and passed into the possession of the police and when they were with the Magistrate it is unnecessary to consider whether the Magistrate had possession or merely custody of the goods.
The suggestion that the goods continued to be, at that stage, in the possession of the accused does not embody a correct appreciation of the law as regards possession.
A 'seizure ' under the authority of law does not involve a deprivation of possession and not merely of custody and so when the police officer seized the goods, the accused lost possession which vested in the police.
When that possession is transferred, by virtue of the provisions contained in section 180 to the Customs authorities, there is no fresh seizure under the .
It would, therefore, follow that, having regard to the circumstances in which the gold came into the possession of the Customs authorities, the terms of section 178A which requires a seizure under the Act were not satisfied and consequently that provision cannot be availed of to throw the burden of proving that the gold was not smuggled, on the accused.
Through the learned Magistrate held that section 178A applied to the case, he also entered into an elaborate discussion of the positive evidence in the case, so that it is not quite clear whether he would 374 have reached the same conclusion, viz., that the gold was smuggled, even without reference to the rule as to onus enacted by that section.
When the matter was before the learned Sessions Judge he first held that section 178A of the Customs Act did apply to the case before him but proceeded also to deal with the case on an alternative footing that the provisions of section 178A were not applicable to the case and set out the circumstances which led him to that conclusion.
The learned Single Judge who heard the revision in the High Court, however, dealt with the case solely on the footing that section 178A was applicable.
The constitutional validity of that section was challenged before the High Court and figured prominently in the grounds of appeal to this Court but this point has been decided against the appellants by this Court and is therefore no longer a live issue.
If, as we have pointed out earlier, the delivery to the Customs authorities under section 180 is not a seizure under the Act within section 178A it would follow that the judgment of the High Court cannot be upheld for it has proceeded on the sole basis of the provisions of that section being attracted.
We have already pointed out that the learned Sessions Judge had upheld the conviction of the appellants by an independent finding that the prosecution had positively established that the goods were smuggled and that the accused had knowingly done the acts referred to in section 167(81) with which they were charged.
This part of the case of the prosecution has not been considered by the learned Judge in the High Court and this would have to be done before the revision petition of the appellants could properly be disposed of.
The appeal is accordingly allowed and the order of the High Court set aside.
The case will be remitted to the High Court for the revision petition of the appellants being disposed of in the light of this judgment and in accordance with law.
| The validity of a scheme of road transport service approved by the Government of Orissa under section 68D (2) of the 682 , was challenged by the petitioners on the grounds (1) that a proper notice was not given for the hearing of objections to the scheme, (2) that the Minister for Transport who approved of the scheme was biased, (3) that the final scheme did not mention the date on which it was to come into operation, and (4) that the Transport Controller who published the scheme had no authority to do so.
^ Held, that; (1) r. 8 of the Rules framed by the Orissa State Government under Ch.
IVA of the , applied only to the first date to be fixed for hearing, and that if for any reason the hearing was adjourned, it was not necessary to give a fresh notice under the rule for the adjourned date of hearing; (2) the statement made by the minister in answer to a question put in the legislative assembly that the Government had decided to take over all the routes from April 1, 1961, eliminating all private operators, was merely an indication of the Government 's policy and that the minister could not be said to be personally biased; (3) the approved scheme was not invalid for the reason that the actual date of operating the route was not mentioned in the final scheme, as required under r. 3 (vi) of the Rules, inasmuch as the notification publishing the final scheme referred to the draft scheme which contained that date and said that the draft scheme was approved, and, consequently, the rule must be considered to have been substantially complied with; and (4) the Transport Controller, being the Chief Officer of the State Transport Undertaking, had the authority to publish the scheme under section 68C of the Act since the section provided that the State Transport Undertaking "shall cause it to be published" which meant that some officer of the Undertaking would have it published in the Gazette.
|
minal Appeal No. 240 of 1959.
Appeal by special leave from the judgment and order dated July 15, 1959, of the Calcutta High Court in Criminal Revision No. 135 of 1959.
section C. Mazumdar, for the appellant.
Sukumar Ghose, for the respondent No. 1. 1962.
March 26.
The Judgment of the Court was delivered by KAPUR, J.
This is an appeal against the judgment and order of the High Court of Calcutta passed in revision against the order of the Additional Session,% Judge, Howrah, who had modified the order of conviction of the respondents under section 488 read with a. 386(1)(b) of the Calcutta Municipal Act (Act III of 1923) as extended to the Municipality of Howrah, hereinafter called the 'Act '.
The appellant before us is the Chairman of the Municipal Committee of Howrah who is the complainant and the respondent is a company with its premises at No. 1 Swarnamoyee Road, where it was carrying on the manufacture of bobbins, card pine, shuttles etc.
They were also storing their wood and timer in those premises.
49 The charge against the respondent was that it was using the premises within the municipality of Howrah without a license as required under section 386 of the Act and was therefore guilty under section 488 of the Act.
The defence of the respondent was that the premises had been licensed as a warehouse under the West Bengal Fire Services Act, 1950 (Act 18 of 1950) and consequently because of section 38 of that Act, section 386 of the Act stood repealed and the respondent was not required to take out another license under, section 386 of the Act.
The Magistrate, before whom the case was tried, was of the opinion that the effect of a. 38 of the West Bengal Fire Services Act was that the power of the Municipality to require a license under a. 386 of the Act for user as a warehouse had been taken away and therefore in respect of the rest of the premises used as a factory or for other purposes the applicability of section 386 remains unimpaired.
He found that the respondent was running a factory with workshops fitted with electric power in the premises for the manufacture of bobbins, card pins, shuttles etc.
He convicted the respondent under section 488 and sentenced him to a fine of Rs. 250.
In appeal the learned Additional Sessions Judge held that section 38 of the West Bengal Fire Services Act does not repeal all the three clauses of section 386 of the Act but partially repeals a. 386(3) which deals with the levy of fees and therefore a license under section 386(1) will still have to be taken but as the premises had al.
ready been licensed as a warehouse the respondent company could not be required to pay any fees under a. 386(3) of the Act.
The object, according to the learned Sessions Judge, was that the levy of fees twice over in respect of the same premises was prohibited and not that the license was not required.
The sentence of fine was therefore reduced from Rs. 250 to Rs. 10 only.
Against this order the appellant took a revision to the High Court.
50 The High Court held that where the premises are licensed as a warehouse under the Fire Services Act but a portion of it is used as a workshop the Municipal Committee has No. longer the power to levy any fees for granting the license in respect of the premises even though there may be a liability to take out a license i.e. while it may be necessary to take out a license under section 386(1) of the Act no fees could be charged and as the whole of the premises in case had been licensed as a warehouse under the West Bengal Fire Services Act no part of the premises would be liable for any charge of fees for granting a license.
A further argument was also raised for the appellant in the High Court and that was that a. 38 of the West Bengal Fire Services Act did not apply to the Howrah Municipality at all because the Howrah Municipality is governed neither by the Calcutta Municipal Act nor by the Bengal Municipal Act but by the Calcutta Municipal Act as extended to Howrah i. e. as modified in accordance with the powers conferred on the Government by section 541(2) of the Calcutta Municipal Act.
But the High Court was of the opinion that a. 38 of the West Bengal Fire Services Act is applicable to the Howrah Municipality and there.
fore repelled this last argument.
The revision was therefore dismissed, and the rule was discharged.
Against that order the appellant has come in appeal by special leave.
The main argument raised by the appellant was that section 38 of the West Bengal Fire Services Act could not affect the operation of section 386 of the Calcutta Municipal Act as it was extended to the Howrah Municipality.
Section 38 of the former Act reads as under: "On the application of this Act to Calcutta or any other Municipality, section 51 38 6 of the Calcutta Municipal Act, 1923, or section 370 of the Bengal Municipal Act, 1932, as the case may be, shall be deemed to be repealed in so far as they entitle the Corpo ration of Calcutta or the Commissioners of the Municipality to levy fees in respect of any premises or part thereof licensed as a warehouse under this Act".
It was contended that section 38 of that Act does not repeal section 386 of the Act because the interpretation of that section is that it repeals section 386 of the Calcutta Municipal Act 1923 which entitles the Corporation of Calcutta to levy fees and section 370 of the Bengal Municipal Act, 1932 which entitles the Commissioners of other Municipalities to levy fees in respect of any premises licensed as a warehouse; in other words the argument was that in the case of Corporation of Calcutta section 386 of the Act shall be deemed to be repealed to the extent mentioned in section 38 and in the case of other Municipalities and the Commissioners of those Municipalities s.370 of the Bengal Municipal Act.
1932 shall be deemed to be repealed to the extent that, s.38 is applicable and as Howrah Municipality is neither the Corporation of Calcutta nor is it governed by section 370 of the Bengal Municipal Act, section 38 is inoperative.
To test the correctness of this argument it is necessary to refer to the provisions by which the Act was extended to the Municipality of Howrah.
Under so.
540 and 541 of the Calcutta Municipal Act the Provincial Government was empowered to extend all or any of the provision of that Act to the Municipality of Howrah.
Under section 542 the effect of the extension was that the Bengal Municipal Act 1932 stood repealed qua the Municipality of Howrah from the date of such extension and sub cl.
(b) of that section provides: "Except as the Provincial Government may otherwise by notification in the Official 52 Gazette direct, all rules, by laws, orders, directions and powers made, issued or conferred under the portions of this Act which have been so extended and in force at the date of such extension, shall apply to the said municipality or part, in Supersession of all corresponding rules, by laws, orders, directions and powers made, issued or conferred under the said Bengal Municipal Act, 1932" and by an explanation to that section the extension of the Act did not put the Municipality of Howrah tinder the authority of the Corporation of Calcutta.
By a Gazette Notification NO.
260M of January 18, 1932 practically the whole of the Act, excepting the provisions which are not necessary, was extended to the Municipality of Howrah.
The language extending the Act was as follows: "Howrah.
260M. 18th January 1932 In exercise of the power conferred by sub section (2) of section 541 of the Calcutta Municipal Act, 1923 (Bengal Act III of 19 3).
the Government of Bengal (Ministry of Local Self Government) are pleased to extend to the Municipality of Howrah the following pro visions of the Calcutta Municipal Act 1923, subject to the modifications and restrictions specified therein which are 'shown in antique type.
As a result of this extension section 386 was extended to the Municipality of Howrah with this modification that in place of the word "Corporation of Calcutta ' the word "Commissioners" was substituted.
In 1951 the Calcutta Municipal Act 1951 being West Bengal Act 33 of 1951 was enacted thus replacing Act 3 of 1923 which was therefore repealed.
In the new Act corresponding provision to sections 540, 541 and 542 are sections 589, 590 and 591.
Section 614 of the new Act provides that the provisions of Act III of 1923 as extended to the Municipality of Howrah shall continue to be in force until the provisions of the new 53 Act are extended to that Municipality under the new Act.
Thus the effect of the extension by the Notification under sections 540 and 541 of the Calcutta Municipal Act is that to the Municipality of Howrah an amended Act with an amended section 386 is applicable and not section 386 of the Act III of 1923.
Keeping this in view we have then to see how far section 38 of the West Bengal Fire Services Act 1950 (Act 18 of 1950) has affected the operation of section 386 as it applies to the Municipality of Howrah.
Section 38 provides that section repeals section 386 of the Act III of 1925 to the extent therein mentioned.
It also repeals section 370 of the Bengal Municipal Act as it applies to the Commissioners of Municipalities in Bengal.
It does not apply to section 386 as modified and is inapplicable to the Municipality of Howrah because in section 386 as applicable to the Corporation of Calcutta the word used is ",Corporation" and not "Commissioners" and wherever the word "Corporation" is used in section 386 it is replaced by the word "Commissioners" in section 386 as it applies to the Howrah.
Municipality.
It cannot be said therefore that section 38 repeals section 386 of the Act III of 1923 as it applies to the Howrah Municipality.
In a somewhat similar case a similar view was taken by the Privy Council.
See Secretary of State for India vs Hindusthan Co operative lnsurance Society (1).
In that case certain provisions of the Land Acquisition Act were incorporated by reference Into the Calcutta Improvement Act 1911.
By an amendment of 1921 the right of appeal to the Privy Council from the decision of the High Court was provided in matters failing under the Land Acquisition Act.
It was held that the right of appeal so given was not applicable to the award of a tribunal under the Calcutta Improvement Act assessing compensation in respect of land acquired under the provisions of the.
Land Acquisition Act.
Dealing with this matter Sir George Lowndes quoted with (1) (1931) L.R. 58 1.A. 259.
54 approval the observations of Lord Westbury in Ex parts St. Sepulchre 's (1) and observed: "It seems to be no less logical to hold that where certain provisions from an existing Act have been incorporated into a subsequent Act, no addition to the former Act, which is not expressly made applicable to the subsequent Act, can be deemed to be incorporated in it, at all events if it is possible for the subsequent Act to function effectually without the addition".
Although a. 38 of the West Bengal Fire Services Act extends to the whole of Bengal and to the extent there set out it repeals section 386 of the Calcutta Municipal Act which applies to the Corporation of Calcutta and section 370 which applies to the other Municipalities of Bengal yet it does not affect the operation of section 386 of the former Act as modified and extended to the Municipality of Howrah by the notification which has been set out above.
The reason for that is that the language of section 386 has been modified to make it appropriate in its application to the Municipality of Howrah and for that purpose in place of the word `corporation ' the word " 'Commissioners" has been substituted.
Thus modified it is not a. 386 of the Calcutta Municipal Act but a different section.
Therefore what s.38 of the West Bengal Fire Services Act repeals is section 386 of the Calcutta Municipal Act and not section 386 of that as modified and applied to the Municipality of Howrah.
It may look rather anomalous but that is what the effect of the modification of the language is.
In our opinion therefore the contention of the appellant is well founded 'and section 38 of the West Bengal Fire Services Act does not repeal section 386 as modified and as applicable to the Municipality of Howrah.
From the point of view of the respondent the result may be unfortunate (1) , 376.
55 but that is the interpretation of the language of the various sections which are relevant in the present case.
We therefore allow the appeal, set aside the order of the High Court and convict the respondent of the offenses charged, but in view of the fact that the appellant succeeds on a question of interpretation we do not think it necessary to increase the sentence of fine imposed by the learned Sessions Judge, The, appeal is allowed to that extent.
Appeal allowed.
| On February 14, 1953, the Government of Punjab referred certain disputes between the appellant company and its workmen to the Industrial Tribunal which had been consti tuted on August 29, 1953, by a notification issued under section 7 of the industrial Disputes Act, 1947, by which G, an Advo cate, was appointed as the Industrial Tribunal for Punjab.
When the reference was pending the Act was amended.
The Amendment Act inter alia repealed section 7 of the principal Act and replaced it by sections 7A, 7B and 7C, and by section 30 provided for a saving clause in respect of the proceedings pending before the Tribunal constituted under the principal Act.
On April 19, 1957, the Punjab Government issued a notification under section 7 of the Act and section 30 of the Amendment Act extending the life of the Tribunal constituted under the repealed section 7 and also extending the term of G as the member.
On the same date another Notification was issued under section 7A of the Act constituting a new Tribunal and appointing G as the Presiding Officer up to June 3, 1957.
Under section 70 (b) the age of retirement for members was fixed at sixty five and under that provision G would have to retire by June 3, 1957.
The Punjab Government intervened and passed the Industrial Disputes (Punjab Amendment) Act, 1957, raising the age of retirement of members to sixty seven years.
After G had retired on June 3, 1959, the Punjab Government issued a notification appointing another person as the Presiding Officer of the Industrial Tribunal.
The appellant challenged the legality of the reference on the grounds, inter alia, (1) that G was not qualified to be appointed to the Tribunal under section 7 (3) (c) of the Act, as he was over sixty years and, therefore, the reference to him dated 90 February 14, 1955, was incompetent, and (2) that the Indus trial Disputes (Punjab Amendment) Act, 1937, was passed with a view to benefit a single individual, G, and, therefore, was void as offending article 14 of the Constitution of India.
Held, (1) section 7(3)(c) of the , did not import any qualification based on the age of the person to be appointed, and that the appointment of G on August 29, 1953, was valid under that section.
On the true Construction of article 217 of the Constitution of India, the prescription of age therein is a condition attached to the duration of the office and not a "qualifica tion" for appointment to it.
G.D. Karkare vs T.L. Shevde, I.L.R. and Prabhudayal vs State of Punjab, A. I. R. 1959 Punj.
460, approved.
(2) the Industrial Disputes (Punjab Amendment) Act,1957,not contravene article 14 of the Constitution, because thoughthe occasion which inspired the enactment of the statutemight be to benefit an individual, it was of general application and could not therefore be held to be discriminatory.
Ameerunissa vs Mehboob; , , distinguished.
|
Appeal No. 264 of 1960.
Appeal by special leave from the Award dated October 12, 1959, of the Industrial Tribunal, Bombay in Reference (IT) No. 81 of 1959.
section T. Desai, Sukumar Ghose and B. N. Ghose, for the appellant.
C. L. Dhudia and K. L. Hathi, for the respondents.
April 3.
The Judgment of the Court was, delivered by GAJENDRAGADKAR, J.
This appeal by special leave is directed against the award passed by the industrial tribunal in a matter which was referred to it under section 36A(2) of the , for interpretation of certain terms of the award made by the said tribunal on April 28, 1951, in Reference No. 168 of 1950.
It appears that a dispute had arisen between the appellant M/s. Jeewanlal (1929) Ltd. and its workmen in regard to certain demands made by the respondents against the appellant in 1950.
The said dispute was referred for adjudication as a result of which an award was passed which, inter alia, provided for a gratuity scheme.
Some provisions of this award have been referred for interpretation in the present reference.
On August 31, 1957, resignation submitted by the appellant 's employee Bhanu Bala was accepted by the appellant.
The said employee had joined the appellant 's service in 1929 but there was a break in the continuity of his service for nearly 81 months because he had remained absent from duty without permission or leave from.
February 14, 1945 to the end of October, 1945.
According to the appellant the said employee was not entitled to any gratuity under the scheme framed by the award.
Even so the appellant offered him Rs. 1,165 and odd on compassionate grounds.
The employee was not willing to accept that amount because he claimed that he was entitled to Rs. 2,282.50 nP. by way of gratuity.
The demand thus made by the employee led to an industrial dis pute which was taken by the employee before the 720 First Labour Court at Bombay under section 33C of the Act.
The Labour Court entertained the application, decided the point in dispute in favour of the employee and directed the appellant to pay him Rs. 1,781 80 nP. as gratuity.
The appellant then moved the Bombay High Court for a writ under articles 226 and 227 on the ground that the Labour Court had no jurisdiction to entertain the application made before it by the employee.
This writ petition was allowed and the order passed by the Labour Court was quashed.
It was at this stage that the Government of Bombay referred the question of interpretation of the term "continuous service" contained in the award of 1951 to the Industrial Court under section 36A(1) of the Act.
That is how the Industrial Court was possessed of the matter.
It has held that the words "continuous service" I as used by the tribunal when it framed the award in question mean service not broken or interrupted by the termination of the contract of employment by either the employer or the employee or by operation of law.
It is this interpretation the correctness of which is challenged by the appellant in its present appeal.
The relevant part of the gratuity scheme which was framed by the tribunal in the earlier reference reads thus: (i) On the death of an employee while in the service of the company or on an employee becoming physically or mentally disabled to continue further in service half a months wages for each year of service subject to a maximum of ten months ' wages to be paid to him or to his heirs, executors, assigns or nominees as the case may be.
(ii) On the termination of his service by the company after five years ' continuous service Gratuity at the same rate as above.
(iii)On voluntary retirement or resignation of an employee after 15 years ' continuous service Gratuity at the same rate as above.
As we have already seen the employee Bhanu Bala resigned and his resignation was accepted in August, 1957.
He claimed the benefit of el.
(iii) whereas the 721 appellant contended that the said employee had not been employed in continuous service for the requisite period because there was a break in his service between February 14, 1945, to the end of October, 1945, and that affected the continuity of his employment which made his claim incompetent under el.
(iii).
This contention has been rejected by the tribunal.
Mr. section T. Desai contends that in interpreting the words "continuous service" in cl.
(iii) we should compare the provisions of section 49B(l) along with the explanation in the Indian Factories Act, 1934 (XXV of 1934) as well as section 79(1) along with explanation (1) in the Indian (63 of 1948) prior to its amendment in 1954; and he argues that unauthorised absence from work should normally cause a break in service so that if an employee, after uNauthorised absence from work, is allowed to resume after such unauthorised absence he should not be entitled to claim continuous service in view of the break in his service.
In support of this argument reliance has been placed on the decision of this Court in Buckingham and Carnatic Co. Ltd. vs Workers of the Buckingham and Carnatic Co. Ltd. (1).
In that case this Court has held that the continuity of the service of the workers was interrupted by the illegal strike and so they were not entitled to claim holidays with pay under section 49B(1) of the Indian .
It would, however, be noticed that the said decision turned upon the definition of the word "strike" in section 2(q) of the , read with the relevant provision of section 49 B of the Indian Factories Act, 1934; and there can be no doubt that in a different context the same words can and often have different meanings.
As this Court has observed in Budge Budge Municipality vs P. It.
Mukherjee (2), "the same words may mean one thing in one context and another in different context.
This is the reason why decisions on the meaning of particular words or collection of words found in other statutes are scarcely of (1) ; (2) , 198.
91 722 much value when we have to deal with a specific statute of our OWn; they may be helpful but cannot be taken as guides or precedents".
Therefore, the meaning attributed to the words "continuous service" in the context of the Factories Act may not have a material bearing in deciding the point in the present appeal.
The same comment falls to be made in regard to the argument based on the definition of the expression "continuous service" contained in section 2(eee) of the .
The said section provides that "continuous service" means uninterrupted service and includes service which may be interrupted merely on account ' of sickness or authorised leave or an accident or a strike which is not illegal, or a lockout or a cessation of work which is not due to any fault on the part of the workmen.
This definition is undoubtedly relevant in dealing with the question of continuous service by reference to the provisions of Industrial Disputes ' Act but its operation cannot be automatically extended in dealing with an interpretation of the words "continuous service" in an award made in an industrial dispute unless the context in which the expression is used in the award justifies it.
In other words, the expression "continuous service" may be statutorily defined in which case the definition will prevail.
An award using the said expression may itself give a definition of that expression and that will bind parties in dealing with claims arising from the award.
Where, however, the award does not explain the said expression and statutory definitions contained in other Acts are of no material assistance it would be necessary to examine the question on principle and decide what the expression should mean in any given award '; and that is precisely what the tribunal had to do in the present case.
"Continuous service" in the context of the scheme of gratuity framed by the tribunal in the earlier reference postulates the continuance of the relationship of master and servant between the employer and his employees.
If the servant resigns his employment service automatically comes to an end.
If the employer terminates the service, of his employee that 723 again brings the continuity of service to an end.
If the service of an employee is brought to an end by the operation of any law that again is another instance where the continuance is disrupted; but it is difficult to hold that merely because an employee is absent without obtaining leave that itself would bring to an end the continuity of his service.
Similarly, participation in an illegal strike which may incur the punishment of dismissal may not by itself bring to an end the relationship of master and ser vant.
It may be a good cause for the termination of service provided of course the relevant provisions in the standing orders in that behalf are complied with; but mere participation in an illegal strike cannot be said to cause breach in continuity for the purposes of gratuity.
On the other hand, if an employee continues to be absent from duty without obtaining leave and in an unauthorised manner for such a long period of time that an inference may reasonably be drawn from such absence that by his absence he has aban doned service, then such long unauthorised absence may legitimately be held to cause a break in the continuity of service.
It would thus always be a question of fact to be decided on the circumstances of each case whether or not a particular employee can claim continuity of service for the requisite period or not.
In our opinion, therefore, the view taken by the tribunal is substantially right though we would like to make it clear that in addition to the cases where according to the tribunal continuity of service would come to an end there would be the class of cases where long unauthorised absence may reasonably give rise to an inference that such service is intended to be abandoned by the employee.
With this modification we confirm the award and dismiss the appeal.
There would be no order as to costs.
Appeal dismissed.
| The Income tax Officer found that the respondents ' books of accounts were unreliable and after assessing income for Fasli year 1357, corresponding to the year 1946 47, issued notice to the respondents on December 22, 1949, under section 40 of the Hyderabad Income tax Act to show cause why penalty should not be levied in addition to the tax and by an order dated October 31, 1951, directed payment of the said penalty.
The State of Hyderabad merged with the Indian Union during the pendency of the proceedings before the Income tax Officer and by section 13 of the Finance Act, 1950, the Hyderabad Income tax Act ceased to have effect from April 1, 1950, but the operation of that Act in respect of levy, assessment and collection of income tax and super tax in respect of periods prior thereto for which liability to income tax could not be imposed under the Indian Income tax Act, was saved.
The question was whether (a) the Income tax Officer had power on October 31, 1951, to impose a penalty under section 40(1) of the Hyderabad Income tax Act and (b) whether the assessee had a right to appeal against the order of the Income tax Officer imposing penalty and whether the Appellate Assistant Commissioner had jurisdiction to hear appeals or whether his order was a nullity.
Held, that the power of the Income tax Officer to impose a penalty under section 40(1) of the Hyderabad Income tax Act in respect of the year preceding the date of the repeal of the Hyderabad Income tax Act was not lost because by section 13 of the Finance Act, 1950,,for the operation by the Hyderabad Income tax Act in respect of levy, assessment and collection of income tax and super tax in respect of periods prior to April, 1951, for which liability to income tax could not be imposed under the Indian Income tax Act, was saved and so the proceedings for imposing the penalty could be continued after the enactment of section 13(1) of the Indian Finance Act, 1950.
Held, that the appeal against the order of the Income tax Officer on the ground that he was not competent to pass the order did lie to the Appellate Assistant Commissioner, whose jurisdiction was not made conditional upon the competence of the 924 Income tax Officer to pass the.
orders made appealable; as a court of appeal he had jurisdiction to determine the soundness of the conclusions of the Income tax Officer both on the question of fact and law and even as to his jurisdiction to pass the order appealed from, and his order was not a nullity.
|
vil Appeals Nos.
1002 & 1003 of 1976.
From the Judgment and Order dated 3.10.1972 and 18.9.
1975 of the Allahabad High Court in Civil Misc.
Writ No. 2726 of 1970 and Civil Misc Writ Petition No. 9943 of 1975.
Satish Chander, S.N. Singh, T.N. Singh and H.L. Srivas tava for the Appellants.
J.P. Goyal, M.R. Bidsar and S.K. Jain for the Respondents.
The Judgment of the Court was delivered by FATHIMA BEEVI, J.
These appeals by special leave are directed against the judgments of the High Court of Allaha bad.
The land in plots Nos.
6385 and 6386 measuring 5 bighas and 4 biswas had been in the possession of Ram Dayal as mortgagee under Baijnath who was the original tenant.
Re spondents 1 to 3 are the descendants of Ram 960 Dayal.
They made an application under section 9 of the U.P. Consolidation of Holdings Act, 1954 before the Consolidation Officer.
They claimed tenancy fights on the basis of the deed dated 30.7.1945 and they stated that their names had been recorded in the Khatauni of 1359 Fasli; they are in cultivatory possession and have become adhivasis and subse quently sirdars.
They alleged that the names of the appel lants herein have been wrongly entered in the Khatauni of 1353 Fasli and that the appellants have no right or posses sion over the land.
The respondents prayed for entering their names as sirdars and scoring off the names of the appellants.
This application was allowed by the Consolidation Offi cer by order dated 23.7.1967.
The order was reversed by the Settlement Officer (Consolidation).
The Deputy Director of Consolidation dismissed the revision filed by the respond ents.
However, the writ petition filed by the respondents as C.M.W.P. No. 2726 of 1970 was allowed by the High Court by its judgment dated 3.10.1972 and the orders of the appellate and the revisional authorities were quashed thereby main taining the order of consolidation Officer.
Civil Appeal No. 1002 of 1976 is directed against the judgment dated 3.10.1972 of the High Court.
The appellants had filed a Special Appeal on 30th Novem ber, 1972 against the judgment dated 3.10.1972 of Single Judge of the High Court in C.M.W.P. No. 2726 of 1970.
Howev er, the said Letters Patent Appeal was not maintainable and ultimately dismissed in view of the U.P. High Courts (Aboli tion of Letters Patent Appeal Amendment) Ordinance, 1972 which came into force on 30th June, 1972.
This completes the narration of the fate of the writ petition No. 2726 of 1970 which finally culminated in favour of the respondents by order dated 3.10.72.
The appellants did not challenge the order of the High Court dated 3.10.72 by taking any further steps of filing any special leave petition before this Court.
On the con trary, on some mistaken and totally wrong advice of some counsel the appellants again initiated fresh proceedings by moving an application on 6.7.73 before the Settlement Offi cer Consolidation.
That application was rejected on 30.10.74.
A revision was filed against that order before the Deputy Director of Consolidation which was also rejected by order dated 21.7.75.
Thereafter the appellants filed C.M.W.P. No. 9943 of 1975 before the High Court on 7.8.75 against the order of the Deputy Director Consolidation.
This writ petition came to be dismissed by 961 order dated 18.9.
This judgment of the High Court is challenged in Civil Appeal No. 1003 of 1976.
When the High Court in the earlier Writ Petition No. 2726 of 1970 on the same subject matter had finally decided the matter in favour of the respondents by order dated 3.10.
1972, there was no question of giving any advice by any counsel in good faith to start proceedings afresh by moving a fresh application before the Consolidation authorities.
No counsel could have given such advice in good faith to start proceedings afresh before the Consolidation authorities and then to claim benefit of such period under section 14 of the .
It was elementary for any counsel of whatever standing to have known that none of the authorities of the Settlement or Consolidation department could have any right or juris diction to set aside the order of the High Court dated 3.10.1972.
The Settlement Officer (Consolidation) as such was justified in dismissing the application by his order dated 30.10.
1974, and thereafter the revision by the Deputy Director (Consolidation) by order dated 21.7.
The appellants then under the same mistaken advice not in good faith filed C.M.W.P. No. 9943 of 1975 which came to be dismissed by the High Court on 18.9.
The second judg ment of the High Court is now challenged in Civil Appeal No. 1003 of 1976.
Both the appeals had been filed after the expiry of the period of limitation.
The appellants had applied for condo nation of delay on the ground that the appellants had been prosecuting the prior proceedings in good faith on legal advice and the period of more than three years taken in prosecuting the proceedings is liable to be excluded in computing the period of limitation under the provision of section 14 of the .
The respondents had filed counter to the application and opposed the same.
This Court granted special leave vide order dated 2.9.
1976 in both matters subject to the right of the respondents to argue the question of limitation and the applicability of section 14 of the at the hearing of the appeals.
The first question that we have to decide is that of limitation.
The delay of 1198 days according to the appel lants had occurred unwillingly and the appellants had been prosecuting with due diligence the earlier proceedings before the appellate and the revisional authorities and on the basis of the advice given by their counsel.
There is no proper affidavit of either the appellants or the counsel in support of the application for condonation of delay.
There is also no other material to indicate that the appellants had exercised due diligence in work 962 ing out their remedies and sought proper advice in the matter.
When the party had no right of appeal, the proceed ings instituted before the High Court challenging the judg ment in the writ petition cannot be considered to be one in good faith.
The subsequent proceedings are also not legal or valid.
When the decision of the High Court in the writ petition was one quashing the orders of the appellate and the revisional authorities, the party could not proceed on the basis that the matter was restored to the lower authori ties for fresh decision.
We are therefore not satisfied that there is any merit in the ground urged by the appellants for getting over the bar of limitation.
The appeals are liable to be dismissed as time barred.
We find that even on the merits, the appellants cannot succeed.
The respondents based their claim on the patta in their favour under the deed of 30.7.1945.
The Consolidation Officer accepted the genuineness of the deed and found title with the respondents.
The appellants had claimed right under the subsequent document of 2.8.
1945 in continuation of an earlier deed of 23.11.
The land was admittedly in the possession of Baijnath, the original tenant and he was dispossessed in execution of the decree obtained by the landlord in 1944.
The tenancy in favour of Baijnath was subsisting when the deed of 23.11.
1943 was executed.
The creation of a tenancy during the subsistence of the earlier one could not confer any right.
Before the deed of 2.8.
1945 patta was already granted in favour of the respondents.
The circumstances under which the same was granted also weighed in finding title in favour of the respondents.
The landlord had obtained a decree against Baijnath when the land was mortgaged in favour of Ram Dayal.
The mortgagee later on obtained the decree against the landlord for an amount of Rs.214 being the value of the crops in the land.
An agree ment was subsequently entered into between the landlord and the respondents settling the claim under the decree and granting patta in favour of the respondents.
These facts have been found in favour of the respondents by the Consoli dation Officer.
The High Court in quashing the orders of the appellate and the revisional authorities was of opinion that there was apparent error on the face of the record.
The appellate authority was found to be wrong in its conclusion that the respondents lost their right by the continued possession of the appellants.
The High Court noticed that even before the Consolidation Officer, the appellants did not press their claim on the basis of the patta of 1943 and has also found that the deed of 23.11.1943 was not a valid settlement inasmuch as the land was in the possession of the sitting tenant.
It was also noticed that soon after the deed of 2.8.1945, dispute arose regarding possession, that the 963 appellants had been dispossessed on the basis of the decree obtained by the respondents setting aside the order of a criminal court.
Before the decree became final pending litigation, the U.P. Zamindari Abolition Act came into force.
In view of the subsequent legislation, the respond ents have proceeded under the U.P. Consolidation Act and the proceedings culminated in the present appeals.
In the light of the definite findings of the competent authority that the respondents have derived valid title as tenants under the deed of 30.7. 1945 and the apparent mis take in the proceedings of the appellate and the revisional authorities as found by the High Court, it is not now open to the appellants to contend that they are rightful tenants entitled to possession of the land.
Though the claim based on deed of 23.11.1943 had not been pressed before the lower authorities, it has been contended before us that the appel lants have a case on the principle contained in section 43 of the Transfer of Property Act.
The learned counsel for the appellants maintained that even if the deed of 23.11.
1943 was inoperative or was not valid for the reason that the landlord had no possession since they obtained possession on 30.6.1944, the appellants acquired tenancy right and that has been confirmed by the deed of 2.8.
The argument, though attractive, is not acceptable.
Section 43 of the Transfer of Property Act embodies the rule of estoppel by deed.
The section enables the transferee to whom a transfer is made on fraudulent or erroneous repre sentation to lay hold at his option of any interest which the transferor may subsequently acquire in the property provided by doing so he does not adversely affect the right of any subsequent purchaser for value without notice.
Thus when a lessor erroneously represents that he is authorised to lease a property and creates a lease of it and afterwards acquires that property, the lessee is entitled to have the property from the lessor.
This principle has no application if the transfer is invalid.
The transfer under the deed of 23.11.
1943 became inoperative not on account of any fraudu lent or erroneous representation.
The settlement was invalid and inoperative on account of the subsisting lease in re spect of the land and as the landlord could not super impose a second lease in respect of the tenanted property, no interest could be created in favour of the appellants under that document and, therefore, there is no question of feed ing the estoppel.
The execution of the deed dated 30.7.
1945 in favour of the respondents negatives the claim of the appellants having acquired any right after the property was taken delivery of in 1944.
We therefore reject the conten tion.
964 We accordingly hold that there is no valid ground to interfere with the decision of the High Court.
We therefore dismiss the appeals.
In the facts and circumstances of the case, we direct the parties to bear their respective costs.
S.B. Appeals dismissed.
| The respondent a statutory body corporate constituted under the Bombay Port Trust Act, 1879 a 'State Act ' who had appointed an Assistant Estate Manager as their power of attorney holder to lease out its property from time to time, terminate the leases and to lay action for ejectment, etc.; leased out the suit property to the appellant.
826 The appellant was served with a notice under Section 106 read with Section 111(h) of the terminating the tenancy in terms of the covenants of lease and directing delivery of possession of the demised property giving one month 's time from 22nd January 1975.
The notice was served on the tenants on January 28, 1975 and became effective from 28th February, 1975.
In the meanwhile, the Major Port Trust Act, 1963, a 'Central Act ' was made applicable to the Bombay Port Trust by operation of Section 133(2A) thereof with effect from February 1, 1975.
After the expiry of one month from the suit notice an ejectment application was filed under Section 41 of the Bombay as amended under the Maharashtra 1963 Amendment Act, and a direction was sought for delivery of possession.
After the Maharashtra Amendment Act 19 of 1976 came into force suits were laid against the three other tenants of the demised property.
The respondent pleaded in the said suit that it was a successor ininterest of the Port Trust Board under the State Act, and was entitled to eject the tenants and to take possession of the demised portions.
The appellant contended in his written statement that the suit was not maintainable since the State Act ceased to be operative with effect from February 1, 1975, the quit notice issued under Section 106 read with Section 111(h) of the became ineffective and without determining the tenancy afresh the suit was not validly laid.
It was further submit ted that the respondent had promised that on deposit of a certain amount which the appellant tenant did, he would be given to lease a portion in the reconstructed building, and consequently the respondent was estopped by promissory estoppel to have the tenant ejected.
One suit was dismissed on the ground that the tenancy was not duly determined as per law, while the other suits were decreed.
No appellate forum had been prescribed under the Maha rashtra Amendment Act of 1963 but a substantive suit on the original side provided was available, but such a right to appeal was incorporated by the Maharashtra Amendment Act, 19 of 1976.
The appellant filed a writ petition in the High Court under Articles 226 and 227 of the Constitution and the other tenants filed regular appeals to a Bench of two Judges of the Small Causes Court, which were pending.
827 In the writ petition of the appellant petitioner challenged the vires of sections 2,3 and 4 of the Maharashtra Amending Act, 1963 introducing Section 42(A) in Chapter VII of the and deleting Sections 45 to 47 from the Principal Act and of amendment of SectiOn 49 thereof; as well as Section 46(2) of the as amended by the Maharashtra Amendment Act of 1976 as offending Article 14 of tile Constitution.
When the matter came up before the Single Judge of the High Court it was referred to the Division Bench, which upheld the constitutional validity of the said sections and remitted the matter to the Single Judge for disposal on merits.
The Single Judge considered the matter and negatived the two points raised by the appellant petitioner regarding validity of the notice terminating tile tenancy, and also the plea of promissory estoppel, and dismissed the writ petition.
The appellant appealed to this Court by special leave under Article 136.
It was contended on behalf of the appel lant that the quit notice issued under Section 106 read with Section III(h) of the was invalid and that by issue of the said notice no right accrued to the respondents and that the termination of tenancy became operative only on expiry of one month given thereunder i.e. February 28, 1975, by which date the State Act became inop erative, as from February 1, 1975 the Central Act had come into force; that termination of tenancy was an act inter vivos by operation of Section 106 read with Section III(h) of the , and that under Section 109, the respondent not being a living person, was not entitled to the benefit of the quit notice as its operation was not saved by Section 2(d) and Section 5 of the said Act.
It was also contended that the respondents were estopped from ejecting the appellant and other tenants who were similarly situated on the principle of promissory estoppel, as the Estate Manager of the respondent in his letter dated April 3, 1972 directed the tenant to deposit Rs. 11,000 for grant of tenancy after reconstruction of the flats therein and placing reliance thereon the tenants having deposited the amount demanded from them and acted upon the promise to their detriment, the respondents shall be declared to be estopped from ejecting the tenants from the demised respec tive portions leased out to them.
The appeal was contested on behalf of the respondents by contending that when right, title, and interest in immovable property stood transferred by operation of law, the spirit behind Section 109 of the 828 will apply; and the successor in interest would be entitled to the rights of the predecessor and that as the Estate Manager had no authority to give a promise, and that even assuming that he had such a power, it was a conditional one, namely, approval by the Board, and that the Board having resolved to reject the claim, and on reconstruction decided to allot to its own employees out of administrative necessity, the principle of promissory estop pel cannot be applied.
Dismissing the appeal, this Court, HELD: 1.
When right, title and interest in immovable property stand transferred by operation of law, the spirit behind Section 109 of the per force would apply and successor ininterest would be entitled to the rights of the predecessor.
This is what the Single Judge of the High Court has held and the view is approved as correct.
The notice terminating the tenancy of Vasantkumar would enure to the benefit of the respondent and it could be availed of by the respondent to lay the suit for ejectment.
[836H; 837A B] N.P.K. Raman Menon vs Collector of Malabar, AIR 1924 Madras 908; Trimbak Damodhar Raipurkar vs Assaram Hiraman Patil & Ors., [1962] Suppl.
1 SCR 700; Hitkarini Sabha vs The Corporation of City of Jabalpur & Anr., and Lower vs Sorrell, [ 1963] 1 Queen 's Bench Division 959, referred to.
Gurumurthappa vs Chickmunisamappa, AIR , over ruled.
Halsbury 's Laws of England, 4th Edition, Vol.
27, p. 193; Hill and Redman in Law of Landlord and Tenant, 17th Edition Vol.
I, p. 488, p. 405; Mulla Transfer of Property Act, 6th Edition, p. 676 and Chitaley 's , 4th Edn.
1969, Vol.
III, Note 35, referred to.
2(i) The functionaries under both the State Act and the Central Act are the same.
The notice was issued by the Assistant Estate Manager by virtue of his official function as power of attorney agent on behalf of the respondent The Board of Trustees have the right to terminate the lease under Section 26 of the State Act and these rights stood transferred and vested under Section 29(1) of the Central Act.
Therefore the termination of tenancy and laying the action for ejectment are integrally connected with their official capacity.
There is a reasonable connection between the impugned acts and officials duty.
Thereby, they are the acts done under the Central Act.
[839C E] 829 2(ii) The notice under Section 106 and Section III(h) of the is an act done or purported to have been done in the official capacity as Power of Attorney holder/Assistant Estate Manager on behalf of the respondent, Board of Trustees; the right to lay the suit on expiry of one month 's period prescribed in the notice, namely, on or after February 28, 1975 had accrued to the respondent.
It is an act done or purported to have been done under the Central Act in exercise of the official function.
The right to lay the suit on determination of the tenancy by notice dated January 20, 1975 under the State Act is a transfer of inter est by operation of Section 29(1) of the Central Act, to the respondent under Section 109 of the .
Thereby the quit notice is valid.
The suit laid, pursu ant thereto, is valid and legal.
Accordingly order of eject ment passed by the Small Cause Court is perfectly legal and unassailable.
[840B E] Commissioner for the Court of Calcutta vs Abdul Rahim Osman & Co.; Trustees of Port of Bombay vs The Premier Automobiles Ltd. & Anr., ; , referred to.
3(i) The doctrine of promissory estoppel is now well established one in the field of administrative law.
This principle has been evolved by equity to avoid injustice.
It is neither in the realm of contract nor in the realm of estoppel.
Its object is to interpose equity shorn of its form to mitigate the rigour of strict law.
This doctrine would be displaced in a case where equity would not require that the Government should be held bound by the promise made by it.
But the Government must be able to show that in view of the facts as have been transpired, public interest would not be prejudiced.
Where the Government is required to carry out the promise the Court would have to balance, the public interest in the Government 's carrying out the promise made to the citizens, which helps citizens to act upon and alter ' his position and the public interest likely to suffer if the promises were required to be carried out by the Government and determine which way the equity lies.
[841B; 842G H; 843A] 3(ii) The doctrine of promissory estoppel would equally apply to a private individual as well as a public body like a Municipal Council.
It cannot be applied in the teeth of an obligation or liability imposed by law.
It cannot be invoked to compel the Government to do an act prohibited by law.
There may be no promissory estoppel against exercise of legislative functions.
[843B C] 3(iii) Promissory estoppel cannot be used for compelling the 830 Government or a public authority to carry out a representa tion or promise which is prohibited by law or which was devoid of the authority or power of the officer of the Government or the public authority to make.
It being an equitable doctrine it must yield place to the equity, if larger public interest so requires and if it can be shown by the Government or public authority, for having regard to the facts as they have transpired that it would be inequitable to hold the Government or public authority to the promise or representation made by it.
[844B D] 3(iv) Promissory estoppel should not be extended, though it may be rounded on an express or implied promise stemmed from the conduct or representation by an officer of the State or public authority when it was obtained to play fraud on the Constitution and the enforcement would defeat or tend to defeat the Constitutional goals.
[844D] Union of India vs Indo Afgan Agencies, ; ; Century Spinning and Manufacturing Co. Ltd. vs Ulhasnagar Municipal Council, [1970] 3 SCR 854; Motilal Padampat Sugar Mills vs State of Uttar Pradesh, ; ; Jeet Ram vs State of Haryana, ; ; Union of India vs Godfrey Philips India Ltd., [1985] Supp.
3 SCR 123 at 144; State of Bihar vs Usha Martin Industries Ltd., [1987] 65 STC 430 and Asstt.
Commissioner of Commercial Taxes, Dharwar vs Dharmendra Trading Co. etc.
; , , referred to.
Before making the public authority responsible for act of its subordinate, it must be established that the subordinate officer did in fact make the representation and as a fact, is competent to make a binding promise on behalf of the public authority or the Government, ultra vires acts do not bind the authority and insistence to abide by the said ultra vires promise would amount to putting premium and legitimacy to ultra vires acts of subordinate officers.
[847D E] Howell vs Falmouth Boat Construction Co. Ltd, and Attorney General for Ceylon vs
A.D. Silva, , referred to.
The letter dated April 3, 1972 written by the Estate Manager is a conditional one, namely, that on fulfilling certain conditions indicated in that letter he would make recommendation to the Board for grant of lease, condition precedent being that the tenant would deposit the required sum of about Rs. 11,000 and odd with the respondent.
Un doubtedly, the tenants completed that part of the obliga tion.
Thereafter it was placed before the Board, who by resolution dated 831 September 10, 1974, considered.
,it, but was rejected on the ground that after reconstruction the building would be required by its staff.
[845C E] 6.
The Estate Manager is merely an intermediary to collect the material between the respondent Port Trust and its tenants and to place the material for consideration to the Board.
Thereby the Estate Manager is not clothed with any authority much less even ostensible authority to create a promise so as to bind the respondent, that the respondent would allot the rooms on reconstruction to the tenants.
The promise of him is an ultra vires act, though conditional and, therefore.
it does not bind the respondent.
Though the executive necessity has not been satisfactorily established, the doctrine of promissory estoppel cannot be extended in favour of the appellant and other tenants.
[847E G] 7.
When a constitutional question has been raised and does arise for consideration, unless there is a fulldressed argument addressed by either side before this Court no satisfactory resolution could be made.
Mere paraphrasing the judgment of the High Court in particular when it relates to the local laws is no proper decision making.
[849A B]
|
Appeal No. 121 of 1951.
Appeal from the Judgment and Decree dated 15th December, 1948, of the High Court of Judicature at Madras (Subba Rao and Pancha,Pakesa Ayyar JJ.) in Appeal No. 474 of 1945 arising out of the Judgment and Decree dated 3 1 st July, 1945,, of the Court of the Subordinate Judge of Tenali in Original Suit No, 24 of 1944.
130 1002 M. C. Setalvad, Attorney General for India, (N. Subrahmanyam and K. R. Chowdhury, with him) for the appellants.
K. section Krishnaswamy Aiyangar (M. Seshachalapathi, with him) for the respondents.
February 26.
The Judgment of the Court was delivered by DAS J.
This appeal arises out of a suit for recovery of possession of certain immovable properties measuring about 93 acres and 33 cents which are more fully and particularly set out and described in Schedule A to the plaint.
That suit was instituted by Konduru Venkatapayya, respondent No. 1, in his capacity as the Executive Officer appointed by the Government on the 15th July, 1942, in respect of Sri Somasekharaswami Temple at Kotipalle, hamlet of Donepudi, a temple notified on the 26th October, 1939, under the provisions of Chapter VIA of the Madras Hindu Religious Endowments Act (Act 11 of 1927).
The suit was instituted in forma pauperis.
The claim for ejectment of the defendants was founded on the allegation that the properties belonged to the temple, having been given to it by an Inam grant made in 1770 A.D. by Janganna Rao, the then Zamindar of Rachur, that the defendants I to 16 and their predecessors were Archakas rendering Nitya Naivedya Deeparadhana services and as such were in possession of the properties for and on behalf of the temple and that defendants 17 to 43 were the lessees under the Archakas and that the defendants I to 16 were wrongfully claiming the properties as their own and the other defendants claimed to be in possession of portions of the properties as their lessees.
The plaintiff instituted this suit after having given registered notice to the defendants to make over possession of the suit properties to the plaintiff as the Executive Officer of the temple but the defendants were still continuing in such possession in spite of such notice.
The defendants filed written statements raising various contentions 1003 and issues to which it is not necessary now to refer.
The learned Subordinate Judge by his judgment dated the 31st July, 1945, decreed the plaintiff 's suit.
Some of the defendants preferred an appeal to the High Court but the High Court dismissed the same.
Those defendants obtained leave of the High Court to appeal to the Federal Court and that appeal has now come up for hearing before us.
The only two points which were raised before us, as before the High Court, are (1) whether the Inam grant was made in favour of the temple or whether the grant was made in favour of the Archakas burdened with the duties of service, and (2) what right did the grant confer on the grantee whether it was a grant of the land itself or only of the melvaram interest in the properties.
It is urged by the learned Attorney General that as the defendants and their predecessors have been in possession of the properties from ancient times it should be presumed that their possession originated in some lawful title conferred on them.
In short, the contention, founded on several judicial decisions, is that the principle of a lost grant should be applied in this case in favour of the Archakas who have been in quiet possession for over a century and a half.
There is no doubt, on the authorities, that a presumption of an origin in some lawful title may in certain circumstances be made to support possessory rights long and quietly enjoyed where no actual proof of title is forthcoming but it is equally well established that that presumption cannot be made where there is sufficient evidence and convincing proof of the nature of the grant and the persons to whom it was made.
It is true that the original grant is not forthcoming but turning to the evidence we find two documents which appear to us to be decisive on the question of title.
The first one is Exhibit P/3, a copy of the relevant entries in the Inam Register of 1860.
This Inam Register was prepared after enquiries made by the Inam Deputy Collector and the statements furnished at that time by the then Archakas were taken into consideration for 1004 preparing the register.
The copy of the statement filed by the then Archakas before the Inam Deputy Collector was exhibited in this case as Exhibit D/3.
In the Inam Register (exhibit P/3) under the several columns grouped under the general heading " Class extent and value of Inam " this Inam is classified in column 2 as Devadayam.
In column 3 are set out the survey numbers together with the word ' Dry ' indicating the nature of the land comprised within the survey numbers.
The areas are set out in column 5.
The heading of column 7 is " where no survey has been made and no assessment fixed by Government, the cess paid by the ryot to the Inamdar, or the average assessment of similar Government land should be entered in column (7) ".
Under this heading are set out the amounts of respective assessments against the three survey numbers totalling Rs. 198139.
We then pass on the next group of columns under the general heading " Description, tenure and documents in support of the Inam ".
Under column 8 'description of Inam 'is entered the remark " For the support of a Pagoda.
Now kept up ".
The entry in column 9 shows that the Inam was free of tax, i.e., sarvadumbala.
Under column 10 headed "Hereditary, unconditional for life only or for two or more lives " is mentioned ' Permanent '.
The name of the grantor as stated in column 1 1 is Janganna Rao and the year of grant is fasli 1179, A.D. 1770.
In column 13 the name of the temple is set out as the original grantee.
The name of the temple and the location of the temple are also set out under columns 16 and 17.
Turning now to the statement exhibit D/3 caused to be written and filed by the then Archakas during the Inam Inquiry held in 1859 60 Sree Somasekharaswami Varu is given as the name of the Inamdar and the present enjoyer.
The name of the temple is also set out under columns 3,5,6 and 12.
Under the heading " Income derived from the Inam whether it is sarvadumbala or jodi.
lf jodi the amount" in column 13 is stated " sarvadumbala Inam Cist according to the rate prevailing in the neighbouring fields Rs. 26631.
" This statement (exhibit D/3) bears 1005 the signature of the Karnams and the witnesses.
it will be noticed that neither in the Inam Register exhibit P/3 nor in the statement exhibit D/3 is there any mention of the Archakas as the grantee or for the matter of that, having any the least interest, personal or otherwise, in the subject matter of the Inam grant.
The two exhibits quite clearly indicate that the Inam grant was made in favour of the temple by the gurant or and that in the face of this definite evidence and proof of the nature of the grant, no presumption of a lost grant can be made in favour of the Archakas.
We, therefore, in agreement with the High Court, hold that the deity was the grantee and the first question raised before us must be answered against the appellants.
The learned Attorney General next contends that, assuming that the Inam grant was made in favour of the temple, it was only a grant of melvaram interest and that the Archakas who have the kudivaram rights cannot be ejected.
He relies strongly on an unreported judgment of the Madras High Court in Appeal No. 213 of 1942 (The Board of Commissioners for the Hindu Religious Endowments, Madras vs Parasaram Veeraraghavacharyulu and others) where it was held: "The records of the Inam settlement really contain only one clear indication as to the precise extent of this grant.
The statement at the Inam Inquiry, Exhibit V, upon which the decision of the Inam Commissioner was presumably based contains a column headed " Income realised from the Inam sarvadumbala " and in that column we find the entry "Rs. 14 sarvadumbala".
On its face this entry seems to show that the income of the Inam was Rs. 14 free from all charges.
We find, however, from the Inam Register, Exhibit IV, that the assessment of the Inam on the basis of the enjoyment of 16 97 acres is also Rs. 14.
This seems to indicate that the extent of the Inam was the amount of the assessment.
* * * * * It seems, therefore, that the decision must rest on the recital in Exhibit V that the income of the Inam 1006 consists of Rs. 14, read along with the recital in Exhibit TV that the assessment on the land also comes to Rs. 14.
On these materials we confirm the findings of the learned District Judge, although we do not accept his reasoning, and hold that the grant is a grant of melvaram only.
" The facts of that case appear to us to be different from those in the present case.
The Archakas in.
that case were found to have the kudivaram rights from before the Inam grant was made.
In the copies of the Inam Register and Inam Statement filed in that case the Archakas were shown as the grantees and the present enjoyers of the Inam grant and the amount shown under the heading in column 2 of the Inam register as the assessment was the same as the amount shown under column 3 of the Inam Statement under the heading "Income derived from Inam".
In the case before us the Archakas are nowhere mentioned in either Exhibit P/3 or in Exhibit D/3, there is no evidence that they had any title to kudivaram rights and finally the amount of assessment shown under column 7 of the Inam register, Exhibit P/3, is Rs. 198139, whereas the amount shown as income derived from the Inam as shown in column 13 of the Inam Statement, Exhibit D/3, is Rs. 26631.
Apart from these points of distinction the decision relied on by the learned Attorney General appears to us to be of doubtful authority.
As will appear from the passages quoted above, the decision rested mainly, if not entirely, on the fact that the amount of assessment and the amount of income were the same and the conclusion was drawn that the Inam grant comprised only of the revenue assessment, i.e., of melvaram rights.
We are unable to follow the reasoning.
Whether the Inam comprised the land itself, that is to say, both melvaram and kudivaram rights or only the melvaram rights, the entries had to be made in the Inam Register in the same form and even in the case of the grant of the land itself comprising both the rights the amount of assessment had to be set out under column 7 of the Inam Register for it is not 1007 suggested that a different form had to be used where the grant comprised both the rights.
It follows, therefore, that no inference that the Inam grant comprised only melvaram rights can be inferred from the fact that under column 7 only the amount of assessment is set out, and, therefore, the reasoning on which the decision relied on by the learned Attorney General was founded cannot be supported as correct.
Indeed, that decision has been dissented from by another Bench of the Madras High Court in Yelamanchili Venkatadri & another vs Vedantam Seshacharyulu and others (1).
In the present case the High Court was, in our opinion, clearly right in preferring the last mentioned decision to the unreported decision mentioned above.
Having regard to the different entries under the different columns in Exhibit P/3 and Exhibit D/3 there is no escape from the position that this Inam grant in favour of the temple comprised both the interests in the land.
An argument was sought to be raised by the learned Attorney General that the grantor Janganna Rao was only the Collector of the revenue and as such could not grant more than what he had got.
Reference was made to the Kistna District Manual by Gordon Mackenzie but it appeared that the person therein mentioned was not the same grantor as we are concerned with in this case and the point was not pursued and nothing further need be said about it.
Finally, the learned Attorney General submits that these Archakas who were rendering services faithfully from generation to generation from ancient times should not, in equity, be ejected from the entire lands and that they should be allowed to remain in possession of the lands and be permitted to appropriate to themselves the expenses of the services and a reasonable remuneration and the rest of the income should be made over to the temple as its property.
Reference was made to two unreported decisions of the Madras High Court in Appeal No. 218 of 1946 (1) A.I.R. 1948 Mad. 72, 1008 Dandibhotla Kutumba Sastrulu vs Kontharapu Venkatalingam, and in Appeal No. 709 of 1944, Buddu Satyanarayana vs Dasari Butchayya, Executive Officer of the Temple of Sri Malleswaraswami Varu, China Pulivaram.
In a proceeding for the framing of a scheme relating to a temple it may be permissible to take into account the claims, moral if not legal, of the Archakas and to make some provision for protecting their rights, but those considerations appear to us to be entirely out of place in a suit for ejectment on proof of title.
If the two decisions lay down, as it is contended they do, that the principles which may have a bearing on a proceeding for framing of a scheme or for enforcing the scheme that is framed may be applied to a case of the kind we have now before us it will be difficult for us to uphold them either on authority or on principle.
Further what is the conduct of the Archakas defendants appearing on the record of this case ? Although they are Archakas they actually asserted an adverse right in the face of the honest admission of their predecessors in title, made in the Inam statement Exhibit D 3.
Such conduct cannot but be regarded as disentitling them from any claim founded on equity.
The explanation put forward for the first time in paragraph 7 of their present statement of case filed in this Court explaining the absence of a claim to the property by their predecessors at the time of the Inam Inquiry namely, respect for the deity enjoined by Agama Shastra is not at all convincing.
Further, the giving of such equitable relief must depend on questions of fact, namely, the income of the property, the reasonable expenses and remuneration for the services, the amounts appropriated by them all this time and so forth which have not been investigated into in this case, because, no doubt, this question of equitable relief has been put forward as a last resort after having lost their battle.
We do not think in the circumstances of the case any indulgence should be shown to the Archakas even if it were permissible for the Court in a suit of this description to give such relief.
1009 The result, therefore, is that this appeal must fail and is accordingly dismissed with costs.
Appeal dismissed.
Agent for appellant: section Subramaniam.
Agent for respondent: M.S.K. Aiyangar.
| Though a presumption of an origin in some lawful title may in certain circumstances be made to support possessory rights long and quietly enjoyed where no actual proof of title is forthcoming, that presumption cannot be made where there is sufficient evidence and convincing proof of the nature of the grant and of the persons to whom it was made.
In the case of an inam grant, the mere fact that the amount shown in the In am Register as the assessment was the same as the amount shown in the Inam Statement under the heading "income from the inam" does not lead to an inference that the grant comprised only the melvaram rights and not the land itself.
Though in a proceeding for framing a scheme relating to a temple it may be permissible to take into account the claims, moral though not legal, of the archakas and to make some provision to protect their interest, such considerations are out of place in a suit for ejectment of the archakas on proof of title, especially when they set up an adverse title and deny the title of the temple.
[On the facts their Lordships held (i) that there was clear evidence that the inam grant in question was made by the grantor in favour of the temple and that in the face of this definite evidence as to the nature of the grant no presumption of a lost grant can be made in favour of the archakas of the temple; and (ii) that the grant was of the land itself and not of melvaram rights only.]
|
ition (Civil) Nos.
15466 67 of 1984 Etc.
(Under Article 32 of the Constitution of India.) M.K. Ramamurthi, P. Gaur and Jitendra Sharma for the Petitioners.
G.B. Pai, O.C. Mathur, Miss Deepa Sabra and Mrs. Meera Mathur for the Respondents.
The Judgment of the Court was delivered by RANGANATH MISRA, J.
All these applications under Article 32 of the Constitution are by officers called the Management Staff employed under the Respondent No. 1 and challenge in all the Writ Petitions is to the age of superannuation at 58 years.
The principal ground of attack is discrimination between the clerical staff for whom the age of retirement is 60 years and the management staff in whose case such terminal point is 58 years.
It is also the claim of the petition 741 ers that in keeping with the current trend in the commercial field such age should be fixed at 60.
Each of the petitioners in Writ Petition Nos.
15466 and 15467 of 1984 and 2745 of 1985 is a recent recruit for the management staff while each of the petitioners in the remaining cases was an employee under the Burmah Shell oil Storage and Distributing Company of India Limited and after the take over of that Company under the Burmah Shell (Acquisition of Undertakings in India) Act, 1976, has become an officer of respondent No. 1.
In Som Prakash Rekhi vs Union of India & Anr., ; this Court has held Respondent No. 1 to be "State" within the meaning of Article 12 of the Constitution.
There has, therefore, been no dispute before us that the petitioners would be entitled to invoke the protection of Article 14 in case there indeed be any discrimination.
This Court in Workmen of the Bharat Petroleum Corporation Ltd. (Refining Division) Bombay vs Bharat Petroleum Corporation Ltd. and another; , directed the retirement age of the clerical staff of the Refinery Division of Respondent No. 1 to be fixed at 60 years.
Petitioners have contended that the disparity in the age of retirement between two groups of employees gives rise to discriminatory treatment.
This stand is not tenable for more than one reason.
Clerical staff and officers of the management staff belong to separate classifications and no argument is necessary in support of it.
Petitioners have not contended and perhaps could not legitimately contend, that the two classes of officers stand at par.
In the Workmen 's case itself, this Court did not extend the benefit of superannuation at the age of 60 to all clerical staff but limited the same to that category of employees working in the Refinery Division, Bombay.
Classification on the basis of reasonable differentia is a well known basis and we are of the view that the petitioners are not entitled in the facts of the case to seek support from Article 14 for their claim.
The claim of the clerical staff arose in an industrial dispute.
The scope of such an adjudication is wide and broad based.
The Tribunal has expansive jurisdiction to exercise when a reference is made to it.
This court in appeal against the Award was exercising the same jurisdiction in that case.
We do not think, it would be appropriate for this Court to exercise that jurisdiction in dealing with an application under Article 32 of the Constitution.
It must also be remembered that officers of the management staff are not workmen.
742 It is true that this Court in Workmen of the Bharat Petroleum Corporation Ltd. (Refining Division) Bombay; , quoted with approval its earlier observations in M/s. British Paints (India) Ltd. vs Its Workmen, ; where it was said: "But time in our opinion has now come considering the improvement in the standard of health and increase in longevity in this country during the last fifty years that the age of retirement should be fixed at a higher level, and we consider that generally speaking in the present circumstances fixing the age of retirement at 60 years would be fair and proper, unless there are special circumstances justifying fixation of a lower age of retirement." Again in G.M. Talang and others vs Shaw Wallace and Co. & Anr., this Court referred to the Report of the Norms Committee where it was said: "After taking into consideration the views of the earlier Committees and Commissions including those of the Second Pay Commission the report of which has been released recently, we feel that the retirement age for workmen in all industries should be fixed at 60." A distinction in the treatment on the point in issue between workmen and officers is clearly discernible in judicial thinking as also expert opinion.
Besides, the petitioners have not brought before the Court all the material relevant to the making of a claim as made from which support could be had.
On the other hand, the Respondent No. 1 in its affidavit in opposition has placed various aspects to justify fixation and continuation of the present age of retirement.
It may be that some day, in keeping with the trend of the times, a claim of the type as laid in these applications may nave to be examined.
We, however, hope that adjudication will be required to be made on more cogent and appropriate material than now.
If this Court is moved, it has then to be considered whether an application under Article 32 is the proper remedy for it.
We are, however, of the view that the petitioners are not entitled to their claim in these applications.
The Writ Petitions are dismissed but without costs.
A.P.J. Petitions dismissed.
| The age of superannuation of the clerical staff employed under the Respondent No. 1 is 60 years while in the case of the management staff the terminal point is 58 years.
The officers of the management staff in their petitions under Article 32 alleged that the disparity in the age of retirement between two groups of employees gives rise to discriminatory treatment.
They also claim that in keeping with the current trend in the commercial field such age should be fixed at 60.
Dismissing the petitions, the Court, ^ HELD: 1.
Classification on the basis of reasonable differentia is a well known basis.
Clerical staff and officers of the management staff belong to separate classifications.
Therefore, the petitioners, in the fact of the case, are not entitled to seek support from Article 14 for their claim.
[741 F] 2.
The claim of the clerical staff arose in an industrial dispute.
The scope of such adjudication is wide and broad based.
The Tribunal has expansive jurisdiction to exercise when a reference is made to it.
This Court in appeal against the Award was exercising the same jurisdiction in that case.
It would not be appropriate for this Court to exercise that Jurisdiction in dealing with an application under Article 32 of the Constitution.
The officers of the management staff are not workmen.
[741 G H] 3.
The petitioners have not brought before the Court all the mate 740 rial relevant to the making of a claim as made from which support could be had.
On the other hand, the Respondent No. 1 in its affidavit in opposition has placed various aspects to justify fixation and continuation of the present age of retirement.
[742 E F] 4.
In keeping with the trend of the times, a claim of the type as laid in the instant applications may have to be examined.
However, that adjudication will be required to be made on more cogent and appropriate material than now.
If this Court is moved, it has then to be considered whether an application under Article 32 is the proper remedy for it.
However, the petitioners are not entitled to their claim in these applications.
[742 F G] Som Prakash Rekhi vs Union of India & Anr., ; , followed.
Workmen of the Bharat Petroleum Corporation Ltd. (Refining Division) Bombay vs Bharat Petroleum Corporation Ltd. and another; , , M/s. British Paints (India) Ltd. vs Its Workmen, ; and G.M. Talang and others vs Shaw Wallace and Co. & Anr., , referred to.
|
ivil Appeal No. 1996 of 1990.
From the Judgment and Order dated 14.9.
1989 of the Delhi High Court in Civil Writ No. 2038 of 1988.
T.S. Krishnamurthy Ayer, T.V.S.N. Chari and C.V. Rao for the Appellants.
Ashok Grover and V.N. Kaura for the Respondents.
The Judgment of the Court was delivered by SAWANT, J.
This appeal raises some questions which are important both for the Delhi Administration as well as for their lessees of land.
Shortly stated, the questions in volved are: (a) what constitutes an application for permis sion to convert the user of the land? (b) from which date the conversion charges are leviable? and (c) from which date interest is chargeable on the conversion charges? 2.
The land involved in the present ease is at 20, Barakhamba Road, New Delhi and admeasures about 0,956 acre.
It was leased by 304 the Governor General in Council to one Smt.
Rama Bai on November 17, 1931.
The regular lease deed was drawn up in 1938.
It was a perpetual lease given on a premium of Rs.8,000 at the annual rent of Rs.400.
Rama Bai con structed a residential building on the land.
On May 20, 1938, Smt.
Rama Bai assigned the lease in favour of Smt.
Leelawati who died on November 6, 1969.
The interest in the lease devolved on respondents 1 4 and one Hans Raj Gupta and their names were mutated in the record of rights as is evidenced by the Government Memo of November 21, 1977.
Hans Raj Gupta died on July 31, 1985.
Respondents 5 11 are his heirs and legal representatives.
It appears that Hans Raj Gupta had left a will.
It is the subject matter of probate proceedings in Suit No. 62 of 1985 which is being contested.
If the will is probated then share of the late Hans Raj Gupta will devolve upon respondents 6 9; otherwise, it will devolve on all his heirs, viz., respondents 5 11.
For the purpose of the questions to be answered in this appeal, we are not much concerned with the revolution of property after the death of late Hans Raj Gupta.
In September 1962, the Delhi Development Authority prepared a Master Plan for Delhi under Section 7 of the Delhi Development Act, 1957 (hereinafter referred to as the "Act").
Before the names of respondents 1 4 and the late Hans Raj Gupta were mutated in the property register on November 21, 1977, a letter was written on April 25, 1977 by one of the lessees to be precise, by the first respondent, through an advocate, to the Land & Development Officer which read as follows: ". .
My client Shri Dev Raj Gupta son of late Smt.
Leela Gupta proposes to construct a multi storeyed building on the above mentioned plot.
Please let me know the charges, if any, payable for conversion of the land use from residen tial to commercial for constructing a multi storeyed commer cial building on the said plot after demolishing the exist ing bungalow constructed on the above said plot.
Your early response in the matter shall highly be appreciated.
Thanking you, We do not have on record reply, if any, sent to this letter.
But it 305 appears that there was some letter of the same date, viz., April 25, 1977 addressed by "the heirs and executors" of the estate of late Smt.
Leelawati Gupta, C/o Shri Prem Shankar, Advocate, i.e., the very same advocate who had written the letter earlier alluded to on behalf of the first respondent, and a reply was given by the office of the Land & Develop ment Officer on July 29, 1977 to this letter of the "heirs and executors etc." stating therein that their letter was receiving attention.
What that letter was has not come on record.
The only development thereafter was, as stated earlier, the Government Memo of November 21, 1977 communi cating that the names of respondents 1 4 and of the late Hans Raj Gupta were mutated in the property register against the leased land.
It may be mentioned here that this Govern ment Memo was addressed to the late Hans Raj Gupta and respondents 1 4 care of the said Advocate, Shri Prem Shan kar.
We are informed at the Bar that the request for such mutation was made on October 12, 1972 on the basis of a partition deed of December 15, 1970 after the death of Smt.
Leelawati on November 26, 1969.
What is important to note from the developments so far, as tar as the issues involved in this appeal are concerned, is that no application for conversion of the land was made on behalf of the lessees of the land.
On February 15, 1978, the late Hans Raj Gupta, for himself and "Dev Raj Gupta and others", wrote a letter to the Land & Development Officer stating therein as follows: "Under the Master Plan and the Zonal Plan the above plot now residential can be developed for the construction of a Commercial building.
Please let me know your terms in respect thereof together with commercialisation charges that will have to be paid by us.
The plans have already been submitted to the N.D.M.C. after their approval by the Urban Land Art Commis sioner.
Yours faithfully, S/ d Hans Raj Gupta for Hans Raj Gupta, Dev Raj Gupta and Others" 306 We have then on record a letter dated March 1, 1980 by the Assistant Settlement Commissioner to the lessees as follows: S/Shri Hans Raj Gupta, Dev Raj Gupta, Prem Raj Gupta Pardeep Kumar Gupta, C/o Shri Hans Raj Gupta, 3 Ratendon Road, New Delhi.
Sub: Premises situated on Plot No. 5, Block No. 205 known as 20 Barakhamba Road, New Delhi.
Dear Sir, I am to say that the applications in respect of the above mentioned premises received so far from different persons (some of them are not co lessees) to intimate con version charges for the construction of Multi stroyed Commercial building and your intention to sell the property to M/s. Central Investment (P) Ltd. and the United Towers India (Pvt.) Ltd. but rejection of the same by *.he
Compe tent authority under Urban (Ceiling & Regulation) Act, 1976 have created some doubts about that ownership.
It has there fore been decided that a fresh application for the permis sion to construct the Multi storeyed Building duly signed by all the co lessees be asked for.
You arc therefore requested to make an application in the prescribed proforma for the permission to construct the Multi storeyed Commercial building duly signed by all the co lessees.
Yours faithfully, S/d Encl.
As above.
(R.L. Gupta) Asstt.
Settlement Commissioner".
On June 3, 1980, a reminder was sent by the Government to the late Hans Raj Gupta and respondents 1 4 which reads as follows: " . .
I am to refer to this Office Letter No. LI 9/205(5)/ 307 80/197 dated 1.3.1980 on the above subject and to say that no reply thereto has to far been.
(sic.) In case no reply is received from you within 15 days from the said date of receipt on this letter, then it will be presumed that you are not interested for the permis sion to construct the multi storeyed Commercial Building and the case will be treated as closed . . " To this reminder, the late Hans Raj Gupta replied that the letter of March 1, 1980 sent by the Government appeared to have been lost in transit and did not reach their hands and requested for a duplicate of the same to enable them to take necessary steps.
The Government by its letter of August 11, 1980 sent a copy of its letter of March 1, 1980 and along with it also sent to the late Hans Raj Gupta and others a show cause notice dated May 31, 1980 which had also been received back by the Government undelivered.
Thereaf ter, on February 27, 1981, the late Hans Raj Gupta, and one Raj Kumar Gupta as a constituted Attorney for respondents 1 4, sent an application in the prescribed form.
In the accompanying letter of the same date, if was mentioned that the application was sent with reference to the Land & Devel opment Officer 's letter dated March 1, 1980 and the discus sions held in his office on February 9, 1981 for permission to construct a multi storeyed building.
All that is neces sary for us to note from the contents of the application form is firstly that it was mentioned there against the relevant query that the plan for constructing commercial building was sanctioned on January 21, 1981 by the New Delhi Municipal Committee and that exemption application under Section 20(1) of the Urban Land (Ceiling & Regulation) Act, 1976 was being processed.
On January 12, 1984, the Govern ment intimated to the parties that with reference to their letter of February 27, 1981 seeking permission for construc tion of multi storeyed commercial building, the lessor, i.e., the Government was willing to consider their said request provided they were willing to comply with the terms and conditions mentioned therein full in advance.
The terms and conditions mentioned in this communication included, among other things, the payment of additional premium of Rs.1,77,31,548 in jumpsum and payment of interest on the additional premium at 10 per cent per annum from 27th May, 1981 to 14th July, 1983 being Rs.37,84,349.55 and from 15th July, 1983 to the date of payment, at Rs. 1,47,762.90 per month.
The other terms and conditions imposed by the said letter are not in dispute and, therefore, they need not be reproduced here.
308 6.
On receipt of this letter, the late Hans Raj Gupta and other lessees made a representation on March 31, 1984 to the Works & Housing Minister of the Government of India requesting reconsideration of the terms and conditions imposed in the Government 's letter of permission of January 12, 1984.
It appears that thereafter there was a correspond ence between the parties which finally culminated in the Government 's letter of June 12, 1987 which virtually reject ed the representations of the lessees.
Further representa tions were made thereafter for reconsideration of the terms and conditions offered by the Government for conversion of the use of the leased land but it appears that they were not replied to.
The result was that the lessees approached the High Court by a writ petition challenging the appellant 's letter dated June 12, 1987 reiterating the terms and condi tions which were intimated earlier by the letter of January 12, 1984.
The main challenge in the petition was to the base year for the calculation of the charges for conversion of the land from the residential to the commercial purpose.
It was the contention of the petitioners that since they had applied to the respondents for permission to convert the user on February 15, 1978, they were liable to pay charges calculated with reference to the said date and not as the respondents had done with reference to May 25,1981.
Their second contention was that for the same reason no charges for the misuse of the land could be levied after February 15, 1978 and their third contention was that no interest could be charged on the alleged additional premium which was calculated by taking into consideration May 25, 1981 as the base date.
The High Court accepted all the said three con tentions by holding that the date with reference to which the conversion charges had to be calculated was February 15, 1978 when according to the court the respondents had duly applied for conversion of the user.
The High Court also held that in fact there was no need to make any such application for conversion after September 1962 when the Master Plan was prepared by the Delhi Development Authority declaring the region in which the leased land was situate as a commercial zone.
According to the court, there was an automatic and statutory conversion of the use of the land from residential to commercial purpose and hence there was no question of either payment of conversion charges or the misuse charges.
In this view of the matter the court held that the demand which had been made by the appellants for conversion charges calculated on the basis of the rate prevalent in April, 1981 instead of the rate prevalent on February 15, 1978 was not in accordance with law and the respondents were not obliged to make the payment pursuant to an invalid demand.
The High Court, therefore, quashed the 309 demand for conversion charges contained in the appellants letters dated January 12, 1984 and June 12, 1987 and direct ed the appellants to recompute the additional premium and other charges within a period of six months in accordance with law and in accordance with the observations made by it.
It is this decision which is challenged in this appeal.
While narrating the facts we have referred to the alleged application made by the respondents or on their behalf on April 25, 1977 and February 15, 1978.
Since the respondents do not contend that their alleged application of April 25, 1977 was an application for conversion of the user of the land, it is not necessary for us to deal with the same.
However, since it is contended vehemently on their behalf that the application of February 15, 1978 was a proper application for conversion of the user of the land and the High Court has also accepted it as such, it is necessary to deal with the same.
The contents of the said application have been reproducted above.
In the first in stance, this application was sent by the late Hans Raj Gupta for himself and for "Dev Raj Gupta and others".
The late Hans Raj Gupta did not sign it for Dev Raj Gupta and others as the holder of the power of attorney from them.
Nor did he make clear who "the said others were".
The lessees of the property at that time were Dev Raj Gupta Prem Raj Gupta and Pradeep Kumar Gupta in addition to the late Hans Raj Gupta.
Neither the said letter was signed by Dev Raj Gupta Prem Raj Gupta and Pradeep Kumar Gupta nor was it stated any where in the letter that they had authorised the late Hans Raj Gupta to seek permission on their behalf.
As far as the contents of the letter are concerned, they are self explanatory.
All that the late Hans Raj Gupta wanted to know from the Land and Development Officer were the terms and conditions for the construction of a commercial building on the land and the charges that would have to be paid for the same.
This can hardly be called an application for permission to con struct a commercial building on the land.
It is no more than an enquiry.
We are, therefore, unable to appreciate the contention that this letter constituted an application for permission to use the land for commercial purposes.
It is for this reason that we are unable to agree with the High Court 's finding that this letter was an application for the conversion of the user of the land.
It is immaterial in this connection whether any regular form of application was prepared and was available for use at the relevant time.
Even assuming that such a form was prescribed for the first time on June 15, 1978, the letter of February 15, 1978 could hardly be described as an application signed by the lessees, meaning thereby, all the lessees for permission to convert the user of the land.
310 The absence of a prescribed from does not made the letter the required application.
The least that is expected in an application for the purpose is a request by all the lesseess to permit the change of the user of the land showing readi ness and willingness to abide by the terms and conditions for such conversion of the user.
The letter in question, on the other hand, did nothing more than make an enquiry sug gesting that the application for the change of the would be made after the terms and conditions including the charges for the same are known.
We are, therefore, satisfied that the letter of February 15, 1978 was not an application made for the change of the user of the land.
It is for this very reason that we are of the view that it was for the first time on February 27, 1981 that a proper application was made for the purpose.
As has been pointed out hereinabove, after the letter of February 15, 1978 addressed by the late Hans Raj Gupta and others to the authority, we have on record only the letter of March 1, 1980 addressed by the authority to Hans Raj Gupta and others pointing out that applications in respect of the land were received by him from different persons some of whom were not even co lessees, to intimate conversion charges for the construction of "multi storeyed commercial building".
The letter also referred to their intention to sell the property to M/s. Central Investment Private Limited and the United Towers India Private Limited".
The authority also referred to the reflection of the same by the competent authority under the Urban Land (Ceiling and Regulation) Act, 1976 stated that the same had created some doubts about the ownership of the land.
It was, therefore, necessary accord ing to the authority that a fresh application for the per mission to construct the multi storeyed building" duly signed by all the co lessees" in the prescribed form should be sent.
It is obvious from this letter that there was some correspondence between the parties between February 15, 1978 and March 1, 1980 which has not come on record.
The letter of March 1, 1980 is obviously not a reply sent by the au thority to the late Hans Raj Gupta 's letter of February 15, 1978, for the latter does not refer to the construction of a multi storeyed building or the intended sale of the property to a third party.
The letter is also addressed not to the late Hans Raj Gupta and Dev Rai Gupta and others, but to the late Hans Raj Gupta, Dev Raj Gupta, Prem Raj Gupta and Pradeep Kumar Gupta.
It is also clear from the authority 's letter that different persons were seeking permission for change of the user of the land and some of them were not even the co lessees of the land.
The situation which ob tained till March 1, 1980 was, therefore, that there was no firm application by the authorised person or persons for conversion of the user of the land and it 311 is for this reason that the authority had asked the lessees to send the application in the prescribed form duly signed by all the co lessees.
There was no reply to this letter of March 1, 1980 and hence a reminder was sent by the authority on June 3, 1980 warning the lessees that in case no reply was received from them within 15 days, the matter would be treated as closed.
It is pursuant to this reminder that on February 27, 1981 a letter accompanied by an application in the prescribed form was sent, and both the letter as well as the prescribed form were duly signed for the first time by all the co lessees.
The contents of the accompanying letter make it clear that even the lessees treated this application as the first duly made application for the purpose.
It may also be mentioned here that, as has been stated in the application, the plans for the construction of the commer cial building were sanctioned only on January 21, 1981 and the,exemption application made to the competent authority under Section 20 (1) of the Act was even then still under process.
It is in response to this application that the sanction was given by the authority on January 12, 1984 to convert the user of the land.
We are, in the circumstances, of the view that it was only on February 27, 1981 that an application for the change of the user of the land was made by or on behalf of the respondent lessees of the land.
There is no explanation given by the appellants as to why the application made by the respondents of February 27, 1981 was not replied to till January 12, 1984.
Hence in the absence of anything else on records, it will have to be held that the date with reference to which conversion charges have to be counted is 27th February, 1981.
The authority has calculated additional premium with reference to May 27, 1981 on the footing that the outer limit for granting permission was three months from the date of the receipt of the application.
There is no justification for the authority to hold thus, for they are expected to process the application as early as possible and not to wait till the end of three months.
Unless there are valid reasons for them to do so or the delay is caused on account of an omission or commission on the part of the applicants, it is not proper to take the end of the three months as the date with reference to which the conversion charges should be calculated.
We are, however, informed that in the present case it makes no difference whether the charges are calculated with reference to 27th February 1981 or May 27, 1981.
Hence, the difference in dates in immaterial for our purpose.
312 11.
The High Court is further not right in holding that there was an automatic or a statutory conversion of the user of the land because in the Master Plan the land in question fell in the area reserved for commercial use.
The High Court failed to appreciate that the charge of user of the land permitted by the Plan was only enabling in nature.
It lifted the restriction which was otherwise there for using the land for commercial purpose.
The land has to be used as per the agreement between the contracting parties, and no change of the user can be made contrary to the agreement even if the Plan permits such user.
The Plan helps the parties to change the user, if the parties mutually agree to do so.
It does not permit the occupant to change the user unilaterally.
It is not, therefore, correct to say that no permission of the landlord was reeded to change the user of the land.
In the view we have taken, we direct that the addi tional premium should be calculated by the appellants on the basis of the rate which was prevalent as on February 27, 1981 which is the date of the application made for the change of the user.
The interest should be charged on such additional premium w.e.f. 12th April, 1984 since a period of three months from the date of notice, viz., January 12, 1984 was available to the respondent lessees to make the payment of the additional premium.
Taking into consideration the facts and circumstances of the present case, the appellants should be given the facility to make the payment in three equal annual installments and the interest should be charged on such deferred payment at not more than 14 per cent per annum.
The respondent lessees would, however, not be enti tled to convert the present user of the land into the com mercial user until and unless the last of the amount of the additional premium together with the interest thereon is paid.
The respondents will further be liable to pay the misuse charges mentioned at items 6 and 7 of the ,notice of 12.1.1984 till 12th April, 1984 from which date, they would be paying the conversion charges as above.
The appellants will give the respondents the facility to pay the rest of the amounts, i.e., the amounts other than the conversion charges in twenty four monthly installments with interest at no more than 10 per cent annum.
The decision of the High Court is set aside and the appeal is allowed accordingly with no order as to costs.
G.N. Appeal al lowed.
| The land in this case was leased by the Government to one R in 1931 and a regular lease deed was drawn in 1938.
It was a perpetual lease.
The lessee constructed a residential building on the land, and assigned the lease in favour of one L.
On the death of L, the interest in the lease devolved on the respondents.
Respondent No. 1 sent a letter through his Advocate to the Land & Development Officer, stating that he proposed to construct a multi storeyed building demolish ing the bungalow and demanding to know the charges for conversion of the land use from residential to commercial purposes.
The Land & Development Officer replied that the letter was receiving attention.
Actually the names of the respondents were mutated in the property register after the exchange of the above letters.
However, no application for conversion of the land user was made on behalf of the les sees of the land.
Again in 1978 the parties sent a letter to the Land & Development Officer demanding to know the terms for con struction of a commercial building on the lease land and the charges to be paid for the same.
The Assistant Settlement Commissioner sent a reply requesting that a formal applica tion be made in the prescribed proforma for permission to construct multi storeyed commercial building duly signed by all the co lessees.
In 1980 a reminder was sent to the parties.
Only thereafter the parties filed an application in the prescribed form.
In 1984, the Government intimated the parties that it was willing to comply with the request, provided the parties were willing to abide by certain terms and conditions in advance.
The parties made a representation to the Works & Housing Minis 301 ter requesting for reconsideration of the terms and condi tions.
After a good deal of correspondence the Government rejected the representation.
Thereafter the parties ap proached the High Court by way of a Writ Petition challeng ing the terms and conditions imposed by the Government.
It was contended that since they applied for permission to convert the user of land on 15.2.1978, they were liable to pay charges calculated with reference to that date only; that no charges for misuse of the land could be levied after 15.2.1978; that no interest could be charged on the alleged additional premium which was calculated by taking into consideration May 25, 1981 as the base date.
Accepting the contentions, the High Court held that there was no need to make any application for conversion after 1962 when the Master Plan was prepared by the Delhi Development Authority declaring the region as a commercial zone and that the conversion was automatic and statutory.
The High Court held that the Respondents were not,obliged to make the payment of conversion charges calculated at rates prevalent in April, 1984 instead of the rates obtaining in February, 1978.
It directed the Government to recompute the additional premium and other charges.
Aggrieved by the High Court Judgment, the Government preferred the present appeal.
The same contentions as were raised in the High Court were advanced before this Court, by both the parties.
Allowing the appeal, this Court, HELD: 1.
The land has to be used as per the agreement between the contracting parties, and no change of the user can be made contrary to the agreement even if the Master Plan permits such user.
The Plan helps the parties to change the user, if the parties mutually agree to do so.
It does not permit the occupant to change the user unilaterally.
It is not, therefore, correct to say that no permission of the landlord was needed to change the user of the land.
The High Court is not right in holding that there was an automatic or a statutory conversion of the user of the land because in the Plan the land in question fell in the area reserved for commercial use.
The High Court failed to appreciate that the change of user of the land permitted by the Plan was only enabling in nature.
It lifted the restriction which was otherwise there for using the land for commercial purpose.
[312B C & A] 2.
All that the parties wanted to know from the Land & Development Officer were the terms and conditions for the construction of a commercial building on the land and the charges to be paid for the same.
This can hardly be called an application for permission to con 302 struct a commercial building on the land.
It is no more than an enquiry.
It is immaterial in this connection whether any regular form of application was prepared and was available for use at the relevant time.
Even assuming that such a form was prescribed for the first time on June 15, 1978, the letter of February 15, 1978 could hardly be described as an application signed by the lessees meaning thereby all the lessees for permission to convert the user of the land.
The absence of a prescribed form does not make the letter the required application.
The least that is expected in an application for the purpose is a request by all the lessees to permit the change of the user of the land showing readi ness and willingness to abide by the terms and conditions for such conversion or the user.
The letter in question, on the other hand, did nothing more than make an enquiry sug gesting that the application for the change of the user would be made after the terms and conditions including the charges for the same are known.
Thus, the letter of February 15, 1978 was not an application made for the change of the user of the land.
[309F H; 310A B] 3.
It is clear from the authority 's letter dated March 1, 1980 that different persons were seeking permission for change of the user of the land and some of them were not even the co lessees of the land.
Since there was no firm application by the authorised person or persons for conver sion of the user of the land the authority had asked the lessees to sent the application in the prescribed form duly signed by all the co lessees.
There was no reply to this letter of March 1, 1980 and hence a reminder was sent by the authority on June 3, 1980 warning the lessees that in case no reply was received from them within 15 days, the matter would be treated as closed.
It is pursuant to this reminder that on February 27, 1981 a letter accompanied by an appli cation in the prescribed form was sent, and both the letter as well as the prescribed form were duly signed for the first time by all the co lessees.
The contents of the accom panying letter make it clear that even the lessees treated this application as the first duly made application for the purpose.
As has been stated in the application, the plans for the construction of the commercial building were sanc tioned only on January 21, 1981 and the exemption applica tion made to the competent authority under Section 20(1) of the Delhi Development Act, 1957 was even then still under process.
It is in response to this application that the sanction was given by the authority on January 12, 1984 to convert the user of the land.
Thus, it was only on February 27, 1981 that an application for the change of the user of the land was made by or on behalf of the respondent lessees of the land.
[310G H; 311A D] 4.
There is no explanation given by the appellants as to why the 303 application made by the respondents on February 27, 1981 was not replied to till January 12, 1984.
Hence in the absence of anything else on record, it will have to be taken that the date with reference to which conversion charges have to be counted is 27th February, 1981.
[311E] 5.
The additional premium should be calculated by the appellants on the basis of the rate which was prevalent as on February 27, 1981 which is the date of the application made for the change of the user.
The interest should be charged on such additional premium w.e.f. 12th April, 1984 since a period of three months from the date of notice, viz., January 12, 1984 was available to the respondent lessees to make the payment of the additional premium.
The respondent lessees would not be entitled to convert the present user of the land into the commercial user uniess and until the last of the three annual installments of the addi tional premium together with the interest thereon is paid.
[312C E] 6.
The respondents will further be liable to pay the misuse charges mentioned at items 6 and 7 of the notice of 12.1.1984 till 12th April, 1984 from which date, they would be paying the conversion charges.
[312F]
|
ivil Appeal No. 977 of 1976.
From the Judgment and Order dated 8.3.1976 of the Guwahati High Court in Civil Rule No. 261 of 1973.
D.N Mukherjee, N.R. Choudhary and Ranjan Mukherjee for the Appellant.
PG NO 325 Prabir Choudhary for the Respondents.
The Judgment of the Court was delivered by OJHA, J.
This appeal by special leave has been preferred against the Judgment dated 8th March, 1976 of the Guwahati High Court in Civil Rule No. 261 of 1973.
The appellant who was a Sub Inspector of Police in Assam was dismissed by the Superintendent of Police, Darrang district, Tezpur, by Order dated 29th January, 1973.
This order was passed without compliance with the requirements of Article 311(2) of the Constitution on the ground that it was a case to which the provisions of clause (b) of the second proviso to Article 311(2) were attracted.
The appellant preferred an appeal to the Inspector General of Police, Assam (Shillong).
The said appeal having been dismissed he challenged the order of dismissal as well as the appellate order under Article 226 of the Constitution in Civil Rule No. 261 of 1973 referred to above.
The various submissions made on behalf of the appellant did not, however, find favour with the Learned Judges who heard the civil rule mentioned above resulting in its dismissal by the judgment appealed against.
Two submissions have been made by learned counsel for the appellant: (i) The appellant having been appointed as Sub Inspector of Police by the Inspector General of Police, the order of his dismissal by the Superintendent of Police, Darrang, was illegal being in contravention of article 311(1) of the Constitution.
(ii) The provisions of clause (b) of the second proviso to article 311(2) of the Constitution were not attracted to the facts of the instant case and consequently the order of dismissal was illegal having been passed without compliance with the requirements of article 311(2).
In order to appreciate these submissions, it would be useful to extract article 311 of the Constitution.
It reads: "Dismissal, removal or reduction in rank of persons employed in civil capacities under the Union or a State (1) No person who is a member of a civil service of the Union or an all India service or a civil service of a State or holds a civil post under the Union or a State shall be dismissed PG NO 326 or removed by an authority subordinate to that by which he was appointed.
(2) No such person as aforesaid shall be dismissed or removed or reduced in rank except after an inquiry in which he has been informed of the charges against him and given a reasonable opportunity of being heard in respect of those charges.
Provided that where it is proposed after such inquiry, to impose upon him any such penalty, such penalty may be imposed on the basis of the evidence adduced during such inquiry and it shall not be necessary to give such person any opportunity of making representation on the penalty proposed: Provided further that this clause shall not apply (a) where a person is dismissed or removed in rank on the ground of conduct which has led to his conviction Oil a criminal charge; or (b) where the authority empowered to dismiss or remove a person or to reduce him in rank is satisfied that for some reason.
to be recorded by that authority in writing, it is not reasonably practicable hold such inquiry; or (c) where the President or the Governor, as he the case may be, is satisfied that in the interest of the security of the State it is not expedient to hold such inquiry.
(3) If, in respect of any such person as aforesaid, a question arises whether it ia reasonably practicable to hold such inquiry as is referred to in clause (2), the decision thereon of the authority empowered to dismiss or remove such person or to reduce him in rank shall be final.
" Having heard learned counsel for the parties, we find it difficult to agree with any of the submissions referred to above, In support of his first submission, learned counsel for the appellant placed reliance on a Memo dated 7th July, 1967 from the office of the Inspector General of Police which According to him was the letter of appointment whereby the appellant was appointed as a Sub Inspector of Police.
According to learned counsel for the appellant this being so the order of dismissal having been passed by the Superintendent of Police, Darrang, who was admittedly "an PG NO 327 authority subordinate to that by which the appellant was appointed", was on the face of it illegal.
With regard to this submission, we are of the opinion that the said Memo cannot be treated as the letter of appointment of the appellant.
It reads as hereunder: "Express: Office of the Inspector General of Police: Assam Memo No. F/1/93/Vol.
16/51 Shillong, the 7th July, 1967.
From: Shri P.C. Das, I.P.S., Deputy Inspector General of Police (P) Assam To Md. Ikramuddin Ahmed Borah, Ward No. III, P.O. Mariani, (Jorhat), Dist.
Sibsagar, Subject: Recruitment of temporary Sub Inspector of Police (Unarmed Branch) for 1967 You are hereby informed that you are provisionally selected for appointment as temporary Sub Inspector of Police (U.B.) subject to final and satisfactory police verification report.
Please report to the Principal, Police Training College, Dergaon on 17th July 1967 positively for training failing which your name will be struck off the list of selected candidates.
The details relating to books & uniform required for training in the college should be obtained from the Principal, Police Training College, Dergaon on your joining for the training.
Your provisional appointment letter will be issued by the Principle, Police Training College, Dergaon on joining.
" PG NO 328 In pursuance of the aforesaid Memo the Principal Police Training College, Dergaon, issued Memo dated 17th July, 1967, the relevant portion whereof reads as under: "OFFICE OF THE PRINCIPAL: Police Training College: Dergaon.
APPOINTMENT LETTER Memo No. 10712(A) PTC dated, Dergaon, the 17th July 1967.
Shri Ikramuddin Ahmed Borah, s/o Late A. Ahmed Borah Vill.
Mariani, P.O. Mariani, P.S. Mariani, Dist.
Sibsagar is hereby informed that he has been provisionally appointed as a Cadet Sub Inspector of Police in Assam with effect from 17 7 1967 A.N. He should provide himself with the books and uniforms.
2 to 6. . . 7.
Principal, Police Training College, Assam may expel or discharge him any time during the training if his progress or discipline or behaviour shows that he is not likely to be tit for Police service.
Principal Police Training College, Assam, Dergaon.
Even on a bare perusal of the two Memos mentioned above, it is apparent that by Memo dated 7th July, 1967 which was issued by the Deputy Inspector General of Police, the appellant was only informed that he had been provisionally selected for appointment as temporary Sub Inspector of Police (U.B.)and the order of appointment was to be issued by the Principal, Police Training College which indeed was issued by the subsequent Memo dated 17th July, 1967.
This memo seems to have been sent by the Deputy Inspector General of Police as President of the Selection Board constituted for the purpose according to the procedure for appointment of a Sub Inspector to be found in Assam Police Manual in Part III.
Rule 11(x) at the relevant time as it appears from the judgment appealed against read as hereunder: PG NO 329 "11.
(x) Direct recruitment of Sub Inspectors: The final selection will be made by the Deputy Inspector General of Police sitting as President of a Selection Board, which will consist of himself and 2 Superintendents of Police appointed by the Inspector General of Police.
The order of appointing Probationary Sub Inspectors will be issued by the Superintendents of Police of the Districts from which the candidates are nominated.
" Rule 66 deals with proceedings to be drawn up in cases of major punishment.
The said rule contains a schedule.
Item No. 3 of column I refers to Sub Inspector of Police.
Column II indicates that the appointing authorities of a Sub Inspector of Police inter alia are Superintendent of Police; S.P./S.S.P./C.I.D.; Commandant of Battalion, Principal, APTC (that is Assam Police Training College).
Deputy Inspector General of Police is shown as the final appellate authority.
Rule 11(x) and the schedule referred to above are the relevant provisions in pursuance whereof the selection was made of the appellant vide Memo dated 7th July 1967 and the appointment order was issued by the Principal Training College, Dergaon vide Memo dated 17th July, 1967.
Consequently, Superintendent of Police and Principal, Police Training College, Assam, are authorities having coordinate jurisdiction according to column Il of the schedule.
The appellant having been appointed by Principal Police Training College Dergaon, Assam, and having been dismissed by the Superintendent of Police, Darrang, who was a coordinate authority, the submission made by the learned counsel for the appellant that the order of dismissal was illegal having been passed by an authority sub ordinate to that by which he was appointed.
obviously therefore has no substance.
Coming to the second submission, we find it necessary to refer to the order of dismissal in extenso.
It reads: "D.O. No. 320 dated 29.1.73.
Whereas it has been made to appear before me that proby.
Sub Inspector of Police Ikramuddin Ahmed Borah was appointed as proby.
Sub Inspector of Police on l7.7.67 against a temporary vacancy; AND PG NO 330 Whereas said Ikramuddin Ahmed Borah since his joining the department, his service in all branches of Police work where he had been tried leaves much to be desired and that consistent efforts by his senior officers for improving his work has proved abortive and further that despite the above drawbacks the said S.I. 's conduct and integrity has recently been found to be doubtful and the said S.I. has been recently misusing his official position to the detriment of general social well being and to his personal gain.
AND Whereas I am satisfied that it is not reasonably practicable to hold any inquiry as contemplated under Clause (2) of Article 311 of the Constitution of India because of non availability of witnesses who would not testify against the said S.I. of Police out of various considerations such as fear and because of the likelihood of causing of damage to the Police image and administration before the general public in the event of holding of such an enquiry; Now, therefore, in exercise of powers under proviso (b) clause (2) of Article 311 of the Constitution of India, l, Shri P.N. Goswami, Superintendent of Police Darrang District, Tezpur, hereby order that said Ikramuddin Ahmed Borah be dismissed from the force with effect from the date of issue of this order.
Said Ikramuddin Ahmed Borah is accordingly dismissed from the police service.
Sd/ P.N. Goswami (P.N. Goswami) Superintendent of Police, Darrang, District Tezpur.
" The scope of clause (b) of the second proviso to Article 311(2) and of Article 311(3) came up for consideration before a Constitution Bench of this Court in Union of India and Anr vs Tulsi Ram Patel and Others, [1985] supplementary 2 S.C.R., page 131.
While construing the clause "it is not reasonably practicable to hold such enquiry" used in clause (b) aforesaid, it was held: PG NO 331 "Thus, whether it was practicable to hold the inquiry or not must be judged in the context of whether it was reasonably practicable to do so.
It is not a total or absolute impracticability which is required by clause (b).
What is requisite is that the holding of the inquiry is not practicable in the opinion of a reasonable man taking a reasonable view of the prevailing situation.
It is not possible to enumerate the cases in which it would not be reasonably practicable to hold the inquiry, but some instances by way of illustration may, however, be given.
It would not be reasonably practicable to hold an inquiry where the government servant, particularly through or together with his associates, so terrorizes, threatens or intimidates witnesses who are going to give evidence against him with fear of reprisal as to prevent them from doing so . " With regard to Article 311(3) of the Constitution after pointing out that where a government servant is dismissed, removed or reduced in rank by applying clause (b) or an analogous provision of the service rules and he approaches either the High Court under Article 226 or this Court under Article 32, the Court will interfere on grounds well established in law for the exercise of judicial review in matters where administrative discretion is exercised, it was held: "If the court finds that the reasons are irrelevant, then the recording of its satisfaction by the disciplinary authority would be an abuse of power conferred upon it by clause (b) and would take the case out of the purview of that clause and the impugned order of penalty would stand invalidated.
In considering the relevancy of the reasons given by the disciplinary authority the court will not, however, sit in judgment over them like a court of first appeal.
In order to decide whether the reasons are germane to clause (b), the court must put itself in the place of the disciplinary authority and consider what in the then prevailing situation a reasonable man acting in a reasonable way would have done.
The matter will have to be judged in the light of the then prevailing situation and not as if the disciplinary authority was deciding the question whether the inquiry should be dispensed with or not in the cool and detached atmosphere of a court room, removed in time from the situation in question.
Where two views are possible, the court will decline to interfere.
" PG NO 332 One of the illustration justifying clause (b) of the second proviso to Article 311(2) being invoked, as indicated above, is the non availability of the witnesses on account of fear of the officer concerned.
In the instant case as is apparent from the impugned order of dismissal this was the main ground for invoking the said clause (b).
On the material on record, it is not possible for us to make the view that there was an abuse of power by the disciplinary authority in invoking clause (b).
The Superintendent of Police who passed the order of dismissal was the best authority on the spot to assess the situation in the circumstances prevailing at the relevant time and we do not find any good ground to interfere with the view taken by the Superintendent of Police in this behalf.
As pointed out in the case of Tulsi Ram Patel supra, in such matters, the Court will not sit in judgment over the relevancy of the reasons given by the disciplinary authority for invoking clause (b) like a Court of first appeal and that even in those cases where two views are possible, the Court will decline to interfere.
In this view of the matter, we do not find any substance in the second submission either.
In the result, this appeal fails and dismissed but in the circumstances of the case there would be no order as to costs.
N.V.K. Appeal dismissed.
| The petitioner in the Special Leave Petition is the tenant, Respondent No. 3 was one of the five co owners of the petition premises.
On January 28, 1978, one of the co owners who had sole possession of the shop vacated the shop and sent intimation of the vacancy to the Rent Controller under the U.P. Urban Buildings (Regulation of Letting and Eviction) Act, 1972.
The petitioner filed allotment application for the said shop and he was the sole applicant.
The Rent Control Officer directed the petitioner to appear in the allotment proceedings, called for a report from the Inspector, found one of the co owners to he in possession of the shop and that he had discontinued the business and was going to let out the shop.
The 3 other co owners never objected to the petitioner 's tenancy on the allotment order.
The allotment letter was accordingly passed on 12th February.1978, and possession was taken up by the petitioner thereafter.
On or about 25th February, 1978 the 3rd respondent who was a non occupant owner filed an application under section 16(5) of the Act i.e. after 25 days of the allotment, for review of the order.
The Rent Controller allowed the review application and cancelled the allotment order.
The Additional District Judge having dismissed the revision petition, the petitioner filed a writ petition in the High Court.
The question about the maintainability of the review application under section 16(5) of the Act at the instance PG NO 276 PG NO 277 of a non occupant owner having arisen the matter was referred to a Full Bench and by a majority, the Bench came to the conclusion that such an application was maintainable.
Dismissing the Special Leave Petition, HELD: 1.
A landlord, even though not in actual possession at the time of the possession of the property, can ask for review of the order of release or allotment.
[280G] 2.
A landlord has a right to the property.
The section should not be so construed as to defeat the right to possession of property in appropriate cases unless the intention of the Legislature is manifest.
[280F] 3.
Section 16(5)(a) speaks of 'where the landlord or any other person '.
Hence, two categories of persons are contemplated i.e. a land lord, or any other person.
[280C] 4.
The requirement of the sub section, to be in lawful occupation of the building or any part thereof, applies only in case of any other person claiming to be in lawful occupation and not in case of landlord.
The Section has used the expression "or" and so the expression "or" is disjunctive of these two categories to be treated separately.
Hence, the requirement to be in lawful occupation, is not there is case of an application by the landlord.
[280C D] 5.
The proviso puts an embargo of 7 days in making the application for review.
It can only apply to those who were in lawful occupation at the time of the making of the original Order.
It cannot curtail the rights of the landlord.
as such, it only affects any other person who was in lawful occupation.
[280E G] Niren Kumar Das vs 7he District Judge, Pilibhit & Ors.
AIR 1977 Allahabad 47, approved.
|
iminal Appeal No. 90 of 1952.
Appeal under article 134(1) (c) of the Constitution of India from the Judgment and Order, dated 28th November, 1954, of the Punjab High Court in Criminal Revision No. 865 of 1951, arising out of the Judgment, dated 2nd August, 1951, of the Court of Additional Sessions Judge, Rohtak, Gurgaon, in Criminal Revision No. 4 of 1951.
M. C. Setalvad, Attorney General for India (Tek Chand and Rajinder Narain, with him) for the appellant.
Gopal Singh and K. L. Mehta for the respondent.
section M. Sikri, Advocate General for the State of Punjab (Jinder Lal and P. G. Gokhale, with him) for the Intervener (The State of Punjab).
October 12.
The Judgment of the Court was delivered by MEHR CHAND MAHAJAN C.J.
This appeal, by leave of the High Court of Judicature at Simla, raises a novel and interesting question of law, viz., whether a person accused of an offence under the Indian Penal Code and committed in a district which after the partition of India became Pakistan, could be tried for that offence by a Criminal Court in India after his migration to that country, and thereafter acquiring the status of a citizen.
The material facts relevant to this enquiry are these: The respondent, Ram Narain, acting on behalf of his firm, Ram Narain Joginder Nath, carrying on business at Mailsi in Multan District, was allowed a cash credit limit of rupees three lakhs by the Mailsi branch of the Central Bank of India Ltd. (the appellant) on the 23rd 699 December, 1946, shortly before the partition of British India.
The account was secured against stocks which were to remain in possession of the borrowers as trustees on behalf of the bank.
On 15th August, 1947, when British India was split into two Dominions, the amount due to the bank from Ram Narain was over Rs. 1,40,000, exclusive of interest, while the value of the goods pledged under the cash credit agreement was approximately in the sum of Rs. 1,90,000.
On account of the disturbances that followed in the wake of the partition of the country, the bank 's godown keeper at Mailsi left Mailsi some time in September, 1947, and the cashier, who was left in charge, also was forced to leave that place in October, 1947, and thus no one was in Mailsi to safeguard the bank 's godowns after that date.
It is alleged that in January, 1948, when, Mr. D. P. Patel, Agent of the Multan branch of the appellant bank, visited Mailsi, he discovered that stocks pledged by Messrs. Ram Narain Joginder Nath, against the cash credit agreement had disappeared.
On inquiry he found that 801 cotton bales pledged with the bank had been stolen, and booked by, Ram Narain to Karachi on the 9th November, 1947, and that he had recovered a sum of Rs. 1,98,702 12 9 as price of these bales from one Durgadas D. Punjabi.
The bank claimed this amount from Ram Narain but with no result.
It then applied under section 188, Criminal Procedure Code, to the East Punjab Government for sanction for the prosecution of Ram Narain for the offences committed in Pakistan in November, 1947, when he was there, in respect of these bales.
The East Punjab Government, by its order dated 23rd February, 1950, accorded sanction for the prosecution of Ram Narain, under sections 380 and 454, Indian Penal Code.
Ram Narain, at this time, was residing in Hodel, District Gurgaon, and was carrying on business under the name and style of Ram Narain Bhola Nath, Hodel.
In pursuance of this sanction, on 18th April, 1950, the bank filed a complaint against Ram Narain under sections 380 and 454, Indian Penal Code, and also under section 412 of the Code before the District Magistrate of Gurgaon.
700 Ram Narain, when he appeared in Court, raised a preliminary objection that at the time of the alleged occurrence he was a national of Pakistan and therefore the East Punjab Government was not competent to grant sanction for his prosecution under section 188, Criminal Procedure Code, read with section 4, Indian Penal Code.
This objection was not decided at that moment, but after evidence in the case had been taken at the request of both sides the Court heard arguments on the preliminary point and overruled it on the finding that Ram Narain could not be said to have acquired Pakistan nationality by merely staying on there from 15th August, till 10th November, 1947, and that all this time be had the desire and intention to revert to Indian nationality because he sent his family out to India in October, 1947, wound up his business there and after his migration to India in November, 1947, he did not return to Pakistan.
It was also said that in those days Hindus and Sikhs were not safe in Pakistan and they were bound to come to India under the inevitable pressure of circumstances over which they had no control.
Ram Narain applied to the Sessions Judge, Gurgaon, under sections 435 and 439, Criminal Procedure Code, for setting aside this order and for quashing the charges framed against him.
The Additional Sessions Judge dismissed this petition and affirmed the decision of the trial magistrate.
Ram Narain then preferred an application in revision to the High Court, Punjab, at Simla, and with success.
The High Court allowed the revision and quashed the charges and held that the trial of respondent, Ram Narain, by a Magistrate in India was without jurisdiction.
It was held that until Ram Narain actually left Pakistan and came to India he could not possibly be said to have become a citizen of India, though undoubtedly he never intended to remain in Pakistan for any length of time and wound up his business as quickly as he could and came to India in November, 1947, and settled in Hodel.
It was further held that the Punjab Government had no power in February, 1950, to sanction his prosecution under section 188, Criminal Procedure Code, for acts 701 committed in Pakistan in November, 1947.
The High Court also repelled the further contention of the appellant bank that in any case Ram Narain could be tried at Gurgaon for the possession or retention by him at Hodel of the sale proceeds of the stolen cotton which themselves constitute stolen property.
Leave to appeal to this Court was granted under article 134(1) (c) of the Constitution.
The sole question for determination in the appeal is whether on a true construction of section 188, Criminal Procedure Code, and section 4 of the Indian Penal Code, the East Punjab Government had power to grant sanction for the prosecution of Ram Narain for offences committed in Pakistan before his migration to India.
The relevant portion of section 4, Indian Penal Code, before its amendment read thus: "The provisions of this Code apply also to any offence committed by (1) any Native Indian subject of Her Majesty in any place without and beyond British India; Since 1950, the wording is: "Any citizen of India in any place without and beyond India Section 188, Criminal Procedure Code, formerly read thus : " When a Native Indian subject of Her Majesty commits an offence at any place without and beyond the limits of British India he may be dealt with in respect of such offence as if it had been committed at any place within British India at which he may be found. " These wordings were subsequently adapted after the formation of two Dominions and read as follows: When a British subject domiciled in India commits an offence at any place without and beyond all the limits of the provinces he may be dealt with in respect of such offence as if it had been committed at any place within the Provinces at which he may be found." After 1950, the adapted section reads as follows " When an offence is committed by 90 702 (a)any citizen of India in any place without and beyond India. he may be dealt with in respect of such offence as if it had been committed at any place within India at which he may be found. " The learned Attorney General contended that Ram Narain was, at the time when sanction for his prosecution was given by the East Punjab Government, a citizen of India residing in Hodel and that being so, he could be tried in India being a citizen of India at that moment, and having committed offences outside India, and that the provisions of section 4, Indian Penal Code, and section 188, Criminal Procedure Code, were fully attracted to the case.
In our opinion, this contention is not well founded.
The language of the sections plainly means that if at the time of the commission of the offence, the person committing it is a citizen of India, then even if the offence is committed outside India he is subject to the jurisdiction of the Courts in India.
The rule enunciated in the section is based on the principle that qua citizens the jurisdiction of Courts is not lost by reason of the venue of the offence.
If, however, at the time of the commission of the offence the accused person is not a citizen of India, then the provisions of these sections have no application whatsoever.
A foreigner was not liable to be dealt with in British India for an offence committed and completed outside British India under the provisions of the sections as they stood before the adaptations made in them after the partition of India.
Illustration (a) to section 4, Indian Penal Code, delimits the scope of the section.
It indicates the extent and the ambit of this section.
I runs as follows: "(a) A, a coolie, who is a Native lndian subject commits a murder in Uganda.
He can be tried and convicted of murder in any place in British India in which he may be found.
" In the illustration, if (A) was not a Native Indian subject at the time of the commission of the murder, the provisions of section 4, Indian Penal Code, could not apply to his case.
The circumstance that after the commission of the offence a person becomes domiciled in another country, or acquires citizenship of that 703 State ' cannot confer jurisdiction on the Courts of that territory retrospectively for trying offences committed and completed at a time when that person was neither the national of that country nor was he domiciled there.
The question of nationality of Ram Narain really does not arise in the case.
The real question to be determined here is, whether Ram Narain had Indian domicile at the time of the commission of the offence.
Persons domiciled in India at the time of coming into force of our Constitution were given the status of citizens and they thus acquired Indian nationality.
If Ram Narain had Indian domicile at the time of the commission of the offence, he would certainly come within the ambit of section 4, Indian Penal Code, and ,section 188, Criminal Procedure Code.
If, on the other hand, he was not domiciled in India at the relevant moment, those sections would have no application to his case.
Writers on Private International Law are agreed that it is impossible to lay down an absolute definition of 'domicile ' The simplest definition of this expression has been given by Chitty J. in Craignish vs Craignish(1), wherein the learned Judge said: " That place is properly the domicil of a person in which his habitation is fixed without any present intention of removing therefrom. " But even this definition is not an absolute one.
The truth is that the term domicil ' lends itself to illustra tions but not to definition.
Be that as it may, two constituent elements that are necessary by English Law for the existence of domicil are: (1) a residence of a particular kind, and (2) an intention of a particular kind.
There must be the factum and there must be the animus.
The residence need not be continuous but it must be indefinite, not purely fleeting.
The intention must be a present intention to reside for ever in the country where the residence has been taken up.
It is also a well established proposition that a person may have no home but he cannot be without a domicil and the law may attribute to him a domicil in a country where in reality he has not.
A person may be a vagrant (1) , 192.
704 as when he lives in a yacht or wanderer from one European hotel to another, but nevertheless the law will arbitrarily ascribe to him a domicil in one particular territory.
In order to make the rule that nobody can be without a domicil effective, the law assigns what is called a domicil of origin to every person at his birth.
This prevails until a new domicil has been acquired, so that if a person leaves the country of his origin with an undoubted intention of never returning to it again, nevetheless his domicil of origin adheres to him until he actually settles with the requisite intention in some other country.
It has been held by the High Court that Ram Narain remained in Multan District of the West Punjab, where he and his ancestors had lived till his migration to India.
The contention that as no Hindu or Sikh could possibly remain in Pakistan and therefore every such person must have been bound upon making his way to India as quickly as possible and that merely by forming an intention to come to India be became an Indian subject and was never even for a moment a subject of Pakistan, was negatived, and it was said that "though there is no doubt that so far as Punjab is concerned the vast majority of Hindus and Sikhs came to India but even in the Punjab the exodus has not been complete and in the East Bengal there are a considerable number of non Muslims who no doubt by now have become full citizens of Pakistan.
" In view of these findings it was concluded that the only possible way by which a resident of the territories which became Pakistan could become an Indian subject was by actually coming to India and unless and until any such person did come to India he retained Pakistan domicil, and was not covered by the words "Native Indian subject of Her Majesty" in the meaning which they automatically acquired as from the 15th August, 1947, and he certainly could not be described as a citizen of India in November, 1947, The learned Attorney General combated this view of the learned Judge and laid considerable emphasis on his following observations: 705 " There does not seem to be any doubt in the evidence produced that Ram Narain never intended to remain in Pakistan for any length of time.
In fact, he wound up his business as quickly as he could and came to India later in November 1947 and settled in Hodel" and he further emphasized the circumstance relied upon by the trial magistrate and Sessions Judge that Ram Narain had sent his family to India in October, 1947.
In our opinion, none of these circumstances conclu sively indicate an intention in Ram Narain of permanently removing himself from Pakistan and taking up residence in India.
It has to be remembered that in October or November, 1947, men 's minds were in a state of flux.
The partition of India and the events that followed in its wake in both Pakistan and India were unprecedented and it is difficult to cite any historical precedent for the situation that arose.
Minds of people affected by this partition and who were living in those parts were completely unhinged and unbalanced and there was hardly any occasion to form intentions requisite for acquiring domicil in one place or another.
People vacillated and altered their programmes from day to day as events happened.
They went backward and forward; families were sent from one place to another for the sake of safety.
Most of those displaced from West Pakistan had no permanent homes in India where they could go and take up abode.
They overnight became refugees, living in camps in Pakistan or in India.
No one, as a matter of fact, at the moment thought that when he was leaving Pakistan for India or vice versa that he was doing so for ever or that be was for ever abandoning the place of his ancestors.
Later policies of the Pakistan Government that prevented people from going back to their homes cannot be taken into consideration in determining the intention of the people who migrated at the relevant moment.
Ram Narain may well have sent his family to India for safety.
As pointed out by the learned Judge below, he and his ancestors lived in the Multan District.
He had considerable business there.
706 The bank had given him a cash credit of rupees three lakhs on the security of goods.
He had no doubt some business in Hodel also but that was comparatively small.
There is no evidence that he had any home in India and there is no reason to go behind the finding of the learned Judge below that he and his ancestors had been living in Mailsi.
In these circumstances, if one may use the expression, Ram Narain 's domicil of origin was in the district of Multan and when the district of Multan fell by the partition of India in Pakistan, Ram Narain had to be assigned Pakistan domicil till the time he expressed his unequivocal intention of giving up that domicil and acquiring Indian domicil and also took up his residence in India.
His domicil cannot be determined by his family coming to India and without any finding that he had established a home for himself.
Even if the animus can be ascribed to him the factum of residence is wanting in his case; and in the absence of that fact, an Indian domicil cannot be ascribed to Ram Narain.
The subsequent acquisition by Ram Narain of Indian domicil cannot affect the question of jurisdiction of Courts for trying him for crimes committed by him while he did not possess an Indian domicile The question in this case can be posed thus: Can it be said that Ram Narain at the time of the commission of the offence was domiciled in India ? That question can only be answered in one way, viz., that he was not domiciled in India.
Admittedly, then he was not a citizen of India because that status was given by the Constitution that came into force in January, 1950.
He had no residence or home in the Dominion of India.
He may have had the animus to come to India but that animus was also indefinite, and uncertain.
There is no evidence at all that at the moment he committed the offence he had finally made up his mind to take up his permanent residence in India, and a matter of this kind cannot be decided on conjectural grounds.
It is impossible to read a man 's mind but it is even more than impossible to say how the minds of people worked during the great upheaval of 1947.
707 The learned Attorney General argued that Ram Narain was a native Indian subject of Her Majesty before the 15th August, 1947, and that description continued to apply to him after the 15th August, 1947, whether he was in India or in Pakistan, but we think that the description 'Native subject of Her Majesty ' after the 15th of August, 1947, became applicable in the territory now constituted India only to residents of provinces within the boundaries of India, and in Pakistan to residents of provinces within the boundaries of Pakistan and till the time that Ram Narain actually landed on the soil of India and took up permanent residence therein he cannot be described to be domiciled in India or even a Native Indian subject of His Majesty domiciled in India.
For the reasons given above we are of the opinion that the decision of the High Court that Ram Narain could not be tried in any Court in India for offences committed in Mailsi in November, 1947, is right and that the Provincial Government had no power under section 188, Criminal Procedure Code, to accord sanction to his prosecution.
The result is that the appeal fails and is dismissed.
Appeal dismissed.
| The great grandfather of the appellant executed a trust deed in respect of certain properties.
The trustees were enjoined to.
apply the income of the trust towards charities as also for the benefit of the settlor and his family and descendants.
The appellant filed a suit to enforce his rights under the trust and the trial court granted him maintenance to the extent of Rs. 50/ per mensem out of the trust properties instead of the sum of Rs. 10/. allowed under the trust deed.
In appeal, however, the High Court dismissed the appellant 's suit and reversed the order of the trial court granting him the said increased maintenance.
In this Court The contentions of the appellant which fell for consideration were: (i) whether the dominant purpose of the trust was the maintenance of the settlor 's family, the grant to.
the charities being only secondary; (ii) whether the cy pres doctrine applied to the case, justifying the payment of maintenance money as decreed by the trial court to the appellant.
HELD: (i) The provisions in the deed of trust and the direction to the trustees, first to accumulate the income after meeting the expenses of assessment, quit rent and maramath and the monthly and annual expenses and secondly to purchase properties therewith were to provide income only for the aforesaid charity.
The words "for the aforesaid charity" were of important significance.
The entire accumulation was for charity.
The provisions regarding maintenance and education were subordinate to the provisions for meeting the expenses of the Utsavam to be celebrated in the specified Devasthanams.
[303 E F] Further the provisions regarding maintenance and education were to be at the sole discretion of the trustees who could stop the same.
This power of the trustees was a complete negation of the appellanT 's contention that the intention of the settlor was that education and maintenance expenses were the dominant purpose of the settlement.
The settlor could never have allowed his dominant intention to be repelled by a discretion conferred on the trustees to stop such expenses.
[303 G H] The tenor of the document thus pointed to the inescapable conclusion that the predominant and over whelming intention of/he settlor was to benefit the charities and provide for the same.
[304 A] (ii) The cy pres doctrine applies where a charitable trust is initially impossible or impracticable and the court applies the property cy pres.
viz. to some other charities as nearly as possible.
resembling the original trust.
In the present case, the maintenance and education expenses were neither charitable trust nor similar objects of charity and the High Court therefore rightly interfered with the trial court 's order granting increased maintenance at Rs. 50/ per mensem to the appellant.
[304 C D]
|
Appeal No. 322 of 1965.
Appeal from the judgment and decree dated December 5, 1960 of the Mysore High Court in Regular Appeal No. 81 of 1956.
A. K. Sen and R. Gopalakrishnan, for the appellants.
H. R. Gokhale, K. R. Chaudhuri and K. Rajendra Chaudhri for respondent No. 1.
The Judgment of the Court was delivered by Ramaswami, J.
This, appeal is brought by certificate from the judgment of the Mysore High Court dated December 5, 1960 in R. A. No. 81 of 1956.
120 The appellants and respondent No. 4 are the daughters and legal representatives of Savoy Ranganna who was the plaintiff in O.S. 34 of 1950 51 instituted in the court of the District Judge, Mysore.
The suit was filed by the deceased plaintiff for partition of his share in the properties mentioned in the schedule to the plaint and for granting him separate possession of the same.
Respondent No., 1 is the brother 's son of the Plaintiff.
The rela tionship of the parties would appear from the following pedigree: Savoy Ranganna (Sr) Rangamma Savoy Ranganna Chikka Ranganna (Died 45 Alamma (plaintiff) (Died in 1947 years ago (Deft. 2) Dodda Rangamma M. section R. Ranganna, 3 (Deft. 2 (a) (Deft. 1) Lakkamma Kenchanna (suppl, (D. W. 10) Def).
Chikka Rangamma PuttaRangamma Rangathayamma Chinnathayyamma (Deft. 3) (1st L. R. of (2nd L. R. of (3rd I R. Of plaintiff) plaintiff) plaintiff) The case of the plaintiff was that he and the defendants lived together as members of a Joint Hindu family till January 7, 1951, Plaintiff being the karta.
The plaintiff had no male issue but had only four daughters, Chikka Rangamma, Putta Rangamma, Rangathayamma and Chinnathayamma.
The first 2 daughters were widows.
The fourth daughter Chinnathayamma was living with her husband.
Except Chinnathayamma, the other daughters with their families had been living with the joint family.
The plaintiff became ill and entered 'Sharda Nursing Home for treatment as an in patient on January 4, 1951.
In order to safeguard the interests of his daughters the plaintiff, Savoy Ranganna issued a notice on January 8, 1951 to the defendants declaring his unequivocal intention to separate from them.
After the notices were registered at the post office certain well wishers of the family intervened and wanted to bring about a settlement.
On their advice and request the plaintiff notified to the post office that he intended to withdraw the registered notices.
But as no agreement could be subsequently reached between 'the parties the plaintiff.instituted the present suit on January 13 The 951 'for partition 'of his share of the joint family properties.
The suit was contested mainly by 121 respondent No. 1 who alleged that there was.
no separation of status either because of the notice of January 8, 1951 or because of the institution of the, suit on January 13, 1951.
The case (if respondent No. 1 was that Savoy Ranganna was 85 years of age and in a weak state of health and was not in a position to understand the contents of the plaint or to affix his signature or thumb impression thereon as well as on the Vakalatnama.
As regards the notice of January 8,1951, respondent No. 1 asserted that there was no communication of any such notice to him and, in any case, the notices were withdrawn by Savoy Ranganna unconditionally from the post office.
It was therefore contended that there was no disruption of the joint family at the time of the death of Savoy Ranganna and the appellants were not entitled to a decree for partition as legal representatives of Savoy Ranganna.
Upon the examination of the evidence adduced in the case the trial court held that Savoy Ranganna had properly affixed his thumb impression on the plaint and the Vakalatnama and the presentation of the plaint was valid.
The trial court found that Savoy Ranganna was not dead by the time the plaint was presented.
On the question whether Savoy Ranganna was separate in status the trial court held that the notices dated January 8, 1951 were a clear and unequivocal declaration of the intention of Savoy Ranganna to become divided in status and there was sufficient communication of that intention to respondent No. 1 and other members of the family.
The trial court was also of the opinion that at the time of the issue of the notices dated January 8, 1951 and at the time of execution of the plaint and the Vakalatnama dated January 13, 1951 Savoy Ranganna was in a sound state of mind and conscious of the consequences of the action he 'Was taking.
The trial court accordingly granted a decree in favour of the appellants.
Respondent no took the matter in appeal to the Mysore High Court which by its judgment dated December 5, 1960 reversed the decree of the trial court and allowed the appeal.
Hegde, J. one of the members of the Bench held that the suit could not be said to have been instituted by Savoy Ranganna as it was not proved that Savoy Ranganna executed the plaint.
As regards the validity of the notice exhibit
A, and as to whether it caused any disruption in the, joint family status, Hegde, J. did not think it necessary to express any opinion.
The other member of the Bench, Mir.
lqbal Husain, J., held that the joint family of which the deceased Savoy Ranganna was a member had not been disrupted by the issue of the notice dated January 8, 1951.
The view taken by Mir lqbal Husain, J. was that there was no proof that the notice was communicated either to respondent No. 1 or other members of the family and, in any event, the notice had been withdrawn by Savoy Ranganna and so there was no severance of joint status from the date of the notice.
L4Sup.
C.1/68 9 122 The first question to be considered in this appeal is whether Savoy Ranganna died as a divided member of the joint family as alleged in the plaint.
It is admitted that Savoy Ranganna was very old, about 85 years of age and was ailing of chronic diarrhoea.
He was living in the family house till January 4, 1951 when he was removed to the Sharda Nursing Home where he died on January 13, 1951 at 3 p.m According to the case of respondent No. 1 Savoy Ranganna had a paralytic stroke in 1950 and was completely bed ridden thereafter and his eyesight was bad for 5 to 6 years prior to his death.
It was alleged in the written statement that Savoy Ranganna was unconscious for some days prior to his death.
The case of respondent No. 1 on this point is dis proved by the evidence of D.W. 6, Dr. Venkata Rao who was in charge of the Sharda Nursing Home on the material dates.
This witness admitted that the complaint of Savoy Ranganna was that he was suffering from chronic diarrhoea for over five months.
He was anaemic but he was not suffering from any attack of paralysis.
As regards the condition of Savoy Ranganna on January 8, 1951, the evidence of P.W. 1, Dr. Subbaramiah is important.
This witness is the owner of the Sharda Nursing Home and he has testified that the notice exhibit A was read over to Savoy Ranganna and after getting it read the latter affixed his thumb mark thereon.
The witness asked Savoy Ranganna whether he was able to understand the contents of the notice and the latter replied in the affirmative.
The witness has certified on the notice, exhibit A 1 that Savoy Ranganna was conscious when he affixed his left thumb mark, to the notice in his presence.
No reason was suggested on behalf of the respondents why the evidence of this witness should be disbelieved.
The trial court was highly impressed by the evidence of this witness and we see no reason for taking a different view.
The case of the appellants is that respondent No. 1 had knowledge of the notice, exhibit A because he was present in the Nursing Home on January 8, 1951 and he tried to snatch away the notice from the hands of P.W. 1 but he was prevented from.
so doing.
P.W. 5, Chinnanna stated in the course of the evidence that after P.W. 1 had signed the certificate in all the three copies, respondent No. 1 and one Halappa came to the ward and tried to snatch away the notices.
The first respondent tried to snatch away the copy exhibit A 1 that was in the hands of Dr. Subbaramiah and attempted to tear it.
Dr. Subbaramiah somehow prevented respondent No. 1 from taking away exhibit A and handed it over to P.W. 5.
The evidence of P.W. 5 with regard to the "snatching incident" is corroborated by Dr. Subbaramiah who stated that after Savoy Ranganna had executed the notices and he had signed the certificates, one or two persons came and tried to snatch the document.
P.W. 1 is unable to identify the first respondent as one of the persons who had taken part in the "snatching incident".
The circumstance that P.W. 1 was unable to identify respondent No. 1 123 is not very material, because the incident took place about three years before he gave evidence in the court, but his evidence with regard to the "snatching incident ' strongly corroborates the allegation of P.W. 5 that it was respondent No. 1 who bad come into the Nursing Home and attempted to snatch the notice.
There is also another circumstance which supports the case of the appellants that respondent No. 1 had knowledge of the contents of exhibit A and of the unequivocal intention of Savoy Ranganna to become divided in status from the joint family.
According to P.W. 5 res pondent No. 1 and his wife and mother visited Savoy Ranganna in the Nursing Home later on and pressed him to withdraw the notices promising that the matter will be amicably settled.
Sowcar T. Thammanna also intervened on their behalf.
Thereafter the deceased plaintiff instructed his grandson P.W. 5 to withdraw the notice.
Accordingly P.W. 5 prepared two applications for the withdrawal and presented them to the postal authorities.
The notice, exhibit A meant for the first respondent and exhibit E meant for the original second defendant were withheld by the postal autho rities.
These notices were produced in court by the postal authorities during the hearing of the case.
In our opinion, the evidence of P.W. 5 must be accepted as true, because it is corroborated by the circumstance that the two notices, Exs.
A and E were intercepted in the post office and did not reach their destination.
This circumstance also indicates that though there was no formal.
communication of the notice, exhibit A to the first respondent, he had sufficient knowledge of the contents of that notice and was fully aware of the clear and unequivocal intention of Savoy Ranganna to become separate from other members of the joint family.
It is now a settled doctrine of Hindu Law that a member of a joint Hindu family can being about his separation in status by a definite, unequivocal and unilateral declaration of his intention to separate himself from the family and enjoy his share in severalty.
It is not necessary that there should be an agreement between all the coparceners for the disruption of the joint status.
It is immaterial in such a case whether the other coparceners give their assent to the separation or not.
The jural basis of this doctrine has been expounded by the early writers of Hindu Law.
The relevant portion of the commentary of Vijnaneswara states as follows [And thus though the mother is having her menstrual courses (has not lost the capacity to bear children) and the father has attachment and does not desire a partition, yet by the will (or desire) of the son a partition of the grandfather 's wealth does take place]" 124 Saraswathi Vilasa, placitum 28 states [From this it is known that without any speech (or explanation) even by means of a determination (or resolution) only, partition is effected, just an appointed daughter is constituted by mere intention without speech.]" Viramitrodaya of Mitra Misra (Ch. 11.
23) is to the following effect: [Here too there is no distinction between a partition during the lifetime of the father or after his death and partition at the desire of the sons may take place or even by the desire (or at the will) of a single (coparcener)].
" Vyavahara Mayukha of Nilakantabhatta also states [Even in the absence of any common (joint family) property, severance does indeed result by the mere declaration 'I am separate from thee ' because severance is a. particular state (or condition) of the mind and the declaration is merely a manifestation of this mental state (or condition).]" (Ch.
IV, section iii I).
Emphasis is laid on the "budhi visesha" (particular state or condition of the mind) as the decisive factor in producing a severance in status and the declaration is stated to be merely "abhivyanjika" or manifestation which might vary according to circumstances.
In Suraj Narain vs Iqbal Narain(1) the Judicial Committee made the following categorical statement of the legal position : "A definite and unambiguous indication by one member of intention to separate himself and to enjoy his share in severalty may amount to separation.
But to have that effect the intention must be unequivocal and clearly expressed. .
Suraj Narain alleged that he separated a few months later; there is, however, no (1) I.L.R. 35 All. 80.
(P.C.) 125 .lm15 writing in support of his allegation, nothing to show that at that time he gave expression to an unambiguous intention on his part to cut himself off from the joint undivided family.
" In a later case Girja Bai vs Sadashiv Dhundiraj(1) the Judicial Committee examined the relevant texts of Hindu Law and referred to the well marked distinction that exists in Hindu law between a severance in status so far as the separating member is concerned and a de facto division into specific shares of the property held until then jointly, and laid down the law as follows : "One is a matter of individual decision, the desire on the part of any one member to sever himself from the joint family and to enjoy his hitherto undefined or unspecified share separately from the others without being subject to the obligations which arise from the joint status; whilst the other is the natural resultant from his decision, the division.
and separation of his share which may be arrived at either by private agreement among the parties, or on failure of that, by the intervention of the Court.
Once the decision has been unequivocally expressed and clearly intimated to his co sharers, his right to his right to have his share allocated separately from has a title is unimpeachable; neither the co sharers can question it nor can the Court examine his conscience to find out whether his reasons for separation were well founded or sufficient; the Court has s imply to give effect to his right to have his share allocated separately from the others.
In Syed Kasam vs Jorawar Singh (2), Viscount Cave, in delivering the judgment of the Judicial Committee, observed "It is settled law that in the case of a joint Hindu family subject to the law of the Mitakshara, a severance of estate is effected by an unequivocal declaration on the part of one of the joint holders of his intention to hold his share separately, even though no actual division takes place : and the commencement of a suit for partition has been held to be sufficient.to _effect a severance in interest even before decree." These authorities were quoted with approval by this Court in Addagada Raghavamma vs Addagada Chenchamma(3), and it was held that a member of a joint Hindu family seeking to separate himself from others will have to make known his intention to other members of his family from whom he seeks to separate.
The (1) I.L.R. (2) I.L.R. (3) ; 126 correct legal position therefore is that in a case of a joint Hindu family subject to Mitakshara law, severance of status is effected by an unequivocal declaration on the part of one of the jointholders of his intention to hold the share separately.
It is, how.ever, necessary that the member of the joint Hindu family seeking to separate himself must make known his intention to other member of the family from whom he seeks to separate.
The process of communication may, however, vary in the circumstances of each particular case.
It is not necessary that there ' should be a formal despatch to or receipt.
by other members Of the family of the communication announcing the intention to divide on the part of one member of the joint family.
The proof of such a despatch or receipt of the communication is not essential, nor its absence fatal to the severance of the status.
It is, of course, necessary that the declaration to be effective should reach the person or persons affected by some process appropriate to the given situation and circumstances of the particular case.
Applying this principle to the facts found in the present case, we are of opinion that there was a definite and unequivocal declaration of his intention to separate on the part of Savoy Ranganna and that intention was conveyed to respondent No. 1 and other members of the joint family and respondent No. 1 had full knowledge of the intention of Savoy Ranganna.
It follows therefore that there was a division of status of Savoy Ranganna from the joint Hindu family with effect from January 8, 1951 which was the date of the notice.
It was, however, maintained on behalf of the respondents that on January 10, 1951 Savoy Ranganna had decided to withdraw the two notices, Exs.
A & E and he instructed the postal authorities not to forward the notices to respondent No. 1 and other members of the joint family.
It was contended that there could be no severance of the joint family after Savoy Ranganna had decided to withdraw the notices.
In our opinion, there is no warrant for this argument.
As we have already stated, there was a unilateral declaration of an intention by Savoy Ranganna to divide from the joint family and there was sufficient communication of this intention to the other coparceners and therefore in law there was in consequence a disruption or division of the status of the joint family with effect from January 8, 1951.
When once a communication of the intention is made which has resulted in the severance of the joint family status it was not thereafter open to Savoy Ranganna to nullify its effect so as to restore the family to its original joint status.
If the intention of Savoy Ranganna had stood alone without giving rise to any legal effect, it could, of course, be withdrawn by Savoy Ranganna, but having communicated the intention, the divided status of the Hindu joint family had already come into existence and the legal consequences had taken effect.
It was not, therefore, possible for Savoy Ranganna to get back 127 to the old position by mere revocation of the intention.
It is, of course, possible for the members of the family by a subsequent agreement to reunite, but the mere withdrawal of the unilateral declaration of the intention to separate which already had resulted in the division in status cannot amount to an agreement to reunite.
It should also be stated that the question whether there was a subsequent agreement between the members to reunite is a question of fact to be proved as such.
In the present case, there is no allegation in the written statement nor is there any evidence on the part of the respondents that there was any such agreement to reunite after January.8, 1951.
The view that we have expressed is borne out by the decision of the Madras High Court in Kurapati Radhakrishna vs Kurapati Satyanarayana(1) in which there was a suit for declaration that the sales in respect of certain family properties did not bind the plaintiff and for partition of his share and possession thereof and the plaint referred to an earlier suit.
for partition instituted by the 2nd defendant in the later suit.
It was alleged in that suit that 'the plaintiff being unwilling to remain with the defendants has decided to become divided and he has filed this suit for separation of his one fifth share in the assets remaining after discharging the family debts separated and for recovery of possession of the same '.
All the defendants in that suit were served with the summons and on the death of the 1st defendant therein after the settlement of issues, the plaintiff in that action made the following endorsement on the plaint : "As the 1st defendant has died and as the plaintiff had to manage the family, the plaintiff hereby revokes the intention to divide expressed in the plaint and agreeing to remain as a joint family member, he withdraws the suit. ' It was held by the Madras High Court that a division in status had already been brought about by the plaint in the suit and it was not open to the plaintiff to revoke or withdraw the unambiguous intention to separate contained in the plaint so as to restore the joint status and as such the members should be treated as divided members for the purpose of working Out their respective rights.
We proceed, to consider the next question arising in this appeal whether the plaint filed on January 13, 1951 was validly executed by Savoy Ranganna and whether he had affixed his thumb impression thereon after understanding its contents.
The case of the appellants is that Sri M. section Ranganathan prepared the plaint and had gone to the Sharda Nursing Home at about 9 30 or 10 a.m. on January 13, 1951.
Sri Ranganathan wrote out the plaint which was in English and translated it to Savoy Ranganna who approved the same.
P.W. 2, the clerk of Sri Ranganathan has deposed to this effect.
He took the ink pad and affixed the left thumb impression of Savoy Ranganna on the plaint and also on the Vakalatnama.
There is the attestation of Sri M. section Ranganathan on the (1) (1948)2M.L.J.331.
128 plaint and on the Vakalatnama.
The papers were handed over to P.W. 2 who after purchasing the necessary court fee stamps filed the plaint and the Vakalatnama in the court at about 11.30, a.m. or 12 noon on the same day.
The evidence of P.W. 2 is corroborated by P.W. 5 Chinnanna.
Counsel on behalf of the respondents.
, however, criticised the evidence of P.W. 2 on the ground that the doctor, D.W. 6 had said that the mental condition of the patient was bad and he was not able to understand things when he examined him on the morning of January 13, 1951.
D.W. 6 deposed that he examined Savoy Ranganna during his usual rounds on January 13, 1951 between 8 and 9 a.m. and found "his pulse imperceptible and the sounds of the heart feeble".
On the question as to whether Savoy Ranganna was sufficiently conscious to execute the plaint and the Vakalatnama, the trial court has accepted the evidence of P.W. 2, Keshavaiah in preference to that of D.W. 6.
We see no reason for differing from the estimate of the trial court with regard to the evidence of P.W. 2.
The trial court has pointed out that it is difficult to accept the evidence of D.W 6 that Savoy Ranganna was not conscious on the morning of January 13, 1951.
In cross examination D.W. 6 admitted that on the night of January 12, 1951 Savoy Ranganna was conscious.
He further admitted that on January 13, 1951 he prescribed the same medicines to Savoy Ranganna as he had prescribed on January 12, 1951.
There is no note of the necessary data in the case sheet, exhibit I to suggest that Savoy Ranganna was not conscious an January 13, 1951.
It is therefore not unreasonable assume that the condition of Savoy Ranganna was the same on January 13 ', 1951 as on January 12, 1951 and there was no perceptible change noticeable in his condition between the two dates.
In these circumstances it is not possible to accept the evidence of D.W. 6 that Savoy Ranganna was unconscious on the morning of January 13, 1951.
It was pointed out on behalf of the respondents that D.W. 7, Miss Arnold has also given evidence that the condition of Savoy Ranganna became worse day by day and on the last day his condition was very bad and he could not understand much, nor could he respond to her calls.
The trial court was not.
impressed with the evidence of this witness.
In our opinion, her evidence suffers from the same infirmity as of D.W. 6, because the case sheet, exhibit I does not corroborate her evidence.
It is also difficult to believe that D.W. 7 could remember the details of Savoy Ranganna 'section case after a lapse of three years without the help of any written case sheet There is also an important discrepancy in the evidence of D.W. 7.
She said that on January 13, 1951 she called D.W. 6 at 12 noon since the condition of the patient was very bad, but D.W. 6 has said that he did not visit Savoy Ranganna after 8 or 9 a.m. on that date.
Comment was made by Counsel on behalf of the respondents that Sri Ranganathan was not examined as a witness to prove that he had prepared 129 the plaint and Savoy Ranganna had affixed his thumb impression in his presence.
In our opinion, the omission of Sri Ranganathan to give evidence in this case is unfortunate.
It would have been proper conduct on his.
part if he had returned the brief of the appellants and given evidence in the case as to the execution of the plaint and the Vakalatnama.
But in spite of this circumstance we consider that the, evidence of the appellants or, this aspect of the case must be accepted as true.
It is necessary to notice that the plaint and the Vakalatnama are both counter signed by Sri Ranganathan a responsible Advocate and it is not likely that he would subscribe his signatures to these documents if they had been executed by a person who was unable to understand the contents thereof.
As we have already said, it is unfortunate that the Advocate Sri Ranganathan has not been examined as a witness, but in spite of this omission we are satisfied that the evidence adduced in the case has established that Savoy Ranganna validly executed the plaint and the Vakalatnama and that he was conscious and was in full possession of his mental faculties at the time of the execution of these two documents.
It follows therefore that the, appellants and respondent No. 4 who are the daughters and legal representatives of Savoy Ranganna are entitled to a decree in the terms granted by the District Judge of Mysore.
For the reasons expressed, we hold that this appeal should be allowed, the judgment of the Mysore High Court dated December5, 1960 in R.A. No. 81 of 1956 should be set aside and that of ' the District Judge, Mysore dated October 31, 1955 in O.S. No. 34 of 1950 51 should be restored.
The appeal is accordingly allowed with costs.
V.P.S. Appeal allowed.
| The karta of a joint Hindu family fell ill.
He had no male issue arid in order to safeguard the interests of the appellant and fourth respondent, who were his daughters, he issued registered notices to the other members of the joint family declaring his unequivocal intention to separate from them.
Later, he decided to withdraw the notices and instructed the postal authorities not to forward them, but, the unequivocal declaration of his intention to separate was conveyed to the other members, of the joint family and they had full knowledge of such intention.
A few days thereafter he instituted a suit for partition and possession of his share of the Property.
The plaint was prepared by a responsible advocate, who explained the contents to the plaintiff (the karta), who was conscious and in full possession of his mental faculties, had his thumb impression affixed on the plaint and Vakalatnama, signed them both and had them filed in court.
After the suit was filed on the same day, the plaintiff died.
The trial court decreed (the suit, but the High Court, in appeal, reversed the decree.
In appeal to this Court, HELD: The mere withdrawal of the Plaintiffs unilateral declaration of intention to separate, which already had resulted in his division in status because of the communication of the intention to the other members, did not nullify its effect so as to restore the family to its original joint status, or amount to an agreement to reunite; and (the appellant and the fourth respondent, as the legal representatives of the plaintiff, were entitled to the decree.
[126 G H; 127 A B; 129 D] Radhakrishna vs Satyanarayana, , approved.
|
Appeal No. 717 of 1961.
Appeal by special leave from the judgment and order dated April 10, 1961 of the Assam High Court in Civil Revision No. 10 of 1961.
D. R. Prem, P. D. Menon for R. N. Sachthey, for the appellants.
The respondent did not appear.
626 1963.
May 7.
The judgment of the Court was delivered by RAGHUBAR DAYAL J.
This appeal, by special leave, is directed against the order of the High Court of Assam rejecting the revision application, under section 115 of the Code of Civil Procedure, hereinafter called the Code, of the appellants against the order of the Additional Subordinate, Judge, Gauhati, in a money suit to the effect that he had jurisdiction to try the suit.
The contention of the appellants is that this view of the Subordinate judge, confirmed by the High Court, is wrong.
To appreciate the contention for the appellants, the facts of the case may be stated.
The suit was instituted by the plaintiff respondent against the Union of India and the Northern Frontier Railway represented by the General Manager, having its headquarters at Pandu.
It related to a claim for recovery of a sum of Rs. 8,250/ on account of nondelivery of the goods which had been consigned to the plaintiff 's firm run tinder the name and style of M/s. Ladu Lal Jain.
The consignment consisted of 134 bags of rice and was booked from Kalyanganj station of defendant No. 2 for carriage to Kanki station of the same defendant on April 13, 1958.
The goods consigned were no, delivered to the plaintiff and hence the suit, after serving a notice under section 77 of the Indian Railways Act on the defendant railway and also serving a notice tinder section 80 of the Code.
It was alleged in the plaint that the cause of action arose at Pandu within the jurisdiction of the Court at Gauhati, the place where notice under section 80 of the Code was duly served upon the defendant railway and that the suit was filed in the Court within the jurisdiction of which the defendant railway had 627 its principal place of business by virtue of its held quarters being at Pandu.
The two defendants filed a joint written statement.
Kalyanganj is in West Bengal and Kanki is in the State of Bihar.
Gauhati is in the State of Assam.
It was contended inter alia that Gauhati Court had no territorial jurisdiction to try the suit as neither of the aforesaid railway stations was within its jurisdiction and that the consignment never travelled within any part of the State of Assam and therefore the cause of action could not arise within the jurisdiction of any Court in Assam It was further contended that mere service of notice, which was not admitted, on the defendants at a place within the jurisdiction of the Court, could not vest territorial jurisdiction on it and that defendant No. 1, the Union of India, had no principal place of business at Pandu or any other place within the jurisdiction of the Court, its head quarters office being at New Delhi.
It was also stated that defendant No. 2 is owned and managed by defendant No. 1, that the office of defendant No. 2 at Pandu was also owned and controlled by defendant No. 1 and that the office at Pandu was a branch office of the Union of India which was controlled by defendant No. I from New Delhi.
Relying on the case reported as P.C. Biswas vs Union of India (1), the Trial Court decided the preliminary issue about jurisdiction against the defendants holding that the principal place from which the railway administrator in a particular area is carried on is the principal place of business for the purpose of section 20 of the (ode.
The single judge of the High Court rejected the revision also on the basis of the same decision of his Court.
The territorial jurisdiction of a Court is in general determined by the provisions of section 20 of the Code which reads : "Subject to the limitations aforesaid, ever suit 628 shall be instituted in a Court within the local limits of whose jurisdiction (a) the defendant, or each of the defendants where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain or (b) any of the defendants, where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides,.
or carries on business, or personally works for gain, provided that in such case either the leave of the Court is given, or the defendants who do not reside, or carry on business, or personally work for gain, as aforesaid, acquiesce in such institution ; or (c) the cause of action, wholly or in part, arises.
Explanation I : Where a person has a permanent dwelling at one place and also temporary residence at another place, he shall be deemed to reside at both places in respect of any cause of action arising at the place where he hag such temporary residence.
Explanation 11 : A corporation shall be deemed to carry on business at its sole or principal office in India or in respect of any cause of action arising at any place where it has also a subordinate office, at such place.
" The principle behind the provisions of clauses (a) and (b) of section 20 is that the suit be instituted at a place 629 where the defendant be able to defend the suit without undue trouble.
The expression 'voluntarily resides or personally works for gain ' cannot be appropriately applied to the case of the Government.
The Government can however carry on business.
The mere fact that the expression 'carries on business ' is used along with the other expressions, does not mean that it would apply only to such persons to whom the other two expires ions regarding residence or of personally working for gain would apply.
The sole contention raised for the appellants in this Court is that the running of railways by the Union of India cannot be said to amount to its carrying on business and that therefore the fact that the headquarters of the Northern Frontier Railway Administration is at Pandu within the jurisdiction of the Court at Gauhati does not give the Court jurisdiction under section 20 of the Code.
The contention is based on the reasoning that any undertaking run by the Government, even if it amounts to the carrying on of a business when run by a private individual, would not be the carrying on of business by the Government if there was no element of profit making in it.
There is no allegation in the written statement that the Government is not running railways for profit.
No issue was framed about it.
The Court below recorded no decision on the point.
It cannot be presumed that the Government is not making a profit from its running the railways in the country or is not running it with a profit motive.
The fact that the Government runs the railways for providing quick and cheap transport for people and goods and for strategic reasons will not convert what amounts to the carrying on of a business into an activity of the State as a sovereign body.
630 Article 298 of the Constitution provides that the executive power of the Union and of each State shall extend to the carrying on of any trade or business and cl.
(6) of article 19 provides that nothing in sub cl.
section (g) of cl.
(1) of that Article shall prevent the State from making any law relating to the carrying 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.
These provisions clearly indicate that the State can carry on business and can even exclude citizens completely or partially from carrying on that business.
Running of railways is a business.
that is not denied.
Private companies and individuals carried on the business of running railways, prior to the State taking them over.
The only question then is whether the running of railways ,ceases to be a business when they are run by Government.
There appears to be no good reason to hold that it is so.
It is the nature of the activity which defines its character.
Running of railways is such an activity which comes within the expression 'business '.
The fact as to who runs it and with what motive cannot affect it.
This Court bad occasions to detemine the nature of certain activities of Government.
The rationale of those cases is a good guide for determining the point before us.
In State of Bombay vs The Hospital Mozdoor Sabha(1) ' the question was whether the relevant provisions of the , applied to the group of hospitals run by the State of Bombay and whether they are 'industry ' within the meaning of that Act.
The decision of the question depended on the interpretation of the definition of 'industry ' prescribed by section 2 (j) of the Act.
This section provides that industry means any business, trade, undertaking etc., of employers.
In considering the question it became necessary to enquire whether that activity, i.e., the running of the (1) 631 hospitals, would be an undertaking if it is carried on by a private citizen or a group of private citizens.
It was field that if a hospital is run by private citizens for profit, it would be an undertaking very much like the trade or business in their conventional sense.
It was observed at p. 878 : "Thus the character of the activity involved in running a hospital brings the institution of the hospital within section 2.(j).
Does it make any difference that the hospital is run by the Government in the interpretation of the word undertaking ' in section 2 (j) ? In our opinion, the answer to this question must be in the negative.
It is the character of the activity which decides the question as to whether the activity in question attracts the provision of section 2(j); who conducts the activity and whether it is conducted for profit or not do not make a material difference " To similar effect were the observations in The Corporation of the City of Nagpur vs Its employees where it was said : "If a service rendered by an individual or a private person would be an industry, it would equally be an industry in the hands of a corporation.
" It was earlier said at p. 960 "Monetary considerations for service is, therefore, not an essential characteristic of industry in a modern State." "Barring the regal functions of a municipality, if such other activities of it, if undertaken by an individual, would be industry, then they would equally be industry in the hands of a municipality, (1) [1960] a S.C.R. 942, 962, 632 Lastly, in Satya Narain vs District Engineer, P.W.D. (1), the question for determination was whether plying motor buses by the Government by way of commercial activity amounts to its running it on a public service.
In determining this question, this Court observed at p. 1163: "It is undoubtedly not easy to define what is "Public service ' and each activity has to be considered by itself for deciding whether it is carried on as a public service or not.
Certain activities will undoubtedly be regarded as public services, as for instance, those undertaken in the exercise of the sovereign power of the State or of governmental functions.
About these there can be no doubt.
Similarly a pure business undertaking though run by the Government cannot be classified as public service.
But where a particular activity concerns a public utility a question may arise whether it falls in the first or the second category.
The mere fact that that activity may be useful to the public would not necessarily render it public service.
An activity however beneficial to the people and however useful cannot, in our opinion, be reasonably regarded as public service if it is of a type which may be carried on by private individuals and is carried on by government with a distinct profit motive.
It may be that plying stage carriage buses even though for hire is an activity undertaken by the Government for ensuring the people a cheap, regular and reliable mode of transport and is in that sense beneficial to the public.
It does not, however, cease to be a commercial activity if it is run with profit motive.
Indeed even private operators in order to attract custom are also interested in providing the same facilities to the public as the Government undertaking provides.
Since that is so, it is difficult (1) A, I, R. 633 to see what difference there is between the activity carried on by private individuals and that carried on by Government.
By reason of the fact that a commercial undertaking is owned and run by the State it does not ipso facto become a "public service '.
" This case simply held that commercial activity carried on with profit motive cannot be held to be 'public service '.
It does not hold that such activity carried on by Government will not be "business ' if conducted without profit motive.
We are of opinion that 'profit element ' is not a necessary ingredient of carrying on business, though usually business is carried on for profit.
It is to be presumed that the Railways are run on a profit basis, though it may be that occasionally they are run at a loss.
The case reported as Director of Rationing & Distribution vs The Corporation of Calcutta (1), relied on for the appellants is really of no help to them.
It was in connection with the sovereign activities of the State that it was said that the State was not bound by any statute unless the statute provided to that effect in express terms or by necessary implication.
The contention that the Government could not get the benefit of this law in connection with its business activities was neither repelled nor considered.
It was held to have no foundation as there was nothing on the record that the Food Department of the Government of West Bengal by undertaking rationing and distribution of food on a rational basis had embarked upon any trade or business and, in the absence of any such indication, it appeared that the department was discharging the elementary duty of a sovereign to ensure proper and equitable distribution of available foodstuffs with a view to maintaining peace and good government.
(1) [1961] I. &.C.
A? 158, 634 In view of what we have said above, we hold that the, Union of India carries on the business of running railways and can be sued in the Court of the Subordinate Judge of Gauhati within whose territorial jurisdiction the headquarters of one of the railways run by the Union is situated.
We accor dingly dismiss the appeal with costs.
Appeal dismissed.
| Nine persons including K instituted a suit for ejectment and recovery of rent against two defendants and obtained a decree, but on appeal, the District judge set aside the decree against defendant No. 2.
The plaintiffs then filed a second appeal in the High Court on February 29, 1952, and while the appeal was pending K died on September 8, 1955.
No application for bringing his legal representatives on the record was, however, made within the prescribed time, and the appeal abated so far as K was concerned.
When the appeal of the appellants other than K came up for hearing on September 1, 1958, a preliminary objection was taken for the respondents that the entire appeal had abated on the ground that the interest of the surviving appellants and the deceased appellant were joint and indivisible and that in the event of the success of the appeal there would be two inconsistent and contradictory decrees.
The appellants claimed that the appeal was maint.
ainable on the grounds that the surviving appellants could have filed the appeal against the entire decree in view of the provisions of O. 41, r. 4, of the Code of Civil Procedure, that they were, therefore, competent to continue the appeal even after the death of K and the abatement of the appeal so far as he was concerned, and that the Court could have reversed or varied the whole decree in favour of all the original plaintiffs and could have granted relief with respect to the rights and interests of K as well.
Held (1) that the provisions of r. 4 of 0.
41 of the Code of Civil Procedure were not applicable, since the second appeal in the High Court was not filed by anyone or by even some of the plaintiffs as an appeal against the whole decree, but was filed by all the plaintiffs jointly, and the surviving appel 550 lants could not be said to have filed the appeal as representing K. (2) that an appellate court had no power to proceed with the appeal and to reverse and vary the decree in favour of all the plaintiffs or defendants under O. 41, r. 4, of the Code of Civil Procedure, when the decree proceeded on a ground comm.
on to all the plaintiffs or defendants, if all the plaintiffs or the defendants appealed from the decree and any of them died and the appeal abated so far as he was concerned under O. 22, r. 3.
Ramphal Sahu vs Babu Satdeo Jha, I.L.R. 19 Pat. 870; Amin Chand vs Baldeo Sahai Ganga Sahai, I.L.R. ; Baij Nath vs Ram Bharose, I.L.R. 1953 (2) All. 434; Nanak vs Ahmad Ali, A.I.R. 1946 Lah. 399; Pyarelal vs Sikhar, Chand, I.L.R. 1957 M.P. 21; Raghu Sutar vs Narusingha Nath, A.I.R. 1959 Orissa 148 ; Venkata Ran Rao vs Narayana, A. I.R. and Sonahar Ali vs Mukbul Ali, A.I.R. 1956 Assam 164, approved.
Shripad Balwant vs Nagu Kusheba, I.L.R. ; Satula Bhattachariya vs Asiruddin Shaikh, I.L.R. and Somasundaram Chettiar vs Vaithilinga Mudaliar, I.L.R. , disapproved.
(3) that the provisions of O. 41, r. 33 were 'not applicable since the appeal by the surviving appellants was not competent in the circumstances of the case.
Mohomed KhaleeJ Shirazi & Sons vs Lee Tanneries 53 I.A. 84, relied on.
|
iminal Appeal No. 9 of 1955.
Appeal by special leave from the Judgment and Order dated the 26th September, 1951, of the Hyderabad High Court in Criminal Confirmation No. 638/6 of 1951 and Criminal Appeal No. 770 of 1951, arising out of the Judgment and Order dated the 27th June, 1951, of the Court of the Sessions Judge, Osmanabad, in Criminal Case No. 12/8 of 1951.
525 R. Patnaik for the appellant.
Porus A. Mehta and P. G. Gokhale for the respondent.
September 27.
The Judgment of the.
Court was delivered by BOSE J. This is another of those cases in which Courts are compelled to acquit because Magistrates and Sessions Judges fail to appreciate the importance of section 342 of the Criminal Procedure Code and fail to carry out the duty that is cast upon them of questioning the accused properly and fairly, bringing home to his mind in clear and simple language the exact case he has to meet and each material point that is sought to be made against him, and of afford ing him a chance to explain them if he can and so desires.
Had the Sessions Judge done that in this case it is possible that we would not have been obliged to acquit.
The facts are simple.
The appellant Machander was charged with the murder of one Manmatb.
Machander 's brother Gona was also challaned but as he absconded he could not be tried.
The appellant and the deceased and Gona reside in the same village.
There was some ill feeling between the appellant and the deceased and it can be accepted that Gona shared his brother 's sentiments because, so far as the latest cause for enmity goes, Gona is equally concerned; and this also applies to Pandu, the appellants father, and Bhima, another brother.
The causes for enmity are the following.
In or about the year 1947 the appellant appears to have stolen a pair of bullocks and a cart belonoing to the deceased.
The deceased prosecuted him for the theft and also instituted a civil suit for the price of the cart 'and bullocks.
He succeeded in both cases.
The appellant was convicted of the theft and sent to jail.
A decree was also passed against him for Rs. 520 and that decree was duly executed.
We now come to the events immediately preceding the murder.
The appellant and his family took forcible possession of some land belonging to the 526 deceased 's sister Parubai.
She sued the whole family for possession of this land, that is to say, she impleaded the appellant 's father Pandu, the appellant and his two brothers Bhima and Gona.
The last hearing was on 15 12 1950 and the decision was announced on 16 12 1950.
It was in Parubai 's favour.
The deceased conducted this litigation on behalf of his sister.
He was present in Court on the 15th and was present at Parenda, where the Court is situate, up to 3 P.m.
on the 16th, the day the decision was announced.
That was the last that was seen of him.
These facts are said to be the cause of the ill feeling.
But, as the facts themselves indicate, a similar cause for enmity (though not to the same degree) could be assigned to the father and the other brothers; equally, they had similar opportunities.
The movements of the appellant have been traced to Parenda and back but not the movements of the rest of the family.
So it is not shown that they had no similar opportunity to murder.
It can however be accepted that cause for enmity on the appellant 's part is established.
It is proved that the deceased went to Parenda on the 15th for the last hearing of the case and that he was also there on the 16th up to 3 p.m.
It is also proved that the appellant was in Court on the 15th and that he was in Parenda on the following day.
It can be accepted that both the deceased and the appellant were present in Court at the same time on the 15th and that therefore the appellant knew that the deceased had attended the Court that day.
But there is no proof that the two met each other or that either knew about the movements of the other on the 16th.
All we know is that both went to see their respective pleaders at different places and times and learned the result of the case.
Four or five days after the case, the appellant came home but not the deceased.
The deceased 's son Shantiling (P.W. 10), who knew that the appellant bad also gone to Parenda for the case, asked him where his father was.
The appellant said that the father had not attended court.
This made the son 527 anxious, 'so he went to Parenda to make enquiries.
The pleaders there told him that his father had attended court on the 15th and that he was in Parenda till,3 P.m. on the 16th.
Shantiling (P.W. 10) immediately informed the police that his father was missing and gave them a description of him and also a list of the things he was wearing and a description of the horse he was riding.
This was on the 26th.
Three days later, on the 29th, he lodged a regular complaint and said that he was afraid his father had been murdered and said that he suspected the appellant and his brother Gona.
The appellant was arrested the same day and after his arrest he led the police and Panchas to a place where blood stained earth and grass were found and a bloo dstained stone, also some of the articles which Shantiling (P.W. 10) had described to the police on the 26th, namely pieces of a silver linga, two silver kadas, a silver spike and a white gilt button.
All except the kadas were found to be stained with human blood.
About 25 paces from here the appellant pointed out another place where the corpse of the deceased was found to be buried.
Pearl ear rings and a kardoda of yarn with three iron keys were still on the body.
They were all stained with human blood and are proved to have belonged to the deceased.
On the 1st of January 1951 the appellant took the police and the Panchas to a place where two saddle straps and two iron stirrups were buried.
One of the stirrups was stained with human blood.
On the 3rd the reins of the horse and the horse itself were discovered but this discovery was not at the instance of the appellant.
Except for the confession, which has been excluded, this is all there is against the appellant.
The question is whether that is enough to bring guilt home to him.
Stated briefly, the circumstances are 1.
That the appellant knew that the deceased had attended the Court at Parenda on the 16th and that he had seen him there but when questioned about it he told a lie.
67 528 In passing it is to be observed that this is not the .lass of case in which an accused person is last seen with a murdered man within a few hours of the murder.
Though the deceased and the appellant were both in Court at the same time, they were not there "together" and in view of the ill will between them and in view of the fact that the deceased went on a horse it is unlikely that they travelled together either going or coming; and the appellant was not with the deceased when he was last seen at 3 P.m. on the 16th.
But it is clear that the appellant wanted to hide something.
2.That thirteen days after the murder he knew that Manmath had been murdered.
He also knew where the murder had been committed and where the body and certain articles belonging to the deceased were hidden.
3.That there was ill will between them, but an ill will that other members of the appellants family might be expected to share.
4.That he had full opportunity to commit the crime, but the same kind of opportunity that the other members of his family also had.
The question is whether these four circumstances, regarded in the background of this case, are sufficient to warrant a conclusion of murder by the appellant.
In our opinion, they are not because the same circumstances could be said to point with equal suspicion at other members of the appellant 's family.
It has to be remembered that the brother Gona was also suspected and that he absconded and could not be traced.
We do not say that he was the murderer and it would be wrong to suggest that in his absence, but if he was, then the appellant 's knowledge of the murder and of the concealment, thirteen days later, might have been derived from Gona, or it might even be that he saw his brother commit the crime and hide the corpse and the articles.
Those are hypotheses that are not unreasonable on the facts of this particular case and they have not been reasonably excluded.
Consequently, we are unable to bold that mere knowledge thirteen days later, coupled with a motive which three others 529 share, and a lie about the deceased 's movements told four or five days after the murder, are enough; and, as that is all that the High Court has based on, the conviction must be set aside.
We have assumed throughout that the identity of the corpse that was discovered on the 29th and the fact of murder have been established.
Those facts were not admitted before us but we need not discuss the point.
It is enough to say that, in our opinion, both facts are satisfactorily proved.
We referred, earlier in our judgment, to a confession which the High Court has excluded.
This was excluded from evidence because the appellant was not questioned about it under section 342, Criminal Procedure Code.
We gather that the High Court thought that that occasioned prejudice though the learned Judges do not say so in so many words.
The appellant was arrested on the 29th and he made many discoveries on the 29th December 1950 and on the 1st, 2nd and 3rd January 1951 but did not confess till the 6th.
Much might have happened in the eight days between his arrest and the 6th, so the High Court was not unjustified in refusing to take that into consideration without bearing the appellant 's side of the story.
We were asked to reopen the question and, if necessary, to remand the case.
But we decline to do that.
Judges and magistrates must realise the importance of the examination under section 342 of the Criminal Procedure Code and this Court has repeatedly warned them of the consequences that might ensue in certain cases.
The appellant was arrested in December 1950 and has been on his trial one way and another ever since, that is to say, for over 4 1/2 years.
We are not prepared to keep persons who are on trial for their lives under indefinite suspense because trial judges omit to do their duty.
Justice is not one sided.
It has many facets and we have to draw a nice balance between conflicting rights and duties.
While it is incumbent on us to see that the guilty do not escape it is even more necessary to see that persons accused 530 of crime are not indefinitely harassed.
They must be given a fair and impartial trial and while every reasonable latitude must be given to those concerned with the detection of crime and entrusted with the administration of justice, limits must be placed on the lengths to which they may go.
Except in clear cases of guilt, where the error is purely technical, the forces that are arrayed against the accused should no more be permitted in special appeal to repair the effects of their bungling than an accused should be permitted to repair gaps in his defence which he could and ought to have made good in the lower courts.
The scales of justice must be kept on an even balance whether for the accused or against him, whether in favour of the State or not; and one broad rule must apply in all cases.
The error here is not a mere technicality.
The appellant appears to have been ready to disclose all on the 29th and make a clean breast of everything and yet the police waited eight days before getting a confession judicially recorded.
That may be capable of explanation but the difficulty of asking an accused person to establish facts of this kind in his favour four and a half years later is obvious.
Without therefore attempting to lay down any general rule, we are not prepared to order a retrial in this case because of the facts that appear here.
The appeal is allowed.
The conviction and sentence are set aside and the appellant is acquitted.
| The petitioners, who are jagirdars of Marwar, sought to impugn the constitutional validity of sections 81 to 86 of the Marwar Land Revenue Act which embody a scheme for fixing fair and equitable rents payable by cultivating tenants on the ground that they infringed their fundamental rights under articles 14, 19(1)(f) and 31(2) of the Constitution.
Their contentions were that after the merger of Marwar in the State of Rajasthan the Act had become discriminatory as it applied only to the jagirdars of Marwar and not to the entire body of jagirdars of the State of Rajasthan, that settlement of rents made with reference to different areas on different dates on the basis of previous ten years ' average of collections might result in different rates of rent and lead to inequality such as is prohibited by article 14, that the Act deprived the landlords of their right to realise rents from the tenants freely and without hindrance and invaded their right to hold property guaranteed by article 19(1)(f) of the Constitution, that the power conferred on the Settlement Officer by section 86 of the Act to enforce the rates of rent retrospectively is an invasion of their right to hold property and amounts to acquisition of property without compensation and that it confers absolute and uncontrolled discretion on the Settlement Officer and is an encroachment on the right to hold property.
Held, repelling these contentions, that article 14 only prohibits unequal treatment of persons similarly situated and a classification might properly be made on territorial basis, if that was germane to the purposes of the enactment and no tenancy legislation can be held to contravene the article solely on the ground that it does not apply to the entire State.
Before the petitioners could succeed it was 532 incumbent on them to show that conditions obtaining in other parts of the State were similar to those in Marwar and this they had failed to do.
Bowman vs Lewis ; , referred to.
That the provision in the Act for assessment of rents with reference to a portion of the area to which the Act applies is not a contravention of article 14.
To hold otherwise would be to make it impossible for any State to carry on its settlement operation.
Biswambhar Singh vs The State of Orissa and others; , , and Thakur Amar Singhji vs State of Rajasthan, ; , applied.
That the fundamental right to hold property in the case of a, landlord in respect of his tenanted lands is no more than the right to receive reasonable rents and no legislation which has for its object the settlement of fair and equitable rents can contravene article 19 (1)(f) of the Constitution even though it may give such rents retros pective operation.
That the provision in section 86 of the Act empowering the Settlement Officer to give retrospective operation to the rates of rent does not contravene article 19(1)(f) and, therefore, no question as to whether such a provision is not of a regulatory character and as such prohibited by article 19(5) can at all arise.
That it is well settled that a law which regulates the relation of a landlord with his tenant is not one which takes property within the meaning of article 31(2) even though it has the effect of reducing his rights.
Consequently, there is no contravention of article 31(2) of the Constitution.
Thakur Jagannath Baksh Singh vs United Provinces, [1943] 6 F.L.J. 55: A.I.R. 1943 F.C. 29 and Thakur Jagannath Buksh vs United Provinces, L.R. 73 I.A. 123, relied on.
That section 86 of the Act does not confer an absolute and uncon trolled discretion on the Settlement Officer and such power as it gives does not constitute an encroachment on the right to hold property within the meaning of article 19(1)(f) of the Constitution.
Thakur Baghubir Singh vs Court of Wards, Ajmer and another; , , explained and distinguished.
|
iminal Appeal No. 55 of 1965.
Appeal by special leave from the judgment and order dated June 16, 1964 of the Calcutta High Court in Criminal Misc.
Case No. 28 of 1964.
Debobrata Mukherjee and P. K. Chakravarty, for the appel lants.
D. N. Mukherjee for P. K. Bose, for respondent No. 1.
Niren De, Solicitor General, B. Sen and G. section Chatterjee, for the intervener.
Hidayatullah, C.J.
The five appellants are District Magis trate of Nadia and his four assistants who have been found guilty of contempt of the High Court of Calcutta and the Sessions Court of Nadia and sentenced to fines with imprisonment in default of payment.
They now appeal by special leave granted by this Court.
The facts are long and need a full narration.
306 One Birendra Kumar Sarkar, Sub Agent of Phosphate Co. Ltd. Krishnagar, District Nadia, was prosecuted for contravention of the Fertiliser Control Order, read with section 7(1) of the Essential Commodities Act and on his own plea was convicted and sentenced to Rs. 20 fine or simple imprisonment for 10 days.
We are not concerned with his conviction.
The fertiliser seized during investigation was sold by order of the Court and the sale proceeds held in deposit.
On the conviction of Birendra Kumar the amount in deposit (Rs. 4,215) was directed on March 11, 1963 to be returned to him.
The same day the Phosphate Co. Ltd. applied to take out the amount and the Magistrate reversed the earlier order and directed that the amount be paid to the Company.
Birendra Kumar appealed to the Sessions Judge, Nadia under section 520 of the Code of Criminal Procedure.
This appeal succeeded and on December 23, 1963, the Sessions Judge directed the Magistrate to deliver the amount to Sarkar upon his furnishing security and executing a bond to the satisfaction of the District Magistrate, Nadia.
On January 3, 1964 Sarkar produced a certified copy of this order and asked to be allowed to take out the amount and furnished a bond.
The bond was found in order by N. C. Mookherjee, Magistrate 1st Class, who recommended its acceptance.
It was then accepted by A. Sen, Additional District Magistrate, Nadia.
On January 11, 1964 the accountant attached to the Court of N. C. Mookerjee reported and the latter directed issuance of a pay order.
Sarkar received the pay order the same day and deposited it with his bankers (State Bank of India) on January 13, 1964.
On January 8, 1964 the Company expressed to the Sessions Court, its intention of moving an application for revision in the High Court at Calcutta against the order of December 23, 1963 and asked for stay.
Stay was not immediately granted.but notice F was issued to Sarkar to show cause on January 16, 1964.
Later a stay order was also sent.
On January 13, 1964 the High Court issued a rule and also directed stay of operation of the Sessions Judge 's order of December 23, 1963.
It will be seen from the above facts that the actual payment of money was made under the orders of the Sessions Judge passed on December 23, 1963 as far back as January 11, 1964.
The High Court has considered the question of the contempt of the Sessions Judge 's order from the angle of the kind of bond which was accepted, and the Officers who accepted it.
We shall come to it later.
We shall now trace the progress of the orders which were passed by the Sessions Judge and the High Court in proceedings subsequent to January 1964.
For this purpose it is sufficient to extract the summary of the events made by the High Court itself: 307 " The stay order dated 14th of January, 1964 was communicated by.
the Sessions Judge by his Memo.
No. 170 and it was received by the District Magistrates Office on 16th of January, 1964.
On 20th January, 1964 Memo No. 443 Jm.
containing the direction to carry out the order of the Sessions Judge dated 23rd December, 1963 was drafted by Pulak Kumar De and it was signed by another Magistrate Shri Jyotirmoy Ghose.
On 22nd January, 1964 on which date the Rule issued by this Court in Criminal Revision No. 60 of 1964 was also received in the District Magistrate 's Office.
It was sent to the trial Magistrate 's Court with Memo No. 549 Jm.
only on 29th January 1964 and was received in the trial Magistrate 's Court on 30th January, 1964.
In the meantime Sessions Judge 's Memo No. 170 that had been received in the District Magistrate 's Office on 16th of January 1964 was also dispatched to the trial Magi strate 's Court on 29th of January, 1964 by Memo.
No. 554 Jm.
and the trial Magistrate received it on 30th January, 1964.
Sessions Judge 's Memo.
No. 108 dated 11th January, 1964 which was received in the District Magistrate 's Office on 15th January, 1964 and is said to have be en dispatched to the trial Magistrate 's Court on 22nd January, 1964 with Memo.
No. 443 Jm.
is said to have been received by the Bench Clerks of the trying Magistrate on 25th January, 1964 and put up before the Magistrate only on 1st February, 1964.
" On the above facts the High Court framed the following questions: "(1) Has there been disobedience of the order of the Sessions Judge, Nadia that money should be given to Birendra Kumar Sarkar on a Bond to the satisfaction of the District Magistrate, Nadia ? (2) Was the Bond upon which pay order for the money had been made a document that complies with the order for the Sessions Judge of Nadia dated 23rd December, 1963 ? (3) Was Memo.
No. 443 Jm.
dated 20th January, 1964 directing to carry out Sessions Judge 's order dated 23rd December, 1963 after the order of stay made by the Sessions Judge on 14th January, 1964 was received in the District Magistrate 's office on 16th January 1964 by Memo.
No. 108 dated 11th January 1964 an intentional violation of the stay order? The first two questions were treated as interconnected and dealt with together.
The High Court found fault with the bond 308 and also opined that none else save the District Magistrate could accept the bond.
With all respect, the High Court erred on both the aspects.
The bond is reproduced below ': "BOND A bond is made this day by Sri Birendra Kumar Sarkar son of late Bilash Chandra Sarkar of Chand Sarkar, Krishnagar, Dt.
Nadia is hereby agreed and received Rs. 4,125 (Rupees four thousand one hundred and twenty five only) which has been deposited in the court in connection with G.R. Case No. 338 of 1961 and the said amount has been ordered by the Sessions Judge of Nadia in case (Criminal Appeal No. 75 of 1963), 1 Birendra Kumar Sarkar s/o late Bilash Chandra Sarkar bind myself and my heirs, executors, administrators and representatives to refund the entire money if disputes arises to the Government of West Bengal or its successors.
I bind myself, my heirs, executors, administrators and representatives firmly by this bond signed in my own hand dated this the 3rd day of January, 1964.
Sd/ Birendra Kumar Sarkar, 3 1 64 Signature of the executant Signed in my presence and identified.
Rajendranath Biswas, Muktear.
Krishnagar, 3 1 64" Now it is admitted that there is no prescribed form of bond applicable to the case.
The form had to be devised for the purpose.
The bond which was taken in an ordinary indemnify bond.
There is nothing in the words of section 517, Criminal Procedure Code, which excluded the use of an indemnity bond.
The Sessions Judge did not order that the bond should be taken in the name of any particular court.
A bond in the name of the Government of West Bengal substantially (if not wholly) complied with the order of the Sessions Judge.
It could be enforced against Sarkar without any trouble.
The further point that the District Magistrate alone could accept the bond ignores the powers of the Additional District Magistrate under the Code of Criminal Procedure.
The practice of courts in Bengal is also against the proposition because such bonds are usually considered for acceptance by Additional District Magistrates.
The High Court apparently thinks that the District Magistrate was a persona designate for the purpose.
We are unable to read such an inference in the order of the Sessions Judge which ran: 309 "The learned Magistrate be directed to deliver the sale proceeds which are now deposit (sic) in Court to the accused on the accused 's furnishing, bond of the amount covered by the sale proceeds to the satisfaction of the District Magistrate, Nadia.
" In our judgment the High Court could not base any action on such material.
It may be pointed out that the High Court did not throw into the balance the acceptance of the bond by the Additional District Magistrate holding that there was room for an error there but took serious note of the fact that the bond was not in the proper form.
We do not agree with the High Court.
This brings us to the last question.
The fact here is that the orders took some time before reaching their destination.
While we do not condone such delays, we think that the High Court was taking too strict a view of the matter.
Two things seems to have played a prominent part in the drawing of the inference against the concerned officers.
The first is that there was an intentional disobedience of the orders.
This the High Court visualised in the following terms: "That by itself bespeaks of a well throughout (sic) scheme to achieve an end and that end is the cherished goal to make over the money to Birendra Kumar Sarkar by violating the stay order of the Sessions Judge dated 14th January, 1964.
For carrying out that scheme the file in which the order sheet started on 3rd January, 1964, was started separately and to seclude the features in that file it was withheld from this Court when return was made to the Rule in Criminal Revision case No. 60 of 1964 until it was thought useful for making a defence in this Contempt Rule.
No other view of the matter could be suggested by the three learned Advocates appearing for the, several parties or the learned Advocate for the State, Mr. Fanindra Mohan Sanyal, and no other view is possible.
Now it seems quite impossible to subscribe to this opinion.
For a conspiracy to be hatched there must be some foundation of gain or purpose.
The conspirators (if they knew anything) would at least know that there was nothing to be gained by delaying the orders since the money was already paid out.
Once that had happened some fresh order would be necessary to demand back the amount from Sarkar or the bond would be enforced.
The stay orders were ineffective since there was nothing to stay.
To think that the officers (one and all) were actuated by a motive to frustrate the stay orders is to imagine a state of affairs for which there was no warrant at all.
There was thus no question of undermining the authority of the Court of Sessions Judge ' or 310 of bringing the 'administration of justice in the District of Nadia to ridicule '.
Nor can it be said that there was a deliberate interference with or obstruction to due course of justice.
There was no doubt some delay but that was a different matter and could be dealt with in other ways than punishment for an ;Imaginary contempt of court.
The second point which the High Court unfortunately placed at the very forefront was failure to offer an apology and noted with great show of emotion that none was offered.
Of course, an apology must be offered and that too clearly and at the earliest opportunity.
A person who offers a belated apology runs the risk that it may not be accepted for such an apology hardly shows the contrition which is the essence of the purging of a contempt.
However, a man may have the courage of his convictions and may stake his all on proving that he is not in contempt and may take the risk.
In the present case the appellants ran the gauntlet of such risk and may be said to have fairly succeeded.
The High Court was extremely hard upon the appellants in this case.
Details collected from the files of the case having no bearing upon the question of contempt were freely used.
They carry no convincement.
There are observations which in their tone do show that the matter was not approached in that cool manner in which the High Court considers contempt of itself or of courts subordinate to it.
This is a matter of regret to this Court.
A question whether there is contempt of court or not is a serious one.
The court is both the accuser as well as the judge of the accusation.
It behaves the court to act with as great circumspection as possible making all allowances for errors of judgment and difficulties arising from inveterate practices in courts and tribunals.
It is only when a clear case of contumacious conduct not explainable otherwise, arises that the condemner must be punished.
It must be realised that our system of courts often results in delay of one kind or another.
The remedy for it is reform and punishment departmentally.
Punishment under the law of Contempt is called for when the lapse is deliberate and in disregard of one 's duty and in defiance of authority.
To take action in an unclear case is to make the law of contempt do duty for other measures and is not to be encouraged.
In this case, no doubt there was some avoidable delay but as pointed out above it was the result of our system of transmission of orders of superior courts which must pass through several hands and not the product of design or defiance of the superior courts.
In these circumstances, it cannot be said that there was contempt of the authority of the High Court or of the Sessions Judge and the several appellants could not be convicted or punished.
In 311 this view of the matter we set aside their convictions and order refund of their fines.
We, however, caution all concerned that orders of stay, bail, injunctions received from superior courts must receive close and prompt attention and unnecessary delay in dispatching or dealing with them may well furnish grounds for an inference that it was due to a natural disinclination to deal with the matter born of indifference and sometimes even of contumaciousness.
G.C. Appeal allowed.
| Held, that sections 21, 30(2), 31, 55, 56 and 63 to 69 of the Madras Hindu Religious and Charitable Endowments Act, 1951 (Madras Act XIX of 1951) are ultra vires articles 19(1)(f), 25 and 26 of the Constitution of India.
Section 76(1) of the Act is void as the provision relating to the payment of annual contribution contained in it is a tax and not a fee and so it was beyond the legislative competence of the Madras State Legislature to enact such a provision.
That on the facts of the present case the imposition under a. 76(1) of the Act, although it is a tax, does not come within the latter part of article 27 because the object of the contribution under the section is not the fostering or preservation of the Hindu religion or any denomination under it but the proper administration of religious trusts and institutions wherever they exist.
130 1006 The word " property " as used in article 19(1)(f) of the Constitution should be given a liberal and wide connotation and should be extended to all well recognized types of interest which have the insignia or characteristics of proprietary right.
The ingredients of both office and property, of duties and personal interest are blended together in the rights of a Mahant and the Mahant has the right to enjoy this property or beneficial interest so long as he is entitled to hold his office.
Therefore he is entitled to claim the protection of article 19(1)(f).
A tax is a compulsory exaction of money by public authority for public purposes enforceable by law and is not payment for services rendered.
It is not possible to formulate a definition of fee that can apply to all cases as there are various kinds of fees.
But a fee may generally be defined as a charge for a special service rendered to individuals by some governmental agency.
The amount of fee levied is supposed to be based on the expenses incurred by the Government in rendering the service, though in many cases such expenses are arbitrarily assessed.
The distinction between a tax and a fee lies primarily in the fact that a tax is levied as part of a common burden, while a fee is a payment for a special benefit or privilege.
" Scope of articles 25 and 26 discussed.
Meaning of the term " Mathadhipati " and religion explained.
Vidya Varuthi vs Balusami (48 I.A. 302), Monahar vs Bhupendra , Ganesh vs Lal Behary (63 I.A. 448), Bhabatarini vs Ashdlata (70 I.A. 57), Angurbala vs Debabrata ([1951] S.C.R. 1125), Davis vs Benson; , , The State of West Bengal vs Subodh Gopal Bose (civil Appeal No. 107 of 1952 decided by the Supreme Court on the 17th December, 1953), Adelaide Company vs The Commonwealth ; , 127), Minersville School District, Board of Education etc.
vs Gobitis ; , West Virginia State Board of Education vs Barnette ; , Murdock vs Penissyl vania ; , Tones vs Opelika (316 U.S. 584), Matthew 's V. Chicory Marketing Board ; , 276), Lower Mainland Dairy vs Crystal Dairy Ltd. ([1933] A.C. 168) referred to.
(Findlay Shirras on Science of Public Finance, Vol.
I. p. 203).
|
Civil Appeal No. 903 of 1976.
Appeal from the Judgment and Order dated the 15 7 1976 of the Orissa High Court in OJ.C No. 698 of 1976.
G. Rath, Advocate General, Orissa, R.K. Mehta for the Appellants.
Vepa Parthasarthy and C.S. Rao for Respondents.
The Judgment of the Court was delivered by KAILASAM, J.
This appeal is by the State of Orissa represented by the Secretary, Revenue Department, against the judgment of a Bench of the Orissa High Court on a cer tificate of fitness granted by it.
The respondent herein is a land holder whose ceiling surplus was determined by the Revenue Officer under section 43 of the Orissa Land Reforms Act, 1960, as amended by Act 13 of 1965 and subsequently by Act 29 of 1976.
The Revenue Officer rejected the plea of the respondent that there was a partition between him and his sons and determined the surplus extent as 12.08 standard acres.
The respondent preferred an appeal before the Sub Divisional Officer and the Sub Divisional Officer confirmed the order of the Revenue Officer and dismissed the appeal Against the order of the appellate authority the respondent filed a revision before the Additional District Magistrate, Gan jam.
The Additional District Magistrate held that the appellate orders trader section 44 were final and that no revision lay to him.
The respondent thereupon filed a petition under Articles 226 and 227 of the Constitution challenging the order of the Additional District Magistrate rejecting the. revision petition.
A Bench of the Orissa High Court by an order dated 15th July, 1976, allowed the writ petition holding that the Additional District Magis trate had powers to revise the order of the appellate au thority passed under section 44 by virtue of the powers conferred on him under section 59 of the Act.
The High Court came to this conclusion that a revision was entertain able tinder section 59 by the Additional District Magistrate even before the amendment introduced by Orissa Act 29 of 1976, the details of which will be referred to later.
The only question that arises in this appeal is whether an order passed by the appellate authority under section 44 which has become 9 502 SCI/77 558 final under section 44(2) is capable of revision by the Collector under section 59 before the amendment of the Act in 1976.
Section 44 runs as follows : "44.
(1) On the termination of the proceedings under Section 43, the Revenue Officer shall by order confirm the draft statement with such alterations or amendments as may have been made therein under the said Section.
(2) An appeal against the order of the Revenue Officer under 'sub section (1 ) con firming the statement if presented within thirty days from the date of the order shall lie to the prescribed authority and subject to the results of such appeal, if any, the orders of the Revenue Officer shall be final." Under section 44(1) the Revenue Officer confirms the draft statement and under section 44(2) an appeal lies to the prescribed authority against the order under sub section (1) and subject to results of such appeal, if any, order of the Revenue Officer shall be final.
Section 58 provides a right of appeal to any person aggrieved by an order passed under any of the sections enumerated in sub section.
As the decision in this case will depend upon the construction that is put upon section 59 we extract section 59(1) and (2) in full.
Revision: (1 ) The Collector may revise any order passed in appeal by any officer below the rank of a Collector under this Act and the Board of Revenue may revise any order passed by the Collector under this Act and the period of limitation for such revision shall be as may be prescribed.
(2) For the purposes of sub section (1) the Collector or the Board of Revenue as the case may be may suo motu or on application of either party or any interested person call for and examine the record of any matter in respect of any proceedings under this Act as to the regularity of such proceedings or the correctness, legality or propriety of any decision or order passed thereon and if in any case if appears that any such decision or order shall be modified, annulled, reversed or remitted for reconsideration, the Collector or Board of Revenue as the case may be, may consider accordingly.
" Sub section ( 1 ) provides that the Collector may revise any order passed in appeal by any officer below the rank of a Collector under this Act.
It also empowers the Board of Revenue to revise an order passed by the Collector under the Act.
Sub section (2) enables the collector or the Board of Revenue suo motu or on the application of the party con cerned call for and examine the record in respect of any proceedings under the Act and modify, annual, reverse or remit for reconsideration such a decision to the lower authority.
The section as if stands does not put any re striction on the power of revision by the Collector or the Board of Revenue for it states that the Collector or the Board of Revenue may revise any order passed under this Act which would 559 include an order passed under section 44(2).
Again sub section (2) of section 59 provides that the Collector or the Board of Revenue may examine the record of any matter in respect of any proceedings under the Act which would include the proceedings under section 44(2).
The submission of the learned counsel for the appellant is that the power of revision under section 59 is restricted to an appeal that is disposed of under section 58 and is not available against an order passed under section 44(2).
The learned counsel very strongly relied on the wording of section 44(2) which provides that the order of the Revenue Officer shall be final subject to the result of an appeal provided under section 44(2) and therefore submits that no other relief is available to the aggrieved party.
The learned counsel in contrast referred us to section 58 where the order of the lower authority is not stated to be final subject to the result of the appeal, As no finality is provided for orders passed on appeal under section 58, the submission was that a revision under section 59 is available for those orders but orders passed under section 44(2) are final and they are not subject to revision under section 59.
There is no doubt that section 44(1) provides that the order of the Revenue Officer shall be final subject to the result of an appeal under section 44(2) while no such final ity is mentioned in the case of an appeal under section 58.
But this cannot conclude the matter for the powers of revi sion conferred under section 59 are very wide and empowers the Collector or the Board of Revenue to revise any order passed under this Act and sub section (2) empowers the Collector and the Board of Revenue to set aside any irregu larity in respect of any proceedings under this Act.
As the power of revision is not restricted we are unable to accept the contention of the learned counsel that because of the wording of section 44(2) providing.
that the order of the Revenue Officer subject to the result of the appeal would .be final, bars the revisionary jurisdiction of the Collector and the Board of Revenue as provided under section 59.
We do not find any conflict between the two sections and the provision as to finality under section 44(2) is provided for so that in the absence of the aggrieved party proceeding further in the matter the consequences of the vesting of surplus lands under section 45, the preparation of the Compensation Assessment Roll, the settlement of surplus lands etc. can be proceeded with.
The learned counsel drew our attention to the amendment to the Orissa Act by Act 29 of 1976.
The Orissa Land Reforms (2nd Amendment) Act ', 1975, and submitted that the amendments introduced to section 44, 45 and 59 would make it dear that the legislature understood that the sections as they stood before the amendment did not enable the Collector to exercise revisional jurisdiction over orders passed by the appellate authority under section 44(2) of the Act.
By the amending Act.
section 44, sub sections (2) and (3) are amended.
Sub section (2) of section 44 as it originally stood provided that subject to the result of such appeal, if any, the orders of the Revenue Officer shall be final and sub section (3) provided that the draft statement as con firmed or as modified in appeal shall be final and con 560 clusive.
By the amendment sub section (2) is recast and sub section (3) provides that the draft statement as con firmed or as modified in appeal on revision shall be final and conclusive.
The amendment specifically provides for a revision.
The amended sub section (1) of section 59 pro vides that on an application by party aggrieved by any order passed in an appeal under any provision of this Act filed within the prescribed period, the prescribed authority may revise such order.
Though the amendment to section 44(3) makes it clear that a right to revision is provided for orders passed under section 44(2), we do not think that this could mean that section 44(2) as it originally stood did not provide for power of revision to the Collector under section 59.
In our opinion, amendment does not make any difference.
The learned counsel for the appellant submitted that section 44(3) is in the nature of a special provision and should be construed as an exception to section 59 on the principle of harmonious construction.
In support of this plea the learned counsel referred to the decision in The J.K. Cotton Spinning & Weaving Mills Co. Ltd. vs State of U.P. & Ors.
In construing the provisions of clause 5(a) and clause 23 of the G.O. concerned, this Court held that the rule of harmonious construction should be applied and in applying the rule the court will have to remember that to harmonise is not to destroy and that in interpreting the statutes the court always presumes that the legislature inserted every part thereof for a purpose and the legisla tive intention is that every part of the statute should have effect, and a construction which defeats the intention of the rule making authority must be avoided.
This decision does not help the appellant for in our view in applying the rule of harmonious construction with a view to give effect to the intention o(the legislature the court will not be justified in putting a construction which would restrict the revisionary jurisdiction of the Collector and the Board of Revenue.
It may be noted that the Act is of exproprietory nature and the determination of the excess lands is done by the Revenue Officer and on appeal by the Revenue Divisional Officer.
In such circumstances, it is only 13roper to presume that the legislature i,tended that any error or irregularity should.
be rectified by higher authorities like the Collector and the Board of Revenue.
In our view it will be in conformity with the intention of the legislature to hold that section 59 confers a power of revision of an order passed under section 44(2) of the Act.
The learned counsel next referred to a decision of this Court in The Bengal Immunity Company Limited vs The State of Bihar and Others.(2) The rule of construction is stated at p. 791 in the following terms by Venkatarama Ayyar ,J. speaking for the Court : "It is a cardinal rule of construction that when there are in a Statute two provi sions which are in conflict with each other such that both of them cannot 'stand, they should, if possible.
be so interpreted that effect can be given to both, and that a con struction which renders either of them inoper ative and useless should not be adopted except in the last resort.
This is what is known as the rule of harmonious construction.
One application of this rule is that when there 561 is a law generally dealing with a subject and another dealing particularly with one of the topics comprised therein, the general law is to be construed as yielding to the special in respect of the matters comprised therein.
" Construing section 59 as conferring a power of revision against an order passed under section 44(2) is not in any way contrary to the principle laid down in the above deci sion.
We agree with the view taken by the Orissa High Court that the language of section 59(1) is wide enough to enable the Collector to revise any order including an appellate order under section 44 of the Act.
In the result the appeal is dismissed with costs.
S.R. Appeal dismissed.
| Under Section 43 of the Orissa Land Reforms Act, the Revenue Officer determines the ceiling surplus and on the termination of the proceedings thereunder, the Revenue Officer u/s 44(1) confirms the draft statement; u/s 44(2) an appeal lies to the prescribed authority against the order under sub section (1) and subject to results of such appeal, if any, order of the Revenue Officer shall be final.
Sec tion 58 provides a right of appeal to any person aggrieved by an order passed under any of the Sections enumerated in subsection (1).
Sub section (1) of section 59 provides that the Collector may revise any order passed in appeal by any officer below the rank of a Collector under this Act.
Section 59(1) also empowers the Board of Revenue to revise any order passed by the Collector.
Sub section (2) enables the Collector or the Board of Revenue sue motu or on the application of the party concerned call for and examine the record in respect of any proceedings under the Act and modify, annual reverse or remit for reconsideration.
In the proceedings u/s 38 of the Act the plea of the respondent landlord that there was a partition between him and his sons was rejected by the Revenue Officer who deter mined the surplus extent as 12.08 standard acres.
The appeal preferred before the Sub Divisional Officer having failed, the respondent filed a revision before the Additional District Magistrate.
The Additional Magistrate held that the appellate orders u/s 44 are final and that no revision lay to him.
The writ petition filed against this order filed by the respondent was allowed by the Orissa High Court by its order dated 15 7 1976 holding that the Additional Magistrate had powers to revise an order of the appellate authority passed u/s 44 by virtue of the powers conferred on him under section 59of the Act.
Dismissing the appeal by certificate, the Court, HELD: (i) The language of section 59(1) of the Orissa Land Reforms Act is wide enough to enable the Collector to revise any order including an appellate order under section 44 of the Act.
[561 B] (ii) In applying the rule of harmonious construction with a view to give effect to the intention of the legisla ture the court will not be justified in putting a construc tion which would restrict the revisionary jurisdiction of the Collector and the Board of Revenue.
[560E] In the instant case, the Act is of expropratory nature and the determination of the excess lands is done by the Revenue Officer.
The legislature intended that any error or irregularity should be rectified by higher authorities like the Collector and the Board of Revenue.
[560E] J. K. Cotton Spinning & Weaving Mills Co. Ltd. vs State of U.P. & Ors. ; held not applicable.
The Bengal Immunity Company Ltd. vs The State of Bihar & Ors.
[1955] 2 S.C R. 603 referred to.
(iii) It cannot be said that there is any conflict between section 44(1) and 8.
58 inasmuch as section 44(1) provides that the order of the Revenue Officer shall be final, sub ject to the result of appeal u/s 44(2), while no such final ity 557 is mentioned in the case of an appeal u/s 58.
The provision as to finality u/s 44(2) is provided for so that in the absence of the aggrieved party proceeding further in the matter, the consequences of the vesting of surplus lands u/s 45, the preparation of the Compensation Assessment Roll, the settlement of surplus lands etc. can be proceeded with.
[559 D F] (iv) The amendment to 8.
44(3) by the Amendment Act of 1975 making it clear that a right to revision is provided for orders passed u/s 44(2) does not make any difference.
The amendment could not mean that section 44(2) as it originally stood did not provide for power of revision to the Collec tor ' u/s 59.
[560 A B]
|
tition (Civil) Nos.
507 and 1260 of 1989.
(Under Article 32 of the Constitution of India).
M.K. Ramamurthy, Rajinder Sachhar, Dr. Francis Julion, Ms. Aruna Mathur, A. Mariarputham, Ms. section Dikshit, section Va sudevan and Pradeep Misra for the Petitioners.
For the Respondents Nemo.
The following Order of the Court was delivered by 496 section RANGANATHAN, J. This order will dispose of a prelimi nary objection raised on behalf of the respondents that these writ petitions should be dismissed because the peti tioners have suppressed certain material facts from this Court and have also tried to abuse the process of court in the manner hereinafter appearing.
Writ Petition No. 507 of 1989 has been filed by the All India State Bank Officers ' Federation (hereinafter called 'the Federation ') through its President.
It was filed in this Court on 21st April, 89 and was supported by an affida vit of Umed Singh, President of the Federation, affirming the contents of the petition to be true to his personal knowledge.
By this writ petition the Federation seeks to impugn a new promotion policy decided upon by the State Bank of India (hereinafter called 'the Bank ').
In paragraph 9(mm) of the petition it is stated that the petitioners are ap proaching this Court in great haste as the Bank is moving with great speed and is likely to constitute Departmental Promotion Committees and declare the results of the inter views in implementation of the new promotion policy within the next two or three days.
In the affidavit of Umed Singh, referred to earlier, it has been stated in para 4 that the petitioners have not filed any other similar writ petition in this Honourable Court or any other High Court.
In the counter affidavit filed on behalf of Bank, it is stated that the statement in paragraph 4 of the petition in support of the writ petition is false.
It is pointed out that the Federation through its Deputy General Secretary had filed Writ Petition No. 5286 of 1989 in the High Court of Andhra Pradesh at Hyderabad along with an application No. 6969 of 1989, seeking stay of the promotion policy.
On 13.4.89 the Andhra Pradesh High Court admitted the writ petition but the learned judge rejected the application for interim stay observing "that he was prima facie satisfied that the selection is going on according to a fair procedure and that there is no need to stay any of the interviews or the appointment".
It is further pointed out that another petition has also been filed by the State Bank of India Officers ' Association (Karnataka) having its office at Bangalore in the Karnataka High Court, being Writ Petition No. 7848 of 1989.
It is, therefore, submitted that the petitioners have suppressed from this Court the material fact that a writ petition has already been filed by them in the Andhra Pradesh High Court and that an application for stay had been made and rejected by the said court.
A second objection to the 497 maintainability.
of the petition raised on behalf of the Bank in paragraph 3 of its counter affidavit was that since promotions had already been made they could not be disturbed "as the promoted officers have not been made parties".
It is common ground that 58 officers had been promoted w.e.f.
24th April, 89 but no steps were taken to implead these officers, who would be directly affected as a result of the prayer made in the writ petition.
To these objections, a rejoinder was filed on behalf of the petitioners, supported again by an affidavit of Umed Singh on the 23rd of October, 1989.
The two objections raised by the Bank were sought to be refuted in the follow ing manner: "1.
That the contents of para 1 are denied and it is reiter ated that the writ petition is maintainable as there is clear violation of fundamental rights guaranteed to the petitioners.
The writ petition filed in the Andhra Pradesh High Court has since been withdrawn as per the undertaking given to the Supreme Court during arguments on 24.4.89.
The deponent had no knowledge of the writ petition filed before the High Court of Andhra Pradesh, hence as soon as it came to his knowledge the same has been withdrawn.
Even otherwise the deponent understands that in the said writ petition the stay of interviews was prayed and the same was declined on representation made by the respondent bank.
It is indeed regrettable that even before Hon 'ble High Court the bank made incorrect statements.
A perusal of the order of High Court would show the same.
Regarding the question of making such employees who have been promoted as a party respondent, it is submitted that firstly it is the promotion policy which had been challenged being arbitrary, discriminatory and framed in gross violation of the prescribed procedure and provisions of law, secondly the petitioners even today do not know the names of all such 58 candidates who have been promoted favoured." (emphasis added) It may be mentioned here that Writ Petition No. 507 of 1989 came up for admission before a Bench of this Court on 26th April, 1989.
Apparently, the counsel for the State Bank of India was present and accepted notice on behalf of the bank.
The Bench passed the following order: 498 "Issue notice, Mr. S.S. Sharma, learned counsel accepts notice on behalf of the State Bank of India.
Counter affida vit shall be filed within four weeks from today.
Reply, if any, shall be filed within two weeks thereafter, the matter will be placed for final disposal on 24.10.1989 subject to overnight part heard.
The promotion if given in the meantime will be subject to the decision in the writ petition.
Mr. K.K. Venugopal, learned counsel states that the writ peti tion which has been filed before the High Court will be withdrawn." The Writ Petition came on for hearing before us on 5th April, 1990.
Sri G. Ramaswamy, counsel for the Bank, put the above objections in the forefront as preliminary objections.
After hearing him and the counsel for the petitioner, we directed the petitioner federation to file a better affida vit explaining the correct position.
In compliance with the direction given by us, another affidavit has been filed by Sri Umed Singh.
In this affidavit, again, although purport ing to "tender an unqualified apology" for the misstatement in the earlier affidavit, the deponent reiterated "that he did not know on the date of swearing of the affidavit on 21.4.89 that some other office bearer of the petitioner federation has filed such a petition".
He claims to have come to know of it only on the 23rd April, 1989 from a telephonic conversation with the Deputy Secretary and wishes to take credit for the fact that he at once informed his counsel about it who in turn brought it to the notice of the Court at the time of the preliminary hearing on 26th April, 1989.
The truth of these allegations is refuted on behalf of the Bank.
It is submitted that the counsel for the petition er did not, even at the time of hearing on 26.4.89, bring to the notice of this Court the fact that he had filed a peti tion in the Andhra Pradesh High Court.
On the other hand, it is claimed, it was the counsel for the Bank who was present and who took notice on behalf of the Bank, that brought to the notice of the Court that the petitioner had already moved the Andhra Pradesh High Court in regard to the same relief and it was only thereafter that the counsel for the petitioner made a statement that the petitioner would with drew the petition filed in the Andhra Pradesh High Court.
Even this, it is pointed out, they did not do immediately as stated in Umed Singh 's affidavit for the said petition was withdrawn only much later on 27th of July, 1989.
On behalf of the Bank it is also pointed out that the statement made in the rejoinder filed by Umed Singh, sup ported by his affidavit, 499 that the addresses of the 58 promotees was not known to the petitioner is again a total falsehood as is demonstrated by two circumstances.
In the first place, in the writ petition filed in the Karnataka High Court, the petitioner there has joined all the 58 officers as parties and an application was moved before the said High Court on 27th April, 89, seeking stay of promotion of the said respondents.
That apart, on 1st May, 89, a fortnightly bulletin issued by the State Bank of India Officers ' Association (Mumbai circle), which is admitted to be one of the associations affiliated to the petitioner Federation, carries a message of congratulations to all the 58 officers, who had been promoted w.e.f.
24th April, 89.
The names of all the 58 officers so promoted has been set out in this bulletin.
In this state of the record, learned counsel for the Bank strongly urges that we should dismiss the writ petition straightaway on the ground that the petitioner has not come to Court with clean hands.
We have heard learned counsel on both sides at length.
There is no doubt left in our minds that the petitioner has not only suppressed material facts in the petition but has also tried to abuse judicial process.
The explanation that the President of the Federation when he filed the writ in this Court on 21st April, 89, was not aware that a petition had been filed in the Andhra Pradesh High Court (repeated for a second time in the affidavit of 5th April ' 90) is, in our opinion, is totally unacceptable.
Admittedly the federa tion was considerably agitated by the new promotion policy.
The matter was considered to be very urgent and the federa tion was too keen to obtain a stay of implementation of the policy which, it feared.
the Bank might do any day.
In this situation, not even the most gullible of persons would be credulous enough to accept the explanation that the Deputy General Secretary of the Federation had not apprised the President of their failure to obtain the stay order from the Andhra Pradesh High Court.
It is totally unbelievable that between 13.4.89, when the interim application in the Andhra Pradesh High Court was rejected and 21.4.89 when the writ petition was filed, the President was not aware of what had happened in the High Court.
It is deplorable that such an explanation should have been not only put forward in the original rejoinder but should have been repeated again in the latest affidavit.
The petitioner had, in our opinion, deliberately suppressed from the petition this crucial and important fact.
As to the credit sought for having brought this fact to the notice of the Court on 25.4.89.
the circum stances suggest that perhaps they would not have brought it to the notice of the court at all had not counsel on behalf of the Bank been present.
to receive notice 500 when the matter was moved for admission on 26.4.89.
whether, as asserted by the counsel for the petitioner, the petition er considered it prudent, in view of the presence of the Bank 's counsel, to volunteer at the time of the said hearing the information that a petition had been filed in the Andhra Pradesh High Court and to offer an undertaking that it would be withdrawn or whether, as alleged in a "statement of facts" ' placed before us by Sri S.S Sharma, the learned counsel for the Bank who appeared at the hearing, even this information had to be supplied to the Court by the Bank, is a controversy into which we need not enter.
We shall proceed on the assumption that the statement made by the counsel for the petitioner is correct, but even that does not explain why a reference to the writ petition in the High Court was not made in the writ petition as it had to be made.
The statement in the affidavit of Umed Singh that no petition had been filed in any High Court was clearly and plainly false.
It is equally clear that the statement made in the rejoinder affidavit that "till today (i.e. 23rd October, 1989) the petitioner federation is not aware of the names of the promoted officers" is again an incorrect statement.
These officers had been impleaded in the interim application for the relief sought against them in the Karnataka High Court as early as 27.4.89.
That apart the federation could not have been unaware of the contents of the bulletin issued by the Mumbai circle of the SBI Officer 's Association issued on 1.5.89.
There is no doubt that the petitioner did not deliberately implead the 58 promoted officers.
Sri Sachhar, for the petitioner, sought to contend that these 58 officers may be proper parties but not necessary parties and he referred us to the judgments of this Court in The General Manager, South Central Railway, Secunderabad and Another vs A.V.R. Siddhantti and Ors., and Col. D.D. Joshi & Ors.
vs Union of India & Ors.
, [1983] 2 S.C.C. 235.
We are not here concerned with the question whether these officers were necessary or proper parties and, indeed, this issue is no longer alive as, subsequently, the peti tioner itself has undertaken to implead these 58 officers and notices have been issued to them in both the writ peti tions.
What we are concerned here with is the statement, in the rejoinder affidavit that the Federation was not aware of the names of the 58 officers till November 1989 which, in the circumstances is a clear misstatement.
Apart from misstatements in the affidavits filed before this Court, the petitioner Federation has clearly resorted to tactics which can only be described as abuse of the process of court.
The simultane 501 ous filing of writ petitions in various High Courts on the same issue though purportedly on behalf of different associ ations of the Officers of the Bank, is a practice which has to be discouraged.
Sri Sachhar and Sri Ramamurthy wished to pinpoint the necessity and importance of petitions being filed by different associations in order to discharge satis factorily their responsibilities towards their respective members.
We are not quite able to appreciate such necessity where there is no diversity but only a commonness of inter est.
All that they had to do was to join forces and demon strate their unity by filing a petition in a Single Court.
It seems the object here in filing different petitions in different Courts was a totally different and not very laud able one.
Again an attempt was made to obtain a stay in the Andhra Pradesh High Court and when that attempt failed the writ petition here was filed.
In this the petitioners were able to obtain only an order that any promotions made during the pendency of the petition would be subject to the deci sion in the writ petition.
But, having obtained this order on 26.4.89, it is curious and inexplicable that an affiliat ed association should have made an application on 27.4.89 in the Karnataka High Court praying for a stay of the promo tions.
These are only tactics that it will be indulged in by a chronic and compulsive litigant and not by a federation like the petitioner.
We have set out the facts in this case at some length and passed a detailed order because we are deeply grieved to come across such conduct on the part of an association, which claims to represent high placed officers of a premier bank of this country.
One expects such officers to fight their battles fairly and squarely and not to stoop low to gain, what can only be, temporary victories by keeping away material facts from the court.
It is common knowledge that, of late, statements are being made in petitions and affida vits recklessly and without proper verification not to speak of dishonest and deliberate misstatements.
We, therefore, take this opportunity to record our strong and emphatic disapproval of the conduct of the petitioners in this case and hope that this will be a lesson to the present petition er as well as to other litigants and that atleast in future people will act more truthfully and with a greater sense of responsibility.
The question that now remains to be considered is wheth er the petition is liable to be dismissed for this conduct of the President of the Federation.
Sri Rajendra Sachhar, appearing on behalf of the petitioners, sought to get over the Bank 's objections by addressing certain technical argu ments.
He submitted that even if Writ Petition No. 507/ 89 was liable to be dismissed for mis statement and suppression there 502 would be no reason to dismiss C.W.P. No. 1260 of 1989 which has been filed by another association of the same officers.
He also sought to contend that, since it had been brought to the notice of this Court on 26.4.89 that a petition had been filed in a High Court and that it was being withdrawn, the order passed by this Court on 26.4.89 should be taken as having condoned any mis statement or mis conduct or defects in the writ petition.
We are not inclined to accept these submissions.
However, it is not necessary to discuss this aspect further as we do not wish to penalise the various officers who may suffer as a consequence of the new policy, which they wish to challenge, for the misstatements or wrong steps taken by the Officers of the federation perhaps, in their over anxiety to get quick interim relief.
We do not wish to decline them an opportunity to put forward their grievances before the court by dismissing these writ peti tions on the preliminary objections raised by the Bank.
In fact, we should like to place on record our appreciation of the stand taken by Sri G. Ramaswamy, learned counsel for the Bank in this respect.
He fairly stated that, as he is ap pearing for a public sector undertaking, he is quite pre pared to contest the writ petitions on their merits and that his preliminary objections were primarily intended to bring to our notice the conduct of the petitioners in this case.
We are glad he did it as this was a matter which needed serious notice.
We should like to record our dis approval of the way in which the proceedings have been conducted on behalf of the Federation.
However, as mentioned above, we overrule the preliminary objections and will proceed to dispose of the writ petitions on their merits.
The Writ Petitions are adjourned, as per separate order, to 17.7.90 for further hearing.
| The All India State Bank Officers ' Federation filed a Writ Petition in this Court on the 24th April, 1989 seeking to impugn a new promotion policy initiated by the State Bank of India.
The petition was supported by an affidavit of the President of the Federation affirming the contents of the petition to be true to his personal knowledge, and submit ting in paragraph 9(mm) of the petition that the petitioners were approaching this Court in great haste as the Bank was moving with great speed to implement its new promotion policy and was likely to constitute a Departmental Promotion Committee, and declare the results.
In para 4 it was submit ted that the petitioners had not filed any other similar petition either in this Court or any other High Court.
When the writ petition came up for admission before a Bench of this Court on April 26, 1989, counsel for the State Bank of India was present and accepted notice on behalf of the Bank.
The Writ Petition was contested by the Bank which sub mitted in its counter affidavit that the statement in para 4 of the petition in support of the writ petition was false, and pointed out that the Federation through its Deputy General Secretary had filed a Writ Petition in the High Court of Andhra Pradesh along with an application seeking stay of the promotion policy, and that the High Court admit ted the Writ Petition on April 13, 1989 but rejected the application for interim stay, and further pointed out that another petition had been filed by the State Bank of India Officers ' Association (Karnataka) in the Karnataka High Court.
A second objection as regards the maintainability of the 494 petition was raised in para 3 that since the promotions had already been made they could not be disturbed and that no steps were taken to implead those officers, who would be directly affected as a result of the prayer made in the writ petition.
To the aforesaid objections raised by the Bank the petitioner filed a rejoinder supported by an affidavit of the President of the Federation, submitting that the depo nent did not have any knowledge of the writ petition filed in the High Court of Andhra Pradesh, and that as soon as it came to his knowledge it was withdrawn.
and that the peti tioners did not know the names of all the 58 candidates who had been promoted favoured.
When the Writ Petition was taken up for further hearing on April 5, 1990, counsel for the Bank objected to the maintainability of the writ petition on the grounds of suppression of material facts and abuse of the process of court.
The Court directed the petitioner to file a better affidavit, and the petitioner Federation filed a better affidavit explaining the correct position and tendering an unqualified apology for the mis statements in the earlier affidavit, but still reiterated that they came to know of the writ petition in the Andhra Pradesh High Court only on April 23, 1989 and that, at the time of the preliminary hearing, it was brought to the notice of the Court by the Respondent 's counsel.
The respondent pointed out that the statements made in the rejoinder filed by the petitioners that they were not aware of the names of the promoted officers till November, 1989 was a total falsehood because; (i) the writ petition filed in the Karnataka High Court made all of them parties to the writ petition, and (ii) the names of the promoted officers were listed in the fortnightly bulletin of the State Bank Officers ' Association dated 1st May, 1989 carry ing a message of congratulations to all of them.
Disposing of the preliminary objections and adjourning the writ petition for further hearing on merits, the Court, HELD: 1.
Apart from mis statements in the affidavits filed before this Court the petitioner federation has clear ly resorted to tactics which can only be described as abuse of the process of court.
The simultaneous filing of writ petitions in various High Courts on the same issue though purportedly on behalf of different associations of the Officers of the Bank, is a practice which has to be discour aged.
[500H; 501A] 495 2.
An attempt was made to obtain a stay in the Andhra Pradesh High Court and when that attempt failed the writ petition here was filed.
In this the petitioners were able to obtain only an order that any "promotions made during the pendency of the petition would be subject to the decision in the writ petition.
But having obtained this order on April 26, 1989, it is curious and inexplicable that an affiliated association should have made an application on April 27, 1989 in the Karnataka High Court praying for a stay of the promotions.
These are only tactics that will be indulged in by a chronic and compulsive litigant and not by a Federation like the petitioner.
[501C D] 3.
One expects that officers fight their battles fairly and squarely and not stoop low to gain what can only be temporary victories by keeping away material facts from the court.
[501E] 4.
It is common knowledge that, of late, statements are being made in petitions and affidavits recklessly without proper verifications not to speak of dishonest and deliber ate misstatements.
Strong and emphatic disapproval of the conduct of the petitioners in this case is recorded in the hope that this will be a lesson to the present petitioners as well as to other litigants and that atleast in future people will act more truthfully and with a greater sense of responsibility.
[501F G] 5.
The Court does not wish to penalise the various officers who may suffer as a consequences of the new policy, which they wish to challenge, and decline them an opportuni ty to put forward their grievances before the Court, for the mis statements or wrong steps taken by the officers of the Federation in their over anxiety to get quick interim re lief.
[502B C]
|
iminal Appeal No. 73 of 1966.
105 Appeal from the judgment and order dated March 31, 1965 of the Calcutta High Court in Criminal Revision No. 921 of 1963.
P.K. Chatterjee, for the appellants.
B.K. Bhattacharya, G.S. Chatterjee for P.K. Bose, for the respondent.
The Judgment of the Court was delivered by Bachawat, J.
The complainant Sarajit Kumar Bose was a forest ranger having his headquarters at Bara Bazar range in the district of Purulia.
Bibhuti Bhusan Dasgupta was the editor and Ram Chandra Adhikari was the printer and publisher of "Mukti" a local Bengali weekly journal with its registered office at Purulia town.
At the instance of Sripati Gope, a resident of Bhuni, P.S. Patanda, district Singhbhum they published a letter in the weekly issue of Mukti dated the 4th Asar, 1388 B.S. corresponding to June 19, 1965.
The letter which bore the caption "Wild law in the land of the Nags (barbarians)", contained several defamatory statements concerning Sarajit Bose.
On his complaint, Sripati Gope and Bibhuti Dasgupta were charged with an offence punishable under sec.
500 of the Indian Penal Code and Ram Adhikari was charged with an offence punishable under sec.
501 I.P.C. They were tried jointly by Shri S.M. Chatterjee, Magistrate, First Class, Purulia.
The Magistrate convicted all of them of the offences with which they were respectively charged, and passed appropriate sentences.
The appeals filed by them against the order were dismissed by the Sessions Judge, Purulia.
The order concerning the conviction and sentence of Sripati Gope has now become final.
The two courts rejected his claim for protection under the first exception to section 499 I.P.C. A revision petition filed by Bibhuti Dasgupta and Ram Adhikari was dismissed by the High Court.
They have filed the present appeal after obtaining a certificate under Article 134(1 ) (c) of the Constitution.
All the courts concurrently found that the publication was not made by the appellant in good faith for the public good and that they were not entitled to the protection of the ninth exception to sec.
499 as claimed by them Mr. Chatterjee attacked this finding.
The ninth exception to section 499 provides that "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 any other person, or for the public good.
" Section 52 provides that "nothing is said to be done or believed in "good faith" which is done or believed without due care and attention.
" The appellants ' case is that on their L2Sup C[169 8] 106 behalf one Dol Gobinda Chakravarty made enquiries and was satisfied about the truth of the defamatory statements.
It appears that Dol Govinda did not make any report to the appellants in writing.
The enquiries made by him did not reveal that all the defamatory imputations in the publication were true.
On the materials on the record it is impossible to say that the appellants published the statements in good faith or with due care and attention.
In Harbhajan Singh vs State of Punjab (1) the Court held that the accused person was entitled to the protection of the ninth exception to sec.
499 if he.
succeeded in proving a preponderance of probability that the case was within the exception.
We do not find that the courts below placed upon the appellant any heavier burden of proof.
Mr. Chatterjee next contended that the trial of Bibhuti Dasgupta was illegal as he was not personally examined under sec. '342 of the Code of Criminal Procedure.
To appreciate this argument it is necessary to refer to the following facts.
On September 27, 1961 the Magistrate examined the complainant and issued summons to.
the three accused.
On the application of Bibhuti Dasgupta the Magistrate passed an order o.n December 12, 1961 dispensing with his personal appearance and permitting him to appear by his pleader.
On September 17, 1962 the examination of prosecution witnesses was concluded.
On the same day Ram Adhikari was examined under sec.
On December 21, 1962 the lawyer representing Bibhuti Dasgupta flied a petition stating that he was undergoing an operation in Calcutta and that the lawyer may be examined on his.
behalf under sec.
On the same date the Magistrate allowed the application and examined his lawyer.
On April 17, 1963 the Magistrate delivered judgment.
The plea that the trial of Bibhuti Dasgupta was vitiated on account of his non examination under section 342 was not taken before the Magistrate or the Sessions Judge or at the hearing of the revision petition in the High Court.
It was taken for the first time in the petition for grant of the certificate under article 134( 1 )(c).
In this background let us examine the contention.
As a general rule save where the magistrate dispenses with the personal attendance of the accused person the first step in a criminal proceeding is to bring him before the magistrate.
The attendance of the accused is secured if necessary by summons or by warrant of arrest.
Thereafter the inquiry or trial proceeds in his presence.
Section 205 of the Code of Criminal Procedure empowers the Magistrate whenever he issues a summons to dispense with the personal attendance of the accused and permit him to appear by a pleader.
The section runs as follows : (1) ; 107 "205.
(1) Whenever a Magistrate issues a summons, he may, if he sees reason to do so, dispense with the personal attendance of the accused and permit him to appear by his pleader.
(2) But the Magistrate inquiring into or trying the case may, in his discretion at any stage of the proceedings, direct the personal attendance of the accused, and, if necessary, enforce such attendance in the manner hereinabove provided.
" The form of summons issued to the accused runs as follows "Whereas your attendance is necessary to answer to a charge of (state shortly the offence charged) you are hereby required to appear in person (o.r by pleader, as the case may be) before the (Magistrate) of. on the . day . of .
Herein fail not.
" Section 540A empowers the magistrate at any stage of an inquiry or trial to dispense with the personal attendance of the accused if he is represented by a pleader.
The section is as follows : "540A (1) At any stage of an inquiry or trial under this Code, if the Judge or Magistrate is satisfied, for reasons to be recorded, that the personal attendance of the accused before the Court is not necessary in the interests of justice, the Judge or Magistrate may, if the accused is represented by a pleader, dispense with his attendance and proceed with such inquiry or trial in his absence, and may, at .any subsequent stage of the proceedings, direct the personal attendance of such accused.
(2) If the accused in any such case is not represented by a pleader, or if the Judge or Magistrate considers his personal attendance necessary, he may if he minks fit, and for reasons to be recorded by him, either adjourn such inquiry or trial, or order that the case of such accused be taken up or tried separately.
" The point in issue is whether the pleader can represent the accused for purposes of sec.
342 and whether the examination of the pleader in place of the accused is sufficient compliance with the section in a case where the magistrate has dispensed with the personal attendance of the accused and permitted him to appear by a pleader.
On this question there is a sharp conflict of judicial opinion.
Most of the decisions upto 1962 are referred to in Prova Devi vs Mrs. Fernandes(1).
In that case a Full Bench of Calcutta High Court by a majority decision held that the magistrate may in his discretion examine the pleader on behalf of the (1) A.I.R. 1962 Cal.
108 accused under sec.
This view is supported by numerous decisions of other High Courts, but from time to time many judges expressed vigorous dissents and came to the opposite conclusion.
The two sides of the question are ably discussed in the majority and minority judgments of the Calcutta case.
After a full examination of all the decided cases on the subject, we are inclined to agree with the minority opinion.
The main arguments in favour of the view that the examination of the pleader is sufficient compliance with the provisions of section 342 may be summarized as follows.
The pleader authorised to appear on behalf of the accused can do all acts which the accused can do.
The representation of the pleader extends throughout the trial except as provided in section 366(2).
The form .of the summons shows that the pleader may answer to charge on behalf of the accused at every stage of the proceedings.
He may even plead guilty under secs.
242, 243, 251A, 255 and 271.
There is no reason why he cannot be examined under section 342. 'That section is subject to and controlled by.
section 205.
The accused can refuse to answer questions under sec.
342 and there is no point in insisting on his personal attendance if he has no intention to answer them.
Accused persons will suffer harassment and inconvenience if the magistrates have no discretion to dispense with their personal examination under section 342.
Having considered all these arguments we are not convinced that pleader can be examined in place of the accused under section 342.
Section 342 reads as follows : "342.
( 1 ) For the purpose of enabling the accused to explain any circumstances appearing in the evidence against him, the Court may, at any stage of any inquiring or trial without previously warning the accused, put such questions to him as the Court considers necessary, and shall, for the purpose aforesaid, question him generally on the case after the witnesses for the prosecution have been examined and before he is called on for his defence.
(2) The accused shall not render himself liable to punishment by refusing to answer such questions, or by giving false answers to them; but the Court and the jury (if any) may draw such inference from such refusal or answers as it thinks just.
(3) The answers given by the accused may be taken into consideration in such inquiry.
or trial, and put in evidence for or against him in any other inquiry into or trial for, any other offence which such answers may tend to show he has committed.
(4) No oath shall be administered to the accused when he is examined under sub section (1 ).
" 109 Sub section (1 ) of sec.
342 consists of two parts.
The first part gives a discretion to the Court to question the accused at any stage of an inquiry or trial without previously warning him.
Under the second part the Court is required to question him generally on the case after the witnesses for the prosecution have been examined and before he is called for his defence.
The second part is mandatory and imposes upon the Court a duty to examine the accused at the close of the prosecution case in order to give him an opportunity to explain any circumstances appearing against him in the evidence and to say in his defence what he wants to say in his own words.
He is not bound to.
answer the.
questions but if he refuses to answer or gives false answers, the consequences may be serious, for under sub section (2) the Court may draw such inference from the refusal or the false answers as it thinks fit.
Under sub sec.
(3) the answers given by the accused may be taken into consideration in the inquiry or trial.
His statement is material upon which the Court may act, and which may prove his innocence, (see State of Maharashtra vs Laxman Jairam(1).
Under sub sec.
(4) no oath is administered to him.
The reason is that when he is examined under sec.
342, he is not a witness.
Before sec.
342A was enacted, he was not a competent witness for the defence.
His statement under sec.
342 was intended to take the place of what he could say in his own way in the witness box.
(see Hate Singh vs State of Madhya Bharat(2).
Under sec.
342A, he is now a competent witness.
But the provisions of sec.
342A does not affect the value of his examination under sec.
Under sub section (3) of section 342 his answers may be put in evidence for or against him in other inquiries or trials for other offences.
For instance, if in a trial for murder he says that he concealed the dead body and did not kill the victim his statement may be used as evidence against him in a subsequent trial for an offence under sec.
The privilege of making a statement under sec.
342 is personal to the accused.
The clear intention of the section is that only he and nobody else can be examined under it.
This conclusion is reinforced if we look at sec.
The whole of his examination including every question put to him and every answer given by him must be recorded in full and interpreted to him in a language which he understands, and he is at liberty to explain or add to his answers; and when the whole is made conformable to what he declares is the truth the record has to be signed by him and the Magistrate.
The idea that the pleader can be examined on his behalf is foreign to the language of secs.
342 and 364.
It was well observed by Rankin J. in Promotha Nath vs Emperor(3) that: (1) [1962] Supp. 3 S.C.R. 230.
(2) A.I.R. 1953 S.C. 468, 470.
(3) A.I.R. 1923 Cal.
470, 481. 110 ". the intention of the statute iS that at a certain stage in the case, the Court itself shall put aside all Counsel, all 'pleaders, all witnesses, all representatives, and shall call upon an individual accused with the authority of the Court 's own voice, to take advantage of the opportunity which then arises to.
state in his own way anything which he may be desirous.
of stating. what is necessary is.
that the accused shall be brought face to face solemnly with an opportunity given to him to make a statement from his place in the dock in order that the Court may have the advantage of hearing his defence if he is willing to make one with his own lips? ' The proposition that a pleader authorised to appear on behalf of the accused can do all acts which the accused himself can do at the trial is too wide.
If the statute gives the accused a personal privilege or imposes upon him a personal duty, only he can exercise the privilege or perform the duty.
Thus under sec.
366(2) the accused must hear the judgment in person unless the sentence is one of fine only or unless, he is acquitted.
Under sec.
342A only the accused can give evidence in person and his pleader 's evidence cannot be treated as his.
The answers of the accused under section 342 is intended to be a substitute for the evidence which he can give as a witness under sec.
The privilege and the.
duty of answering questions under sec.
342 cannot be delegated to a pleader.
No doubt the form of the summons show that the pleader may answer the charges against the accused, but in so answering the charges, he cannot do.
what only the accused can do personally.
The pleader may be permitted to represent the accused while the prosecution evidence is being taken.
But at the close of the prosecution evidence the accused must be questioned and his pleader cannot be examined in his place.
Sections 205 and 540A do not expressly mention that the pleader cannot be examined under sec.
342, but this does not lead to the inference that the pleader can be so examined.
On the other hand, secs.
353, 360, 361 and 366 expressly provide that the pleader may represent the accused for certain purposes, but from this fact alone no inference can be drawn that the pleader cannot represent the accused for purposes of section 342 or other sections.
It is from, the scheme, purpose and language of sec.
342 that we are driven to the conclusion that the examination under the section must be of the accused person and not his pleader.
In Dorabshah vs Emperor(1) the Bombay High Court held that where the accused is permitted to appear by his pleader (1) A.I.R. 1926 Bom.
111 under sec.
205 the pleader may on his behalf be examined and may plead guilty under secs.
242 and 243.
Whether the Court can act upon an admission of guilt by the pleader under secs.
242, 243, 251A, 255 and 271 does not directly arise in this case and we express no opinion on it.
It is sufficient to say that the language of those sections and the effect of admissions under them are entirely different.
We are not impressed with the argument that an accused person will suffer inconvenience and harassment if the Court cannot dispense with his attendance for purposes of sec.
The examination under the section becomes necessary when at the close of the prosecution evidence the magistrate finds.
that there are incriminating circumstances requiring an explanation by the accused.
If there is.
no evidence implicating the accused, no explanation from him is necessary and he need not be examined under section 342.
If there is evidence implicating him, it is in his interest that he should be examined personally.
There are exceptional cases when an examination of the accused personally under sec.
342 is not necessary or possible.
Where the accused is a company or other juridical person it cannot be examined personally.
It may be that the Court may then examine a director or some other agent on its behalf [see Express Diary Ltd. vs Corporation of Calcutta(1)].
Exceptional cases apart, only the accused in person can be examined under section 342.
We therefore hold that the Magistrate should have examined Bibhuti Dasgupta personally and the examination of his pleader was not sufficient compliance with sec.
This conclusion does not dispose of Bibhuti Dasgupta 's appeal.
Under sec.
537 the conviction and sentence are.
not reversable on account of any error, omission or irregularity in any proceedings during the trial unless the error, omission or irregularity has ' in fact occasioned a failure of justice.
Mere non examination or defective examination under sec.
342 is not a ground for interference unless prejudice is established.
[see Tilakeshwar Singh vs The State of Bihar(2) K.C. Mathew vs The State of Travancore Cochin(3), Ram Shankar Singh vs State West Bengal (4)].
Looking at the facts of this case we do not find that any prejudice was caused to Bibhuti Dasgupta by his non examination under sec.
The prosecution evidence was closed on September 17, 1962.
Ram Adhikari appeared in Court and was examined personally.
Bibhuti Dasgupta did not appear in Court on that date.
After 3 months o.n December 21, 1962 his pleader was examined on his behalf at his express request.
The Magistrate delivered judgment on April 17, 1963.
(1) I.L.R. (2) (3) ; , 1061 2.
(4) [1962] Supp. 1.
S.C.R. 49, 64 112 On that date Bibhuti Dasgupta was.
present in Court.
He made no complaint at any time before the Magistrate or the Sessions Judge or the High Court that he had suffered any prejudice.
Even in this Court Mr. Chatterjee could not point out what further explanation could have been given by Bibhuti Dasgupta if he had been examined personally.
We are satisfied that the omission to examine him under sec.
342 did not cause him any prejudice and has not in fact occasioned a failure of justice.
We are, therefore, not inclined to interfere with his conviction and sentence.
In the result, the appeal is dismissed.
Y.P. Appeal dismissed.
| In petitions for the writ of habeas corpus under article 32 of the Constitution for release from detention under orders passed under section 3(2) of the Prevention of Detention Act, HELD: The reasonableness of the satisfaction of the detaining authority cannot be; questioned in a Court of law; the adequacy of the material on which the said satisfaction purports to rest also cannot be examined in a Court of law.
But if any of the grounds furnished to the detent are found to be irrelevant while considering the application of cls.
(i) to (iii) of section 3(1)(a) of the Act and in that sense are foreign to the Act, the satisfaction of the detaining authority on which the order of detention is based is open to challenge and the detention order liable to be quashed.
[640 H 641 C] Even if any one of the grounds or reasons that led to the satisfaction was irrelevant, the order of detention would be invalid even if there were other relevant grounds, because it could never be certain to what extent the bad reasons operated on the mind of the authority concerned or whether the detention order would have been made at all if only one or two good reasons had been before them.
Similarly, if some of the ground supplied to the detent are so vague that they would virtually deprive the detent of his statutory right of making a representation, that again may make the order of detention invalid.
If, however, the grounds on which the order of detention proceeds are relevant and germane, to the matters which fall to be considered under section 3(1)(a) of the Act, it would not be open to the detenu to challenge the order of detention by arguing that the satisfaction of the detaining authority is not reasonably based on any of the said grounds.
Though the satisfaction of the detaining authority contemplated by section 3(1)(a) is the subjective satisfaction of the said authority, cases may arise: where the detenu may challenge the validity of his detention on the ground of mala fides.
[641 B F, 644 C D] In the present case, (1) with respect to some of the petitioners three of the grounds of detention related to cases of assault on solitary individuals either by knife or by using crackers.
It could not be held that these grounds had any relevance or proximate connection with the maintenance of public order.
Therefore the orders of detention of these petitioners were illegal and ultra virex.
The expression "public order" in section 3 (1) of the Act does not take in every kind of infraction of law.
When two people quarrel and fight 'and assault each other inside a house or in a street, it may be said that there is disorder but not public disorder.
Such cases are dealt with under the powers vested in the executive authorities under the provisions of ordinary criminal law but the culprits cannot be detained on the 636 ground that they were, disturbing public order.
The contravention of any law always affects order but before it can be said to affect public order, it must affect the community or the public at large.
A line of demarcation between serious and aggravated forms of disorder which directly affect the community or injure the public interest must be drawn and the, relatively minor breaches of peace of a purely local significance which primarily injure specific individuals and only in a secondary sense public interest.
A mere disturbance of law and order leading to disorder is thus not necessarily sufficient for action under the Preventive Detention Act but a disturbance which will affect public order comes within the scope of the Act.
A District Magistrate is therefore entitled to take action under section 3( 1 ) of the Act to prevent subversion of public order but not in aid of maintenance of law and order under ordinary circumstances.
The difference= between the concepts of 'public order ' and 'law and order ' is similar to the distinction between 'public ' and 'private ' crimes in the realm of jurisprudence.
In considering the material elements of crime, the historic Jests which each community applies are intrinsic wrongfulness and social expediency which are the two most important factors which have led to the designation of certain conduct as criminal. 'Public ' and 'private ' crimes have been distinguished in the sense that some Offences primarily injure specific persons and only secondarily the public interest, while others directly injure the public interest and affect individuals only remotely.
[641 H 642 D; 643 G, H] The State of Bombay vs Atma Ram: Sridhar Vaidya, ; ; Dr. Ram Manohar Lohia vs State of Bihar, ; ; Shibban Lal Saksena vs The State of Uttar Pradesh, ; , followed.
(2) One of the grounds of detention supplied to some of the other petitioners, stated, that they had become a menace to the society and there had been disturbances and confusion in the lives of peaceful citizens of the locality and that the inhabitants thereof were in constant dread of disturbances of public order.
The ground was extremely vague and gave no particulars to enable the petitioners to make an adequate representation against the order of detention and this infringed the Constitutional safeguard provided under article 22(5).
Therefore, the orders of detention of these petitioners were illegal and ultra vires.
The Constitutional requirement that the ground must not be vague must be satisfied with regard to each of the grounds communicated to the person detained subject to the claim of privilege under el.
(6) article 22 of the Constitution and therefore even though one ground was vague and the other grounds were not vague, the detention was not in accordance with procedure established by law and was therefore illegal.
[648 B C] Dr. Ram Krishan Bhardwaj vs The State of Delhi, ; , followed.
|
Civil Appeal No. 840 of 1978.
Appeal by Special Leave from the Judgment and order dated 14th December 1977 of the Punjab and Haryana High Court in Civil Revision No 613/74.
Govind Das, Mrs. Urmila Kapoor and Mrs. Shobha Dixit for the Appellant.
M.N. Phadke, N.C. Jain, S.K. Dhingra and S.L. Sethia for the Respondent.
The Judgment of the Court was delivered by PATHAK, J.
This appeal by special leave is directed against a judgment of the High Court of Punjab & Haryana dismissing a tenants ' revision petition.
under section 15(5), East Punjab Urban Rent Restriction Act, 1949 arising out of eviction proceedings.
The respondent, as landlord, applied under section 13(2) (ii) (a) of the East Punjab Urban Rent Restriction Act, 1949 for the possession of a shop forming part of the premises No. 6283, Nicholson Road.
Ambala Cantonment occupied by the appellants.
He claimed that the shop had been let out to the first appellant, Gurcharan Singh but that he had without the written consent of the respondent, sublet the shop to his father, Gurdayal Singh and his brothers, Anoop Singh and Jagjit Singh.
The appellants denied that the shop had been sub let and pleaded that they, along with their father constituted a joint Hindu family, and that the joint Hindu family was the tenant of the shop.
The Rent Controller found in favour of the respondent and passed an order of eviction, which was subsequently affirmed by the Appellate Authority.
The appellants applied in revision, and the High Court has, by its judgment and order dated 14th December, 1977 dismissed the revision application.
The first contention of the appellant is that there is no evidence that the shop was sub let, and the finding is misconceived in ' point of law.
493 It is sufficient to point out that the Rent Control Authorities and the High Court have concurrently found that the shop was let out to Gurcharan Singh and not to the joint Hindu family, and that Gurcharan Singh sub let it in 1967 to a partnership firm consisting of his father and brother.
The finding is supported by ample evidence on the record.
The material shows that the shop was let out to Gurcharan Singh alone, and the business carried on by him was later taken over by a partnership consisting of his father and brothers.
He was no longer proprietor of the business, and merely extended his assistance under a power of attorney enabling him to, act for the partnership.
The execution of the power of attorney establishes that he was not a partner.
It appears that Gurcharan Singh individually carried on some other business, but there is no evidence to show that business was lodged in the shop under consideration.
The material before us demonstrates that the shop was occupied exclusively by the partnership firm and that Gurcharan Singh was left with no right to possession therein.
The evidence is incompatible with the case, now set up before us, that the partnership was merely a licensee of Gurcharan Singh.
Learned counsel for the appellants relies on Hira Singh & Ors.
vs Banarsi Dass.
That case.
however, was one of a joint tenancy, and it was held that the mere circumstance that one of the co tenants had ceased living in the premises for some time could not lead to the inference that he had sub let it to the other co tenants.
The evidence Showed that all the co tenants were carrying or business in partnership, although one of them was not disclosed was a partner.
Some reliance was placed on the circumstance that the licence for carrying on the business stood in the name of Gurcharan Singh.
As the evidence plainly shows, the licence was issued to him when he was carrying on the business, and subsequently, although it continued to stand in his name, it was.
used by the partnership firm, and no inquiry was ever made by the licensing authority, when renewing it, to determine whether the original holder of the licence was still carrying on the business.
We are of opinion that the finding of the High Court and the Rent Control authorities that Gurcharan Singh had sub let the shop is unassailable.
Learned counsel for the appellants contends next that the ground sub letting taken under the East Punjab Urban Rent Restriction Act, 1949 is not available to the respondent because on the date when the sub letting took place that Act was not in force in the Ambala Cantonment.
Now, it appears that section 3 of the Cantonments (Extension 494 of Rent Control Laws) Act, 1957 empowered the Central Government to extend, by notification, to any cantonment with such restrictions and modifications as it thought fit, any enactment relating to the t control of rent and regulation of house accommodation which was in force on the date of the notification in the State in which the cantonment was situated.
In exercise of that power, the Central Government issued Notification No. SRO 7.
dated 21st November, 1969 extending the East Punjab Urban Rent Restriction Act, 1949 to cantonments in the States of Haryana & Punjab.
Consequently, with effect from 21st November.
1969 the East Punjab Urban Rent Restriction Act became a law operating in the cantonment.
Section 13 (2) (ii) (a) of the Act provides for an order of eviction if the Controller is satisfied "that the tenant has, after commencement of this Act, without the written consent of the landlord (a) transferred his right under the lease or sub let the entire building or rented land or any portion thereof.
" It is clear that the tenant falls within the mischief of this sub clause only if he has effected the transfer or sub letting after the commencement of the Act.
The Act commenced to operate in the Ambala Cantonment on 21st November, 1969.
In regard to that territory, it was not law before that date, but only on and from that date.
It is clear that the sub letting in the present case having been effected in 1967, was not made after the commencement of the Act.
Learned counsel for the respondent urges that section 13(2)(ii)(a) of the Act uses the words "has sub let", and submits that sub letting is a continuous process and that even though in the present case it may be said to have commenced before the Act came into force it continued in operation after the Act was brought into force.
Now, when section 13(2)(ii)(a) speaks of a tenant who "has sub let", it refers to a tenant who has entered into a transaction of sub letting.
And the transaction of sub letting is referable to a single point of time.
It is the moment when the act effecting the sub letting is completed.
That transaction is located at a fixed point.
What happens then is that a flowing stream of rights and obligations issues from the sub letting.
Those rights continue as long as the sub lease subsists.
but they have their source in the definitive transaction of sub letting located in a single fixed point of time.
We may add that in the context of section 13(2)(ii)(a) of the Act.
the words "has sub let" imply that the sub letting must subsist on the date when the Act comes into force.
The reason is apparent from the object of the Act, which is to protect the personal occupation of the tenant.
The protection is not extended to a tenant who has abandoned occupation of the premises and has passed possession to another, even though by way of a sub tenancy.
495 The protection against eviction is not available for permitting a tenant to make a profit out of his tenancy rights by sub letting the premises.
Therefore, the words "has sub let" unqualified by any reference to the commencement of the Act.
refer to a transaction of sub letting entered into before or after the commencement of the Act, and in the case where sub letting has been effected before the commencement of the Act the sub lease must subsist, and the rights under it continue to flow, on the date of the commencement of the Act.
In the present case, however, section 13(2)(ii)(a) of the Act confines its scope to sub leases effected after the commencement of the Act, that is to say, transactions of sub letting effected after the date when the Act came into force.
For that reason, a sub letting effected before the commencement of the Act cannot be brought within the mischief of section 13(2)(ii)(a) even though it continues to subsist on or after the commencement of the Act.
In Goppulal vs Thakurji Shriji Shriji Dwarkadheeshji & Anr.
on which learned counsel for the respondent relies, the relevant provision did not include the words "after the commencement of this Act".
and, therefore, took within its scope a sub letting transacted before the coming into force of the relevant Act.
In our opinion, the respondent cannot avail of section 13(2)(ii)(a) of the East Punjab Urban Rent Restriction Act on the basis that it was brought into operation in the Ambala Cantonment by the Notification of 1969.
We find, however, that the Cantonment (Extension of Rent Control Laws) Act, 1957 was amended by Act No. XXII of 1972.
Upon amendment, section 1(2) of the principal Act declared that the principal Act would be deemed to have come into force on 26th January, 1950.
The words "on the date of the Notification" were omitted in section 3(1) of the principal Act, and were deemed always to have been omitted, so that under section 3 the Central Government must be deemed to have been empowered always to extend to a cantonment any enactment relating to the control of rent and regulation of house accommodation in force in the State even as it stood before the date of the Notification.
This amendment was made in order to accord with the further amendment made by inserting sub section (3) in section 3 of the principal Act, which provided that where an enactment in force in any State relating to the control of rent and regulations of house accommodation was extended to a cantonment from a date earlier than the date of such extension was made, such enactment, as in force on such earlier date, would apply to such cantonment.
Section 3(2) was added in the principal Act, and it provided: 496 "2.
The extension of any enactment under sub section
(1) may be made from such earlier or future date as the Central Government may think fit: Provided that no such extension shall be made from a date earlier than (a) the commencement of such enactment, or (b) the establishment of the cantonment, or (c) the commencement of this Act, whichever is later.
" Subject to the proviso, the Central Government now enjoyed power to extend an enactment from a date earlier than the date of the notification or from a future date.
Subsequently, the Central Government issued Notification No. SRO 55, dated 24th January, 1974 superseding the earlier Notification No. SRO 7, dated 21st November, 1969 and extending the East Punjab Urban Rent Restriction Act afresh to cantonments in the States of Haryana and Punjab.
Section 1(3) of that Act was modified to read that, except for section 19, it would be deemed to have come into force on 26th January.
The result is that the East Punjab Urban Rent Restriction Act will be deemed to have come into force in the Ambala Cantonment on 26th January, 1950.
And if that be so, the sub letting effected in 1967 must plainly be regarded as having been made after the commencement of that Act.
Two points are raised on behalf of the appellants against that conclusion.
The first is that the power under section 3 of the having been exercised once, that is to say, by the Notification dated 21st November, 1969, the power of extension stood exhausted and could not be availed of again, and therefore the Notification dated 24th January, 1974 was without statutory sanction and invalid.
We are referred to Lachmi Narain etc., etc.
vs Union of India & Ors.
That was a case where this Court held that a Notification under section 2 Part States (Laws) Act, 1950 having been issued in 1951 by the Central Government extending the Bengal Finance (Sales Tax) Act, 1941 to the State of Delhi, the power given by section 2 exhausted itself on the extension of the enactment and could not be exercised again to enable the issue of a fresh Notification modifying the terms in which the Bengal Act was extended.
The case is clearly distinguishable.
The power under which the Notification dated 24th January, 1974 has been issued is a separate and distinct power from that under which the Notification dated 21st November, 1969 was made.
The power now exercised passed into the , 497 1957 when it was amended in 1972.
In its nature and quality it is not identifiable with the power vested under the unamended Act.
A power conferred by statute is distinguished by the character and content of its essential components.
If one or more material components characterising the power cannot be identified with the material components of another, they are two different and distinct powers.
Although broadly the power envisaged in section 3 of the amended is a power of extension even as it was under the unamended Act, there is a vital qualitative difference between the two.
The power under the unamended Act was a limited power.
It could operate prospectively only.
There was no choice in the matter.
After amendment, the Act provided for a power which could be exercised retrospectively.
The power extended to giving retrospective effect to an enactment in force in the State in the form in which that enactment was in force on the date on which the extension was made.
It was a power whose reach and cover extended far beyond what the power under the unamended Act could achieve.
We are of the view that in issuing the Notification dated 24th January, 1974 and thereby extending the East Punjab Urban Rent Restriction Act to the Ambala Cantonment retrospectively with effect from 26th January, 1950, the Central Government exercised a power not available to it when it issued the Notification dated 21st November, 1969.
The contention that the issue of the Notification of 24th January, 1974 amounted to a further exercise of power conferred by section 3 of the , under which the earlier Notification was issued is without force and must be rejected.
The second point raised is that in clause (c) of the proviso to section 3(2) of the , which speaks of "the commencement of this Act", the words "this Act" refer to the Cantonments (Extension of Rent Control Laws) Amendment Act, 1972, which commenced to operate from 2nd June, 1972.
The argument is founded in fallacy.
The words "this Act" refer to the principal Act in which sub section 3(2) is inserted by virtue of the amendment, and that Act, by virtue of section 2(2) as amended, must be deemed to have come into force on 26th January, 1950.
In the result, the appeal fails and is dismissed with costs.
Appeal dismissed.
| In the year 1978, a proviso was added to Rule 3(j) of the Bar Council of Delhi Election Rules, 1968 with the approval of the Bar Council of India in accordance with the requirement of Sub section (3) of section 15 of the .
In accordance with that proviso a copy of the declaration form was sent on 14th June, 1978 to the Advocates whose names found place in the State roll of Advocates asking them to return the declaration form duly filled up and signed within the specified period.
A publication to this effect was also made in some newspapers viz. Hindustan Times, Indian Express, Statesman etc.
The last extended date for the submission of the declaration forms was 14th September, 1978 and the electoral roll was finally published on the 16th September, 1978 excluding the names of about 2,000 Advocates who had failed to submit such declaration forms.
On the basis of the electoral roll so prepared, elections to the Bar Council of Delhi was held on the 17th November, 1978.
The total number of advocates on the Advocates roll was 5,000 and odd out of which the names of about 3,000 and odd only were included in the electoral roll in accordance with the proviso to Rule 3(j) of the Election Rules of the Bar Council of Delhi.
The results of the election were declared on the 19th November, 1978.
The names of the 15 persons who were declared elected were published in the Gazette on the 22nd November, 1978.
Thereafter the respondents in these appeals filed writ petitions challenging the whole election by attacking the validity of the proviso to Rule 3(j).
The Delhi High Court allowed the three writ petitions taking the view, (i) so far as the qualifications to be possessed by and the conditions to be satisfied by an advocate before being brought on to the Electoral Roll was concerned only the Bar Council of India has the competence to make the rules under section 3(4) and section 49(1)(a) of the and the State Bar Council has no power at all to make a rule on this subject; (ii) the plea of estoppel against Surjeet Singh does not arise, (iii) rank injustice has been done to the petitioners because more than 2000 advocates were wrongfully disqualified being brought on the Electoral Roll.
This has materially affected the result of the elections; and (iv) Rule 3(j) of the Bar Council of Delhi Election Rules, 1968 is in excess of the rules making power of Bar Council of Delhi.
Dismissing the appeals by special leave the Court, ^ HELD: 1.
The impugned proviso to Rule 3(j) of the Delhi Bar Council of Election Rules is ultra vires and invalid and the electoral roll prepared by 947 the Delhi Bar Council on the basis of the same resulting in the exclusion of the names of about 2000 advocates from the said roll was not valid in law.
[958D E] (b) The whole election was invalid on that account and it could be challenged as such in a writ petition.
It was not a case of challenging the preparation of the electoral roll on the factual basis of wrong exclusion of a few names.
For the said purpose Rule 4 occurring in Chapter I of the Bar Council of India Rules could come into play.
But here, because of the invalidity of the Rules itself, the preparation of the electoral roll was completely vitiated a matter which cannot be put within the narrow limit of the said rule.
[958E F] However, it depends upon the nature and the intensity of the error committed in the preparation of the electoral roll and its effect on the whole election for deciding the question as to whether a writ petition would be maintainable or not.
[862E F] Chief Commissioner, Ajmer vs Radhey Shyam Dani, ; ; Parmeshwar Mahaseth and Ors.
vs State of Bihar and Ors.
, ; Umakant Singh and Ors.
vs Binda Choudhary and Ors., AIR 1965 Patna 459; Dev Prakash Balmukand vs Babu Ram Rewti Mal and Ors.
AIR 1961 Punjab 429; Ramgulam Shri Baijnath Parsad vs The Collector, District Guna and Ors., and Bhoop Singh vs Bar Council of Punjab and Haryana through its Secretary and Ors., AIR 1976 M.P. 110; referred to.
(c) The illegal preparation of the electoral roll by the Delhi Bar Council on the basis of the invalid proviso to Rule 3(j) goes to the very root of the matter and no election held on the basis of such an infirmity can be upheld.
There is no question of the result being materially affected in such a case.
[958F G] (d) The contesting respondents could not be defeated in their writ petitions on the ground of estoppel or the principle that one cannot approbate and reprobate or that they were guilty of laches.
In the first instance some of the contesting respondents were merely voters.
Even Sri Surjeet Singh in his writ petition claimed to be both a candidate and a voter.
As a voter he could challenge the election even assuming that as a candidate after being unsuccessful he was estopped from doing so.
But, merely because he took part in the election by standing as a candidate or by exercise of his right of franchise he cannot be estopped from challenging the whole election when the election was glaringly illegal and void on the basis of the obnoxious proviso.
There is no question of approbation and reprobation in such a case.
A voter could come to the High Court even earlier before the election was held.
But merely because he came to challenge the election after it was held it cannot be said that he was guilty of laches and must be non suited on that account.
[958F H, 959A B] Kanglu Beula Kotwal and Anr.
vs Chief Executive Officer, Janpad Sabha, Durga and Ors., ; distinguished.
(e) The manner of resolving disputes as to the validity of election is provided for in Rule 34 of the Delhi Bar Council Election Rules.
This is not an 948 appropriate and adequate alternative remedy to defeat the writ petitioner on that account.
Firstly, no clause of Rule 34 covers the challenging of the election on the ground that it has been done in this case.
Secondly, the Election Tribunal will not be competent to declare any provision of the Election Rules ultra vires and invalid.
It is not a case where the name of any voter was wrongly omitted from the electoral roll but it is a case where the preparation of the whole electoral roll was null and void because of the invalidity of the impugned proviso.
[959C D, E F] Ramgulam Shri Baijnath Pd.
vs The Collector, Dist.
Guna and Ors., and Bhupendra Kumar Jain vs Y. section Dharmadhikari and Ors., AIR 1976, M.P. 110; referred to.
Bhoop Singh vs Bar Council of Punjab and Haryana through its Secretary and Ors., AIR 1977 Pb. & Haryana; quoted with approval.
K. K. Srivastava etc.
vs Bhupendra Kumar Jain and Ors., AIR 1977 S.C. 1703; distinguished.
If the alternative remedy fully covers the challenge to the election then that remedy and that remedy alone must be resorted to even though it involves the challenge of the election of all the successful candidates.
But if the nature and the ground of the challenge of the whole election are such that the alternative remedy is no remedy in the eye of law to cover the challenge or, in any event, is not adequate and efficacious remedy, then the remedy of writ petition to challenge the whole election is still available.
In the present case the Election Tribunal would have found itself incompetent to declare the proviso to Rule 3(j) of the Delhi Bar Council Election Rules ultra vires and that being so the alternative remedy provided in Rule 34(8) was no remedy at all.
[964D F] Suryya Kumar Ray vs The Bar Council of India and Ors.
Matter No. 304 of 1976 decided on December 17, 1976, overruled.
Harish Sambhu Prasad vs Bar Council of Gujarat, Special Civil Application Nos. 542 and 551 of 1969; approved.
So long the existing rules framed by the Bar Council of India remained in vogue all persons whose names are on the State Roll are entitled proprio vigore to be put on the electoral roll.
Sections 24(e) (1) and 26A of the read with Rules 1, 2 and 3 of Chapter I of of the Bar Council of India Rules make this position clear.
[954A B, D H] 4.
On a plain reading of sub sections 4 of section 3 of the , it is manifest that under the Act the qualifications and conditions entitling an advocate to vote at an election or for being chosen as a member of the State Bar Council has to be prescribed by the Bar Council of India.
The State Bar Council has no such power.
The power of the State Bar Council is merely to prepare and revise from time to time the electoral roll subject to the Rules made by the Bar Council of India concerning the qualifications and conditions aforesaid.
This interpretation of Section 3(4) of the Act finds ample support from the very special and specific provision contained in section 49(1) (a) providing for the general power of the Bar Council of India.
[956F H] 949 5.
It is true that the power to make rules conferred by section 15 is both for the Bar Council of India as also for the Bar Council of a State.
But no provision of section 15 can override the specific provision made in section 3(4) and section 49(1)(a) of the Act.
Sub section (1) of section 15 says "A Bar Council may make rules to carry out the purposes of this Chapter" which means Chapter II including section 3.
But the power to prescribe qualifications and conditions entitling an advocate to vote at an election being that of the Bar Council of India section 15(1) cannot be interpreted to confer power on the State Bar Council to make rules regarding the qualifications and conditions aforesaid.
[957B D] The State Bar Council can frame rules for the preparation and revision of electoral rolls under section 15(2)(a).
That would be in conformity with the latter part of sub section (4) of section 3 also.
But in the garb of making a rule for the preparation and revision of the electoral rolls it cannot prescribe disqualifications, qualifications or conditions subject to which an advocate whose name occurs in the State roll can find place in the electoral roll resulting in his deprivation of his right to vote at the election.
In the instant case under the impugned proviso failure on the part of an advocate to submit the required declaration within the specified time entitles the State Bar Council to exclude his name from the electoral roll.
Such a thing was squarely covered by the exclusive power conferred on the Bar Council of India under sections 3(4) and 49(1)(a) of the .
The State Bar Council had no such power.
[957F H] 6.
The approval of the Bar Council of India can make the rule made by the State Bar Council valid and effective only if the rule made is within the competence of the State Bar Council otherwise not.
Mere approval by the Bar Council of India to a rule ultra vires the State Bar Council cannot make the rule valid.
Nor has it the effect of a rule made by the Bar Council of India.
Making a rule by the Bar Council of India and giving approval to a rule made by the State Bar Council are two distinct and different things.
One cannot take the place of the other.
[958B D]
|
Civil Appeals Nos. 2475 to 2477 and 2579 of 1969 From the judgment and order dated the 15th April, 1969 of the Judicial Commissioner 's Court at Goa, Daman and Diu in Civil Appeal Nos. 3217, 3334/64 and 3466 of 1965 and 3467 of 1965.
V.M. Tarkunde, Bernardo Doss Reis and Naunit Lal for the Appellants in CA.
2476/69.
S.D. Tamba, Girish Chandra and Miss A. Subhashini, for the Respondents.
The Judgment of the Court was delivered by PATHAK, J.
These appeals by certificate granted by the Additional Judicial Commissioner of Goa, Daman and Diu arise out of suits for the recovery of loans made to the appellants at various branches of the Banco Nacional Ultramarino in Goa during Portuguese rule, 19 The territories, of Goa, Daman and Diu constituted the Estado de India of the sovereign State of Portugal.
The Banco Nacional Ultramarino (the National overseas Bank) with its Head office at Lisbon in Portugal, carried on banking business in Goa at different Branches, some of them being situate at Vasco Da Gama, Margao and Panjim.
It was also a currency issuing Bank and discharged the functions of a Government Treasury.
It issued Portuguese currency notes in Goa, and in its banking capacity it received deposits and granted loans.
On December 20, 1961 the territories of Goa, Daman and Diu were liberated from Portuguese rule and integrated with India.
On the eve of the transfer of power the Banco Nacional Ultramarino closed its Branches at Goa and removed a substantial portion of the valuable assets held there to its Head office at Lisbon and to other places overseas.
To provide for the administration of the liberated territories the President of India promulgated the Goa, Daman and Diu (Administration) ordinance, 1962, which on March 27, 1962 was replaced by enacted by Parliament.
By virtue of sub section
(1) of section 5 of the Act all laws in force immediately before "the appointed day" (December 20, 1961) in Goa, Daman and Diu were to continue to be in force therein until amended or repealed by a competent legislature or other competent authority.
The clo sure of the Branches of the Banco Nacional Ultramarino at Goa gave rise to considerable confusion.
It was necessary to take measures for the exchange of over nine crore rupees worth of Portuguese currency notes for Indian currency, and likewise to provide for the repayment of moneys and the return of valuables deposited with the Branches.
As the Banco Nacional Ultramarino had closed those Branches no one could operate on them.
To relieve the common confusion and distress, the President of India promulgated, under Article 240 of the Constitution, the Goa, Daman and Diu (Banks Reconstruction) Regulation, 1962 (hereinafter referred to as "the Regulation").
Section 3 declared that in view of the closure of the branches and the transfer of a substantial portion of their assets out of India on or about the "appointed day" and the difficulties experienced by depositors, the 20 Branches would, as from that day, be reconstructed in the interests of the general public in accordance with the provisions of the Regulation.
An examination of the provisions which follow shows that the Branches were integrated into a fully constituted Bank independent of the Banco Nacional Ultramarino, the purpose being to dispose of the business pending on December 20, 1961, with no fresh business being undertaken, and its functions being confined to the discharge of existing liabilities and the recovery of existing debts and other assets with a view to the ultimate winding up of the Bank.
A Custodian was appointed by the Central Government to take charge of the Bank.
The properties and assets as well as the obligations and liabilities of the Bank stood transferred to and vested in him, and he was empowered to realise any debts or other amounts due to the said Branches including any debts or other amounts due from the Head office of the Banco Nacional Ultramarino.
On March 30, 1963, the Custodian filed a suit in the Court of the Civil Judge at Ilhas, Panaji against the Agencia Commercial International, its managing partner, Jose Antonio Gouveia and his wife Geraldina Pereira Gouveia, alleging that the branch of the Banco Nacional Ultramarino at Panaji had, pursuant to a request of the Agencia, opened a current account in its favour upto the limit of Escudos 300.000$00 for three months renewable at 4% interest, 3% fine, 1 1/4% quarterly commission, penal interest at 6% and court expenses, the loan account being secured by a promissory note with its maturity date in blank, executed by the Agencia and guaranteed by the managing partner and his wife.
The limit was raised subsequently, and the excess was also guaranteed by a promissory note with its maturity date in blank and signed by the defendants.
The plaintiff stated that the loan account showed a debit balance of Escudos 428.612$37, equivalent to Rs. 71,435.40, in favour of the Panjim branch of the Banco Nacional Ultramarino, the account being closed on December 20, 1961 and the balance thereof becoming payable.
It was stated further that the promissory notes were not in the possession of the plaintiff and could be presumed to have been removed to Portugal.
The plaintiff prayed for a joint and several decree against the defendants for Rs. 71,435.40 with accrued interest, Penal interest, commission, fine and court expenses.
21 The suit was resisted by the defendants, principally on the ground that the Banco Nacional Ultramarino was a public limited company with its head office at Lisbon, that the Branch at Panjim did not possess a separate juridical personality from the Company and could not be said to possess assets or liabilities of its own, that transactions by the Panjim Branch were made under the direct superintendance of the Head office and credit was granted directly by B the Head office, and that the credit in question was incorporated in promissory notes lying with the Banco Nacional Ultramarino which had already informed its debtors that it would take action on the bills directly or by transferring them to a third party.
It was also pleaded that the debtors could be compelled to pay the credit incorporated in a promissory note only when the creditor returned the promissory note for payment, so that future duplication of payment would be avoided.
The defendants asserted that Escudos 25,794$45, equivalent to Rs. 4,234.09, had been entered to their credit in the Bank account and that they were entitled to a set off.
The plaintiff filed a replication to the written statement of the defendants, and the defendants followed with a rejoinder.
Civil suits were also filed by the Custodian against other defendants in respect of similar transactions, and a substantially similar defence was set up in all of them.
The suits were instituted in the Court of the Civil Judge, Senior Division at Margao.
Some of the suits filed at Margao were tried by Shri E.S. Silva, Comarca Judge, while the other by Shri Justino Coelho, Comarca Judge.
The preliminary objections to the maintainability of the suits found favour with Shri Silva, and he dismissed the suits before him altogether.
Sheo Coelho, however, found it necessary to try the suits instituted in his court on their merits, and he decreed them against the original debtor as well as the guarantor and surety.
The lone suit decided by Shri Ataide Lobo, the Comarca Judge, Ilhas at Panaji was decreed against the principal debtor but dismissed against the guarantors.
Ten appeals were filed before the Addl.
Judicial Commissioner.
The Additional Judicial Commissioner dismissed the appeals against the judgment of Shri Ataide Lobo.
Allowing the appeals against the judgments of Shri E.S. Silva, he decreed the suits and granted the reliefs claimed by the Custodian.
The appeals against the judgment of Shri Justino Coelho were dismissed except that the appeal tiled by Amalia Gomes Figueiredo, one of the guarantors, was allowed and the suit dismissed as against her.
22 The Additional Judicial Commissioner held that the Regulation effected a reconstruction of the Branches in Goa, Daman and Diu of the Banco Nacional Ultramarino, that the rights and obligations of the Branches referred to in the Regulation must be understood to mean the rights acquired and the obligations undertaken by the Banco Nacional Ultramarino through those Branches and therefore the Custodian was entitled to maintain the suits and sue for the realisation of debts arising out of transactions entered into through those Branches.
The Additional Judicial Commissioner also held that as the execution of the negotiable instruments had been admitted in the written statements and it was commonly agreed that they were not within the reach of the Custodian, having been removed by the officers of the Banco Nacional Ultramarino to Lisbon or elsewhere on December 20, 1961, there was nothing to preclude the Custodian claiming relief without producing those negotiable instruments.
He also repelled the contention that the bills of exchange and the promissory notes could on endorsement by the Banco Nacional Ultramarino in favour of others result in the defendants having to make payment a second time.
He recorded an oral undertaking furnished by the Custodian that in the event of a decree in such suits the Custodian would render compensation to the defendant to the extent that the Custodian had made realisation pursuant to the decrees under appeal.
Having regard to Article 53 of the Uniform Law on Bills of Exchange and Promissory Notes, the Additional Judicial Commissioner held that the holder had lost his right of recovery against all except the acceptor in respect of whom, observed the Judicial Commissioner, the suits were within time in view of Article 70 of the Uniform Law.
Shri V.M. Tarkunde appearing for the appellants in Civil Appeal No. 2476 of 1969 contends that the loans were granted by the Head office of the Banco Nacional Ultramarino, and not by the Branches at Goa, and that as the properties and assets, rights and claims of the Branches alone vested in the Custodian under the Regulation, the Custodian was not entitled to sue for recovery of the loans granted by the Head office.
Shri Tarkunde relies on the distinction made by the Regulation between the Head office and the Branches of the Bank and says that they have been regarded as separate entities.
Shri Tarkunde further says that even if the suits are held maintainable, the Additional Judicial Commissioner erred in not proceeding further to determine whether the appellants were 23 entitled to credit for the adjustments claimed by them in the loan accounts.
Shri Naunit Lal, appearing for the appellants in Civil Appeals Nos. 2475, 2477 and 2579 of 1979, adopts the submissions of Shri Tarkunde.
Shri F.S. Nariman, appearing for the appellants in Civil Appeals Nos.
2464 to 2468 of 1969, also disputes the maintainability of the suits.
He has strenuously urged that no dichotomy can be envisaged between the Head of the Banco Nacional Ultramarino and its Branches in Goa, and it is only the Banco Nacional Ultramarino at its Head office at Lisbon which can sue for recovery of the debts.
Alternatively he contends that even if the Head office and the Branches can be regarded in law as separate entities some, if not all, of the loans had been extended directly by the Mead office and in respect of them, he says, the Regulation cannot be applied.
He also urges that even if all the transactions are held covered by the Regulation, the suits cannot be decreed as there is no statutory discharge of the appellants ' liability to the Banco Nacional Ultramarino in respect of the debts.
The indemnity offered by the Custodian, he urges, is of no value in law.
Another reason why the suits cannot be decreed, says Shri Nariman, is because the promissory notes have not been produced.
There has been considerable dispute on the point whether the transactions were entered into by the Branches of the Banco Nacional Ultramarino or could be attributed to the Head office at Lisbon.
It seems to us clear from the material on the record that the appellants entered into the loan agreements with the Banco Nacional Ultramarino, and the Head office of the Bank at Lisbon authorised the relevant Branch at Goa to give effect to the agreement.
The evidence is clear that the agreements were signed on behalf of the bank by the Manager of the relevant branch and the loan accounts were opened by the branches in their books, that payments were made by the Branches to the appellants, that deposits by way of repayment were made by the appellants in these accounts maintained by the Branches, and the appellants pledged or hypothecated their goods in favour of the branches; in short while the Head office authorised the Branch to execute the agreements the transactions were regarded for all purposes as transactions pertaining to 24 the respective Branches, to be actually controlled and worked out by them.
The suits, it may be noted, were filed on the basis of the balance recorded in the accounts books of the relative Branch.
Now it is indisputable as a general proposition 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 it is with the corporate body, that a person must deal directly.
But it is also now generally agreed that in the case of a Bank which operates through its Branches, the Branches are regarded for many purposes as separate and distinct entities from the Head office and from each other.
This Court observed in The Delhi Cloth and General Mills Co. Ltd. vs Harnam Singh and others :(1) "In banking transactions the following rules are now settled: (1) the obligation of a bank to pay the cheques of a customer rests primarily on the branch at which he keeps his account and the bank can rightly refuse to cash a cheque at any other branch: Rex v Lovitt (1912) A.G. 212 at 219, Bank of Travancore vs Dhrit Ram (69 I.A. 1, 8 and 9) and New York Life Insurance Company vs Public Trustee , 110 at page 117; (2) a cumtomer must make a demand for payment at the branch where his current account is kept before he has a cause of action against the bank: Joachimson vs Swiss Bank Corporation (1921) 3 K.B. 119 quoted with approval by Lord Reid in Arab Bank Ltd. vs Barclayas Bank , 531) The rule is the same whether the account is a current account or whether it is a case of deposit.
The last two cases refer to a current account; the Privy Council case Bank of Travancore vs Dhrit Ram (supra) was a case of deposit.
Either way, there must be a demand by the customer at the branch where the current account is kept, or where the deposit is made and kept, before the bank need pay, and for these reasons the English Courts hold that the (3) at 422.
25 situs of the debts is at the place where the current account is kept and where the demand must be made.
" It was explained further that if the bank wrongly refused to pay when a demand was made at the proper place and time, then it could be sued at its head office as well as at its branch office, but the reason was 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", and reference was made to Warrington, L.J. at page 116 and Atkin, L.J. at page 121 of New York Life Insurance Co. vs Public Trustee.(l) That is the position in regard to banking law and practice, and it is apparently in that light that the Regulation has been framed.
The Regulation was intended to achieve what emergency legislation was designed to secure in a somewhat different context by somewhat comparable methods.
In England, during the First World War the Trading with the Enemy Amendment Act, 1916 provided for the winding up of the business carried on in England by companies incorporated in Germany.
That Act was considered by the court In re W. Hagelberg Aktien Gesellschaft(2) and it was observed that although the branches and agency of a business could not be regarded as distinct from the principal business of.
the owner, nonetheless, if a statute was enacted to create that effect, effect had to be given to the statute for the purposes incorporated therein.
During the Second World War the courts in England were called upon to consider the Defence (Trading with the Enemy) Regulation, 1940 under which a winding up order could be made in respect of the business of any enemy bank carried on at its London offices.
In Re The Banca Commercial Italiana(3) the court observed that having regard to the language of the statute and previous cases on the point "a winding up order made under the regulation must be held to create for the purpose of winding up a new entity, namely, the business ordered to be wound up, and this entity is considered as one which can possess assets and have liabilities of its own." Corresponding legislation in India during the Chinese invasion and (1) (2) [1916] Chancery Division 503.
(3) [1943] 1 All Eng.
L.R. 480.
26 the Indo Pakistan Wars was incorporated in the Defence of India Rules framed from time to time.
In all these cases there is a departure from the general rule that the branches and agencies of a business are no more than the components through which the entire enterprise is carried on, and that they cannot be considered as distinct or separate from the Head office.
The departure was necessitated by an emergent or a normal situation, and incorporated and regulated by specific legislation enacted for the purpose of coping with the problems arising out of such a situation.
It is only right then that the true scope of what is intended by the legislation should be determined by close reference to the express terms of the legislation.
It is abundantly plain from the object and purpose of the Regulation and the provisions which seek to realise them that all transactions effected by or through the Branches of the Banco Nacional Ultramarino were intended to be brought within the compass of the Regulation.
As observed earlier, although the loan agreements may have been entered into with the Banco Nacional Ultramarino, 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 Brancn 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.
It will be noticed that section S of the Regulation expressly speaks of "properties and assets, all rights, powers, claims, demands, interests, authorities and privileges and all obligations and liabilities" of the Branches and of "all contracts, deeds, bonds, agreements. " to which the Branches are a party or which are in their favour.
It proceeds clearly on the basis that the Branches must be regarded as entering into and carrying out transactions identifiable as theirs.
These are transactions distinct from those exclusively carried on by 27 the Head office of the Banco Nacional Ultramarino, with which transactions in their essence the Branches had nothing to do.
It will also be noticed that by sub section
(2) of section 7 the Regulation envisages financial transactions between the Branches and the Head office.
The entire purpose of the Regulation is to reconstruct by operation of statute the closed Branches of the Banco Nacional Ultramarino and to constitute them into a Bank and to work out existing transactions and square up all pending business with a view to ultimately winding up the affairs of the Branches.
section 14 of the Regulation provides: "The Central Government shall, on the expiry of twelve years, and may, at any time before such expiry, direct that the books of account and affairs of the branches of the Banco Nacional Ultramarino in Goa, Daman and Diu shall be inspected by the Reserve Bank or by such other agency as the Central Government may determine and that a report on the basis of such inspection shall be made and the Central Government may, after considering the said report, direct the winding up of the affairs of the said branches on such terms and conditions to be specified by that Government which shall, as far as practicable, be in consonance with the provisions relating to winding up of a banking company under the Banking Companies Act, 1949".
To accept the contentions advanced by the appellants would be to negative the very object and purpose of the Regulation and to nullify its provisions.
Such a construction of the Regulation is not open to the Court, for it could never be supposed that in enacting the Regulation the President intended an exercise in futility.
It is well settled that the construction put by a court on the provision of a statute should accord with the object and purpose of the statute, and in that behalf the rule in Heydon 's case(1) relied on by this Court in R.M.D. Chamarbaugwalla vs The Union of India(2) is attracted.
What was the law before the statute was passed, what was the mischief or defect for which the law had not provided, what remedy had the legislation appointed and what was the reason of the remedy ? That substantially was also the test laid down in (1) ; (2) ; 28 Vrajlal Manilal & Co. & Ors.
vs State of Madhya Pradesh & ors.(1) It was observed in Kanai Lal Sur vs Paramnidhi Sadhukhan:(2) "When the material words are capable of two cons tructions, one of which is likely to defeat or impair the policy of the Act whilst the other construction is likely to assist the achievement of the said policy, then the courts would prefer to adopt the latter construction.
" We are of opinion that the transactions under consideration in these appeals fall within the scope of the Regulation and the Custodian is fully entitled to sue for the recovery of the debts covered by the loan agreements.
The contention of the appellants to the contrary is rejected.
We now turn to the remaining points raised in these appeals.
It has been urged that the statutes cannot be decreed because the Promissory Notes and the Bills of Exchange have not been produced by the Custodian before the trial court.
Now, it is not disputed that the documents have been removed from Goa to Portugal or to other places overseas and are no longer in the possession of the Branches.
The debts were sought to be proved on the basis of the accounts maintained in the books of account of the relevant Branches.
This was permissible by virtue of sub section
(1) of 8. 8 of the Regulation which provides: "8.
(1) If for the prosecution of any suit, appeal or other legal proceeding by the Custodian in any court it is necessary to produce any document or other particulars and the said document or particulars are proved to the satisfaction of the Court to have been removed to Portugal or to any of the territories under Portuguese control, it shall be lawful for the Court, in disposing of the suit, appeal or other legal proceeding to base its decree or decision on the books of account of the branches of the Banco Nacional Ultramarino in Goa, Daman and Diu and on the evidence which can be otherwise produced." (1) ; , 410.
(2) ; 367. 29 Having regard to the circumstances, it is within the competence of the court to base its decree on the books of account of the Branches in Goa and on other evidence which can be produced.
It was not necessary for the Custodian, indeed it was not possible, to produce the Promissory Notes and Bills of Exchange.
Our attention has been invited to a passage in Byles on Bills of Exchange (1) which declares that "in any action or proceeding upon a bill, the court or a judge may order that the loss of the instrument shall not be set up provided an indemnity be given to the satisfaction of the court or judge against the claims of any other person upon the instrument in question".
The provisions of Rule 16 of order VII of the Code of Civil Procedure and section 81 of the were also referred to.
It is true that those provisions require the plaintiff to furnish an indemnity before a suit can be decreed if the negotiable instrument on which the suit is founded is proved to have been lost or cannot be produced.
It seems to us that resort to those provisions cannot be justified inasmuch as the cases fall to be determined under the Regulation and the Portuguese law which continued in force in Goa.
Even in respect of the Portuguese law, that is to say, provisions in the Portuguese Commercial Code and the Portuguese Uniform Law, to which our attention has been specifically drawn, we are of opinion that it stands superseded by reason of the express provisions contained in sub section
(1) of section 8 of the Regulation.
No indemnity can be reasonably required of the Custodian when it has been proved to the satisfaction of the court that the document has been removed to Portugal or to any of the territories under Portuguese control.
The sub section plainly makes no provision for indemnifying the debtors against any further claims made against them.
Such a measure was not considered necessary, because the Regulation vested the entire right in the Custodian to recover the debt and no further right was left in anyone else; The debts were regarded as properties and assets of the Branches, and all rights in respect of them stood transferred to and vested in the Custodian by virtue of sub section
(I) of section 5.
Having regard to the provisions of the Regulation and the object with which it was enacted it is not possible to conceive that it would be open to the Head office of the Banco Nacional Ultramarino to sue the debtors for recovery of those debts.
Shri Nariman contends that an express provision was neces (1) 22nd Edn.
p. 389 para.
30 sary in the Regulation to effect a complete discharge of the debtors from further liability as was the case in section 11 (2) of the Pakistan Ordinance considered in The Delhi Cloth and General Mills Co. Ltd. vs Harnam Singh and others.(1) We think it is not necessary that there should be such a specific provision.
rt is sufficient if the same conclusion can be drawn from a proper construction of the general provisions of the Regulation and the object with which it has been enacted.
We may point out that although reference was made by this Court in The Delhi Cloth and General Mills Co. Ltd. vs Harnam Singh and others (supra) to section 11 (2) of the Pakistan Ordinance, it was also observed on page 425 that alternatively: "Such payment would operate as a good discharge even under the English rules: see Fouad Bishara Jabbour vs State of Israel(2) where a number of English authorities are cited, including a decision of the Privy Council in Odwin vs Forbes.(3) That was also the result of the decisions in the following English cases, which are similar to this, though the basis of the decisions was the situs of the debt and the multiple residence of corporations: Fouad Bishara Jabbour vs State of Israel (supra), Re.
Bangue Des March ands De Moscou Barclays Bank(4), Arab Bank Lrd.
vs Braclays Bank(5).
The Learned Additional Judicial Commissioner has reached the same conclusion, but in doing so he has relied on certain provisions of the Portuguese Uniform Law.
We have not found it possible to examine the validity of his reasons because a complete statement of the Portuguese Uniform Law is not before us, and therefore we can find no justification for disturbing the basis on which he has come to his finding.
The learned Additional Judicial Commissioner has also adverted to an undertaking offered by the Custodian to indemnify the debtors against any action by anyone else for recovery of the debts, but on the view that we have taken we need not examine the validity or sufficiency of that undertaking, (1) , 425.
(2) @ 154.
(3) (4) (5) , 529.
31 We are satisfied that the discharge of the debts under the Regulation amounts to their complete discharge and it is not open to anyone else to sue for their recovery.
No indemnity is required to be furnished by the Custodian on the ground that the relevant documents cannot be produced.
It is faintly urged that the suits filed by the Custodian were premature.
This point was not raised before the courts below and we cannot allow it to be raised at this stage.
There is one point, however, which, in our opinion, requires consideration by the trial court.
In some of the suits it has been pleaded by the appellants that they were entitled to a set off by reason of certain credits in their favour.
The learned Additional Judicial Commissioner has held that the trial court was justified in declining to enter into those claims.
We think that in this regard the courts below have erred.
It was necessary to do complete justice between the parties having regard to the peculiar circumstances of these cases, and we are of opinion that so far as these claims are concerned the trial court should now examine them on their merits.
In the result, the appeals are dismissed subject to the direction that the trial court will take up the suits again solely for the purpose of examining the validity of the claims to set off made by the appellants in those suits.
We make no orders as to costs of these appeals.
P.B.R. Appeals dismissed.
| The U.P. Urban Buildings (Regulation of Letting, Rent and (Eviction) Act, 1972 provided by sub section (2) of section 2 that except as provided in the Act, the Act was not to apply to a building during a period of 10 years from the date on which its construction was completed.
Explanation I to the sub section provided that the building shall be deemed to have been completed on the date on which completion thereof is reported or otherwise recorded by the local authorities having jurisdiction, and in case of a building subject to assessment, the date on which the first assessment thereof comes into effect, and where the said dates are different, the earliest of the said date, and in the absence of any such report, record or assessment, the date on which it is actually occupied for the first time.
The appellant tenant was in occupation of a shop from the 16th June, 1967 and prior to his occupation the shop was in occupation of another tenant for about a month and a half.
The first assessment of the shop took place on Ist of April, 1968.
The respondent landlord filed a suit for the eviction of the tenant on the ground that the Act did not apply to the shop and the tenant was liable to eviction.
The Trial Judge finding that the construction of the shop was completed in the year 1967 and that 10 years having not elapsed since then, held that the provisions of the Act did not apply and decreed the suit.
The appellant 's 492 petition under section 25 of the Provincial Small Causes Courts Act was dismissed.
In his revision petition to the High Court under section 115 of the Civil Procedure Code the appellant contended that the date of occupation should be taken to be the date of completion of the construction of the shop and not the date of first assessment.
The High Court overruled the contention and held that the construction of the shop would be deemed to have been completed on 1st of April, 1968 the date of the first assessment and ten years not having elapsed, the Act would not be applicable to the building and dismissed the revision petition.
In the appeal to this Court it was contended on behalf of the appellant: (1) that by virtue of sub section (2) of section 2, the Act would be applicable to the shop in question and that the exemption created by the sub section did not embrace buildings constructed prior to the commencement of the Act and (2) that the building should be deemed to have been constructed on the date of occupation on 16th June, 1967 and not on the date of the first assessment.
and that the appellant was entitled to the benefit of section 39 of the Act.
Dismissing the appeal, ^ HELD: 1(i) The suit was rightly decreed by the Courts below.
The Act had no application and the appellant could not be given the benefit of section 39.
[498 G H] (ii) Primarily, the language employed is the determining factor of the intention of the legislature.
The first and primary rule of construction is that the intention of the legislature must be found in the words used by the legislature itself.
The question of interpretation arises only when the language is ambiguous and, therefore capable of two interpretations.
[497 F] (iii) The language of sub section (2) of section 2 of the Act is explict and unambiguous and is not capable of two interpretations.
[497 G] In the absence of any ambiguity there is no question of taking any external aid for the interpretation of the sub section.
The sub section contemplates that the Act shall not apply to a building during a period of 10 years from the date on which its construction is completed.
It no where says that the building should have been constructed after the enforcement of the Act and to interpret it in such a way would be to add words to the sub section, which is not permissible.
[497 D F] 2 (i) Explanation I makes it abundantly clear that the date of occupation would be taken to be the date of completion of the construction only when there is no report or record of the completion of the construction or no assessment thereof.
If there is an assessment, as in the instant case it will be the date of the first assessment which will be deemed to be the date of completion of the construction.
The building had not therefore become more than ten years 's old on the date when the revision came to be decided by the High Court and consequently there was no question of giving the benefit of section 39 of the Act to the appellant.
[498 D F] 493 (ii) In order to attract section 39 the suit must be pending on the date of the commencement of the Act which was 15th of July, 1972.
[498 F] In the instant case the suit was filed on 23rd of March 1974 long after the commencement of the Act.
[498 F] (iii) In view of sub section (2) of section 2, the Act is not applicable to a building which has not a standing of ten years.
If the Act itself was not applicable, it would be absurd to say that section 39 thereof would be applicable.
[498 G] Rattan Lal Shinghal vs Smt.
Murti Devi (1980)4 S.C.C. 258 and Ram Saroop Rai vs Lilavati ; , over ruled.
|
Appeals Nos. 776 and 777 of 1957.
Appeals by special leave from the judgment and order dated September 25, 1956, of the Bombay High Court in Income tax Application No. 48 of 1956; and from the judgment and order dated March 17,1954, of the Income tax Appellate Tribunal, Bombay, in E.P.T.A. Nos. 757, 903 and 944 of 1948 49, respectively.
A. V. Viswanatha Sastri and G. Gopalakrishnan, for the appellants.
A. N. Kripal and D. Gupta.
for the respondent.
November 30.
The Judgment of the Court was delivered by HIDAYATULLAH, J.
These are two appeals, with special leave, against an order of the High Court of Bombay rejecting a petition under section 66(2) of the Indian Income tax Act and the order of the Income tax Appellate Tribunal, Bombay, in respect of which the petition to the High Court was made.
Messrs. section C. Cambatta & Co. (Private) Ltd., Bombay, have filed these appeals, and the Commissioner of Excess Profits Tax, Bombay, is the respondent.
We are concerned in these appeals with three chargeable accounting periods, each ending respectively on December 31, beginning with the year, 1943 and ending with the year, 1945.
807 The appellants carry on various businesses, and one such business was the running of a theatre and restaurant, called the Eros Theatre and Restaurant.
In October, 1943, a subsidiary Company called the Eros Theatre and Restaurant, Ltd. was formed.
The paid up capital of the subsidiary Company was Rs. 7,91,100 divided into 7,911 shares of Rs. 100 each.
7,901 shares were allotted to the appellant Company as consideration for assets, goodwill, stock in trade and book debts which were taken over by the subsidiary Company, and the remaining 10 shares were held by the Cam batta family.
The assets which were transferred were as follows: Assets: Assets transferred.
Rs.1,28,968 Stock in trade.
Rs.40,000 Book debts. .
Rs.100 Rs.1,69,068 They together with the capital reserve of Rs. 6,21,032 made up the amount of Rs. 7,90,100.
In the books of the subsidiary Company, the share capital account was shown separately as follows: Rs. 2,50,000 debited to the various assets account.
Rs. 5,00,000 debited to the goodwill account.
Rs. 40,000 debited to the stock in trade account.
Rs. 100 debited to the book debts account.
It will thus appear that goodwill was not shown separately in the appellants ' account books, but only in the accounts of the subsidiary Company.
In working out the capital of the two Companies for excess profits tax, a sum of Rs. 5,00,000 was claimed as goodwill as part of the capital of the subsidiary Company.
Both the Department as well as the Tribunal held that section 8(3) of the Excess Profits Tax Act applied; and the goodwill was not taken into account in working out the capital.
The Tribunal declined to state a case, but the High Court directed that a reference be made on two questions, which were framed as follows: 808 "(1) Whether on the facts of the case, the Appellate Tribunal was right in applying section 8(3) of the Excess Profits Tax Act? (2).
Whether in the computation of the capital employed. in the business of the assessee, the Tribunal erred in. not including the value of the goodwill or any "portion thereof?" The High Court by its judgment and order answered the first question in the negative and the second, in the affirmative.
It held that sub section
(5) and not sub section
(3) of section 8 of the Excess Profits Tax Act was applicable.
It, therefore, held that "the Tribunal should have allowed for the value of the goodwill whatever it thought was reasonable at the date of the transfer.
" When the matter went before the Tribunal again, three affidavits and a valuation report by a firm of architects were filed.
The goodwill, according to the report of the architects, amounted to Rs. 25 lakhs.
It may be mentioned here that the subsidiary Company was using the premises under a lease granted on November 20, 1944, for three years beginning from April 1, 1944, on a rental of Rs. 9,500 per month.
The Tribunal came to the conclusion that no goodwill had been acquired by the business of the Theatre as such, and that whatever goodwill there was, related to the site and building itself.
They then proceeded to consider what value should be set upon the goodwill on the date of the transfer of the subsidiary Company as directed by the High Court.
They took into account certain factors in reaching their conclusions.
They first considered the earning capacity of the business, and held that prior to 1942 the business had not made profits, and that the name of Eros Theatre and Restaurant thus by itself had no goodwill at all.
They, therefore, considered that the only goodwill which had been acquired attached to the lease, which the trustees had given to the Eros ;Theatre and Restaurant Ltd., and computing the goodwill as the value of the lease to the subsidiary Company, they felt that Rs. 2 lakhs was a liberal estimate of the value of the goodwill in the hands of Eros Theatre and Restaurant, Ltd. at the material time.
809 Petitions under sections 66(1) and 66(2) read with a. 21 of the Excess Profits Tax Act were respectively rejected by the Tribunal and the High Court; but the appellants obtained special leave from this Court, and filed these appeals.
In our opinion, a question of law did arise in the case whether the goodwill of the Eros Theatre and ' Restaurant, Ltd., was calculated in accordance with law.
The Tribunal seems to have taken into account only the value of the leasehold of the site to the subsidiary Company, and rejected other considerations which go to make up the goodwill of a business.
No doubt, in Cruttwell vs Lye(1), Lord Eldon, L. C. observed that goodwill was "nothing more than the probability that the old customers would resort to the old place".
The description given by Lord Eldon has been considered always to be exceedingly narrow.
The matter has to be considered from the nature of the business, because the goodwill of a public inn and the goodwill of a huge departmental stores cannot be calculated on identical principles.
The matter has been considered in two cases by the House of Lords.
The first case is Trego vs Hunt (2), where all the definitions previously given were considered, and Lord Macnaghten observed that goodwill is "the whole advantage, whatever it may be of the reputation and connection of the firm, which may have been built up by years of honest work or gained by lavish expenditure of money".
In a subsequent case reported in Inland Revenue Commissioners vs Muller & Co.s.
Margarin, Ltd. (3), Lord Macnaghten at pp.
223 and 224 made the following observations:.
"What is goodwill? It is a thing very easy to describe, very difficult to define.
It is the benefit and advantage of the good name, reputation, and connection of a business.
It is the attractive force which brings in custom.
It is the one thing which distinguishes an old established business from a new business at its first start. . .
If there is one attribute common to all cases of goodwill in it is the attribute (1) 346.
(2) (3) 810 of locality.
For goodwill has no independent existence.
It cannot subsist by itself. 'It must be attached to a business.
Destroy the business, and the goodwill perishes with it, though elements remain which may perhaps be gathered up and be revived again".
These two cases and others were considered in two 'Australian cases.
The first is Daniell vs Federal Com missioner of Taxation (1), where, Knox, C. J. observed: "My opinion is that while it cannot be said to be absolutely and necessarily inseparable from the premises or to have no separate value, prima facie at any rate it may be treated as attached to the premises and whatever its value may be, should be treated as an enhancement of the value of the premises".
In the second case reported in Federal Commissioner of Taxation vs Williamson (2), Rich, J., observed at p. 564 as follows: "Hence to determine the nature of the goodwill in any given case, it is necessary to consider the type of business and the type of customer which such a business is inherently likely to attract as well as the surrounding circumstances. .
The goodwill of a business is a composite thing referable in part to its locality, in part to the way in which it is conducted and the personality of those who conduct it, and in part to the likelihood of competition, many customers being no doubt actuated by mixed motives in conferring their custom".
In Earl Jowitt 's Dictionary of English Law, 1959 Edn., "goodwill" is defined thus: "The goodwill of a business is the benefit which arises from its having been carried on for some time in a particular house, or by a particular person or firm, or from the use of a particular trade mark or trade name" It will thus be seen that the goowill of a business depends upon a variety of circumstances or a combination of them.
The location, the service, the standing of the business, the honesty of those who run it, and the lack of competition and many other factors go individually or together to make up the goodwill, (1) ; (2) ; 811 though locality always plays a considerable part.
Shift the locality, and the goodwill may be lost.
At the same time, locality is not everything.
The power to attract custom depends on one or more of the other factors as well.
In the case of a theatre or restaurant, what is catered, how the service is run and what the competition is, contribute also to the goodwill.
From the above, it is manifest that the matter of goodwill needs to be considered in a much broader way than what the Tribunal has done.
A question of law did arise in the case, and, in our opinion, the High Court should have directed the Tribunal to state a case upon it.
Civil Appeal No. 776 of 1957 is allowed.
The High Court will frame a suitable question, and ask for a statement of the case from the Tribunal, and decide the question in accordance with law.
The costs of this appeal shall be borne by the respondent; but the costs in the High Court shall abide the result.
There will be no order in Civil Appeal No. 777 of 1957.
C. A. No. 776 of 1957 allowed.
| Various contracts for sale of goods had been made between the parties in Bombay each of which contained an arbitration clause.
Disputes having arisen in March, 1952, in respect of these contracts, they were referred to arbitration and a composite award was made on October 7, 1952, against the respondent.
One of these disputes had arisen out of a forward contract in groundnuts.
The respondent applied to have the award set aside on the ground that the forward contract in groundnuts was illegal as such a contract was prohibited by the Oilseeds (Forward Contract Prohibition) Order, 1943, issued under the Essential Supplies (Temporary Powers) Act, 1946, passed by the Central Legislature.
The appellant contended that the Essential Supplies (Temporary Powers) Act, 1946, was repugnant to the Bombay Forward Contracts Control Act, 1947, passed by the Provincial Legislature of Bombay which had received the assent of the Governor General of India and therefore under section 107(2) of the Government of India Act, 1935, which applied, the Bombay Act prevailed in Bombay in preference to the Central Act and under the Bombay Act Forward Contract in groundnut was valid.
The High Court accepted the contention of the respondent and set aside the award.
Section 8 of the Bombay Act provided: "Every forward con tract for the sale or purchase of, or relating to, any goods specified in the notification under sub section (3) of section 1 which is entered into, made or to be performed in any notified area shall be illegal if it is not entered into, made or to be performed" and thereafter, set out the manner in which and the persons between whom such contracts could be made and also made punishable a person making a contract declared illegal.
Section 3 of the Central Act provided, "The Central Govern ment may by notified order provide for prohibiting trade and commerce" in any essential commodity.
Under this section the Oilseeds (Forward Contract Prohibition) Order was passed prohibiting forward contracts in groundnuts, which was one of the essential commodities specified in the Central Act.
Held, The Bombay Act did not make any contract legal.
Its only effect was to render certain forward contracts illegal if not 781 made in compliance with its terms while the Central Act made the contracts to which it applied, illegal.
There was, therefore, no repugnancy between the Bombay Act and the Central Act and both of them applied to Bombay.
Article 372 of the Constitution continued both these Acts, and so there is no provision in the Constitution under which any one of them may be said to apply to the exclusion of the other.
A composite award in respect of more than one dispute which is not severable, must be set aside as a whole if any of the disputes had been illegally referred.
|
Civil Appeals Nos. 1656 to 1659 of 1973.
Appeal by special leave from the judgment and order dated the 29th September, 1972 of the Madras High Court in Writ Appeals Nos. 191, 23, 24 & 190 of 1968 respectively.
section Challaswamy and K. Hillgorani, for the appellant.
8 L839SupCI/75 334 A. K. Sen, A. V. Rangam` and A. Subashini, for the respondents.
The Judgment of the Court was delivered by KRISHNA IYER, J.
The die hard 'tax ' 'fee ' dilemma survives, as these appeals, by special leave, attest, long after this Court has dispelled the fiscal legal confusion on the point in a series of rulings.
The cases before us were provoked by a sudden escalation of licence 'fee ' imposed on all homelier by the common appellant, the Maduari Municipal Council (now it is a Corporation, but that makes no difference) (Council, for short).
The scale of fees which, perhaps, merely defrayed the cost of issuing the licence, was moderate to begin with and paid periodically by the respondents who run hotels within the municipal limits; but their present grievance is that the resolution of December 28, 1965, whereby a sharp spurt in the rates of fee was Cr brought about, has been tainted with 'unconstitutionality '.
The authority, to justify the levy qua fee, must render some special services to the category from whom the amount is exacted and the total sum so collected must have a reasonable correlation to the cost of such services.
Where these dual basic features are absent, you cannot legally claim from the licensee under the label 'fee '.
D This Court has, as late as the Salvation Army Case(l) set out the tests beyond doubt.
When the respondents (writ petitioners) challenged the fee raise, the plea in defence first was that the impost was a fee strictly so called, that it was requited by adequate benefits and that the larger lay out on the inspecting staff and allied items, both necessitated and validated the new increase.
However, on later and better reflection, may be, the inspirational source for which was stated to be this Court 's pronouncement in the Liberty Cinema Case(2), the Council rightly abandoned the fee cum quid pro quo formula and anchored itself on the right to exact the higher rate as a 'tax on land and building ' under Entry 49 of List II, in the Seventh Schedule, read with section 321(2) of the Madras District Municipalities Act, 1920 (for short, the Act).
This volte face as it were, was not objected to by the opposite party and the writ petitions and writ appeals were disposed of on that footing.
The learned Single Judge upheld the levy but the appellate Bench upset it.
The appellant Council has journeyed to this Court to repair the blow on its revenue since there are 1,200 and odd hotel keepers similarly situated in the Madurai Municipal limits, although only four have figured as respondents here.
The financial dimension of the decision is, indeed, considerable.
Shri Chellaswamy, counsel for the Council, has been refreshingly fair in his submissions and consistently with the case urged in the High Court to support the levy, has grounded his defence of the 'feehike ' on the taxing power of the municipal body under the Act.
The core of the matter, therefore, is whether the context and text of the statute and other surrounding circumstances warrant the validation of the levy as a tax in essence, be its name what it may.
(1) ; (2) [1965] 2 section C. R. 477.
335 Let us formulate the problems for facility of logical handling.
Agreed, as both parties now are, that this licence fee stands or falls as a tax, the principal question is whether the 'fee ' provided for in section 321(2) of the Act, under which it is collected, is a tax at all, having regard to the anatomy of the Act.
If it can be so regarded, the next point is whether Entry 49 of List II can bring within its constitutional compass the licence fee for running a hotel trade.
Thirdly, if that is permissible, are there other incurable infirmities ? These apart, some matters of subsidiary moment do arise and may be considered in the appropriate sequence.
The initial terminological hurdle in the way of the appellant is that section 321(2) of the Act authorizes the collection of a licence fee in contra distinction to property tax in section 78 of the Act.
Ajoy Kumar vs Local Board(l).
Naturally, Shri A. K. Sen, counsel for the con testants, insisted that the Act had made a deliberate dichotomy between the two types of levy, placed them subject wise in different parts of the statute and meaningfully referred to them as 'tax ' and 'fee ' in sections 78 and 321(2), respectively.
Counsel for the appellant, relying on certain passages in Liberty Cinema, (supra) desired us to slur over the verbal error.
True, mere nomenclature cannot, without more, lead to rejection of the plea of tax, though it is a relevant factor, since, to some extent, Liberty Cinema (supra) has whittled down the efficacy of this circumstance.
This Court there observed, at p. 483: "Now, on the first question, that is, whether the levy is in return for services, it is said that it is so because section 548 (of Calcutta Municipal Act 33 of 1951) uses the word 'fee '.
But, surely, nothing turns on the words used.
The word 'fee ' cannot be said to have acquired a rigid technical meaning in the English language indicating only a levy in return for services.
No authority for such a meaning of the word was cited.
However that may be, it is conceded by the respondent that the Act uses the word 'fee ' indiscriminately.
It is admitted that some of the levies authorised are taxes though called fees.
Thus, for example, as Mitter J (in the High Court, Division Bench) pointed out, the levies authorised by sections 218, 222 and 229 are really taxes though called fees, for no services are required to be rendered in respect of them.
The Act, therefore, did not intend to use the word fee as referring only to a levy in return for services. " (emphasis, ours) We have therefore to have a view of the concerned parts of the Act with a comparative eye on the Calcutta Municipal Act which fell for decision in Liberty Cinema (supra).
Every local authority, under the relevant statute, has the power to tax, so as to finance the various welfare activities it is expected to fulfil.
Similarly such local bodies also exercise the police powers of the State to the extent they are vested (1) ; 336 in them by the State law for the purpose of controlling, regulating and proscribing operations of individuals which may need to be conditioned by licences and permissions or prohibited in public interest because they are noxious or dangerous.
Towards these ends, licences and fees for services, if any, rendered may be prescribed.
The Madras Act, like other similar statutes, embraces both types of activities in a systematized way.
Thus Taxation and Finance are covered by Part 1 III while Public Health Safety and Convenience, comes under Part IV, Procedure and Miscellaneous, which include general provisions regarding licences and permissions, are clubbed together in Part Vl.
Section 78, empowering property tax levy, falls in Part III (Taxation and Finance), while section 321, relating to licence fees, is located in Part VI.
The scheme thus separates issue of licences and levy of licence fees from taxes on property and other items.
Prima facie, in the absence of other compelling factors, to lug in a taxing provision into Part VI may, therefore, lead to obscurity and confusion.
The Calcutta Municipal Act, 1951, also has some scheme of sorts and deals with Finance in Part III, Taxation in Part IV and Public Health, Safety and Convenience in Part V.
In the same Part, Chapter XXVI deals with a miscellany of matters like Inspection and Regulation of Premises, and of Factories, Trades and Places of Public Resort.
Section 443 deals with licensing and control of theatres, circuses and places of public amusement.
Strangely enough, section 548(1) which relates to 'licence and written permission ' also empowers in addition to any other matter required to be specified under any other Section of this Act (a) * * * * (b) * * * * (c) * * * * (d) * * * * (e) the tax or fee, if any, paid for the licence or written permission.
" F There is thus in section 548 an extra power specifically conferred to levy tax or fee, which is significantly absent in the Madras Act (We are aware there is some obscurity here because cinema licensing is provided for earlier in section 443).
It is this provision of the Calcutta Act (section 548) which fell for construction before this Court in Liberty Cinema (supra).
While one may discern a broad scheme in that Act, there is some wobbling in the sense that a power to tax is oddly placed in a Chapter primarily concerned with licences and permissions.
The Madras Act, on the other hand, speaks with more precision and relegates licences and licence fees to a Part different from Taxation and Finance.
The procedure for each is also delineated separately.
For these reasons we refuse to aceede to the contention that 'fee ' in section 321 (2) is a tax.
Shri A. K. Sen has cited a catena of Madras cases, spread over several decades, where, under this very Act, fee has been interpreted as fee with a tag of special services in lieu of such payment.
He has 337 further pressed the drafting indifference while using the words 'fee ' and 'tax ' in s.548 of the Calcutta Act to repel the application of the observations in Liberty Cinema (earlier quoted) to the provisions of the Madras Act.
In the latter, the contrast is boldly projected not only in the phraseology but in the chapter wise dealing with the two topics.
We feel the force of this submission.
Shri Chellaswamy sought to counter the contention based on the location of s.321 in a Part which has nothing to do with taxation.
In Liberty Cinema (supra) this Court had occasion to warn against reaching any conclusion, when there is a tax fee conflict based on the col location of subjects in a statute or the placement of a provision under a certain rubric as clinching.
What is telling is the totality, not some isolated indicium.
A short cut is often a wrong cut and a fuller study of the statute to be construed cannot be avoided.
Sarkar, J. (as he then was), in Liberty cinema (supra), observed at p. 488: "It was also contended that the levy under s.548 (of the Calcutta Municipal Act) must be a fee and not a tax, for all provisions as to taxation are contained in Part IV of the Act, while this section occurred in Chapter XXXVI headed 'Procedure ' in Part VIII which was without a heading.
It was pointed out that Part V dealt with 'Public Health Safety and Convenience ' and section 443 which was included in Chapter XXVI contained in this Part was headed 'Inspection and Regulation of Premises, and of Factories, Trades and Places of Public Resort '.
A cinema house, it is not disputed, is included in the words 'Places of public resort '.
It was, therefore, contended that a levy outside Part IV could not be a tax and hence must be a fee for services.
This contention was sought to be sup ported by the argument that s.443 occurred in a Part concerning Public Health, Safety and Convenience and therefore the intention was that the levy authorised by the section would be in return for work done for securing public health, safety and Convenience and was hence a fee.
We are wholly unable to accept this contention.
Whether a particular levy is a fee or tax has to be decided only by reference to the terms of the section as we have earlier stated.
Its position in the Act cannot determine its nature; an imposition which is by its terms a tax and not a fee, which in our opinion the present imposition is, cannot become a fee by reason of its having been placed in a certain part of the statute.
The reference to the heading of Part V can at most indicate that the provisions in it were for conferring benefit on the public at large.
The cinema house owners paying the levy would not as such owners be getting that benefit.
We are not concerned with the benefit, if any, received by them as members of the public for that is not special benefit meant for them.
We are clear in our mind that if looking at the terms of the provision authorising the levy, it appears that it is not for special services rendered to the person on whom the levy is imposed, it cannot be a fee wherever it may be placed in the statute.
A consideration 338 of where ss.443 and 548 are placed in the Act is irrelevant for determining whether the levy imposed by them is a fee or a tax.
" So we do not rest our conclusion solely on the location of section 321 in a different Part from Taxation, while we recognise it as an indicator, among a variety of considerations of course, when drafting precision is absent, judicial caution has to be alerted.
To recapitulate, in the Madras Act, Chapter VI of Part III is devoted to Taxation and Finance.
Section 78(1)(a) authorizes levy of property tax.
The section sets out the other taxes a Municipal Council may levy Section 78(3) together with a proviso, contains the procedural prescriptions for imposing taxes.
Admittedly, there has been no compliance with this procedure and, if such conformance is mandatory, as it is, the case of tax set up by the appellant collapses (Vide: Atlas Cycle Industries vs Haryana(1).
Whether some minor defect or deficiency will defeat the validity of the tax is moot but since here there is a total failure to adhere or advert to the procedure in s.78, we need not consider hypothetical shortfalls and their impacts.
Counsel for the appellant resourcefully urged that when two constructions are possible, we should opt in favour of validity since law leans towards life and must sustain, not stifle it.
The statute, other things being equal, must be interpreted us res magis valeat gaum pareat("): see Broom 's Legal Maxims ( 10 ed. ) p. 361, Craies on Statutes (6th ed.) p. 95 and Maxwell on Statutes (11th ed.) p 221 In his submission it is possible to uphold the 'levy ', miscalled 'fee ', on the basis that it is a tax.
The argument is that ignoring the placement of section 321 (2) in Part VI and blurring the precision of the word 'fee ' used, we can still look at the pith and substance of the matter and regard it as a 'tax on land and buildings ' provided for in Entry 49, List II of the Seventh Schedule.
He relied on Ajoy Kumar (supra) where also a landholder who was holding a market on his land was directed to take out a licence and pay Rs. 600/ per year as licence fee, challenged the validity of the claim on the score that the State had no power to tax markets.
Repelling this contention, this Court held that the use to which the land was put furnished sufficient nexus for the Legislature to impose a tax on land.
In that connection, the following observations lay down the guide lines: "It is well settled that the entries in the three legislative lists have to be interpreted in their widest amplitude and there fore if a tax can reasonably be held to be a tax on land it will come within entry 49.
Further it is equally well settled that tax on land may be based on the annual value of the land and would still be a tax on land and would not be beyond the com petence of the State legislature on the ground that it is a tax on income: (See Ralla Ram vs The province of East Punjab: It follows therefore that the use to which the land is put can be taken into account in imposing a tax (1) ; (2)Quoted in Liberty cinema: P. 484. 339 on it within the meaning of entry 49 of List II, for the annual value of land which can certainly be taken into account in imposing a tax for the purpose of this entry would necessarily depend upon the use to which the land is put." (p. 49).
x x x x x x "It will be seen from the provisions of these three subsections (sub sections
(1) to (3) of section 62 of the Assam Local self Government Act l953 Act 25 of l953) that power of the board to impose the tax arises on its passing a resolution that no land within its jurisdiction shall be used as a market.
Such resolution clearly affects land within the jurisdiction of the board and on the passing of such a resolution the board gets the further power to issue licences for holding of markets on lands within its jurisdiction by a resolution and also the power to impose an annual tax thereon." (p.49) x x ".
x x x x x ".
section
62(2) which used the words 'impose an annual tax thereon, clearly shows that the word 'thereon ' refers to any land for which a licence is issued for used as a market and not to the word 'market '.
Thus the tax in the present case being on land would clearly be within the competence of the state legislature." (p.5l) Generously following the line of thinking presented by Shri Chellaswamy, based on Ajoy Kumar (supra) we find difficulty in applying its ratio to section 321 (2).
There the tax was on land and the expression 'thereon ' underscores this idea.
Once the tax is on land, the link between the tax and the land user like running a market or hotel based on the let ting value is good, but in the present case there is nothing to indicate that it is a tax at all.
Secondly, the phraseology does not suggest that it is a tax on the land or the building.
, on the other hand.
it is on the licence fee for plying a particular trade.
It is not possible to blink at this vital distinction between Ajoy Kumar (supra) and the persent case.
Maybe that the Madurai Municipality is perfectly within its competence in imposing a property tax at any particular rate it chooses.
The user of the land or building as a restaurant or hotel being the link as explained above, the fact that there is a tax on all property within the municipality does not mean that this local body cannot levy an additional tax or surcharge on the land or building if put to a particular specialist use.
We see no impediment in the municipal authority taxing hotels at a certain rate exercising its power to impose property tax provided there are no other legal impediements in the way.
We are not pursuing the existence or otherwise of other impediments because that does not fall for our consideration in this case.
Shri A. K. Sen is right is his submission that unlike in the Assam Act considered in Ajoy Kumar (supra) in the present case we do not even find the expression 'tax ' used.
The Municipal resolution might have been saved had we been able to spell out a taxing power on property from s.321 (2) of the Act.
For, there is no gainsaying the state 's right to tax land and buildings 340 and the nexus between the tax and the power may be land use.
Since A running a restaurant or cinema house is clearly a use of building, a tax thereon, based on such user, is constitutionally impeccable.
Such is not the case here.
Thus the plea that section 321 (2) lends itself to being regarded as a tax, indifferently described as fee, breaks down for two reasons.
When the Legislature has carefully provided in s.78 (3) for previous invitation and consideration of objections to enhancement of tax levies, resort to the device of tax disguised as fee, under s.321 (2), may not require any such procedural fairness and discipline and thus will frustrate the processual protection written into the law in regard to fiscal measures.
Secondly, Schedule V, with which s.321 is directly linked, sets out a host of petty and lucrative ventures all of which, theoretically, cannot be carried on except on land or buildings.
Can it be that some flimsy or casual connection with terra firma will furnish the legal nexus between the tax imposed and the land on which the work is done ? For example, washing soiled clothes is an item in Schedule V.
It is straining judicial credulity to snapping point to say that such trivial user justifies a tax on the land when washing is done.
Running a hotel or market or permanent circus or theatre may stand on a different footing.
The com monsense of the common man is the best legal consultant in many cases and eschewal of hyper technical and over sophisticated legal niceties helps the vision.
We cannot list out what, in law, will serve as a nexus between land and tax thereon but, in a given case like in a hotel business, land use may easily be discerned.
The snag is that in the present appeals the levy is not on land but on the licence for business and bearing in mind the identity of the legal concept, we reject the contention that the impugned resolution was an innocent tax on property.
The case falls between two stools.
It is not a fee ex concessionis it is not a tax ex facie.
We further repel the request to read licence fee in section 321 (2) as land tax into every item of activity set out in Schedule V, from washing soiled clothes on a broad stone to using a central place as a posh restaurant.
The cumulative result of the multiple submissions we have been addressed is that the impugned resolution is invalid.
We do not bar the door for the Municipality or the State to pursue other ways to tax hotel keepers, acting according to law and under the power to tax in Entry 49, List II, of the Seventh Schedule, while dismissing the appeals The legal controversy in this case is stricken with more than marginal obscurity and indeed, has exercised our minds on the diverse aspects of law considerably.
Moreover, the battle is between a local authority which is in need of financial resources to fulfil its functions and a host of hoteliers who flourish in private business.
Bearing in mind the conspectus of circumstances, we regard this case as one where the proper order will be that parties do bear their own costs throughout.
V.P.S Appeals dismissed.
| The appellant increased the licence fee imposed on hoteliers respondents under s.321 (2), Madras District Municipalities Act, 1920, and they challenged the increase.
The appellant justified the increase on the basis that the fee under the section is a tax and falls under "tax on land and building ' in Entry 49, List II, VII Schedule of the Constitution.
The High Court held in favour of the respondents.
^ Dismissing the appeal to this Court, HELD: (l) The appellant would be competent to impose a property tax at any Particular rate it chooses.
the user of the land and building as a restaurant or hotel furnishing sufficient nexus for the legislature to impose a tax.
[339H, 340A] Ajoy Kumar vs Local Board ; , referred to.
(2) But the fec imposed under section 321(2) in this ease is not a tax.
[336G] (a) Section 321(2) authorises the collection of a fee in contradiction to tax.
1335B] (b) Section 321 is in a part of the Act different from the part dealing with taxation.
While the nomenclature of the levy or the location of a section in the Act is not conclusive.
they are relevant factors.
for deciding whether the fee imposed is a tax or not.
[335 CD] Liberty Cinema Case ; , referred to.
(c) Section 78(1A) authorises the levy of property tax.
Section 78(3) contains the mandatory procedural prescriptions for imposing taxes.
When the legislature has carefully provided in the sub section for previous invitation and consideration of objections to enhancement of tax levies, resort to section 321(2) to impose a tax as a fee would frustrate the processual protection written into the law in regard to fiscal measures, [338 BCE] (d) Schedule V with which section 321 is directly linked sets out a number of ' petty occupations all of which, theoretically cannot be carried on except on land or in buildings.
If the licence fee in section 321(2) is read as land tax the fee in relation to every item of activity set out in the Schedule would be tax on the basis of the trivial activity furnishing the legal nexus between the tax and the land.
But, it would be straining the language to justify the imposition of a tax on the land, on the basis of such a flimsy or casual connection
|
Civil Appeal No. 712 F. Of 1980.
From the Judgment and order dated 20.12.1978 of the Gujarat High Court in Special C.A. No. 1()73 of 1975.
V.M. Tarkunde, Dr. D.Y. Chandrachud, section Bharatari and P.H. Parekh for the Appellants.
P.S. Poti, M.N. Shroff, K.M.M. Khan and Mrs. H. Wahi for the Respondents.
The Judgment of the Court was delivered by RANGANATH MISRA, J.
This appeal by special leave is directed against the judgment of the Gujarat High Court in a dispute centered round seniority of government employees in the Gujarat Sub ordinate Secretariat Service.
The short facts necessary for disposal of the two contentions raised in this appeal are the following: 613 On May 1, 1960, the State of Bombay was bifurcated into two States Maharashtra and Gujarat.
Prior to that date the six appellants in this appeal had joined Government service as Clerks cum typists.
The Subordinate Secretariat Service was then divided into four grades (i) Clerk cum typist (ii) Junior Assistant (iii) Senior Assistant and (iv) Superintendent.
Promotions were available from the lower tier to the upper one.
When Gujarat became a separate State Government business in the Secretariat was divided into 9 departments separate in every respect so far as the Subordinate service was concerned.
On October 12, 1960, by a Government Resolution the cadre of Superintendents became a common one covering all the departments in the Secretariat.
Until then seniority was being determined department wise and promotions had also been regulated on the same basis in all the four grades.
Under the new arrangement promotion to the post of Superintendent was handled by the General Administration Department out of a common list of Senior Assistants.
On September 25, 1964, under another resolution of Government the grades of Junior Assistants and Senior Assistants were merged into a single one known as Assistants w.e.f. October 1, 1964, and a common seniority list of Government servants working as Assistants was prepared.
A quota system was introduced for recruitment of Assistants.
At one state, the ratio was 3: 1, promotees being the smaller proportion and later it was changed to 2: 1.
On July 19, 1969, a seniority list of Assistants was prepared on quota basis and taking into account continuous officiation in the cadre of Assistants.
The list was assailed before the High Court.
The court found by judgment dated March 9, 1972 that promotees were in excess of the ratio and accordingly gave direction for a fresh list to be drawn up.
On October 11, 1974, Government resolved to have a common cadre of Clerk cum typist and promotion to the post of Assistant was provided therefrom.
In 1975, the October Resolution of Government was challenged before the High Court by filing two writ petitions.
In the meantime, in 1977, a set of rules known as the Gujarat Subordinate Secretariat Service (Seniority of Assistants) Rules, 1977 were framed under the proviso to Article 389 of the Constitution with retrospective effect from May 1, 1960.
Rule 4 of the Rules laid down the principle for determining seniority by providing that seniority among the promotees Assistants inter se shall be fixed on the basis of their length of service in the joint cadre of Clerk cum typist for all departments of the Secretariat as a whole.
In December, 1978, the two writ petitions were dismissed.
The High Court held that the object of the Rules of 1977 was to equalise the chances of promotions to the selection cadre and since the rules took care of the promotee officers by ensuring non reversion, the rules were indeed not retrospective.
H 614 Several consequential dircctions were given.
It is this judgment which is now under appeal.
The main contention advanced by Mr. Tarkunde in the appeal is that the rule regarding seniority is retrospective in operation and takes away the vested right of the appellants to prospects of promotions.
In support of his submission he has relied upon three decisions of this Court, namely, Mervyn vs Collector of Customs, Bombay & Ors., ; Roshan Lal Tandan vs Union of India, [ ; and State of Jammu & Kashmir vs Triloki Nath Khosa & ORS., l 1.
Each one of these is a decision of the Constitution Bench.
We do not find that on facts any of these cases has any support to offer for the point in dispute.
Mervyn 's case was that of Appraisers of the Customs Department and challenge was to the validity of the rotational system in fixing the seniority of Principal Appraisers.
The Court struck down the method used by Government in fixing the seniority of Principal Appraisers on a finding that there was denial of equality of opportunity.
The dispute in this case is different from what came in Mervyn case for determination.
This will be apparent when we presently deal with what exactly is the problem in the matter before us.
Roshan Lal 's case dealt with recruitment into one cadre from two sources.
Even when recruitment from the two sources merged into one cadre, favourable.
treatment was given to recruits from one source regarding further promotion.
The Court found this to be violative of Articles 14 and 16 of the Constitution.
This again is not relevant for resolving the dispute in hand.
Triloki Nath 's case was dealing with the Engineering Service of Jammu & Kashmir.
There was direct recruitment of decree holders in civil engineering as also by transfer of degree or diploma holders who had served as Supervisors for a period of not less than 5 years for recruitment to the cadre of Assistant Engineers.
The relevant rule provided that recruitment to the post of Executive Engineers and above was to be made by promotion only and Assistant Engineers who possessed a degree in engineering alone were eligible for such promotion.
This rule, therefore, disqualified diplomaholders for being promoted as Executive Engineers and they challenged the constitutionality of the rule by contending that it was discriminatory.
The Court found that even after there was one cadre, for the promotional post therefrom, a higher qualification could be prescribed and those out of the common cadre who satisfied that requirement could be made eligible for promotion.
As we have already pointed out in the instant case the State decided at stages to switch over to the common cadre in respect of all the four grades of the Subordinate Service.
Before common grades 615 had been formed promotion was granted departmentwise.
When ultimately a common cadre came into existence and all that was done by 1974 it was realised that if seniority as given in the respective departments were taken as final for all purpose there would be prejudice.
Undoubtedly the common cadre was for the purpose of increasing the efficiency by introducing a spirit of total competition by enlarging the field of choice for filling up the promotional posts and in the interest of discipline too.
After a common cadre was formed, the general feeling of dissatisfaction on account of disparity of seniority became apparent.
The 1977 Rules were introduced in this background to ease the situation.
The scheme of this rule protected the rank then held by every member of the service notwithstanding alteration of seniority on the new basis.
This, therefore, made it clear that accrued benefits were not to be interfered with.
To that extent the 1977 Rules were not retroactive.
In spite of the protection of Rule regarding the post then held, the Rules brought about a change in the inter se seniority by adopting the date of initial recruitment and the length of service became the basis for refixing seniority.
Total length of service for such purpose is a well known concept and could not said to be arbitrary.
Undoubtedly one of the consequences of the change in the basis was likely to effect prospects of promotion a matter in future.
Two aspects have to be borne in mind while considering the challenge of the appellants to this situation.
It was a historical necessity and the peculiar situation that arose out of Government 's decision to create a common cadre with four grades in the entire Secretariat.
We would like to point out with appropriate emphasis that there was no challenge to creation of the common cadre and certainly Government was competent to do so.
The second aspect to be borne in mind is that rules of seniority are a matter for the employer to frame and even though prospects of promotion in future were likely to be prejudiced by introduction of a new set of rules to regulate seniority, if the rules were made bona fide and to meet exigencies of the service, no entertainable grievance could be made.
If these are the tests to apply, we do not think the appellants have indeed any grievance to make.
In our view, therefore, the High Court rightly dismissed the contention and found that appellants were not entitled to relief Mr. Tarkunde next urged about the quota.
We find that the High Court has not dealt with the question.
We do not propose to go into that aspect.
We accordingly dismiss the appeal but leave parties to bear their own costs throughout.
S.L. Appeal dismissed.
| In 1945 the first respondent Trustees of Port of Bombay, granted lease of plot owned by them for the purpose of erecting a godown for carrying on commercial activities at a monthly rent of Rs. 925.
In 1946 the lessee erected a permanent godown.
In 1958, he granted lease of the said godown to the petitioners.
The first respondent filed a suit against the heirs of the original lessee for eviction on the ground of termination of tenancy, and obtained a decree.
When warrant of possession was sought to be executed, the petitioners obstructed the execution of the decree.
The first respondent thereupon took out a Chamber Summons for removal of obstruction under order 21 Rule 97 101 C.P.C.
The petitioners contended that as they were lessees under the original lessee they were entitled to protection of the Bombay Rent, Hotel and Lodging Houses Rates (Control) Act, 1947 the Bombay Rent Act which applied to the building erected by a lessee from the local authority.
The trial court rejected the petitioners ' objection and allowed the Chamber Summons.
The appeal of the petitioners was dismissed by the Single Judge of the High Court holding that they were not entitled to the benefit of the Bombay Rent Act.
The contentions arising out of the Easement Act and alleged acquiescence of the first respondent were negatived.
The Letters Patent Appeal was also dismissed by the Division Bench.
On the question whether the petitioners were entitled to protection under section 4(1)(a) of the Bombay Rent Act.
484 dismissing the Special Leave Petition, ^ HELD: Where a building was erected by the lessee not pursuant to or not under any agreement with the lessor then the case did not fall under section 4(1)(a) of the Bombay Rent, Hotel and Lodging Houses Rates (Control) Act, 1947.
[486G] Section 4(1) gives immunity to the local authority in respect of the land which it has let out to the lessee and that immunity cannot be taken away merely because the lessor on his own volition and without being in obligation under any agreement choses to put up structures on that land.
Therefore, if the premises belonged to the Government or a local authority then the Act would not apply.
[486H; 487A, D] In the instant case, The lands belong to the local authority but the structures were put on by the lessees of the first respondent not under any building lease, and such protection cannot be claimed in respect of these premises.
In view of the fact that the original lease was only a monthly tenancy and not a building lease, the High Court was right in dismissing the objections on behalf of the petitioners.
Since the petitioners have been in possession of the premises for some time, the petitioners are allowed to continue to remain in the premises upto 15th September, 1988.
[489F, H] Kanji Manji vs The Trustees of the Port of Bombay, [1962] Suppl.
3 S.C.R. 461 applied.
|
vil Appeals Nos. 46 to 48 of 1956.
Appeals from the judgment and order dated November 16, 1951, of the former Nagpur High Court in Misc.
Petitions Nos.
45,1568 and 1569 of 1951.
H. J. Umrigar, D. L. Jayawant and Naunit Lal, for the appellants in C. A. Nos. 46 and 47 of 56.
D. L. Jayawant and Naunit Lal, for the appellant in C. A. No. 48 of 56.
1054 R. Ganapathi Iyer and R. H. Dhebar, for the respon dent (In all the appeals).
December 3.
The following Judgment of the Court was delivered by VENKATARAMA AIYAR J.
These appeals are directed against the orders of the High Court of Nagpur dismissing the writ petitions filed by the appellants herein, and as they arise out of the same facts and raise the same points for determination, they were heard together, and will be disposed of by a common judgment.
The facts in Civil Appeal No. 46 of 1956 the facts in the connected appeals are similar and do not require to be stated are that the appellant was employed in 1939 in the Bengal Nagpur Railway as a clerk in the workshop at Nagpur.
In 1946 when the State took over the administration of the Railway, it gave option to the employees to continue in service on the terms set out in a document dated July 5, 1946.
The appellant accepted those terms and continued in service on the conditions mentioned in that document.
Acting in exercise of the powers conferred by sections 241(2), 247 and 266(3) of the Government of India Act, 1935, the Governor General promulgated certain rules called the Railway Services (Safeguarding of National Security) Rules, 1949, hereinafter referred to as the Security Rules, and they came into force on May 14, 1949.
It will be convenient at this stage to set out the Security Rules, in so far as they are material for the purpose of these appeals, as it is the validity of these rules that is the main point for determination by us.
Rules 3, 4, 5 and 7 are as follows: 3. " A member of the Railway Service who, in the opinion of the competent authority is engaged in or is reasonably suspected to be engaged in subversive activities, or is associated with others in subversive activities in such manner as to raise doubts about his reliability, may be compulsorily retired from service, or have his service terminated by the competent authority after he has been given due notice or pay in 1055 lieu of such notice in accordance with the terms of his service agreement: Provided that a member of the Railway Service shall not be so retired or have his service so terminated unless the competent authority is satisfied that his retention in public service is prejudicial to national security, and unless, where the competent authority is the Head of a Department, the prior approval of the Governor General has been obtained.
Where in the opinion of the competent authority, there are reasonable grounds for believing that a member of the Railway Service is liable to compulsory retirement from service or to have his service terminated under Rule 3, it shall (a) by an order in writing, require the said member of Railway service to proceed on such leave as may be admissible to him and from such date as may be specified in the order; (b) by a notice in writing inform him of the action proposed to be taken in regard to him under Rule 3; (c) give him a reasonable opportunity of showing cause against that action ; and (d) before passing a final order under Rule 3, take into consideration any representation made by him in this behalf.
Nothing contained in the Rules in Chapter XVII of the State Railway Establishment Code, Volume 1, shall apply to, or in respect of, any action taken or proposed to be taken under these rules.
Any person compulsorily retired from service or whose service is terminated under Rule 3 shall be entitled to such compensation, pension, gratuity and/ or Provident Fund benefits as would have been admissible to him under the Rules applicable to his service or post on the date of such retirement or termination of service if he had been discharged from service due to the abolition of his post without any alternative suitable employment being provided.
" On July 6, 1950, the General Manager of the Bengal Nagpur Railway issued a notice to the appellant 1056 under R. 3 of the Security Rules stating that in view of the facts recited therein, there was reason to believe that the appellant was engaged in subversive activities and calling upon him to show cause why his services should not be terminated.
He was also placed under suspension from that date.
On July 29, 1950, the appellant sent his explanation denying the allegations contained in the notice dated July 6, 1950.
The matter was then referred to the Committee of Advisers, who held an enquiry on September 8,1950, and after hearing the appellant found that the charges against him mentioned in the notice were true.
Acting on this report, the General Manager terminated the services of the appellant on April 3, 1951, giving him one month 's salary instead of notice.
Meantime, on February 3,1951, the appellant had filed the writ petition, out of which Civil Appeal No. 46 of 1956 arises, in the High Court of Nagpur challenging the validity of the notice dated July 6, 1950, and the order of suspension following thereon.
The order of dismissal dated April 3, 195 1, having been passed during the pendency of this Petition, the appellant had his petition amended by adding a prayer that that order also was bad.
The grounds urged in support of the petition were that the Security Rules under which action was taken were in contravention of articles 14, 19 (1)(c) and 311 of the Constitution, and that, in consequence, the orders passed in exercise of the powers conferred thereby were void.
The respondents resisted the application on the ground that the rules in question were valid, and that the orders passed thereunder were not open to attack.
The petition was heard along with others, in which the same questions were raised, and by their judgment dated November 16, 1951, the learned Judges held that it was unnecessary to decide whether the Security Rules were void as, assuming that they were, the orders terminating the services of the petitioners could be sustained under R. 148 of the Railway Establishment Code.
Sub rules (3) and (4) of R. 148 which bear on this point, are as follows: 1057 R. 148(3) Other (non pensionable) railway servants : "The service of other (non pensionable) railway servants shall be liable to termination on notice on.
either side for the periods shown below.
Such notice is not, however, required in cases of summary dismissal or discharge under the provisions of service agreements, retirement on attaining the age of superannuation, and termination of service due to mental or physical incapacity.
(4) In lieu of the notice prescribed in this rule, it shall be permissible on the part of the Railway Admi nistration to terminate the service of a Railway servant by paying him the pay for the period of notice." The learned Judges held that the appellants were non pensionable railway servants within sub r.(3), that they had been paid one month 's wages instead of notice under sub r.(4), and that, accordingly, the impugned orders were intra vires the powers of the respondents under R. 148, sub r.
In the result, the petitions were dismissed, and the present appeals have been preferred against these orders on a certificate under article 132 (1) and article 133(1)(c) of the Constitution.
The appellants complain that the ground on which the judgment proceeds was not put forward by the respondents in their pleadings and should not have been allowed to be taken by them, and that on the points actually in issue, it should have been held that the Security Rules were repugnant to articles 14, 19(1) (c) and 311 of the Constitution, and, therefore, void.
They further contend that even if the Security Rules were valid, the orders terminating the services were not justified by them, and that further, those orders were bad for the reason that they had not been made by the competent authorities.
The appellants also sought to raise the contention that the enquiry conducted by the authorities was defective, and that there was no proper hearing as provided by the rules, but we declined to hear them on that point, as that was not raised in their petitions.
1058 The points for decision in these appeals are: (I) Whether the orders terminating the services of the appellants can be upheld under R. 148 of the Railway Establishment Code; (II)Whether the Security Rules are bad as infringing (a) article 14, (b) article 19(1)(c) and (c) article 311 of the Constitution; (III)Whether the impugned orders are not valid, even according to the Security Rules; and (IV) Whether those orders were not passed by the competent authorities.
On the first question, it appears clearly from the record that the authorities purported to take action only under the Security Rules.
The notice dated July 6, 1950, was avowedly issued under R. 3 of those rules.
It was in the scrupulous observance of the procedure prescribed therein that the explanations of the appellants in answer to the charges were taken, and the matters were referred to the Committee of Advisers for enquiry.
And above all, the orders terminating the services of the appellants, in terms, recite that they were made under R. 3 of the rules, as for example, the notice dated April 3, 1951, given to the appellant in Civil Appeal No. 46 of 1956, which runs as follows: "I have considered your representation to me in reply to this office letter No. Con/T/2 I /MP/82 dated 6 7 1950 and am of the opinion that you are engaged and associated with others in subversive activities in such mariner as to raise doubts about your reliability and am satisfied that your retention in public service is prejudicial to national security.
I have decided with the prior approval of the President that your services should be terminated under Rule 3 of the Railway Services (Safeguarding of National Security) Rules, 1949.
" It should be added that while the appellants stated in their petitions that action had been taken against them under the Security Rules, and that those rules were ultra vires, the respondents did not plead that 1059 action was taken under R. 148 of the Railway Establishment Code.
They only contended that the Security Rules were valid.
In view of the above,the criticism of Mr. Umrigar for the appellants that the judgment under appeal proceeds on a ground which was, not merely, not in the contemplation of the authorities When they passed the orders in question, but was not even raised in the pleadings in Court, is not without substance.
It is argued that when an authority passes an order which is within its competence, it cannot fail merely because it purports to be made under a wrong pro.
vision if it can be shown to be within its powers under any other rule, and that the validity of an order should be judged on a consideration of its substance and not its form.
No exception can be taken to, this proposition, but it has not been the contention of the respondents at any stage that the orders in question were really made under R. 148(3) of the Railway Establishment Code, and that the reference to R. 3 of the Security Rules in the proceedings might be disregarded as due to mistake.
In the Court below, the learned Judges rested their conclusion on the ground that cl.
(10) of the service agreement dated July 5, 1946, provided that in respect of matters other than those specifically dealt with therein discharge is one of such other matters the Railway rules applicable to persons appointed on or after October 1, 1946 were applicable, that R. 148(3) was one of such rules, and that the appellants who were non pensionable railway servants were governed by that rule, and were liable to be discharged in accordance therewith.
But this reasoning ignores that under cl.
(10) of the service agreement, the Security Rules stand on the same footing as the rules in the Railway Establishment Code and constitute equally with R. 148 the conditions of service on which the appellants held the employment, and there must be convincing reasons why orders passed statedly under R. 3 should be held not to have been passed under that rule.
Before us, a different stand was taken by the respondents.
They did not 1135 1060 dispute that the action was really taken under R. 3 of the Security Rules, but they argued that the power to terminate the service under r. 3 was not something ;different from and independent of the power to discharge, conferred by R. 148, and that an order passed under R. 3 was, on its own terms, one made under R. 148(3).
The basis for this contention is the provision in R. 3 that the service may be terminated in accordance with the service agreement, after giving due notice or.
pay in lieu of such notice.
The appellants controvert this position.
They contend that the power to terminate the service under the Security Rules is altogether different from the power to discharge under R. 148, that the reference in R. 3 to the service agreement is only in respect of the notice to be given, there being different periods fixed under the rules in relation to different classes of employees, and that, in other respects, the Security Rules run on their own lines, and that action taken thereunder cannot be shunted on to R. 148.
We find 'considerable difficulty in acceding to the argument of the respondents.
The Security Rules apply to a special class of employees, those who are engaged or are likely to engage in subversive activities, and in conjunction with the instructions which were issued when they were promulgated, they form a self contained code prescribing a special and elaborate procedure to be followed, when action is to : be taken thereunder.
We see considerable force in the contention of the appellants that the of the service agreement in R. 3 has reference only to the nature of the notice to be given.
If the interpretation which the respondents seek to put on the Security Rules is correct, then it is difficult to see what purpose at all they serve.
Mr. Ganapathy Iyer for the respondents argues that they are intended to afford protection to persons who might be charged with being engaged in subversive activities.
If that is their purpose, then if action is taken thereunder but the procedure prescribed therein is not followed, the Order must be held to be bad, as the protection intended to be given has been denied to the employee, 1061 and R. 148 cannot be invoked to give validity to such order.
Indeed, that has been held in Sambandam vs General Manager, section I. Ry.
(1) and Prasadi vs Works Manager, Lillooah (2) ; and that is also conceded by .Mr.
Ganapathy Iyer.
If then the power to terminate the service under the Security Rules is different from the power to discharge under R. 148 when the procedure prescribed therein is not followed, it must be equally so when, as here, it has been followed, for the complexion of the rules cannot change according as they are complied with or not.
That means that the Security Rules have an independent operation of their own, quite apart from R. 148.
We do not, however, desire to express any final opinion on this question, as Mr. Ganapathy Iyer is willing that the validity of the orders in question might be determined on the footing that they were passed under R. 3 of the Security Rules, without reference to R. 148.
That renders it necessary to decide whether the Security Rules are unconstitutional, as contended by the appellants.
(Ila).
The first ground that is urged against the validity of the Security Rules is that they are repugnant to article 14.
It is said that these rules prescribe a special procedure where action is proposed to be taken against persons suspected of subversive activities, and that when the services of an employee are terminated under these rules, the consequence is to stamp him as unreliable and infamous, and there is thus discrimination, such as is hit by article 14.
It is admitted that if the persons dealt with under these rules form a distinct class having an intelligible differentia which bears a reasonable relation to the purposes of the rules, then there would be no infringement of Art.14.
But it is argued that the expression " subversive activities" which forms the basis of the classification is vague and undefined in that even lawful activities could be roped therein, and that such a classification cannot be said to be reasonable.
Reference was made to the charges which were served on the appellant in Civil Appeal No. 46 of 1956 as showing how even lawful activities (1) I.L.R. (2) A.I.R. 1957 Cal.
4. 1062 could be brought under the impugned rules.
The notice, so far as it is material, runs as follows: " Whereas in the opinion of the. .
General ,Manager, you are reasonably suspected to be a member and office secretary of the B. N. Rly.
Workers ' Union (Communist sponsored) and were thickly associated with communists such as Om Prakash Mehta, B.N. Mukherjee, R. L. Reddy, etc., in subversive activities in such manner as to raise doubts about your reliability and loyalty to the State in that, though a Government employee, you attended private meetings of the Communists, carried on agitation amongst the Railway workers for a general strike from November 1948 to January 1949 evidently to paralyse communication and movement of essential supplies and thereby create disorder and confusion in the country and that, consequently, you are liable to have your services terminated under rule 3 of the said Rules.
" It is argued that it is not unlawful to be a member of the Communist Party or to engage in trade union activities, and if this could form the basis of action under the rules, the classification must be held to be unreasonable.
Reliance was placed on the decision of this Court in The State of West Bengal vs Anwar Ali Sarkar (1), wherein it was held that a power conferred on the executive to select cases for trial by special courts under a procedure different from that of the ordinary courts with the object of ensuring " speedy trial " could not be upheld under article 14 as a valid classification, and on the decision of the Madras High Court in Ananthanarayanan vs Southern Railway(2), wherein it was hold that the words " subversive activities " in R. 3 lacked definiteness.
Now, the principles applicable for a determination whether there has been a proper and valid classification for purposes of article 14 have been the subject of consideration by this Court in a number of cases, and they were stated again quite recently in Budhan Choudhry and others vs The State of Bihar(3), and there is no need to repeat them.
The only point that (1) ; (2) A.I.R. 1956 Mad. 220.
(3) [1955]1 S.C.R. 1045, 1049.
1063 calls for decision in these appeals is whether the classi fication of persons on the basis of subversive activities is too vague to be the foundation of a valid classification.
Mr. Umrigar insists that it is, but his elaborate argument amounts to no more than this that the expression " subversive activities " may take in quite a variety of activities, and that its contents are therefore wide.
It may be that the connotation of that expression is wide, but that is not to say that it is vague or indefinite.
But whatever the position if the words "subversive activities " had stood by them selves, they are sufficiently qualified in the Security Rules to be definite.
Those rules have, for their object, the safeguarding of national security as recited in the short title.
That is again emphasised in R. 3, which provides that a member of the Railway service is not to be retired or his services terminated unless the authorities are satisfied " that his retention in public service is prejudicial to national security ".
In our judgment, the words " subversive activities " in the context of national security are sufficiently precise in their import to sustain a valid classification.
We are unable to agree with the opinion expressed in Ananthanarayanan vs Southern Railway (supra) at p. 223 that the language of R. 3 is indefinite, even when read with the words " national security".
We are also unable to agree with the argument of the appellants based on the charges made against the appellant in Civil Appeal No. 46 of 1956 in the notice dated July 6, 1950, that the expression "subversive activities " is wide enough to take in lawful activities as well, and must therefore be held to be unreasonable for purposes of classification under article 14.
The notice, it is true, refers to the appellant being a member of the Communist Party and to his activities in the trade union.
It is also true that it is not unlawful to be either a Communist or a trade unionist.
But it is not the necessary attribute either of a Communist or a trade unionist that he should indulge in subversive activities, and when action was taken against the appellant under the rules, it was not because he was a 1064 Communist or a trade unionist, but because he was engaged in subversive activities.
We hold that the Security Rules are not illegal as being repugnant to ,a article 14.
(IIb).
It is next contended that the impugned orders are in contravention of article 19(1)(c), and are therefore void.
The argument is that action has been taken against the appellants under the rules, because they are Communists and trade unionists, and the orders terminating their services under R. 3 amount, in substance, to a denial to them of the freedom to form associations, which is guaranted under article 19(1)(c).
We have already observed that that is not the true scope of the charges.
But apart from that, we do not see how any right of the appellants under article 19(1)(c) has been infringed.
The orders do not prevent them from continuing to be Communists or trade unionists.
Their rights in that behalf remain after the impugned orders precisely what they were before.
The real complaint of the appellants is that their services have been terminated; but that involves, apart from article 31 1, no infringement of any of their Constitutional rights.
The appellants have no doubt a fundamental right to form associations under article 19(1)(c), but they have no fundamental right to be continued in employment by the State, and when their services are terminated by the State they cannot complain of the infringement of any of their Constitutional rights, when no question of violation of article 311 arises.
This contention of the appellants must also be rejected.
(IIc).
'it is then contended that the procedure pres cribed by the Security Rules for the hearing of the charges does not satisfy the requirements of article 311, and that they are, in consequence, void.
But article 311 has application only when there is an order of dismissal or removal, and the question is whether an order terminating the services of the employees under R. 3 can be said to be an order dismissing or removing them.
Now, this Court has held in a series of decisions that it is not every termination of the services of an employee that falls within the operation of article 311, 1065 and that it is only when the order is by way of punishment that it is one of dismissal or removal under that Article.
Vide Satish Chandra Anand vs Union of India (1), Shyam Lal vs The State of Uttar Pradesh and the Union of India (2), State of Bombay vs Saubhagchand M. Doshi (3), and Parshotam Lal Dhingra vs Union of India (4).
The question as to what would amount to punishment for purposes of article 311 was also fully considered in Parshotam Lal Dhingra 's case (supra).
It was therein held that if a person had a right to continue in office either under the service rules or under a special agreement, a permature termination of his services would be a punishment.
And, likewise, if the order would result in loss of benefits already earned and accrued, that would also be punishment.
In the present case, the terms of employment provide for the services being terminated on a proper notice, and so, no question of permature termination arises.
Rule 7 of the Security Rules preserves the rights of the employee to all the benefits of pension, gratuities and the like, to which they would be entitled under the rules.
Thus, there is no forfeiture of benefits already acquired.
It was stated for the appellants that a person who was discharged under the rules was not eligible for re employment, and that that was punishment.
But the appellants are unable to point to any rule imposing that disability.
The order terminating the services under R. 3 of the Security Rules stands on the same footing as an order of discharge under R. 148, and it is neither one of dismissal nor of removal within the meaning of article 311.
This contention also must be overruled.
(111) It is next contended by Mr. Umrigar that the charges which were made against the appellant in Civil Appeal No. 46 of 1956 in the notice dated July 6, 1950, have reference to events which took place prior to the coming into force of the Security Rules, which was on May 14, 1949, and that the order terminating the services of the appellant based thereon is bad as giving retrospective operation to the rules, (I) ; (2) ; , (3) Civil Appeal No. 182 Of 1955.
(4) Civil Appeal No. 65 of 1957.
1066 and that the same is not warranted by the terms there of.
Now, the rules provide that action can be taken under them, if the employee is engaged or is reason;ably suspected to be engaged in subversive activities.
Where an authority has to form an opinion that an employee is likely to be engaged in subversive activities, it can only be as a matter of inference from the course of conduct of the employee, and his antecedents must furnish the best materials for the same.
The rules are clearly prospective in that action thereunder is to be taken in respect of subversive activities which either now exist or are likely to be indulged in, in future, that is to say, which are in esse or in posse.
That the materials for taking action in the latter case are drawn from the conduct of the employees prior to the enactment of the rules does not render their operation retrospective.
Vide the observations of Lord Denman C. J. in The Queen vs St. Mary, Whitechapel (1) and The Queen vs Christchurch (2).
This contention must also be rejected.
(IV) Lastly, it was contended that the impugned orders were not passed by the competent authorities under the Security Rules, and that they were, therefore, void.
This contention is based on the fact that the authority competent to pass the orders under R. 3 is, as regards the present appellants, the General Manager, and that the impugned orders were actually communicated to them by the Deputy Manager.
But it has been found as a fact that the orders had been actually passed by the General Manager, and that finding must be accepted.
In the result, the appeals fail, and are dismissed with costs.
The appellants who were permitted to file the appeals in forma pauperis will also pay the court fees payable to the Government.
Appeals dismissed.
(1) ; ; 116 E.R.811.
(2) ; ; , 825.
| The Services of the appellants who were Railway servants, were terminated for reasons of national security under section 3 of the Railway Services (Safeguarding of National Security) Rules, 1949.
Notices served on them under that section to show cause charged them as follows: "Whereas in the opinion of the.
General Manager, you are reasonably suspected to be a member and office secretary of the B. N. Rly., Workers ' Union (Communist sponsored) and were thickly associated with communists such as Om Prakash Mehta, B. N. Mukherjee, R. L. Reddi, etc., in subversive activities in such manner as to raise doubts about your reliability and loyalty to the State in that, though a Government employee, you attended private meetings of the Communists, carried on agitation amongst the Railway workers for a general strike from November 1948 to January 1949 evidently to paralyse communication and movement of essential supplies and thereby create disorder and confusion in the country and that, consequently, you are liable to have your services terminated under rule 3 Of the said Rules".
Orders of suspension were passed on them.
They made their representations.
The committee of Advisers on enquiry and after examining them found that the charges were true and the General Manager acting on its report terminated the services of the appellants, giving them a month 's salary in lieu of notice.
The appellants moved the High Court under article 226 of the Constitution and contended that the Security Rules contravened articles 14, 19(1)(c) and 311 of the Constitution and as such the orders terminating their services were void.
The High Court did not decide the Constitutional validity of the Security Rules and dismissed the petitions on other grounds.
Held, that the words 'subversive activities 'occurring in Rule 3 Of the Railway Services (Safeguarding of National Security) Rules, 1949, in the context of the objective of national security which they have in view, are sufficiently precise in import to 1053 sustain a valid classification and the Rules are not, therefore,invalid as being repugnant to article 14 of the Constitution.
Ananthanarayanan vs Southern Railway, A. I. R. 1956 Mad. 220, disapproved.
The charge shows that action was taken against the appellants not because they were Communists or trade unionists but because they were engaged in subversive activities.
The orders terminating their services could not,.
therefore, contravene article 19(1)(c) of the Constitution since they did not infringe any of the rights of the appellants guaranteed by that Article which remained precisely what they were before.
Article 311 of the Constitution can apply only when there is an order of dismissal or removal by way of punishment.
As the terms of employment of the appellants provided that their services could be terminated on a proper notice and R. 7 Of the Security Rules preserved such rights as benefits of pension, gratuities and the like to which an employee might be entitled under the service rules, there was neither premature termination nor forfeiture of benefits already acquired so as to amount to punishment.
The order ' terminating the services under R. 3 Of the Security Rules stood on the same footing as an order of discharge under R. 148 of the Railway Establishment Code and was neither one of dismissal nor removal within the meaning of article 311 of the Constitution.
Article 311 had, therefore, no application.
Parshotam Lal Dhingra vs Union of India, Civil Appeal No. 65 Of 1957, relied on.
Satish Chandra Anand vs Union of India, [1953] section C. R. 655, Shyam Lal vs The State of Uttar Pradesh and the Union of India, ; and State of Bombay vs Saubhagchand M. Doshi, Civil Appeal No. 182 Of 1955, referred to.
Although the Rules are clearly prospective in character, materials for taking action against an employee thereunder may be drawn from his conduct prior to the enactment of the Rules.
The Queen vs St. Mary, Whitechapel, ; and The Queen vs Christchurch, ; , referred to.
|
N: Criminal Appeal Nos.
373 374 of 1978.
Appeals by Special Leave from the Judgment and Orders dated 10 1 1978 and 14 9 1978 of the Delhi High Court in Criminal Misc.
(M) No. 323 and 322/77 and Criminal Misc.
1083, 1149 of 1978 in Special Misc.
(M) No. 322/77.
Ram Jethmalani (In Crl. A.373), A. K. Sen (In Crl. A.374) and Harjinder Singh for the Appellants.
U. R. Lalit and R. N. Sachthey for the Respondent.
The Judgment of the Court was delivered by CHINNAPPA REDDY, J.
On the intervening night of 31st March 1967 and Ist April 1967, two sandstone pillars of great antiquity, beauty and value were stolen from Suraj Kund temple, in Village Amin (District Karnal, Haryana).
They were of the Sunga period (2nd Century B.C.) and their present estimated value in the International Art Treasures ' Market is said to be around five hundred thousand American dollars.
A first information report (F.I.R. No. 72 of 1967) was registered by the Police of Butana, District Karnal.
The pillars were recovered on 2nd May 1967.
On completion of investigation a charge sheet was filed on 3rd October 1967 in the Court of the Ilaqa Magistrate at Karnal, against one Bali Ram Sharma and two others.
3 119 SCI/79 928 The case ended in their acquittal on 16th July 1968.
During the pendency of the case one Narinder Nath Malik (N. N. Malik) filed an application before the Magistrate alleging that he was a research scholar and requesting that he might be given custody of the two pillars to enable him to make a detailed study.
At the instance of H. L. Mehra, the then Chief Judicial Magistrate, Karnal and a friend of N. N. Malik, the learned Ilaqa Magistrate gave custody of the two pillars to N. N. Malik on his executing a personal bond in a sum of Rs. 20,000/ .
The order was written by H. L. Mehra himself and signed by the Ilaqa Magistrate.
The pillars remained in the custody of N. N. Malik from Ist March 1968 to 27th May 1968, when N. N. Malik purported to return them to the Court of the Ilaqa Magistrate, Karnal.
After the acquittal of Bali Ram Sharma and others, the pillars were handed over to the Lambardar of village Amin.
Later, it came to light that the pillars returned by N. N. Malik were not the original pillars but fakes.
Thereupon, First Information Report No. RC.2/71 CIA/SPE/CBI was registered at Delhi against N. N. Malik and H. L. Mehra under Section 120 B read with Sections 406 and 420 Indian Penal Code.
After completing the investigation the C.B.I. filed a charge sheet No. R.C. 2 of 1971 in the Court of Special Magistrate, Ambala, against N. N. Malik and H. L. Mehra for alleged offences under Section 120 B read with Sections 406 and 420 Indian Penal Code.
The charge sheet was filed on 30th December, 1972.
On 17th May, 1976, the learned Special Magistrate, Ambala, passed an order directing the framing of charges against N. N. Malik and H. L. Mehra.
But, no charges were actually framed as the accused were not present in the Court.
On 17th April, 1977, the Public Prosecutor filed an application under Section 494 Criminal Procedure Code for permission to withdraw the case against Malik and Mehra.
The learned Special Magistrate, Ambala, by his order dated 16th May 1977, permitted the withdrawal of the case and discharged the accused.
Between May 1976 and May 1977 several other things happened and the Narang brothers, the appellants in the two appeals, made their appearance on the scene.
It may be mentioned here, that of the three Narang brothers, Om Prakash alias Omi Narang had been living in London since 1970, Manohar Lal alias Manu Narang had been similarly living in London since July 1974 and Ram Lal Narang alone had been living in India.
Ram Lal Narang was detained first under the MISA from September 1974 till he was released under orders of the High Court, and later, under the COFEPOSA from 1st July 1975 till after the revocation of the internal Emergency in March 1977.
929 The two genuine pillars which had been removed from Suraj Kund temple were traced and found in London in the warehouse of Messrs Spink & Co. It was suspected that Manoharlal Narang and Ramlal Narang had engaged Balkishan Rawal and Nathubhai Rawal of Delhi to make three sets of fakes and had exported the genuine pillars to London.
A First Information Report (R.C. 4/76 CIU(A)/SPE) was registered by the Superintendent of Police, CIU (Antiquities, SPE/CBI, New Delhi) against Manohar Lal Narang and others, for alleged offences under Section 120 B Indian Penal Code read with Section 411 Indian Penal Code and Section 25(1) of the , On 26th June, 1976, N. N. Malik made and application before the Chief Metropolitan Magistrate, Delhi, in case R.C. No. 4/76 CIU(A)/SPE, New Delhi, purporting to be under Section 306 of the Code of Criminal Procedure, 1973, praying that he might be granted pardon.
The application mentioned Sections 411, 406 and 420 Indian Penal Code read with Section 120 B and Section 25(1) of the , as the offences involved.
The application was supported by the reply filed by the Superintendent of Police, C.B.I. On 3rd July 1976, the Chief Metropolitan Magistrate, Delhi, granted pardon to N. N. Malik.
Before the grant of pardon the confessional statement of N. N. Malik was got recorded by the Metropolitan Magistrate, Delhi.
Thereafter, on 19th July 1976, a charge sheet (R.C. 4/1976) was filed in the Court of Chief Judicial Magistrate, Delhi, for offences under Section 120 B Indian Penal Code read with Sections 420, 411 and 406 Indian Penal Code and Section 25 of the .
The case was transferred to the Court of the Additional Chief Metropolitan Magistrate.
On 20th July 1976, the Additional Metropolitan Magistrate issued process for the appearance of the three Narang brothers.
The learned Magistrate also issued warrants for the extradition of Omi Narang and Manu Narang who were in London.
Extradition proceedings were initiated in Britain at the instance of the Government of India.
The Metropolitan Magistrate, Bow Street, London ordered the detention of Omi Narang and Manu Narang pending the issue of warrants by the Secretary of State under Section 5 of the Fugitive Offenders Act.
A petition for the issue of Writ of Habeas Corpus Ad Subjiciendum was filed in the High Court of Justice, Queen 's Bench Division, London.
The Divisional Court directed the release of Omi Narang and Manu Narang.
The Government of India filed an appeal to the House of Lords and on 24th March, 1977, the appeal was allowed.
Omi Narang and Manu Narang were finally extradited and brought to India on 27th July, 1977.
930 Meanwhile internal emergency was lifted in India in March 1977 and Ram Lal Narang was released.
Almost immediately he filed a petition before the Additional Metropolitan Magistrate to drop the proceedings against him, to cancel the extradition warrants and to discharge the accused.
The contention was that the entire investigation in First Information Report No. R.C. 4/76 was illegal as a case on the same facts was already pending before the Ambala Court and that the Delhi Court acted without jurisdiction in taking cognizance of the case pursuant to a report of police based upon such illegal investigation.
The learned Magistrate held that he was not competent to sit in judgment, as it were, over the order of his predecessor taking cognizance of the case.
He, however, found that the conspiracy which was the subject matter of the case before the Court at Ambala and the conspiracy which was the subject matter of the case before himself were one and the same, but, he held that the question as to which Court should proceed with the case, was not for him to decide; it was a matter for the High Court to decide under Section 186 Criminal Procedure Code.
The learned Magistrate also noticed an application filed before him, after the conclusion of arguments, informing him that the case in the Court at Ambala against Malik and Mehra had since been withdrawn on 16th May 1977.
On 21st June 1977, two applications were filed in the Delhi High Court under Section 482 Criminal Procedure Code, one by Ramlal Narang and the other on behalf of Omi Narang and Manu Narang who were still in England awaiting extradition.
The applicants sought quashing of the orders of the learned Metropolitan Magistrate issuing process to them and warrants for the extradition of Omi Narang and Manu Narang.
It was also sought to be declared that the entire investigation in R.C. 4 of 1976 was illegal and the orders of the Chief Metropolitan Magistrate and the Additional Metropolitan Magistrate taking cognizance of R.C. 4 of 1976 were illegal.
The grant of pardon to N. N. Malik was questioned.
It was also prayed that the proceedings before the Metropolitan Magistrate might be quashed.
The petitions were admitted by the Delhi High Court on 22nd June, 1977, but ultimately dismissed on 10th January 1978, by a common judgment.
Ramlal Narang having obtained special leave from this Court has filed Criminal Appeal No. 373 of 1978 and Omi and Manu Narang have preferred Criminal Appeal No. 374 of 1978.
We may mention here that on 1st August, 1977, a supplemental charge sheet was filed making Mehra an accused in the Delhi case, the case in the Ambala Court having been withdrawn on 16th May, 1977, as mentioned earlier.
Malik, we may add, died sometime during August, 1977.
931 We are given to understand that Mehra also was subsequently granted pardon.
Shri Harjinder Singh, learned Counsel for the appellant in Criminal Appeal No. 373 of 1978 and Shri Ashok Sen, learned Counsel for the appellants in Criminal Appeal No. 374 of 1978 argued that the conspiracy and the overt acts which were the subject matter of the two First Information Reports and the two charge sheets were the same and, therefore, there was an implied bar to the power of the Police to investigate into First Information Report No. R.C. 4 of 1976 and the power of the Court at Delhi to take cognizance of the case upon the report of such information.
It was submitted that the mere circumstance that some more persons were mentioned as involved or the mere circumstance that the property was said to have been recovered later would not affect the legal position.
It was submitted that gist of the conspiracy in both the cases was to obtain possession of the pillars.
The offence of conspiracy relating to the obtaining of the pillars having been investigated and a charge sheet having been filed in the Ambala Court, the Police had no authority in law to start a fresh investigation under the Criminal Procedure Code by registering another First Information Report and to submit a charge sheet in the Delhi Court for the very same offence.
That was an unwarranted interference by the Police with the proceedings pending in the Court.
The whole of the investigation subsequent to the filing of the charge sheet in the Ambala Court was without jurisdiction and no material or fact gathered during the course of such illegal investigation could be used to found further proceedings.
The Delhi Court was, therefore, in error in taking cognizance of offences which had already been investigated and which were the subject matter of proceedings in another Court.
It was also argued that the subsequent withdrawal of the case from the Ambala Court did not and could not confer jurisdiction on the Delhi Court.
The withdrawal itself was an abuse of the process of the Court.
Shri Lalit, learned Counsel for the respondents urged that the conspiracy which was the subject matter of the charge sheet filed in the Delhi Court was not the same as the conspiracy which was the subject matter of the charge sheet filed in the Ambala Court.
The circumstance that some of the conspirators were common and part of the case was the same did not make the two conspiracies identical with each other.
There was, therefore, no question of any bar against the Delhi Court from taking cognizance of the case based upon the wider conspiracy merely because the Ambala Court had taken cognizance of the case based upon the narrower conspiracy.
Shri Lalit also urged that the statutory right of the Police to investigate into cognizable 932 offences was not fettered and did not end with the submission of a charge sheet to the Court.
He submitted that the Police had the right and indeed, the duty, to investigate into fresh facts coming to light and to appraise the Court of the same.
The basic submission on behalf of the appellants was that the two conspiracies alleged in the two cases were but one.
The sequitur was that the investigation into and the taking of cognizance of the second case were without jurisdiction.
We will first examine the question whether the conspiracy which was investigated by the Police and which investigation led to the filing of the charge sheet in the Ambala case can be said to be the same as the conspiracy which was later investigated and which led to the filing of the charge sheet in the Delhi Court.
For this purpose, it is necessary to compare the First Information Report and the charge sheet in the two cases.
The First Information Report relating to the case in the Ambala Court was registered against "N. N. Malik and others" for alleged offences under "Section 120 B Indian Penal Code read with Section 420 and Section 406 Indian Penal Code.
" It was stated therein that N. N. Malik applied to the Court of the Judicial Magistrate 1st Class, Karnal and obtained possession of the two stone pillars and dishonestly substituted two fake pillars in their place and returned them to the Court.
The charge sheet which was filed on 30th December, 1972 mentioned N. N. Malik and H. L. Mehra as the two accused in the case and recited that N. N. Malik was introduced by Mehra to the Magistrate as an eminent archaeologist and that he obtained possession of the pillars on the pretext that he wanted to make some research.
The actual order granting custody of the pillars to Malik was written by Mehra but signed by the Magistrate R. K. Sen.
It was further recited that sometime after the pillars were returned by Malik to the Court it was discovered that the pillars so returned were fakes and that N. N. Malik was not an archaeologist.
It was finally said that Malik and Mehra had "thus dishonestly made misrepresentation of fact and got the delivery of the two statues which were subsequently substituted by them" and they had "thus committed the offence under Section 120 B read with Section 420 Indian Penal Code and Section 406 Indian Penal Code.
" It is, therefore, seen from the allegations in the charge sheet filed in the Ambala Court that the conspirators involved in the conspiracy which was its subject matter were two, namely, Malik and Mehra, that the object of the conspiracy was to dishonestly obtain possession of the pillars by making false representation to the Magistrate and to substitute the pillars by fakes after 933 obtaining possession of the same and that the offences committed were under Section 120 B read with Section 420 and 406 Indian Penal Code.
The First Information Report in the Delhi case was registered on 13th May, 1976, and the offences mentioned were Section 120 B Indian Penal Code read with Section 411 Indian Penal Code and Section 25(1) of the .
The accused mentioned in the report were Manu Narang and Ramlal Narang.
After reciting that the pillars had been taken from the Court by N. N. Malik and had been substituted by fake pillars, the First Information Report went on to recite that the genuine pillars, which were stolen from Suraj Kund temple as mentioned above were found to be in the possession and control of Manohar Lal alias Manu Narang in London.
It was further recited that Manu Narang was negotiating the sale of the pillars through some London brokers and the price expected to be fetched was approximately five hundred American dollars.
It was recited further that Manu Narang and his brother Ramlal Narang had commissioned two well known sculptors of Delhi to make three sets of fake pillars.
The two brothers and others, acting in conspiracy, had dishonestly received and exported the two stone pillars.
The charge sheet which followed the investigation was filed on 19th July 1976 in the Delhi Court.
The charge sheet mentioned the three Narang brothers, Ramlal Narang, Manoharlal Narang and Om Parkash Narang, as the three accused persons sent up for trial and H. L. Mehra as a person not sent up for trial as he was already facing trial before the Special Magistrate, Ambala.
The charge sheet recited, among other facts, that the Narang brothers had come to know in or about the month of February 1978 about the invaluable nature of the pillars and devised a stratagem to get the custody of the pillars.
They discussed their stratagem with their family friend N. N. Malik, informing him that the pillars were worth a fortune.
Ramlal Narang and Malik met Mehra and it was decided that Malik should file an application for temporary custody of the pillars and that Mehra should wield his influence over the Magistrate to help N. N. Malik to get such temporary custody.
That was done.
Temporary custody of the pillars was obtained and they were removed to Delhi in a truck at the instance of the Narang brothers to a place in Defence Colony, New Delhi.
Replicas of the pillars were made by Balkrishan Rawal and Natwarlal, two eminent sculptors of Delhi under the supervision of Ramlal Narang and Omi Narang.
Manu Narang also used to visit Delhi and check the progress made.
The original pillars were transported to Bombay by Manu Narang and smuggled out of the country.
934 Fake pillars were substituted and returned by N. N. Malik to the Court.
Later on, suspicion was created by the discovery of two fake pillars which were also attempted to be smuggled out of the country.
The two pillars returned by N. N. Malik were then got examined by experts and were found to be fakes.
Malik was presented by the Narang brothers with a Fiat car, a revolving brass bed and a sum of Rs. 70,000/ .
They also paid for two pleasure trips made by Malik and his wife to Bombay.
It was recited in the charge sheet that the facts disclosed "the commission of offences under Section 406 (criminal breach of trust), Section 411 (receiving and retaining stolen property), Section 420 (cheating) Indian Penal Code and Section 25(1) of the , all read with Section 120 B Indian Penal Code, in pursuance of criminal conspiracy to which Manoharlal Narang, Ramlal Narang and Om Prakash Narang, H. L. Mehra and N. N. Malik (already granted pardon) were parties.
" It was further recited "Manoharlal Narang, Ramlal Narang and Omi Narang also abetted the commission of offences under Section 420 and Section 406 Indian Penal Code by N. N. Malik approver and these three accused were, therefore, liable for prosecution under Section 406 and Section 420 Indian Penal Code read with Section 109 Indian Penal Code and they had also committed other offences under Section 411 Indian Penal Code.
" It was further mentioned in the charge sheet that Manoharlal Narang and Omi Narang were in London and that proceedings for their extradition were under way.
It was also mentioned that H. L. Mehra was facing trial before the Special Magistrate, Ambala, for the offences committed by him and, therefore, he was nor being sent up for trial in this case.
It is obvious that neither at the time when the First Information Report pertaining to the Ambala case was registered nor at the time when the charge sheet was filed in the Ambala Court, were the Narang brothers known to be in the picture.
The investigating agency was not also aware of what Malik and Mehra had done with the pillars after they had obtained possession of the pillars from the Court and substituted and returned fake pillars to the Court.
The First Information Report and the charge sheet were concerned primarily with the offences of conspiracy to cheat and to misappropriate committed by Malik and Mehra.
At that stage, the investigating agency was not aware of any conspiracy to send the pillars out of the country.
It was not known that the Narang brothers were also parties to the conspiracy to obtain possession of the pillars from the Court.
It was much later that the pillars surfaced in London and were discovered to be in the constructive possession of Narang brothers.
Even then, the precise connection between Malik and Mehra on the one side and 935 Narang brothers on the other was not known.
All that was known was that the pillars which were stolen property within the definition of the expression in Section 410 Indian Penal Code were found to be in the possession of Narang brothers in London.
On the discovery of the genuine pillars in the possession of Narang brothers, without anything further to connect Narang brothers with Malik and Mehra, the police had no option but to register a case under Section 411 Indian Penal Code against Narang brothers.
That was what was done.
No fault could, therefore, be found with the police for registering a First Information Report against the Narang brothers for the offence of conspiracy to commit an offence under Section 411 Indian Penal Code.
In the course of the investigation into this offence, it transpired that the Narang brothers were also parties to the original conspiracy to obtain possession of the pillars from the Court by cheating.
Facts came to light which indicated that the conspiracy, which was the subject matter of the case pending in the Ambala Court was but part of a larger conspiracy.
The fresh facts which came to light resulted in the filing of the second charge sheet.
The several facts and circumstances mentioned by us earlier and a comparison of the two First Information Reports and the two charge sheets show that the conspiracy which was the subject matter of the second case could not be said to be identical with the conspiracy which was the subject matter of the first case.
The conspirators were different.
Malik and Mehra alone were stated to be the conspirators in the first case, while the three Narang brothers were alleged to be the principal conspirators in the second case.
The objects of the two conspiracies were different.
The alleged object of the first conspiracy was to obtain possession of the pillars from the Court by cheating and to misappropriate them.
The alleged object of the second conspiracy was the disposal of the stolen property by exporting the pillars to London.
The offences alleged in the first case was Section 120 B read with Section 420 and Section 406 Indian Penal Code, while the offences alleged in the second case were Section 120 B read with Section 411 Indian Penal Code and Section 25 of the .
It is true that the had not yet come into force on the date when the First Information Report was registered.
It is also true that Omi Narang and Manu Narang were not extradited for the offence under the and, therefore, they could not be tried for that offence in India.
But the question whether any of the accused may be tried for a contravention of the or under the corresponding provision of the earlier Act is really irrelevant in deciding whether the two 936 conspiracies are one and the same.
The trite argument that a Court takes cognizance of offences and not offenders was also advanced.
This argument is again of no relevance in determining the question whether the two conspiracies which were taken cognizance of by the Ambala and the Delhi Courts were the same in substance.
The question is not whether the nature and character of the conspiracy has changed by the mere inclusion of a few more conspirators as accused or by the addition of one more among the objects of the conspiracy.
The question is whether the two conspiracies are in substance and truth the same.
Where the conspiracy discovered later is found to cover a much larger canvas with broader ramifications, it cannot be equated with the earlier conspiracy which covered a smaller field of narrower dimensions.
We are clear, in the present case, that the conspiracies which are the subject matter of the two cases cannot be said to be identical though the conspiracy which is the subject matter of the first case may, perhaps, be said to have turned out to be part of the conspiracy which is the subject matter of the second case.
As we mentioned earlier, when investigation commenced in First Information Report No. R.C. 4 of 1976, apart from the circumstance that the property involved was the same; the link between the conspiracy to cheat and to misappropriate and the conspiracy to dispose of the stolen property was not known.
The further connected questions arising for consideration are, what was the duty of the police on discovering that the conspiracy, which was the subject matter of the earlier case, was part of a larger conspiracy, whether the police acted without jurisdiction in investigating or in continuing to investigate into the case and whether the Delhi Court acted illegally in taking cognizance of the case ? In order to answer these questions, it is necessary to refer to the relevant provisions of the Criminal Procedure Code.
Counsel on both sides argued the questions on the basis that the Old Criminal Procedure Code governed the situation.
We proceed on that assumption without deciding whether the trial in the Delhi Court will be governed by the old Code or the new one.
Under the Criminal Procedure Code, 1898, whenever an officer in charge of the Police Station received information relating to the commission of a cognizable offence, he was required to enter the substance thereof in a book kept by him, for that purpose, in the prescribed form (Section 154 Criminal Procdure Code).
Section 156 Criminal Procedure Code invested the Police with the power to investigate into 937 cognizable offences without the order of a Court.
If, from the information received or otherwise, the officer in charge of a Police Station suspected the commission of a cognizable offence, he was required to send forthwith a report of the same to a Magistrate empowered to take cognizance of such offence upon a police report and than to proceed in person or depute one of his subordinate officers to proceed to the spot, to investigate the facts and circumstances of the case and to take measures for the discovery and arrest of the offender (Section 157 Criminal Procedure Code).
He was required to complete the investigation without unnecessary delay, and, as soon as it was completed, to forward to a Magistrate empowered to take cognizance of the offence upon a police report, a report in the prescribed form, setting forth the names of the parties, the nature of the information and the names of the persons who appeared to be acquainted with the circumstances of the case (Section 173(1) Criminal Procedure Code).
He was also required to state whether the accused had been forwarded in custody or had been released on bail.
Upon receipt of the report submitted under Section 173(1) Criminal Procedure Code by the officer incharge of the Police Station, the Magistrate empowered to take cognizance of an offence upon a police report might take cognizance of the offence (Section 190(1) (b) Criminal Procedure Code).
Thereafter, if, in the opinion of the Magistrate taking cognizance of the offence, there was sufficient ground for proceeding, the Magistrate was required to issue the necessary process to secure the attendance of the accused (Section 204 Criminal Procedure Code).
The scheme of the Code thus was that the First Information Report was followed by investigation, the investigation led to the submission of a report to the Magistrate, the Magistrate took cognizance of the offence on receipt of the police report and, finally, the Magistrate taking cognizance issued process to the accused.
The police thus had the statutory right and duty to 'register ' every information relating to the commission of a cognizable offence.
The police also had the statutory right and duty to investigate the facts and circumstances of the case where the commission of a cognizable offence was suspected and to submit the report of such investigation to the Magistrate having jurisdiction to take cognizance of the offence upon a police report.
These statutory rights and duties of the police were not circumscribed by any power of superintendence or interference in the Magistrate; nor was any sanction required from a Magistrate to empower the Police to investigate into a cognizable offence.
This position in law was well established.
In King Emperor 938 vs Khwaja Nazir Ahmed(1), the Privy Council observed as follows: "Just as it is essential that every one accused of a crime should have free access to a Court of justice, so that he may be duly acquitted if found not guilty of the offence with which he is charged, so it is of the utmost importance that the judiciary should not interfere with the police in matters which are within their province and into which the law imposes on them the duty of inquiry.
In India, as has been shown, there is a statutory right on the part of the police to investigate the circumstances of an alleged cognizable crime without requiring any authority from the judicial authorities, and it would, as their Lordships think, be an unfortunate result if it should be held possible to interfere with those statutory rules by an exercise of the inherent jurisdiction of the Court.
The functions of the judiciary and the police are complementary, not overlapping, and the combination of individual liberty with a due observance of law and order is only to be obtained by leaving each to exercise its own function, always, of course, subject to the right of the Courts, to intervene in an appropriate case when moved under Section 491 of the Criminal Procedure Code to give directions in the nature of Habeas Corpus.
In such a case as the present, however, the Court 's function begin when a charge is preferred before it and not until then. .
In the present case, the police have under Sections 154 and 156 of the Criminal Procedure Code, a statutory right to investigate a cognizable offence without requiring the sanction of the Court. .
Ordinarily, the right and duty of the police would end with the submission of a report under Section 173(1) Criminal Procedure Code upon receipt of which it was up to the Magistrate to take or not to take cognizance of the offence.
There was no provision in the 1898 Code prescribing the procedure to be followed by the police, where, after the submission of a report under Section 173(1) Criminal Procedure Code and after the Magistrate had taken cognizance of the offence, fresh facts came to light which required further investigation.
There was, of course, no express provision prohibiting the police from launching upon an investigation into the fresh facts coming to light after the submission of the report under Section 173(1) or after the Magistrate had taken cognizance of the offence.
As we shall presently point out, it was generally, thought by many High 939 Courts, though doubted by a few, that the police were not barred from further investigation by the circumstance that a report under Section 173(1) had already been submitted and a Magistrate had already taken cognizance of the offence.
The Law Commission in its 41st report recognized the position and recommended that the right of the police to make further investigation should be statutorily affirmed.
The Law Commission said : "14.23.
A report under Section 173 is normally the end of the investigation.
Sometimes, however, the police officer after submitting, the report under Section 173 comes upon evidence bearing on the guilt or innocence of the accused.
We should have thought that the police officer can collect that evidence and send it to the Magistrate concerned.
It appears, however, that Courts have sometimes taken the narrow view that once a final report under Section 173 has been sent, the police cannot touch the case again and cannot re open the investigation.
This view places a hindrance in the way of the investigating agency, which can be very unfair to the prosecution and, for that matter, even to the accused.
It should be made clear in Section 173 that the competent police officer can examine such evidence and send a report to the Magistrate.
Copies concerning the fresh material must of course be furnished to the accused".
Accordingly, in the Criminal Procedure Code, 1973, a new provision, Section 173(8), was introduced and it says: "Nothing in this section shall be deemed to preclude further investigation in respect of an offence after a report under sub section (2) has been forwarded to the Magistrate and, where upon such investigation, the officer in charge of the police Station obtains further evidence, oral or documentary, he shall forward to the Magistrate a further report or reports regarding such evidence in the form prescribed, and the provisions of sub sections (2) to (6) shall, as far as may be, apply in relation to such report or reports as they apply in relation to a report forwarded under sub section (2)".
The right of the police to make repeated investigations under the old Code was recognised by the Madras High Court as early as in 1919 in Divakar Singh vs A. Ramamurthi Naidu (1), where Phillips and Krishnan, JJ., observed as follows: 940 "Another contention is put forward that when a report of investigation has been sent in under Section 173, Criminal P.C., the police has no further powers of investigation, but this argument may be briefly met by the remark that the number of investigations into a crime is not limited by law and that when one has been completed another may be begun on further information received".
In re.
Palaniswami Goundan(1) the Madras High Court held that notwithstanding the filing of a final charge sheet, a police officer could still investigate and lay further charge sheets if he got information and that there was no finality either to the investigation or to the laying of charge sheets.
In Md. Niwaz vs The Crown(2) a Bench of the Lahore High Court consisting of Din Mohammad and Cornelius JJ., cited with approval the decision of the Division Bench of the Madras High Court in Divakar Singh vs A. Ramamurthi Naidu(3) already referred to by us.
In Prosecuting Inspector vs Minaketan Mahato(4), the High Court of Orissa held that the police had the right to reopen investigation even after the submission of the charge sheet under Section 173 Criminal Procedure Code if fresh facts came to light.
In Rama Shanker vs State of U.P.(5) a Division Bench of Allahabad High Court took the view that the submission of a charge sheet not being a judicial act, the submission of a fresh charge sheet after submission of a report under Section 173 Criminal Procedure Code was not illegal.
In re.
State of Kerala vs State Prosecutor(6) a Division Bench of the Kerala High Court thought it was well settled law that the police had the right to reopen the investigation even after the submission of a charge sheet under Section 173 Criminal Procedure Code and that there was no bar for further investigation or for filing of supplementary report.
In H. N. Rishbud vs The State of Delhi(7),this Court contemplated the possibility of further investigation even after a Court had taken cognizance of the case.
While noticing that a police report resulting from an investigation was provided in Section 190 Criminal Procedure Code as the material on which cognizance was taken, it was pointed out that it could not be maintained that a valid and legal police report was the foundation of the jurisdiction of the Court to take cognizance.
941 It was held that where cognizance of the case had, in fact, been taken and the case had proceeded to termination, the invalidity of the precedent investigation did not vitiate the result unless miscarriage of justice had been caused thereby.
It was said that a defect or illegality in investigation, however serious, had no direct bearing on the competence of the procedure relating to cognizance or trial.
However, it was observed: "It does not follow that the invalidity of the investigation is to be completely ignored by a Court during trial.
When the breach of such a mandatory provision is brought to the knowledge of the Court at a sufficiently early stage, the Court, while not declining cognizance, will have to take the necessary steps to get the illegality cured and the defect rectified, by ordering such re investigation as the circumstances of an individual case may call for".
This decision is a clear authority for the view that further investigation is not altogether ruled out merely because cognizance of the case has been taken by the Court; defective investigation coming to light during the course of a trial may be cured by a further investigation, if circumstances permit it.
In Tara Singh vs State(1) the police first submitted a report styled as "an incomplete challan", which, however, contained all the particulars prescribed by Section 173(1).
Later, two supplemental challans were submitted containing the names of certain formal witnesses.
The Magistrate had taken cognizance of the case when the incomplete challan was submitted.
It was urged that the Magistrate had taken cognizance of the case illegally and the statements of witneses examined before submission of the supplemental challans should be excluded from the record.
This Court held that the so called incomplete challan was in fact a complete report of the kind contemplated by Section 173(1) (a), and, therefore, the Magistrate had properly taken cognizance of the case.
The Court declined to express any opinion on the question whether the police could be permitted to send incomplete reports under Section 173(1) Criminal Procedure Code.
This case while neither approving nor disapproving the practice of submitting incomplete challans in the first instance, certainly notices the existence of such practice.
Some High Courts took the view that with the submission of a charge sheet under Section 173 the power of the police to investigate came to an end and the Magistrate 's cognizance of the offence started.
942 It was said that any further investigation by the police would trench upon the magisterial cognizance.
Vide Ram Gopal Neotia vs State of West Bengal(1).
In Hanuman & Anr.
vs Raj.(2) it was held that when a case was pending before a Magistrate, the action of the police in resuming investigation and putting up a new challan against a person not originally an accused as a result of the further investigation was unauthorised and unlawful.
In State vs Mehar Singh & Ors.(3), a Full Bench of the High Court of Punjab and Haryana held that the police became functus officio once the Court took cognizance of an offence on the filing of a charge sheet by the police and thereafter further investigation by the police was not permissible.
The police, it was said, could not 'tinker ' with the proceedings pending in the Court.
It was, however, observed that it would be open to the Magistrate to 'suspend cognizance ' and direct the police to make further investigation into the case and submit a report.
The High Court of Punjab and Haryana acknowledged the existence of the practice of submitting supplemental charge sheets, but was of the view that such practice was not sanctioned by the Code.
Faced with the impracticality of banning all further investigation once cognizance of an offence was taken by the Court, the High Court tried to find a solution to the problem by suggesting the procedure of the Magistrate suspending cognizance and ordering further investigation.
The procedure of 'suspending cognizance ' suggested by the High Court of Punjab and Haryana does not appear to us to be warranted by the provisions of the Criminal Procedure Code.
Anyone acquainted with the day today working of the criminal courts will be alive to the practical necessity of the police possessing the power to make further investigation and submit a supplemental report.
It is in the interests of both the prosecution and the defence that the police should have such power.
It is easy to visualise a case where fresh material may come to light which would implicate persons not previously accused or absolve persons already accused.
When it comes to the notice of the investigating agency that a person already accused of an offence has a good alibi, is it not the duty of that agency to investigate the genuineness of the plea of alibi and submit a report to the Magistrate ? After all the investigating agency has greater resources at its command than a private individual.
Similarly, where the involvement of persons who are not already accused comes to the notice of the investigating agency, the investigating agency cannot keep quiet and refuse to investigate the fresh information.
It is their duty 943 to investigate and submit a report to the Magistrate upon the involvement of the other persons.
In either case, it is for the Magistrate to decide upon his future course of action depending upon the stage at which the case is before him.
If he has already taken cognizance of the offence, but has not proceeded with the enquiry or trial, he may direct the issue of process to persons freshly discovered to be involved and deal with all the accused, in a single enquiry or trial.
If the case of which he has previously taken cognizance has already proceeded to some extent, he may take fresh cognizance of the offence disclosed against the newly involved accused and proceed with the case as a separate case.
What action a Magistrate is to take in accordance with the provisions of the Code of Criminal Procedure in such situations is a matter best left to the discretion of the Magistrate.
The criticism that a further investigation by the police would trench upon the proceedings before the Court is really not of very great substance, since whatever the police may do, the final discretion in regard to further action is with the Magistrate.
That the final word is with the Magistrate is sufficient safeguard against any excessive use or abuse of the power of the police to make further investigation.
We should not, however, be understood to say that the police should ignore the pendency of a proceeding before a Court and investigate every fresh fact that comes to light as if no cognizance had been taken by the Court of any offence.
We think that in the interests of the independence of the magistracy and the judiciary, in the interests of the purity of the administration of criminal justice and in the interests of the comity of the various agencies and institutions entrusted with different stages of such administration, it would ordinarily be desirable that the police should inform the Court and seek formal permission to make further investigation when fresh facts come to light.
As observed by us earlier, there was no provision in the Code of Criminal Procedure, 1898 which, expressly or by necessary implication, barred the right of the police to further investigate after cognizance of the case had been taken by the Magistrate.
Neither Section 173 nor Section 190 lead us to hold that the power of the police to further investigate was exhausted by the Magistrate taking cognizance of the offence.
Practice, convenience and preponderance of authority, permitted repeated investigations on discovery of fresh facts.
In our view, notwithstanding that a Magistrate had taken cognizance of the offence upon a police report submitted under Section 173 of the 1898 Code, the right of the police to further investigate was not exhausted and the police could exercise such right as often as necessary when fresh information came to light.
Where the police desi 944 ed to make a further investigation, the police could express their regard and respect for the Court by seeking its formal permission to make further investigation.
As in the present case, occasions may arise when a second investigation started independently of the first may disclose a wide range of offences including those covered by the first investigation.
Where the report of the second investigation is submitted to a Magistrate other than the Magistrate who has already taken cognizance of the first case, it is up to the prosecuting agency or the accused concerned to take necessary action by moving the appropriate superior Court to have the two cases tried together.
The Magistrates themselves may take action suo motu.
In the present case, there is no problem since the earlier case has since been withdrawn by the prosecuting agency.
It was submitted to us that the submission of a charge sheet to the Delhi Court and the withdrawal of the case in the Ambala Court amounted to an abuse of the process of the Court.
We do not think that the prosecution acted with any oblique motive.
In the charge sheet filed in the Delhi Court, it was expressly mentioned that Mehra was already facing trial in the Ambala Court and he was, therefore, not being sent for trial.
In the application made to the Ambala Court under Section 494 Criminal Procedure Code, it was expressly mentioned that a case had been filed in the Delhi Court against Mehra and others and, therefore, it was not necessary to prosecute Mehra in the Ambala Court.
The Court granted its permission for the withdrawal of the case.
Though the investigating agency would have done better if it had informed the Ambala Magistrate and sought his formal permission for the second investigation, we are satisfied that the investigating agency did not act out of any malice.
We are also satisfied that there has been no illegality.
Both the appeals are, therefore, dismissed.
M.R. Appeals dismissed.
| The respondent was appointed as a Sub Inspector of police in a temporary post in 1955.
He was discharged from service on July 13, 1957.
A Writ Petition filed by him in the Allahabad High Court was allowed on August 4, 1959 and consequently he was re instated in service on December 15, 1959.
Thereafter, on January 21, 1960 his services were terminated on the ground that they were no longer required by the State.
A suit for declaration that the said order of termination was null and void was decreed in his favour by the trial court which was affirmed in appeal and also by the High Court in second appeal.
Allowing the State appeal by special leave the Court, ^ HELD: 1.
The considerations which prevailed with the High Court in reaching its findings on the application of Article 311(2) of the Constitution and the bona fides of the superior authority in making the impugned order of termination simpliciter are not warranted in law.
[1130D] 2.
The order terminating the services was order of termination simpliciter passed in accordance with the rules applicable to temporary Government servants.
After the original order of discharge was quashed by the High Court, the respondent was reinstated, allowed increment in pay and one month 's salary in lieu of notice under the 'general rules for termination of services of temporary government servants was also given.
[1128F G] 3.
It was open to the superior authority to terminate the respondent 's services on the ground on which it did so.
And the evidence disclosed no personal motive had influenced the order or that it was passed by way of punishment.
A departmental enquiry is not required under the law.
Instead of instituting disciplinary proceedings against the government servant, the suitability for retention in service could be decided.
[1128H, 1129A, E] State of U.P.v.
Ram Chandra Trivedi; , ; Champaklal Chimanlal Shah vs The Union of India, , Jagdish Mitter vs Union of India, A.I.R. 1964 S.C. 449 and State of Punjab & Anr.
vs Shri Sukh Raj Bahadur, ; ; referred to.
Union of India & Ors.
vs R. section Dhaba, , State of Bihar & Ors.
vs Shiva Bhikshuk Mishra and R. section Sial vs The State of U.P. and Ors., ; applied.
The State of Bihar vs Gopi Kishore Prasad, A.I.R. 1960 SC 689 and Madan Gopal vs The State of Punjab, [1963] 3 SCR 716; distinguished. 1127
|
Appeal Nos.
1301 07 of 1991 From the Judgment and Order dated 31 3 89 of the Income Tax Settlement Commission Bombay in Settlement Application No. 10/5/41/78IT.
Ashok Desai, Debi Pal B.K. Mehta, N.K. Sahu, U.K. Sagar and P.H. Parekh for the Appellant.
Dr. V. Gaurishankar and section Rajappa for the Respondents.
The Judgment of the Court was delivered by B.P. JEEVAN REDDY, J.
These appeals are preferred against the orders of the Settlement Commission dated March 31, 1989 in pursuance of the offers of settlement made by the appellant.
Civil Appeals 1301 07 of 1991 relate to the assessment years 1964 65 to 1970 71 while Civil Appeals 1288 1300 of 1991 relate to the assessment years 1970 71 to 1982 83.
Under its orders, the Settlement Commission computed the taxable income of the appellant 's father (who died on August 22, 1969) and of the appellant for the aforesaid assessment years and gave certain directions, applying which the I.T.O. was directed to compute the total income for each of the said assessment years and raise demand for the tax due.
The main issue in all these matters is the assessability of income from five foreign trusts created by the appellant 's father, Sri Vikramsinhji.
Sri Vikramsinhji, Ex ruler of Gondal executed three deeds of settlements (trusts deeds) in the United States of America on December 19, 1963 and two deeds in the United Kingdom on January 1, 1964.
The three settlements executed in U.S. are in identical terms.
Similarly, the two settlements, executed in U.K. are similar.
The two sets of settlements, however, differ from each other in certain particulars, though both the sets are meant for the benefit of the settlor and the members of his family.
We may refer to the relevant clauses in the settlements executed in U.S. in the first instance.
946 Under the U.S. settlements, The National City Bank, New York is constituted the sole trustee.
The trust is created for the benefit of the grantor/settlor, his wife and children and their spouses (referred to as family members) and their descendants.
The trustee is empowered to collect the income from the trust properties and to apply the same among the family members and/or their descendants in such manner as he thinks appropriate.
He is also authorised to terminate the trusts for any reason (including tax reasons) and to transfer, convey and pay off the property held thereunder to any person or persons then eligible to receive the income of the trusts.
On such termination, the entire assets in the hands of the trustee are to be paid over to the then Maharaja (Ruler) or to his living male descendants in equal shares per stripes.
The clause which is relevant herein, which according to the Revenue, makes the trusts revocable ones we may refer to it as para 1(2) for the sake of convenience reads thus: "Anything hereinabove to the contrary notwithstanding, at any time and from time to time the Trustee shall transfer, convey and pay over any portion of the income of the trust fund and any portion or all of the principal held in trust to or to the use of such one or more members of a class composed of the Grantor, the wife or widow of the Gran tor, the children of the Grantor living from time to time, the spouse of any child of the Grantor then living or deceased (hereinafter referred to as the "Family Members"), and the descendants of the Family Members living from time to time, in such amounts, shares and proportions, either absolutely or in trust, and upon such terms and conditions (including the grant of a further power to appoint) as the Trustee and a Maharaja who shall have attained the age of eighteen (18 years) shall at any time and from time to time appoint and direct in a written instrument which refers to and specifically exercises this power and which is duly executed by the Maharaja and by the Trustee then acting here under.
The foregoing power to appoint may be released in whole, or in part by the Maharaja or by the Trustee or by both at any time by one or more written instruments duly executed by the Maharaja or by the Trustee or by both and delivered to 947 the Trustee then acting here under, provided, however, that if either the Maharaja or the Trustee, but not both of them, shall release such power, then the party not so releasing shall continue to have the power to appointment hereinbefore provided, acting alone.
" Clauses (2) and (3) of the deeds confer an absolute discretion upon the trustee to pay over or apply in his discretion, any part or whole of income or any part of or whole of the principal to "any person then eligible to receive the income of this trust" at such time and in such manner, as he may decide in his absolute discretion.
Clause (3) says further that "the Trustee may omit eligible members of the class from any and all such payments and applications, and no such payment or application or commission of a person from participation therein shall cause a charge against or otherwise effect the future interest or share of any person here under." Any determination made by the trustee in good faith in exercising the said discretion is held to be binding and conclusive.
It is not necessary to notice other clauses of these settlements except to say that the object of these trusts is to provide for the education, maintenance and up keep of the members of the settlor 's family and their descendants.
The settlor died on August 22, 1969.
During his lifetime, the settlor, Vikramsinhji was filing returns of his income in India including therein whole of the income arising from the U.S. trusts.
The returns were filed by him for the assessment years 1964 65 to 1969 70 (both years inclusive).
Since he died in the middle of the accounting year relevant to the assessment year 1970 71, two returns were filed for the said assessment year, one upto the date of the death of the settlor and the other from the date of the death of settlor to the end of the accounting year.
These returns were filed by his elder son, Jyotendrasinhji, appellant in these appeals.
In these returns too, the appellant included whole of the income from the U.S. trusts in the respective returns.
At this stage, the appellant says.
he was advised that the income from U.S. trusts was not taxable in India either in the hands of settlor or in his hands and that inclusion of the said income in the returns by the settlor and by the appellant was a mistake.
Urging the said contention, the appellant filed appeals against the assessment orders pertaining to the A.Ys.
1965 66 and 1966 67.
Inasmuch as the appeals were barred with respect to other assessment orders, he preferred revisions 948 before the Commissioner of Income Tax.
(It may be mentioned at this stage itself that the income from U.K. trusts was included in the aforesaid returns just as the income from U.S. trusts was included.
Similarly, the plea of non taxability was urged with respect to the income from U.K. trusts on the same basis as was urged with respect to the income from the U.S. trusts) The Appellate Assistant Commissioner, Rajkot admitted additional grounds and allowed the aforesaid appeals by his orders dated April 4, 1975 and August 20, 1975.
The Revenue went up in appeal to Tribunal.
The Tribunal allowed the appeals holding that the A.A.C. acted contrary to Rule 46(2) of the Income Tax Rules in admitting the additional grounds and in looking into new material.
Accordingly it set aside his orders and remitted the appeals back to A.A.C.
It is at this stage that the appellant approached the settlement commission under chapter XIX(A) of the Income Tax Act, 1961.
We may now notice the relevant clauses in the deeds of settlements executed in U.K. Under these settlement deeds, one Mr. Robert Hampton Robertson McGill was designated as the trustee, referred to in the deeds as "the original trustees".
These trusts too were created for the benefit of the settlor, the members of his family and their descendants, referred to as 'beneficiaries '.
The deeds define the expression "the trustees" to mean and include the original trustee or the other trustees for the time being appointed in terms of the deeds of settlement.
The expression "the beneficiaries" was defined to mean and include (a) the settlor, (b) the children and remoter issue for the time being in existence of the settlor, and (c) any person for the time being in existence who is the wife or widow of the settlor or the wife or widow or husband or widower of any of them, the children and remoter issue of the settlor.
The clauses which are relevant for our purposes read thus: (We have, for the sake of convenient reference, numbered them as clauses (3) and (4)).
THE Settlor hereby directs that the Trustee shall and accordingly the Trustees shall stand possessed of the Trust Fund and the income thereof upon the trusts following that it 1 to say : 949 (1) UPON TRUST to raise and pay out of the capital thereof any further estate duty which may still be payable thereon in respect of the death of the Settlor 's father His Late Highness Shri Bhojrajji Maharaja Saheb of Gondal who died on the Thirty first day of July One Thousand nine hundred and fifty two and any interest payable on such duty and any costs incurred in connection with the ascertainment or payment of such duty and interest.
(2) Subject as aforesaid UPON TRUST for all or such one more and more exclusively of the others or other of the Beneficiaries at such age or time or respective ages or times if more than one in such shares and with such trusts for their respective benefit and such provisions for their respective advancement and maintenance and education at the discretion of the Trustees or of any other person or persons as the person who for the time being is the Maharaja or (of the title is abolished) would have been the Maharaja had the title not been abolished shall at any time during the specified period by any deed or deeds revocable or irrevocable appoint AND in default of and subject to any such appointment upon he trusts and with and subject to the powers and provisions hereinafter declared and contained concerning the same PROVIDED ALWAYS that the foregoing power of appointment shall not be capable of being exercised: (a) by anyone other than the Settlor or the Elder son or the Younger Son; or (b) in favour of the person making the appointment save with the consent of the Trustees (being at least two in number or a trust Corporation) such consent to be testified by their being parties to the deed of appointment and executing the same. . 4.
SUBJECT aforesaid the Trustees shall stand possessed of the Trust Fund and the income thereof upon the trusts 950 following that is to say : (1) The income of the Trust Fund accruing during the life of the Settlor shall belong and be paid to the Settlor (2) Subject as aforesaid the income of the Trust Fund accruing during the life of the Elder Son shall belong and be paid to the Elder Son. . (3) Subject as aforesaid the Trust Fund shall be held in Trust for the person who (being a descendant of the Elder Son) first during the specified period : (a) becomes the Maharaja or would become the Maharaja if his title had not been abolished and (b) attains the age of eighteen years. .
It is not necessary to notice the other provisions/clauses of these deeds.
During his lifetime, the settlor, Vikramsinhji, was including the whole of the income from these trusts in his returns of income just as he was doing in the case of U.S. trusts.
The said income was also included in the two returns filed by his son for the A.Y.1970 71.
Thereafter, however, the appellant took the stand, as mentioned hereinbefore, that the income from these trusts is not includable in his income.
He also took the stand that the inclusion of the said income in the returns submitted by his father for the A.Ys.1964 65 to 1969 70 and by him in the returns relating to A.Y.1970 71 was under a mistake.
This submission too was the subject matter of the appeals and the revisions filed before the A.A.C. and the Commissioner of Income Tax, referred to hereinbefore.
When the appellant approached the settlement commission with an application for settlement, it related to the income from U.K. trusts as well.
The Settlement Commission heard the arguments in extenso spread over several days and disposed of the matter under two elaborate orders.
One order relates to A.Ys.
1964 65 to 1970 71 (Vikramsinhji) and the other to A.Ys.1970 71 to 1982 83 (Appellant).
The findings of the Commission which constitute the bases for its orders may briefly be stated as the following : 951 (i)Though the U.S. settlements are in the nature of discretionary trusts, they fall within the mischief of sub clause (ii) of Clause (a) of Section 63 of the Act.
For this reason, the whole of the income arising from the trust properties was liable to be included and was rightly included in the income of the settlor/transferor, Sri Vikramsinhji.
(ii) On the death of the settlor, the U.S. settlement deeds ceased to be revocable but inasmuch as the entire income thereunder was received by the appellant, Sri Jyotendrasinhji, it constitutes his income and could be and was lawfully.
taxed in his hands.
(iii) So far as the U.K. trusts are concerned, clause (3) did never come into operation inasmuch as no additional trustees were appointed as contemplated by it.
If so, clause (4) sprang into operation where under the entire income under the settlements flowed to the settlor during his lifetime and on his death, to his elder son, the appellant herein.
In other words, these settlements are in the nature of specific trusts.
In any event, the entire income from these trusts was received by the settlor during his lifetime and after the settlor 's death, by the appellant.
Therefore, the said income was rightly included in the total income of the settlor and the assessee during the respective assessment years.
On the above bases, the Commission computed the taxable income of the settlor under both the sets of trusts for A.Ys.1964 65 to 1970 71 (upto the date of the death of the settlor) as also the income of the appellant for the A.Ys.1970 71 to 1982 83.
The appellant then preferred these two sets of appeals against the two orders.
At the stage of granting leave, this court ordered (vide the order dated March 22, 1991) that the appellant shall not be entitled to question the jurisdiction of the settlement commission to decide the issues before it and that he will "confine himself in appeal only to the questions relating to correctness or otherwise of the Commissioner 's order." Sri Ashok Desai, learned counsel for the appellant urged the following contentions ': (1)The settlement commission erred in law in holding that the U.S. trusts are revocable trusts within the meaning of Section 63 of the Act.
For attracting Section 63, the deed of transfer should give the transferor a right 952 to retransfer directly or indirectly whole or any part of the income or assets to the transferor or it must give him a right to re assum power directly or indirectly over the whole or any part of income or assets.
In this case, the relevant clause does not give the,transferor such a power.
The power is given to the trustee to be exercised with the concurrence of the transferor/settlor.
Even if, for any reason, the clause is construed as giving such a power to the settlor/transferor, Section 63 is not attracted inasmuch as the power is given: not to him a& such "but jointly to him and the trustee.
Such a power does not attract the mischief of Section 63.
(2) The U.S. trusts are discretionary trusts.
In such a case, the assessment can be made only upon the trustees and not upon the beneficiaries recipients.
The Revenue has no option in such a situation.
It must necessarily tax the trustees and trustees alone.
The Revenue cannot take advantage of the mistake of law on the part of the settlor or the appellant.
(3) At any rate, with the death of the settlor, the U.S. trusts ceased to be revocable trusts, assuming that they were so during his lifetime.
So " far as the appellant is concerned, he cannot be taxed on the income received by him from the said trust.
Only the trustee can be taxed.
(4) So far as U.K trusts are concerned, the settlement commission has committee an error of law in holding that clause (3) could come into operation only if and when the settlor appointed the additional trustees as contemplated by it.
In fact, the trust, had come into existence with the sole trustee (McGill) ;and it did not depend upon the appointment of additional trustees.
Clause (3) prevails over clause (4).
If so, the U.K. trusts/settlements are also discretionary trusts and not specific trusts as held by the Settlement Commission.
In such a case again the assessment can be made only upon the trustees and not upon, the beneficiaries recipients. (5) So far as U.K. trusts are concerned no income was received,by the settlor or the appellant either in U.K. or in India.
So long as the trustees decided not to exercise the discretion to distribute the income, no income arose to any of the beneficiaries.
The deeds, do not prescribe, a time limit within which the trustees should exercise their discretion to distribute income.
Until the trustees take a decision to distribute and distribute the income,the beneficiaries have no right to income nor can it be said that the income accrues to them.
The Settlement Commission committed a legal error in the income from the U.K. trusts in the total income of 953 the settlor and the appellant even though it was not paid out by the trustee ,nor received by the assessees.
At any rate, no income was received in India.
(6)In both the U.S. and U.K., tax has been levied upon the respective trust incomes under the laws of those countries.
Levying tax over again in this country on the very same 'income amounts to double taxation.
On this ground too, the tax levied in India must be waived.
On the other hand, Dr. Gauri Shankar, the learned counsel for the Revenue made the following submissions: (i)The Settlement Commission is not a regular Tribunal.
Its function is different from other quasi judicial authorities created by the Income Tax Act.
Where an offer of settlement has been made, the commission either accepts it or rejects it subject to such conditions and terms as it thinks fit to impose in that behalf.
As the name itself suggests, it is a settlement a sort of composition.
It need not even give reasons for its order.
Even if any principles are decided by the Commission, they do not bind the Income Tax authorities in proceedings relating to subsequent years.
The order of the commission is relevant to and is confined only to the assessment years to which it relates.
The jurisdiction of this court under Article 136 in an appeal against the orders of settlement commission must be conditioned by above considerations.
This court would not be able to go into the merits of the order.
The commission 's order cannot be dissected, inasmuch as it is a package deal.
Either it stands or falls as a whole.
(ii) The interpretation placed by the commission on both U.S. and U.K. trusts is perfectly in order and does not call for any interference by this court.
Indeed, under the impugned orders, several benefits have been conferred upon the settlor and the appellant like waiving of penalties, interest and other liabilities attaching to the assessees under the Act.
While accepting the same, the appellant cannot be allowed to disown those features of the order which go against him.
(iii) The argument,of not receiving the income from U.K. trusts is a mere after thought and should not be given any credence.
During his lifetime, the settlor had declared that he had received income from both the U.K. and U.S. trusts and had included the same in his returns of income for each of the assessment years relevant heroin.
The appellant too acted similarly.
954 (iv) A trustee or the trustees, as the case may be are expected to act reasonably and in furtherance of the object of the trusts.
They must apply the income for the purposes specified.
They cannot just accumulate it.
Applying the test of reasonableness it must be held that ordinarily, the trustee ought to distribute the income each year.
As a matter of fact, it was so distributed If so, it must be held that the income from these U.K. trusts has rightly been taken into account by the commission while passing its orders.
The first question we have to answer is the scope of these appeals preferred under Article 136 of the Constitution against the orders of the Settlement Commission.
The question is whether all the questions of fact and law as may have been decided by the commission are open to review in this appeal.
For answering this question one has to have regard to the scheme of Chapter XIX A.
The said chapter was inserted by the Taxation Laws (Amendment) Act, 1975 with effect from April 1, 1976.
A somewhat similar provision was contained sub sections (1A) to (1D) of Section 34 of the Income Tax Act, 1922 introduced in the year 1954.
The provisions of Chapter XIX A are, however, qualitatively different and more elaborate than the said provisions in the 1922 Act.
The proceedings under this chapter commence by an application made by the assessee as contemplated by Section 245 C. Section 245 D prescribes the procedure to be followed by the commission on receipt of an application under Section 245 C. Sub section (4) says: 'after examination of the records and the report of the commissioner received under sub section (1), and the report, if any, of the commissioner received under sub section (3), and after giving an opportunity to the applicant and to the commissioner to be heard, either in person or through a representative duly authorised.in this behalf, and after examining such further evidence as may be placed before it or obtained by it, the settlement commission may,, in accordance with the provisions of this Act, pass such order as it thinks fit on the matters covered by the application and any other matter relating to the case not covered by the application, but referred to in the report of the commissioner under sub section (1) or sub section (3).
" Section 245 E empowers the Commission to reopen the completed proceedings in appropriate cases, while Section 245 F confers all the powers of an Income Tax authority upon the Commission.
Section 245 H empowers the Commission to grant immunity from penalty and prosecution, with or without conditions, in cases where it is satisfied that the assessee has made a full disclosure of his income and 955 its sources.
Under Section 245 HA, the Commission can send back, the matter to assessing.
officer, where it finds that the applicant is not cooperating with it.
Section 245 1 declares that every order of settlement passed under sub section (4) of, Section 245(D) shall be conclusive as to the matters stated therein and no matter covered by such order shall, save as otherwise provided in, Chapter XIX A, be re opened in any proceeding under the Act or under any other law for the time being in force.
Section 245 L declares that any proceedings under chapter XIX A before the settlement commission shall be deemed to be a judicial proceeding within the meaning of Sections 193 and 228 and for the purposes of Section 196 of the Indian Penal Code.
It is true that the finality clause contained in Section 245 I does not and cannot bar the jurisdiction of the High Court under Article 226 or the jurisdiction of this court under Article 32 or under Article 136, as the case may be.
But that does not mean that the jurisdiction of this Court in the appeal preferred directly in this court is any different than what it would be if the assessee had first approached the High Court under Article 226 and then come up in appeal to this court under Article 136.
A party does not and cannot gain any advantage by approaching this Court directly under Article 136, instead of approaching the High Court under Article 226.
This is not a limitation inherent in Article 136; it is a limitation which this court imposes on itself having regard to the nature of the function performed by the Commission and keeping in view the principles of judicial review.
May be, there is also some force in what Dr. Gauri Shankar says viz., that the order of commission is in the nature of a package deal and that it may not be possible, ordinarily speaking, to dissect its order and that the assessee should not be permitted to accept what is favourable to him and reject what is not.
According to learned counsel, the Commission is not even required or obligated to pass a reasoned order.
Be that as it may, the fact remains that it is open to the Commission to accept an amount of tax by way of settlement and to prescribe the manner in which the said amount shall be paid.
It may condone the defaults and lapses on the part of the assessee and may waive interest, penalties or prosecution, where it thinks appropriate.
Indeed, it would be difficult to predicate the reasons and considerations which induce the commission to make a particular order, unless of course the commission itself chooses to, give reasons for its order.
Even if it gives reasons in a given case, the scope of enquiry in the appeal remains the same as indicated above viz., whether it is,contrary 956 to any of the provisions of the Act.
In this context, it is relevant to note that the principle of natural justice (and alteram partem) has been incorporated in Section 245 D itself.
The sole overall limitation upon tire Commission thus appears, to be that it should act in accordance with the provisions of the Act.
The scope of enquiry, whether by High Court under Article 226 or by this Court under Article 136 is also the same whether the order of the Commission is contrary to any of the provisions of the Act and if so, has it prejudiced the petitioner/appellant apart from ground of bias, fraud & malice which, of course, constitute a separate and independent category.
Reference in this behalf may be had to the decision of this Court in Sri Ram Durga Prasad vs Settlement Commission , which too was an appeal against the orders of the Settlement Commission.
Sabyasachi Mukharji J., speaking for the Bench comprising himself and S.R. Pandian, J. observed that in such a case this Court is " concerned with the legality of procedure followed and not with the validity of the order. ' The learned Judge added 'judicial review is concerned not with the decision but with the decision making process.
" Reliance was placed upon the decision of the House of Lords in Chief Constable of the N.W. Police vs Evans, [1982] 1 W.L.R.1155.
Thus, the appellate power under Article 136 was equated to power of judicial review, where the appeal is directed against the orders ' of the Settlement Commission.
For all the above reasons, we are of the opinion that the only ground upon which this Court can interfere in these appeals is that order of the Commission is contrary to the provisions of the Act and that such contravention has prejudiced the appellant The main controversy in these appeals relates to the interpretation of the settlement deeds though it is true, some contentions of law are also raised.
The commission has interpreted the trust deeds in a particular manner, Even if the interpretation placed by the commission the said deeds is not correct, it would not be a ground for interference in these appeals, since a wrong interpretation of a deed of trust cannot be said to be a violation of the provisions of the Income Tax Act.
it is equally clear that the interpretation placed upon the said deeds by the Commission does not bind the authorities under the Act in proceedings relating to other assessment years.
In view of the above, though it is not necessary, strictly speaking, to go into the correctness of the interpretation placed upon the said deeds by the commission, and it is enough if we confine ourselves to the question whether the order of the Commission is contrary to the provisions of the 957 Act, we propose to, for the sake of completeness, examine also whether the order of Commission is vitiated by any such wrong interpretation? U. section TRUSTS.
The sole trustee under this settlement deed is the First National City Bank, New York.
The deed empowers the trustee to hold, manage, invest and reinvest the principal of the trust fund, to collect and receive the income thereof and to pay or apply so much of the net income as the trustee shall in his absolute and uncontrolled discretion deem advisable to or to the use of one or more members of the settlor 's family.
It is thus a discretionary trust.
A discretionary trust is described as a trust where the trustees have been vested with a discretion in the matter of distribution of trust income among the specified class of beneficiaries.
In the case of such trusts, the trustees have a discretion to pay whole or part of the income to such member or members of the designated class as they think fit and it such proportion as they deem appropriate.
Section 164(1) sets out the same idea in the following words: "Where the individual shares of the persons on whose behalf or for whose benefit such income or such part thereof is receivable are indeterminate or unknown. .
In Snell 's Principles of Equity, 25th Edn. (1965), P.129, a discretionary trust is defined in the following words: "A discretionary trust is one which gives the beneficiary no right to any part of the income of the trust property, but vests in the trustees a discretionary power to pay him, or apply for his benefit, such part of the income as they think fit. .
The beneficiary thus has no more than a hope that the discretion will be exercised in his favour.
" That these trusts are discretionary trusts is not in controversy.
The main question is whether Para 1(2), quoted hereinbefore, makes it a revocable trust within the meaning of Section 63? The said clause begins with a non obstante clause, "anything hereinabove to the contrary.
not withstanding ' thereby giving it an overriding effect over what has been said in the earlier recitals.
It then says that "at any time and from time to time, the trustee shall transfer, convey and pay over any portion or of the income 958 of the trust fund and any portion or of all the principal held in trust ', to such member of the settlor 's family 'as the trustee and a maharaja who shall have attained the age of 18 years shall at any time and from time to time appoint and direct in a written instrument which refers to and specifically exercise this power and which is duly executed by the Maharaja and the trustee then acting here under. ' In other words, the said clause empowers the settlor/transferor and the trustee, acting together to direct the trustee, at any time, to pay over the entire income and/or entire corpus.
or a pan thereof to such member of the settlor 's family or their descendants as they may direct.
The said power cannot be exercised by the settlor acting alone.
The question is whether the said clause attracts Section 63? Section 63 defines the expressions 'transfer ' and 'revocable transfer '.
It says that for the purposes of Sections 60, 61 and 62, 'a transfer shall be deemed to be revocable if (i) it contains any provisions for the retransfer directly or indirectly of the whole or any part of the, income or assets to the transferor or (ii) it in any way gives the transferor a right to reassume power directly or indirectly over the whole or any part of the income or assets. ' The expression "transfer" is defined to include any settlement, trust, covenant, agreement or arrangement.
The expression 'family members ' occurring in the aforesaid clause in the trust deeds is defined in the deeds to mean "the children of the grantor living from time to time, the wife or widow of the grantor, the spouse of any child of the grantor then living or deceased. ' The "descendants of the family members ' which expression also occurs in the aforesaid clause is defined 'in the deeds to mean "the descendants of the family members living from time to time during the trust term. ' The contention of Sri Ashok Desai the learned counsel for the appellant is that Section 63 will be attracted 'only where the transferor is vested with the exclusive and/or absolute power to give direction of the nature contemplated therein and not where such a power has to be exercised by the transferor jointly with another person or with the concurrence or consent of another person.
Indeed, he argues that the said power is really given to the trustee to be exercised in concert with the Settlor.
We find it difficult to agree with the learned counsel.
Firstly, the power, properly construed, is given to the settlor to be exercised together with the trustee and not to the trustee to be exercised together with the settlor.
The trustee is anyhow vested with an absolute discretion to distribute the income of or the principal of the trust to such member of the family, as he 959 thinks appropriate, under the clause preceding and paras following para 1(2).
If so, there was no point in saving that he can, together with the settlor, be empowered to pay over part or whole, of income/principal to "such one or more members of a class composed of the family members living".
It cannot also be forgotten that the trustee in this case is a Bank one of the largest in the U.S.A. and not an individual acquainted with the affairs of the settlor 's family.
Now coming to Section 63, it is equally not possible to agree with the learned counsel.
Section 63 does not say that the power of revocation vesting in the transferor should be absolute or unconditional.
As pointed out by Chagla, CJ.
in Behramji Sorubji vs Commissioner of Income Tar, Bombay, , "the only question that has got to be asked is whether the transfer is capable of being revoked by the assessee or not. . it may be that before the power is exercised, the consent of two beneficiaries might have to be taken but even so, although the revocation may be contingent or conditional, still the deed remains a revocable deed of trust.
" The same idea was reiterated by Tendulkar, J. in the said judgment, in the following words: "It is urged by Sir Jamshedji on behalf of the assessee that the words "revocable transfer" in this section require that the transfer should be revocable absolutely and uncondi tional and that by reason of the fact that the transfer in this case could not be revoked under clause 10 of the trust deed without the consent of the wife and the children or any two of them, it is not a revocable transfer within the meaning of Section 16(1)(c).
Apart from any authority, and reading the section by itself, I am unable to agree with this contention.
It would involve my reading into the section words which are not there, and the Court is not entitled to do so unless it appears that giving effect to the section as it stands would lead to an obvious absurdity or inconvenience which could not have been contemplated by the legislature.
No such position arises in this case.
" We find ourselves in agreement with the said opinions.
Section 63 of the present Act corresponds to the proviso appended to Section 16(1)(c) of the 1922 Act.
The first proviso read thus: "provided that for the purposes of this clause the settlement, disposition or a transfer shall be deemed to be revocable if it contains any provision for the retransfer directly or 960 indirectly of the income or assets to the settlor, disponer or transferor or in any way gives settlor, disponer or transferor a right to.
reassume power directly or indirectly over the income or assets. ' Section 63(1) also does not say that the deed of transfer must confer or vest an conditional or an exclusive power in the transferor to give the power/direction of the nature contemplated by it.
, Accordingly, we hold that merely because the concurrence of the trustee had to be obtained by the transferor/settlor for giving the said direction, it cannot be said that the deed does not contain a; provision giving the transferor a; right to reassume power directly or indirectly over the whole or any part of income or assets within the meaning of Section 63(a)(ii)of the Act In this view of the matter, it is not necessary for us to refer to other decisions cited, before us in any detail.
The decision of this Court in commissioner,of Income Tax, Bombay City vs Ratilal Nathalal emphasises,that the power of revocation must be given to the settlor as settlor and not in any other capacity.
In the deeds before us, the power is indisputably conferred upon the Settlor in the very same capacity and not in any different capacity.
The other decision of this court in Sevantilal Maneklal vs C.I.T. is distinguishable for the, reason that the power of the settlor therein was merely to choose among the several objects of the trust and, therefore, it was held that it does not attract Section 63.
On the other hand, Tarunendra Nath Tagore vs Commr.
of Income Tax Calcutta was a case where the trust deed empowered the settlor to cause a re transfer of the trust assets, in certain specified contingencies.
The question was whether such a provision makes the transfer a revocable one within the meaning of the first proviso to Section 16(1)(c) of the 1922 Act.
It was held that it does, notwithstanding the fact that the power had to be exercised only in certain specified contingencies.
The decision of the Madras High Court in K Subramania Pillai vs Agricultural Income For Officer, Thukalay was also a case where the power of revocation was to be exercised in certain specified contingencies alone.
Even so, it was held that it was a revocable settlement.
Commissioner of Income Tax, Punjab vs Raghabir Singh was case where the trust deed provided, for the application of, the trust income, for satisfying the debts which the settlor was under an obligation to discharge.
The question was whether the provision makes the deed a 961 revocable one.
It was held that it did not, inasmuch as there was no provision for re transfer of the income or the assets to the settlor, It was observed that the mere fact that the settlor 's debts had to be discharged from the trust income did not bring it within the four corners of the first proviso to Section 16(1)(c).
In the light of the above discussion it must be held that during the lifetime of the settlor, the, entire income arising from the three U.S. trust deeds was bound to be and was rightly included in the income of the settlor by virtue of Section 63 read with Section 61.
The commission was right in holding so.
With the death of the settlor Section 63 ceased to apply even though the aforesaid clause empowers not only the settlor but also the Maharaja for the time being to exercise the said ;power.
Section 63 is attracted only where such power is given to the transferor and the appellant (the son of the settlor) is not and cannot be called the transferor.
It is not denied that so far as the income from the U.S. trusts is concerned, it was indeed received by the appellant.
The only argument is that inasmuch these trusts are discretionary trusts, the, income therefrom must necessarily be taxed and can only be taxed in the hands of the trustees and not in the hands of the beneficiary.
It is argued that the Revenue has no choice to tax either the trustees or the beneficiaries in such a case.
We are unable to agree The trustees in the case of a trust declared by a. duly executed instrument in writing are treated as representative assessees (Section 160(1)(iv)).
It is equally true that in the case of a discretionary trust, trustees are liable to be taxed in respect of the income received by them at the rate specified in Section 164(1).
(Section 164(1) has undergone several changes since 1962 The sub section as introduced by the Finance Act, 1970 with effect from April 1, 1970 provided that in such case "tax shall be charged (i) as if the relevant income or part of relevant income were the total income of the association of persons, or (ii) @65%, Whichever course would be more beneficial to the Revenue.
" For the purpose of this case, it is not necessary to notice the provisos appended to sub section (1) or the subsequent amendments to the sub section).
At the same time, Section 166 expressly declares that "nothing in the foregoing sections in this chapter shall prevent either the direct assessment 962 of the person, on whose behalf or for whose benefit income therein referred is receivable or the recovery from such person of the tax payable in respect of such income." Language of this section is clear.
The, opening words "nothing in the foregoing sections in this chapter" which means chapter XV, wherein Sections 159 to 165 among other sections occur give it an over riding affect over the preceding provisions in the chapter.
The Section states in unmistakable terms that nothing contained in the preceding provisions in the chapter shall preclude the Revenue from making a direct assessment upon the beneficiary and/or from recovering the tax payable from such person.
The Revenue has thus been given an option to tax the income from a discretionary trust either in the hands of the trustees or in the hands of the beneficiaries.
This Court in Nagappa vs C.I T., and the majority of High Courts have understood this Section in this manner.
In Nagappa, the appellant had executed seven separate trusts setting specific properties for the benefit of his minor children.
He appointed himself, his wife and his married daughter as the trustees.
Under each deed, a portion of the income was to be utilised immediately for the benefit of the beneficiary and the balance accumulated for his or her benefit and handed over to the beneficiary on the specified date.
The entire income of the trusts (including the income accumulated) was included in the income of the appellant (Nagappa) which was questioned by him.
His contention was that the "I.T.O. was bound to assess the income under each deed of trust separately in the hands of 'the trustees as "representative trustees and was incompetent in view of the express enactment of sub section (2) of Section 161 to assess the income in the hands of Nagappa or of the beneficiaries" The contention was rejected with reference to Section 161(1) and Section 166 by Shah, J. (speaking foe the Bench comprising Shah, Ramaswami and Grover, JJ.) in the following words: "It is implicit in the terms.
of sub section (1) that the Income tax Officer may assess a representative assessee, but he is not bound to do so.
He may assess either the representative assessee or the person represented by him.
That is expressly so enacted in section 166 which states: "Nothing in the foregoing sections in this Chapter shall prevent either the direct assessment of the person on whose behalf or for whose benefit income therein referred 963 to is receivable, or the recovery from such person of the tax payable in respect of 'such income. ' The Income tax Officer may, therefore, assess the person represented in respect of the income of the trust property and the appropriate provisions of the income tax Act relating to the computation of the total income and the manner in which the income is to be computed will apply to that assessment.
The Income tax Officer may in appropriate cases assess the representative assessee in respect of that income and limited, to that extent, and tax may be levied and recovered from him to the same extent as may, be leviable and recoverable from the person rep resented by him.
The contention, raised by counsel, for Nagappa that, since the trustees were assessable in respect of the income of the beneficiaries under Section 161(1), that income could not by virtue of sub section (2) of Section 161 be assessed in the hands of the beneficiary is contrary to the plain terms of Section 166.
Sub section (2) of Section 161 does not purport to deny the, Income tax Officer the option to assess the income in the hands of the person represented by the representative assessee;: it merely enacts that when a representative assessee is assessed to tax in exercise of the option of the revenue, he shall be assessed tinder Chapter XV and shall not 'in respect of that income be assessed under any other provision of the Act.
We will presently state the reasons why the rule was so enacted by Parliament.
But on the plain words used by Parliament the plea raised by counsel: that the.
representative assessee alone may be assessed as regards income in respect of which he is.
a representative assessee cannot be accepted.
The learned Judge then went to explain the reasons for which section 166 among other provisions was enacted.
In another case arising under the Bihar Agricultural Income Tax Act, 1948, a Bench of this Court comprising J.L. Kapur, M. Hidayatullah and 964 J.C. Shah, JJ. took a similar view in Ram Swaroop Das vs The State of Bihar , even though that Act and did not contain a provision similar to Section 166.
Section 13 of the Bihar Act provided: "Where any person holds land, from which agricultural income is derived as a common manager appointed under any law.
from the time being in force, or under any agreement or as receiver, administrator or the like on behalf of persons jointly interested 'in such land or in the agricultural income derived therefrom the aggregate of the sums payable as agricultural income tax by each person on the agricultural income derived from such land and received by him shall be assessed on such common manager, receiver, administrator or the like, and he shall be deemed to be the assessee in respect of the agricultural income,tax so payable by each such person and shall be liable to pay the same.
" It was urged that because of Section 13, the Receiver alone can be assessed in respect of the income of the estate under his charge and that no assessment can be made upon the person who actually received such income from the receiver.
The said contention was rejected by Shah, J. speaking for the Bench in the following words: "In our view, there is no substance in the contention raised by the appellant.
The liability to pay tax is charged on the agricultural income of every person.
The income though collected by the Receiver was the income of the appellant.
By S.13, in addition to the owner, the Receiver is to be deemed to be an assessee.
But the fact that the Receiver may, because he held the property from which income was derived in the year of account, be deemed to be an ' assessee and liable to pay tax, does not absolve the appel lant, on whose behalf the income was received from the obligation to pay agricultural income tax.
Section 13 merely provides a machinery for recovery of tax, and is not a charging section.
When property is in the possession of the Receiver, common manager or administrator,, the taxing authorities may, but are not bound, to treat such 965 persons as assessee and recover tax.
The taxing authorities may always proceed against the owner of the income and assess the tax against him.
The definition in the connota tion of 'person ' undoubtedly include a Receiver, trustee, common manager, administrator or executor, and by such inclusion, it is open to the taxing authorities to assess tax against any such persons; but on that account the income in the hands of the owner is not exempt from liability to assessment of tax.
" The principle of this decision does support our view, notwithstanding certain variance between the provision concerned in the said decision and those concerned herein.
Sri Ashok Desai, however, placed strong reliance upon a Full Bench decision of the Gujarat High Court in CL T. vs Kamalini Khatau, where the majority (Divan, CJ. and B.K. Mehta, J. with P.D. Desai, J. dissenting) appears to take a contrary view.
Before we deal with the decision, it would be interesting to note that the counsel for the appellant Sri N.A. Palkhivala who appeared for the appellant before the Settlement Commission had himself repudiated this argument, though, another counsel, who appeared for the appellant at a later stage, did not agree with the view expressed by Sri Palkhivala.
The Commission has recorded the submission of Sri Palkhivala in the following words: "We may mention here that when Shri N.A. Palkhivala appeared before us on behalf of the applicant he had stated that although according to the Gujarat High Court 's decision in the case of Smt.
Kamalini Aatau, the income of a discretionary trust is assessable only in the hands of a representative assessed and not in the hands of the beneficiaries, he would not object to assessment of the amounts received by: the beneficiaries in their hands in the present case, for two reasons.
Firstly, according t o Shri N.A. Palkhivala, the Gujarat High Court 's decision in question was erroneous and it was dissently judgment in that case to the contrary, which was correct.
Secondly, in the case, before us, the representative assessees, namely, the trusts, being situated outside India, could 966 not be taxed in India and in such cases it would not be proper not to assess the beneficiaries, for that will lead to the entire income escaping the Indian 'income tax in the case of both the representative assessees and the beneficiaries.
" Be that as it may, we have been taken though both the opinions in the Full Bench decision in extensor We are told that an appeal is pending against the said decision in this Court.
In the circumstances, we are not inclined to deal with the said opinions in any detail except to say that we are inclined to agree with the dissenting.
opinion of P.D. Desai, J. and are not concerned with the reasoning of the majority.
For the above reasons, we cannot agree with Mr. Ashok Desai.
We hold that by virtue of Section 166, the Revenue has an option in the case of a discretionary trust either to make an assessment upon the trustees or to make an assessment upon the beneficiaries.
Of course, both the trustee and the beneficiary cannot be simultaneously taxed in respect of the same income.
The assessments made by the Commission on the deceased settlor and the appellant are thus unexceptionable.
U.K TRUSTS: The first contention urged with respect to U.K. trusts is that the commission has wrongly construed clause (3) which we have extracted hereinbefore.
Sri Desai argues that the trust had already come into existence with the appointment of the sole trustee, Mr. McGill, and that the coming into existence of the trust did not depend upon the appointment of additional trustees.
The commission was wrong in holding that until and unless the additional trustees are appointed, the trust in clause (3) does not come into existence.
Properly construed, says Sri 'Desai, clause (3) creates a discretionary trust.
Inasmuch as the sub clause does not prescribe any time limit within which the trustees must decide to distribute the income among the beneficiaries, says the counsel, clause (4) has, not and had never come into operation.
In this case the trustees never did decide not to exercise their discretion under clause (3).
If so, no income ever arose or accrued to the Settlor or the appellant under clause (4).
If the trustees fail to exercise their discretion under clause (3), the only remedy for the beneficiaries is to approach the court to compel the trustees to exercise their discretion one way or the other, but they cannot say that the trust 967 income has accrued to them.
Clause (4) comes into operation, says the counsel, only where the trustees decide not to distribute the income among the specified beneficiaries; only then does the trust income belongs to and has to be paid over to the settlor and after the death of the settlor to his elder son, the appellant.
Accordingly, the counsel says, the Commission was wrong in law in treating these trusts as specific trusts.
in our opinion, however, the question urged is academic in the facts and circumstances of the case.
As a matter of fact, both the settlor and the appellant have been receiving the income from these trusts during the several assessment years concerned herein.
Sri Vikramsinhji had voluntarily included the entire income from the U.K. trusts in his income in the returns filed by him for the assessment years 1964 65 to 1969 70.
It is unlikely that he would have so included unless he really received it.
The Commission treated those declarations as proof of the settlor 's real intention.
The Commission also relied upon certain other circumstances including the manner in which the accounts of these trusts were maintained in support of their opinion that all concerned with the trusts, acted on the basis that the trust income was flowing to the settlor, and after his death to the appellant.
The Commission also referred specifically to similar declarations made by the appellant in his returns.
It referred to his statements made in the two returns filed for the assessment year 1970 71, one relating to the income received by his father till his death and the other with respect to the income received by him during the accounting year after the death of his father.
Even subsequent to the death of Sri Vikramsinhji, the Commission pointed out, the appellant has been making similar declarations from time to time.
For instance, in the letter dated March 3, 1975 written by the appellant to the I.T.O., A Ward, Rajkot relating to the A.Y. 1972 73, he had stated, "as per statement of U.K. sent herewith, the trustees have arrived at income of 13,027 pounds for the benefit of Sri Jyotendrasinhji.
According to our opinion, this income is not taxable as U.K. trust is discretionary.
However, as it has been taken last, the income may be included in the hands of Sri Jyotendrasinhji subject to our appeal".
It is significant to notice the ground of non taxability put forward in the said letter.
The appellant did not say that he did not receive the income.
All he said was, since it is a discretionary trust, its income is not taxable in his hands.
If he had not received the income, he would have put forward that fact in the forefront.
But he did not.
Similarly, in the return relating to the A.Y. 1973 74, a note was appended by the appellant to the following effect: 968 "Late H.H. Maharaja Vikramsinhji of Gondal has created trusts in UK.
The assessee has been informed that income falling in the hands of the assessee is 12,627 pounds.
This is, therefore, shows as income in his return. ' (emphasis added).
It is true that the appellant had argued before the commission that the settlor as well as himself had included the said income in their returns out of ignorance and on the basis of wrong legal advice but the said explanation has not been accepted by the commission and we must go by the findings of the commission.
It is not brought to out notice that during any of the years concerned herein, did the appellant ever say that he did not receive the income from these trusts.
If so, the question of law urged is of mere academic interest and need not be dealt with by us.
Section 5 of the Act is wide enough to bring all such income to tax.
So far as the plea of double taxation is concerned, the observation made by the Commission in that behalf is quite adequate.
It has stated that in case appellant proves that any income has been taxed in U.S. or U.K., the same income shall not be taxable over again in India.
For the above reasons, the appeals fail and are dismissed.
No costs.
V.P.R. Appeals dismissed.
| The appellant 's father executed on 1.1.1964, three deeds of settlements (trust deeds) in the United States of America.
The terms in them all were identical.
The object of these trusts was to provide for the education, maintenance and up keep of the members of the settlor 's family and their descendants.
He also executed two settlements in U.K. with the very same object.
The settlor (appellant 's father) was riling returns of his income in India including therein whole of the income arising from the trusts.
For the assessment years 1964 65 to 1969 70, he filed the returns.
Since he died on 22 8 1969, i.e. in the middle of the accounting year (relevant to the assessment year 1970 71), two returns were filed, one up to the date of his 938 939 death and the other from the date of his death to the end of the accounting year, by his eldest son, the appellant, including the whole of the income from the trusts.
The appellant filed appeals against the assessment orders pertaining to the assessment years 1965 66 and 1966 67 contending that the income from U.S. trusts was not taxable in India either in the hands of settlor or in his hands and that the inclusion of the said income in the returns by the settlor and by the appellant was a mistake.
The appellant preferred revisions against other assessment orders, where appeal was barred, taking the plea of non taxability with respect to the income from U.K. trusts and from the U.S. trusts.
The Appellate Assistant Commissioner allowed the appeals.
, The Revenue 's appeals to the Tribunal were allowed holding that the A.A.C. acted contrary to Rule 46(2) of the Income Tax Rules in admitting the additional grounds and in looking into new material.
The Tribunal remitted the appeals back to A.A.C.
At that stage the appellant approached the settlement commission under Chapter XIX(A) of the Income Tax Act, 1961.
The Settlement Commission went into all the aspects of the matter and computed the taxable income of appellant 's father and his income for the assessment years 1964 65 to 1970 71 and 1970 71 to 1982 83.
It directed the I.T.O. to compute the total income for each of the said assessment years accordingly and raise demand for the tax due.
The appellant preferred two sets or appeals before this Court against the two orders of the Settlement Commission.
C.A.s. 4301 07 of 1991 related to the assessment years 1964 65 to 1970 71 and C.As.12881300 of 1991 related to the assessment years 1970 71 to 1982 83.
The appellant contended that the settlement Commission erred in law in holding that the U.S. trusts were revocable trusts within the meaning of Section 63 of the Act; that for attracting Section 63, the deed of transfer must give the transferor a right to retransfer directly or indirectly whole or any part of the income or assets to the transferor or it must give him a right to reassume power directly or indirectly over the whole or any part of income or assets; that in the present case such power was not given to the transferor; that U.S. trusts were discretionary trusts and 940 therefore the assessment could be made only upon the trustees and not upon the beneficiaries recipients; that the revenue could not take advantage of the mistake of law on the part of the settlor or the appellant; that with the death of the settlor, the U.S. trusts ceased to be revocable trusts and the appellant could not be taxed on the income received by him from the said trust, because only the trustee could be taxed; that the U.K. trusts were also discretionary trusts and not specific trusts as held by the Settlement Commission and the assessment could be made only upon the trustees and not upon the beneficiaries recipients; that the Settlement Commission committed a legal error in including the income from the U.K. trusts in the total income of the settlor and the appellant even though it was not paid out by the trustee nor received by the assessees in India; that in the U.S.A and U.K, tax was levied upon the respective trust incomes under the laws of those countries; that levying tax over again in India on the very same income amounted to double taxation and therefore the tax levied in India was to be waived.
The Revenue submitted that even if any principles were decided by the Settlement Commission, they did not bind the Income Tax authorities in proceedings relating to subsequent years; that the order of the Commission was relevant to and was confined I only to the assessment years to which it related; that this Court under Article 136 of the Constitution would not be able to go into the merits of the order, that the Settlement Commission 's interpretation on the U.S. and U.K. trusts was perfectly in order and did not call for any interference by this court; that during his life time, the settlor had declared that he had received income from the U.K. and U.S. trusts and had included the same in his returns of income for each of the assessment years relevant herein; that the appellant too acted similarly and therefore the argument of not receiving the income from UK trusts was a mere after thought and should not he given any credence; that a trustee or the trustees was/were expected to act reasonably and in furtherance of the object of the trusts; that they were to apply the income for the purposes specified, because they could not just accumulate it; that applying the test of reasonableness, it was to be held that ordinarily, the trustee ought to distribute the income each year; and that it was to be held that the income from the UK trusts had rightly been taken into account by the Commission while passing its orders.
Dismissing the appeals, this Court, 941 HELD: 1.01.
The finality clause contained in Section 245 1 does not and cannot bar the jurisdiction of the High Court under Article 226 or the jurisdiction of this court under Article 32 or under Article 136, as the case may be.
But that does not mean that the jurisdiction of this court in the appeal preferred directly in this court is any different than what it would be if the assessee had first approached the High Court under Article 226 and then come up in appeal to this court under Article 136.
A party does not and cannot pin any advantage by approaching this Court directly under Article 136, instead of approaching the High Court under Article 226.
This is not a limitation inherent in Article 136; it is a limitation which this court imposes on itself having regard to the nature of the function performed by the Commission and keeping In view the principles of judicial review.
[955 D E] 1.02.
The scope of enquiry, whether by High Court under Article 226 or by this Court under Article 136 is also the same whether the order of the Commission is contrary to any of the provisions of the Act and if so, has it prejudiced the petitioner/appellant apart from ground of bias, fraud & malice which, of course, constitute a separate and independent category.
[956 B] 1.03.
The appellant power under Article 136 is similar to power of judicial review, where the appeal is directed against the orders of the Settlement Commission.
Sri Ram Durga Prasad vs Settlement Commission, 176 I.T.R. 169 and Chief Constable of the N. W. Police vs Evans,[1982] 1 W.L.R. 1155, referred to.
[956 D] 1.04.
The only ground upon which this Court can interfere in these appeals is that the order of the Commission is contrary to the provisions of the Act and that such contravention has prejudiced the appellant.
[956 E] 1.05.
The main controversy in these appeals relates to the interpretation of the settlement deeds though it is true, some contentions of law are also raised.
The commission has interpreted the trust deeds in a particular manner.
Even if the interpretation placed by the commission on the said deeds is not correct, it would not be a ground for interference in these appeals, since a wrong interpretation of a deed of trust cannot be said to be a violation of the provisions of the Income Tax Act.
[956 F] 942 1.06.
The interpretation placed upon the said deeds by the Commission does not bind the authorities under the Act in proceedings relating to other assessment years.
[956 G] 1.07.
Though it is not necessary, strictly speaking, to go into the correctness of the interpretation placed upon the said deeds by the commission, and it is enough if this court confines itself to the question whether the order of the Commission is contrary to the provisions of the Act, yet, for the sake of completeness, the Court examine whether the order of Commission is vitiated by any such wrong interpretation.
[956 H, 957 A] 2.01.
A discretionary trust is described as a trust where the trustees have been vested with a discretion in the matter of distribution of trust income among the specified class of beneficiaries.
In the case of such trusts, the trustees have a discretion to pay whole or part of the income to such member or members of the designated class as they think fit and in such proportion as they deem appropriate.
[957 C D] Snell 's Principles of Equity, 25th Edn.
(1965) page 129, referred to.
[957 E] 2.02.
The US settlement deed empowers the trustee to hold, manage, invest and reinvest the principal of the trust fund, to collect and receive the income thereof and to pay or apply so much of the net income as the trustee shall in his absolute and uncontrolled discretion deem advisable to or to the use of one of more members of the settlor 's family, It is thus a discretionary trust.
Para 1(2) of the U.S. Deed empowers the settlor/transferor and the trustee, acting together to direct the trustee, at any time, to pay over the entire income and/or entire corpus or a part thereof to such member of the settlor 's family or their descendants as they may direct.
The said power cannot be exercised by the settlor acting Alone.
[958 B] 2.04.
The power, properly construed, is given to the settlor to, be exercised together with the trustee and not to the trustee to be exercised together, with the settlor.
The trustee is anyhow vested with an absolute discretion to distribute the income of or the principal of the trust to such member of the family, as he thinks appropriate, under the clause preceding and paras following para 1(2).
If so, there was no point in saying that 943 he can, together with the settlor, be empowered to pay over part or whole of income/principal to "such one or more members of a class composed of the family members living. ' It cannot also be forgotten that the trustee in this case is a Bank one of the largest in the U.SA.
and not an individual acquaited with the affairs of the settlor 's family.
[958 H, 959 A] 2.05.
Section 63 does not say that the power of revocation vesting in the transferor should be absolute or unconditional.
[959 B] 2.06.
Section 63(1) also does not say that the deed of transfer must confer or vest an unconditional or an exclusive power in the transferor to give the power/direction of the nature contemplated by it.
Merely because the concurrence of the trustee had to be obtained by the transferor/settlor for giving the said direction it cannot be said that the deed does not contain a provision giving the transferor a right to reassume power directly or indirectly over the whole or any part of income or assets within the meaning of Section 63(a)(ii) of the Act.
[960 B C] 2.07.
During the lifetime of the settlor, the entire income arising from the three U.S. trust deeds was bound to be and was rightly included in the income of the settlor by virtue of Section 63 read with Section 61.
[961.B] 2.08.
With the death of the settlor, Section 63 ceased to apply even though the aforesaid clause empowers not only the settlor but also the Maharaja for the time being to exercise the said power.
[961 C] 2.09.
Section 63 is attracted only where such power is given to the transferor and the appellant (the son of the settlor) is not and cannot be called the transferor.
It is not denied that so far as the income from the U.S. trusts is concerned, it was indeed received by the appellant.
[961 D] 2.10.
The trustees in the case of a trust declared by a duly executed instrument in writing are treated as representative assessees (Section 160(1)(iv)).
It is equally true that in the case of a discretionary trust, trustees are liable to be taxed in respect of the income received by them at the rate specified in Section 164(1).
[961 F] 2.11.
Section 166 states in unmistakable terms that nothing contained in the preceding provisions in the chapter shall preclude the Revenue from making a direct assessment upon the beneficiary and/or recovering the tax payable from such person.
[962 B] 944 2.12.
By virtue of Section 166, the Revenue has an option in the case of a discretionary trust either to make an assessment upon the trustees or to make an assessment upon the beneficiaries.
Of course, both the trustee and the beneficiary cannot be simultaneously taxed in respect of the same income.
The assessments made by the Commission on the deceased settlor and the appellant are thus unexceptionable.
[966 D] Behramji Sorabji vs Commissioner of Income Tax, Bombay, ; Commissioner of Income Tax Bombay City vs Ratilal Nathalal, ; Tarunendra Nath Tagore vs Commr.
of Income Tax, ; K. Subramania Pillai vs Agricultural Income Tar Officer, 7hukalay, ; Commissioner of Income Tar, Punjab vs Raghubir Singh, ; Nagappa vs C.I.T, and Ram Swaroop Das vs The State of Bihar, , referred to.
Sevantilal Maneklal vs C.I.T., , distinguished.
C.I.T vs Kamalini Khatau, (F.B.) Agreed with the dissenting opinion.
3.01.Both the settlor and the appellant have been receiving the income from the UK trusts during the several assessment years concerned herein.
The settlor had voluntarily included the entire income from the U.K. trusts in his income in the returns filed by him for the assessment years 1964 65 to 1969 70.
It is unlikely that he would have so included unless he really received it The Commission treated those declarations as proof of the settlor 's real intention.
The Commission also relied upon certain other circumstances including the manner in which the accounts of these trusts were maintained in support of their opinion that all concerned with the trusts, acted on the basis that the trust income was flowing to the settlor, and after his death to the appellant.
The Commission also referred specifically to similar declarations made by the appellant in his returns.
Even subsequent to the death of the settlor, the Commission pointed out, the appellant has been making similar declarations from time to time.
[967 C E] 3.02.
The appellant did not say that he did not receive the income from the U.K. trusts.
All he said was, since it is a discretionary trust, its income is not taxable in his hands.
If he had not received the income, he would have put forward that fact in the forefront.
But he did not.
Section 945 5 of the Act is wide enough to bring all such income to tax.
In case appellant proves that any income has been taxed in U.S. or U.K., the same income shall not be taxable over again in India.
[%7 H, 968 D]
|
Appeal No. 1958 of 1968.
Appeal by special leave from the judgment and order dated August 2, 1966 of the Allahabad High Court in Special Appeal No. 960 of 1964.
G. B. Pai, Bhuvnesh Kumari, O. C. Mathur, J. B. Dadachanji & Co., for the appellant.
Danial Latifii and section Ramachandran, for respondents Nos. 4 and 5.
The Judgment of the Court was delivered by VAIDIALINGAM, J.
The short question that raises for consideration in this appeal, by special leave, is whether the State Government has power under section 6G of the U.P. (hereinafter to be referred to as the Act) to withdraw an order already passed referring a dispute for adjudication.
The facts leading up to the filing of the Writ Petition by the appellant are as follows The appellant, a public limited company, carrying on business of manufacture and sale of sugar from sugarcane, employs about a thousand workmen in its factory at Baitalpur.
The appellant retired three workmen, namely, Chhatradheri Lal Chandrika Prasad Srivastava and Bal Karan.
This led to an industrial dispute.
The State Government by Notification No. 785/LC/XVIII/LA 97(GR)/1959 dated October 25, 1960, referred the said dispute to the Labour Court, Gorakhpur, for adjudication.
This reference (hereinafter to be referred to as Reference, No. 1) was registered by the Labour Court as Adjudication Case No. 93 of 1960.
The parties filed their written statements and proceedings went on resulting in the Labour Court passing an award dated February 26, 1961, holding) that the retirement of the three workmen was neither legal nor justified.
This award was published in the U.P. Gazette dated May 6, 1961, by the State Government 's Notification dated April 4, 1961, No. 1176(EIO)36/ A/46(ST) 59.
There were similar disputes regarding the retirement of several other workmen and accordingly that dispute was referred by the State Government to the same Labour Court for adjudication by Notification No. 322(LC)XVIII LA 115,(GS)/1959 dated October 31, 1960.
This reference (hereinafter to be, referred to as Reference No. 11) was registered by the Labour Court as Adjudication Case No. 98 of 1960.
At this stage it must be mentioned that Reference No. 11 related to several workmen numbering about thirty or forty which included also the three Workmen covered by Reference No. 1.
The three workmen covered by Reference No. 1 made an application to the Labour Court for deleting their names from Reference No. 11 on the ground that their grievance is the subject of adjudication in Case No. 93 of 1960.
Though the appellant opposed this application, the Labour Court by its order dated February 21, 1961, accepted the prayer of the three workmen and as such they ceased to have anything to do further in Reference No. 11.
Adjudication Case No. 98 of 1960, arising out of Reference No. 11, also resulted in an award being passed by the Labour Court on February 27, 1961.
In this award, the Labour Court had decided the dispute on merits.
But it has specifically stated that it is not record ' any finding with 'regard to the ing 69 three workmen covered by Reference No. 1, as their names have been excluded from Adjudication Case No. 98 of 1960, arising out of Reference No. 11.
This award dated February 27, 1961, was published in the State Gazette on April 4, 196f.
We have earlier mentioned that the award dated February 26, 1961, in Adjudication Case No. 93 of 1960, arising out of Reference No. 1, was published in the State Gazette on May 6, 1961.
After the award was made on February 26, 1961, the State Government issued a Notification on February 28, 1961, withdrawing the Notification dated October 25, 1960, making Reference No. 1.
The order of withdrawal runs as follows "GOVERNMENT OF UTTAR PRADESH LABOUR (A) DEPARTMENT No. 167(LG)/XVIII LA 97(GR)/1959 Dated Kanpur, February 28, 1961 ORDER Whereas an industrial dispute between the employers and the workmen of the concern known as Shree Sitaram Sugar Co. Ltd., Baitalpur, Distt.
Deoria relating to retirement of the workmen, was referred for adjudication to the Labour Court at Gorakhpur in G.O. No. ' 785(LC)/XVIILLA 97 (GR)/1959, dated October 25, 1960.
And whereas the same dispute is also covered by G.O. No. 822 (LC)/XVIII LA 115(GR)/1959, dated October 31, 1960, as amended by G.O. No. 912(LC)/XVIII LA115(GR)/1959, dated November 21, 1960, referring the same question of retirement of workmen to Labour Court at Gorakhpur; Now, therefore, in exercise of the powers conferred by sub section (1) of section 6 G of the U.P. (U.P. Act No. XXVIII of 1947), the Governor is pleased to order that G.O. No. 785(LC)/ XVIII LA 97(GR)/1959, dated October 25 1960, referring the said dispute for adjudication, shall be and is hereby withdrawn." Sd/ J. Prasad Under Secretary.
" It will be noted from the above Notification that the State Government had withdrawn its previous order referring the dispute by Virtue of powers stated to be conferred under subsection (1) of section 6 G of the Act.
We have also referred to the fact that the award in Reference No. 1 was published in the State Gazette on May 6, 1961.
It will be noted that the material dates to be considered with regard to Reference No.1 are as follows : (a) The dispute was referred for adjudication by Notification dated October 25, 1960.
(b) The award was made on February 26, 1961.
70 (c) The Notification dated October25, 1960, referring the dispute was withdrawn by Notification dated February 28, 1961.
(d) The award was published in the State Gazette dated May 6, 1961.
It will be noted from these dates that the order withdrawing the original reference was made two days after the Tribunal had passed the award.
The publication of the award was after the State Government had withdrawn its original order making the reference.
The appellant filed the Writ Petition in the High Court under Article 226 for the issue of writ of certiorari quashing the award dated February 26, 1961 and also for a mandaus directing the State Government to withdraw its Notification dated May 6, 1961, publishing the award.
The proceedings before the High Court related to the matters arising out of Reference No. 1.
According to the appellant, the, award dated February 28, 1961, had become ineffectual and useless in view of the State Government having withdrawn the Notification dated October 25, 1960, referring the dispute for adjudication.
Its further contention was that having withdrawn on February 28, 1961, its previous order referring the dispute, the State Government had no power to publish the award, as it had done on May 6, 1961 and that the said order publishing the award had to be revoked.
The union contested the Writ Petition on the ground that the State Government has no power under section 6 G to withdraw an order already passed referring a dispute for adjudication and that, in any event, it has no such power after an award has been made by a Labour Court or Tribunal.
According to the union, the order of withdrawal dated February 28, 1961, is of no effect and that the publication of the award on May 6, 1961, was valid and that the State Government cannot be called upon to revoke the same.
The learned single Judge posed two questions for consideration (1) whether the power to withdraw under section 6 G of the Act is confined to withdrawal for purposes of transferring the proceedings to another Court or Tribunal; and (2) whether the power under section 6 G can be exercised at any stage until the award of the Labour Court or Tribunal has become enforceable under section 6 A of the Act.
The learned single Judge did not consider the first question and proceeded on the assumption that under section 6 G the State Government has power to Withdraw a reference already made.
But, after considering the second question, he came to the conclusion that the power of Withdrawal cannot be exercised after in award had been made by the Tribunal concerned.
In this view, the learned single Judge held that the order of withdrawal dated February 28, 1961, was of no effect and that tie publication of the award on May 6, 1961, was according to law.
In this view, the Court declined to grant any relief to the appellant.
71 The appellant challenged the decision of the learned single Judge in Special Appeal No. 960 of 1964.
The Division Bench of the Allahabad High Court has held that the State Government has power under section 6 G to withdraw any proceedings pending before a. Labour Court or Tribunal.
But it held that as the award had been made on February 26, 1961, there were no proceedings pending before the Labour Court on February 28, 1961, when the order of withdrawal was passed by the State Government.
In this view the Division Bench held that it was not open to the State Government to withdraw the proceedings after the award had been made by the Tribunal and, therefore, the Notification dated February 28, 1961, is of no effect.
By judgment and order dated August 2, 1966, the learned Judges confirmed the order of the single Judge and dismissed the Special Appeal.
The management has come to this Court in this appeal.
Mr. G. B. Pai, learned counsel for the appellant, placed considerable stress on the language of section 6 G of the Act and pointed out that in addition to the power of transferring a proceeding from one Labour Court or Tribunal to another, the said section, has conferred an absolute right on the State Government to withdraw an order already passed referring a dispute for adjudication.
There is only an obligation on the State Government to make the order in writing and also give reasons for the action taken by it.
The counsel very heavily relied on section 6 D of the Act and urged that this power of withdrawing a reference can be exercised till the date when the award becomes enforceable.
Therefore, the mere fact that an award has been made does not take away the power of the State Government to, withdraw a reference.
In the case before us, the counsel pointed out that the award had been made only on February 26, 1961 and the reference had been withdrawn by the State Government on February 25, 1961, long before the award had become enforceable.
The counsel urged that, in view of the circumstances pointed out above, the view of the High Court that the State Government has no power to withdraw the reference, as the award has been made, is erroneous.
Mr. Daniel Latifi, learned counsel for the workmen concerned, on_ the other hand, urged that the view of the High Court that there is a power under section 6 G in the State Government to withdraw a reference is erroneous.
The counsel pointed out that section 6 G confers on the State Government only a power to transfer a proceeding from one Labour Court or Tribunal to another.
The counsel also pointed out that section 6 D has no bearing in the construction of section 6 G of the Act.
When there is no power in the State Government to Withdraw a reference, the counsel pointed out, the question at what stage the proceedings can be withdrawn is purely academic.
Even assuming that there is a power under section 6 G an the State Government to withdraw an order of reference already made, that section, the counsel pointed out, does not give power to order such withdrawal after an award has been passed.
According to him once an award has been made by a Labour Court or Tribun proceedings before it come to a close and there is nothing for being withdrawn by the State Government.
The counsel supported the reasoning of the High Court that section 6 G does not confer any Power on the State Government to 72 withdraw an order of reference after an award had been made by the Labour Court or Tribunal concerned. ' In our opinion, the first and foremost question that should have been considered by the High Court is whither section 6 G confers a power on the State Government to withdraw an order earlier passed referring a dispute for adjudication.
It is only when this point is answered in the affirmative the, further question is upto what stage can the power of withdrawal be exercised by the State.
The, State of Uttar Pradesh was a party before the learned single Judge as well as the High Court and is 2nd respondent in the appeal before us.
We have already referred to the fact that the relief that was asked for by the appellant was by way of writ of mandamus directing the State Government to withdraw the publication, made in the Gazette of May 6, 1961, of the award by its order dated April 4, 1961.
This relief was asked for by the appellant on the ground that the order dated February 28, 1961, of the State, Government withdrawing the reference was well within its power.
In the Writ Petition the powers and functions of the State Government under the Act came squarely for consideration.
Under those circumstances one would have expected the State Government to appear before this Court and place its point of view regarding the points under consideration.
Unfortunately, the State Government has chosen to remain exparte in this appeal.
Hence we have to decide the points in controversy only on the basis of the contentions advanced on behalf of the employer and the workmen.
It is now necessary to refer to certain relevant provisions of the Act.
According to the preamble, the Act has been enacted to provide for powers to prevent strikes and lock outs and for the settlement of industrial disputes and other incidental matters.
Section 2(c) states : " ' Award ' means an interim or final determination of any industrial dispute or of any question relating thereto by, any Labour Court or Tribunal and includes an arbitration award made under Section 5 B." The above definition takes in both interim and final awards. 'Section 4 K gives power to the State Government to refer for adjudication an industrial dispute to the Labour Court or an Industrial Tribunal under the circumstances mentioned therein.
Section 5 gives power to the State Government to include other undertakings in any adjudication.
Section 6 dealing with the proceedings before a Tribunal, Submission of the award and its publication runs as follows : "6.
Awards and action to be taken thereon (1)Where an industrial dispute, has been referred to a Labour Court or Tribunal for adjudication, it shall hold its proceedings expeditiously 'and shall as soon as it is practicable on the conclusion thereof.
submit its award to the State Government.
(2)The award of a Court or Tribunal shall be in writing and shall be signed by its Presiding Officer.
73 (3)Subject to the provisions of sub section (4) every arbitration award and the award of a Labour Court or Tribunal, shall within a period of thirty days from the date of its receipt by the State Government, be published in such manner as the State Government thinks fit.
(4)The State Government may before publication of an award of a Labour Court or Tribunal under sub section (3), remit the award for reconsideration of the adjudicating authority , and that authority shall, after reconsideration submit its award to the State Government, and the State Government shall publish the award in the manner provided in sub section (3).
(5)Subject to the provisions of section 6 A, an award published under sub section (3) shall be final and shall not be called in question in any court in any manner whatso ever.
(6)A Labour Court, Tribunal or Arbitrator any "either of its own motion or on the application of any party to the dispute, correct any clerical or arithmetical mistake in the award, or errors arising therein from I any accidental.
slip or omission; whenever any correction is made as aforesaid, a copy of the order shall be sent to the State Government and the provision of this Act, relating to the publication of an award shall mutatis mutandis apply thereto.
" The above section clearly indicates that when once an industrial dispute has been referred for adjudication, the Labour Court or Tribunal has to conduct its proceedings expeditiously and it has to submit its award to the State Government.
The award has to be published within thirty days of its receipt by the State Government.
Power has no doubt been given to the State Government, before publication of an award, to remit the same for reconsideration.
When the same is received after reconsideration, the State Government is bound to publish the same, as provided under sub section (3).
An award published under sub section (3) is final subject to the provisions of section 6 A.
The Labour Court or Tribunal has power to correct any clerical or arithmetical mistake in the award.
But if any such correction is made, a copy of the order making the correction will have to be sent to the State Government.
The provisions relating to Publication of an award apply to the order making a correction in the award.
Section 6 A deals with the commencement of the award.
The general rule, as provided under sub section (1) is that an award becomes enforceable on the expiry of thirty days from the date of its publication under section 6.
Sub ,section (3) provides for a slightly different period depending upon the circumstances mentioned, therein.
Sections 6 D and 6 G are as follows "6 D. Commencement and conclusion of proceedings, Proceedings before a Labour Court or Tribunal shall be deemed to have commenced on the date of reference of a 74 dispute, to adjudication, and such proceedings shall be deemed to have concluded on the date on which the award becomes enforceable under section 6 A." "6 G. Power to transfer certain proceedings (1)The State Government may, by order in writing and for reasons to be stated therein, withdraw any proceeding under this Act, pending before a Labour Court or Tribunal or transfer a proceeding from one Labour Court or Tribunal to another Labour Court or Tribunal, as the case may be, for the disposal of the proceeding and the Labour Court or Tribunal to which the proceeding is so transferred may, subject to any special directions in the order of transfer, proceed either de novo or from the stage at which it was so transferred; Provided that where a proceeding under section 6 E or section 6 F is pending before a Tribunal, the proceeding may also be transferred to a Labour Court.
(2) Without prejudice to the provisions of sub section (1) any Tribunal, if so authorized by the State Government, may transfer any proceeding under section 6 E or section 6 F pending before it to any one of the Labour Courts specified for the disposal of such proceedings by the State Government by notification in the Official Gazette and the Labour Court to which the proceeding is so transferred shall dispose of the same." Sections 6 D and 6 G substantially correspond to sub section (3) of section 20 and section 33 B respectively of the (Central Act XIV of 1947).
It must be stated that a superficial reading of sub section (1) of section 6 G in isolation will give the impression that the State Government has got two distinct and separate powers, namely (a) to withdraw any proceedings under the Act pending before a Labour Court or Tribunal,; or (b) to transfer the proceedings from one Labour Court or Tribunal to another Labour Court or Tribunal for disposal of the same.
It is on the basis of such a reading of the section that Mr. Pai, the learned counsel, urged that there is an absolute power in the State Government to withdraw an order already passed referring a dispute for adjudication.
This power ' according to the learned counsel, is distinct and separate front the power given under the same section to the State Government to transfer a proceeding from one Labour Court or Tribunal to another.
If we do not accept the contention of Mr. Pai that section 6 G confers two such distinct and separate powers, section 6 D will not assist the appellant.
It is only if we hold that the Government has a power to withdraw simpliciter, the further question regarding the stage upto which the power could be exercised.
will arise for consideration.
75 We have already pointed out that section 6 casts a duty on the Tribunal, when a dispute has been referred to it, to deal with it expeditiously and to submit its award to the State Government.
The State Government has also an obligation to publish the award within thirty days of its receipt.
No doubt sub section (4) of section 6 gives power to the State Government, before publishing the award, to remit the same for reconsideration.
But still a duty is cast upon the State Government to publish the award as reconsidered by the Tribunal within thirty days of its receipt.
Section 6 A also gives certain powers toy the State Government regarding the award, which normally becomes enforceable under sub section (1) on the expiry of thirty days from the date of its publication.
Section 6 G, in our opinion, deals only with the power of the State Government to transfer a proceeding from one Labour Court or Tribunal to another and for purposes of such transfer to withdraw the proceedings from the Labour Court or Tribunal from whom it is being transferred.
We are free to admit that the wording of sub section (1) is capable of being construed as conferring on the State Government a power to withdraw any proceedings or to transfer a proceeding from one Labour Court or Tribunal to another.
But having regard to the scheme of section 6 G, read in the light of the other provisions referred to earlier, the section will have to be interpreted as giving to the ,State Government only a power to transfer a proceeding from one Labour Court to another.
When section 6 makes it obligatory that an award has to be made by the Tribunal concerned, and that it has to, be published by the State Government within thirty days of its receipt and declare that the award on publication becomes final, it is idle to expect that the legislature intended to nullify the entire proceedings.
by conferring an absolute power of withdrawal on the State Government under section 6 G.
The proper way of reading section 6 G is to limit the power of withdrawal, referred to therein, only for the purpose of transferring the proceedings from one Labour Court or Tribunal to another.
That the expression 'or ' in section 6 G(1) interposed between 'withdraw any proceedings '.
. or 'transfer a proceeding ' will have tar be understood as 'and '.
So read, the power conferred under section 6 G on the State Government is that of withdrawing any proceedings from one Labour Court or Tribunal and transferring the same to another.
Mr. Pai drew our attention to section 33 B of the Central Act and emphasised that the said section is words differently from section 6 G of the Act.
According to him, the wording of section 33 B clearly shows that the withdrawal of any proceedings is only for transferring the same to another Labour Court or Tribunal.
On the other hand, the counsel pointed out that a different phraseology has been used in section 6 G indicating the conferment of two distinct powers.
We have already referred to this aspect and expressed the view that a superficial reading of section 6 G will support the contention of Mr. Pai.
If the expression 'or ', as mentioned earlier, is read as 'and ', the section does not present any difficulty.
That having due regard to the scheme of the statute and the purpose sought to be served the expression 'or ' can be read under certain circumstances as 'and ' as has been laid down 76 by this Court in Mazagaon Dock Ltd. vs The Commissioner of Income Tax and Excess Profits Tax.(1) Adopting the same principle and having due regard to the object of section 6 G, which essentially is only to confer in the State Government a power to transfer a proceeding from one Labour Court or Tribunal to another, the expression 'or ' has to be read in section 6 G as 'and ', If so read, sub section (1) of section 6 G confers on the State Government only a power to withdraw a proceeding from one Labour Court or Tribunal and transfer the same to another.
It is needless to state that transfer of a proceeding can only be when it is pending before A Labour Court or Tribunal.
Section 6 D, in our opinion, has no relevancy in construing section 6 G. Section 6 D is enacted for a totally different purpose.
For instance section 6 E provides for conditions of service etc.
to remain unchanged in certain circumstances during the pendency of proceedings.
Similarly under section 6 F a question may arise whether an employer has contr avened the provisions of section 6 E during the pendency of proceeding before a Labour Court or Tribunal.
It may be quite essential to consider whether any proceedings were pending before a Labour Court or Tribunal.
For the purpose of considering the question whether ,any proceedings were pending, the Act has created a fiction under section 6 D by indicating the starting point of a proceeding before a Labour Court as well as its conclusion.
The starting point of the proceedings has been fixed from the date of the reference and its termination has been fixed as the date on which the award becomes enforceable under section 6 A.
During this period broadly it has to be considered that proceedings are pending before a Labour Court or Tribunal.
We need not refer to the other provisions of the Act where the duration of the pendency of proceedings may assume importance.
Section 6 D can be invoked only in those cases.
But it does not come into the picture, as mentioned earlier, in construing section 6 G. Mr. Pai referred us to the decision of this Court in The Sirsilk Ltd., and Others vs Government of Andhra Pradesh & Another(2), where the provisions of section 17 and 18 of the Central Act were read in harmony and the State Government was directed not to publish the award though its publication was mandatory.
We are not faced with ,such a situation in the case before us.
We have already referred to the fact that in Adjudication Case No. 98 of 1960, arising out of Reference No. 11, respondents 4 to 6 herein had requested the Labour Court to exclude them from the said adjudication on the ground that they are already covered by Adjudication Case No. 93 of 1960, arising out of Reference No. 1.
The Labour Court passed an order on February 21, 1961, excluding the said three workmen from Adjudication Case 'No. 98 of 1960.
That means the said three workmen had no further interest in the said Adjudication Case.
If that is so, the award passed on February 26, 1961, in the case arising out of Reference No. 1 was perfectly correct and the publication of the said award on May 6, 1961, was also in pursuance of the mandatory provisions of the Act. 'There is no question of any conflict between the two awards.
Hence the appellant cannot seek any assistance from the decision of this (1) (2) 77 Court in The Sirsilk Ltd., and Others vs Government of Andhra Pradesh& Another(1) and it cannot ask for a writ of mandamus directing the State Government to cancel the publication of the award.
We are in agreement with the view of the High Court that the appellant is not entitled to any relief, though for different reasons.
The appeal fails and is dismissed with costs.
G.C Appeal dismissed.
| The appellant company retired three of its workmen and the industrial dispute thus arising was referred to the Labour Court, Gorakhpur, for adjudication The reference was registered by the Labour Court as Adjudication Case No. 93 of 1960.
The parties filed their written statement and proceedings went on resulting in the Labour Court passing an order dated February 26, 1961 holding that the retirement of the three workmen was neither legal nor justified.
There were similar disputes regarding the retirement of several other workmen and the dispute relating to them was referred to the same Labour Court and this reference was registered as Adjudication Case No. 98 of 1960.
The three workmen whose cases were the subject matter of the first reference were also included in the second reference.
They applied to the Labour Court to have their names deleted from the second reference, and they were accordingly deleted.
The Labour Court gave its award in the second reference on February 27, 1961.
In this award the Labour Court specifically stated that it was not recording any finding with regard to the three workmen covered by the first reference.
On a representation made by the appellant the State Government issued a notification on February 28. 1961 withdrawing the first reference relating to the three aforesaid workmen.
This was purported to be done under sub section (1) of section 6 G of the U.P.
Even so the State Government published the award in the first reference on May 6, 1961.
The appellant filed a writ petition in the High Court under article 226 of the Constitution for the issue of a writ of certiorari quashing the award dated February 26, 1961 and also for a mandamus directing the State Government to withdraw its Notification dated May 6. 1961.
The single Judge as well as the Division Bench decided against the appellant.
In appeal before this Court, HELD : (i) The wording of sub section (1) of section 6 G is capable of being construed as conferring on the State Government a power to withdraw any proceedings or to transfer a proceeding from one Labour Court or Tribunal to another.
But having regard to the scheme of section 6 G read in the light of the other provisions of the Act the section will have to be interpreted as giving to the State Government only a power to transfer a proceeding from one Labour Court to another.
When section 6 makes it obligatory that an award has to be made by the tribunal concerned and that It has to be published by the State Government within 30 days of its receipt and declares that the award on is idle to expect that the legislature intended to by conferring an absolute power of withdrawal on Government State section 6 G.
The proper way of reading section 6 G is to limit the power of withdrawal referred to therein only for the purpose of transferring proceedings from one Labour Court or Tribunal to another.
[75D] The provisions of section 33B and section 6 D of the Act did not support a contrary conclusion.
Sirsilk Ltd. and Others vs Government of Andhra Pradesh & Another ; , distinguished.
(ii) The expression 'or ' in section 6 G (1) interposed between 'withdraw any proceedings ' or 'transfer a proceeding ' will have to be understood as 'and '.
[75H] Mazagaon Dock Ltd. vs The Commissioner of income tax and Excess Profits Tax; , relied on.
|
vil Appeal Nos. 1403 to 1406 of 1974.
From the Judgment and Order dated 23.12.
1971 of the Madras High Court in W.P. Nos.
1053 54, 4679 & 4715 of 1968.
Anil Dev Singh, Ms. Indu Malhotra and C.V. Subba Rao for the Appellant.
467 R.P. Bhat, G.L. Sanghi, M.N. Krishnamani, Vineet Kumar, R. Mohan, K.C. Dua and R.A. Perumal for the Respondents.
The Judgment of the Court was delivered by SINGH, J.
These appeals are directed against the judg ment and order of a Division Bench of the High Court of Madras dated 2.8. 1974, quashing the notices issued by the Deputy Commercial Tax Officer, Madras.
The respondents manufacture various medicinal prepara tions and in that process they use tincture containing alcohol.
On the enforcement of the (hereinafter referred to as 'the Act ') the respondents became liable to pay duty.in accordance with Section 3 of the Act read with Schedule to the Act.
They 'further became liable to obtain licence, but they neither paid duty nor obtained licence.
The Commercial Tax Officer issued notices to the respondents in exercise of his powers under Rule 12 of the Medicinal and Toilet Preparations (Excise Duties) Rules 1956 directing them to pay duty on all medicinal preparations manufactured by them after 1.6.1961.
The notices were in the shape of notice of demand requiring the respondents to pay the duty which they had failed to pay in accordance with the Act and the Rules on the use of tincture in manufacturing medicinal preparations.
The respondents filed writ petitions under Article 226 of the Constitution of India before the High Court of Madras challenging the notices and the proceedings initiated in pursuance thereof for the recovery of duty from them.
A Division Bench of the High Court allowed the writ petitions on the sole ground that Rule 12 under which the impugned notices were issued was ultra vires the Act, conse quently, proceedings initiated in pursuance thereof, were without jurisdiction.
On these findings the writ petitions were allowed and the notices as well as the proceedings were quashed.
The sole question which arises for consideration in these appeals relates to the validity of Rule 12 of the Medicinal and Toilet Preparations (Excise Duties) Rules 1956.
The High Court has declared the Rule ultra vires on the ground that the Act was silent on the question of levy of duty on escaped turn over and hence Rule 12 which pro vides for the recovery of escaped duty was outside the purview and scope of the Act.
The Act was enacted to provide for the levy and collection of 468 duty of excise on medicinal and toilet preparations contain ing alcohol, opium, Indian hemp or other narcotic drugs as the preamble states.
Section 3 provides for levy and collec tion of duties.
It reads as under: "3(1).
There shall be levied duties of excise, at the rates specified in the Schedule, on all dutiable goods manufactured in India.
(2) The duties aforesaid shall be leviable (a) where the dutiable goods are manufactured in bond, in the State in which such goods are released from a bonded warehouse for home consumption, whether such State is the ,State of manufacture or not; (b) where the dutiable goods are not manufac tured in bond, in the State in which such goods are manufactured.
(3) Subject to the other provisions contained in this Act, the duties aforesaid shall be collected in such manner as may be prescribed.
" Excise duty is imposed by Section 3 on the manufacture of dutiable goods at the rates specified in the Schedule.
Sub section (2) indicates the stage at which the duty is to be levied.
Section 3(3) provides for collection of duty, lays down that it shall be collected in such manner as may be prescribed by Rules made under the Act.
Section 3, there fore, imposes duty on the manufacture of medicinal prepara tions and it lays down the rates and it also indicates the stage at which the duty is to be levied.
So far as collec tion of duty is concerned the Act leaves the same to the rule making authority.
Section 19 confers power on the Central Government to make rules to carry out the purposes of the Act.
The relevant provision of Section 19 is as under: "19(1).
The Central Government may, by notifi cation in the Official Gazette, make rules to carry out the purposes of this Act.
(2) In particulars, and without prejudice to the generality of the foregoing power, such rules may (i) provide for the assessment and collection of duties levied under this Act, the authori ties by whom functions 469 under this Act are to be discharged, the issue of notices requiring payment, the manner in which the duties shall be payable and the recovery of duty not paid.
" Section 19(1) read with Section 3(3) confer wide powers on the Central Government to make rules which may be necessary for carrying out the purpose of the Act.
Such rules may provide for the assessment and collection of duties, and, the manner in which the duty is to be paid as well as for the recovery of duty not paid at all.
The Central Government in exercise of its power under Section 19 of the Act has framed the Medicinal and Toilet Preparations (Excise Duties) Rules 1956 which were enforced on 9th March 1957.
Chapter III of the Rules provide for levy and refund of, and, exemp tion from duty.
Rules 6 to 17 relate to recovery, exemption and refund of duty.
Rule 6 requires every person who manu factures any dutiable goods, or who stores such goods in a warehouse to pay the duty on such goods, at such time and place as may be designated.
Rule 9 prescribes time and manner of payment of duty.
According to this Rule no dutia ble goods shall be removed from any place where they are manufactured either for consumption or for export, outside such place until the excise duty leviable thereon is paid at such place and in such manner as prescribed in the Rules or as the Excise Commissioner may require.
Rule 11 provides for recovery of duty or charges which may have been shortlevied through inadvertence, error, collusion, or mis construction on the part of an Excise Officer and through mis statement on the part of the owner and it also provides for recovery of any refund erroneously made to the manufacturer, owner of the goods on written demand made within six months from the date of payment of duty.
Rule 12 confers residuary power for the recovery of sums due to the Government.
Rule 12 reads as under: "12.
Residuary powers for recovery of sums due to Government Where these rules do not make any specific provision for the duty has for any reason been short levied, or of any other sum of any kind payable to the collecting Government under the Act or these rules, such duty, deficiency in duty or sum shall, on written demand made by the proper officer, be paid to such person and at such time and place, as the proper officer may specify.
" 470 As already noted Rules contained in Chapter III of the Rules particularly Rules 6, 9, 10 and 11 provide for payment and recovery of duty and also the time and manner of its payment.
Rule 12 is designed to confer residuary power for recovery of duty if unpaid on account of short levy or deficiency or for any reason it remains unpaid.
If recovery of duty or any amount of sum payable to the Government under the Act is not covered by any specific Rule, additional supplementing provision is made for its recovery by Rule 12.
Rule 12 provides for recovery of duty, as well as any other sum payable to the collecting Government under the Act if the same is not paid on account of short levy or deficiency or for any reason.
In substance Rule 12 contains additional safeguard for recovery of duty, it does not create any additional charge or liability on the manufacturer for the payment of the duty.
The liability to pay tax is created by the charging Section 3 and Rule 12 confers, on the autho rised officer to recover duty if the same has not been paid on account of any short levy or deficiency or any other reason.
Rule 12 is referable to section 19(2)(i) of the Act.
The Rule carries out the purposes of the Act as it seeks to provide for recovery of duty as contemplated by Section 3(3) of the Act.
The High Court committed error in holding that the Rule provides for recovery of escaped duty although the Act is silent on the question of escaped assessment and therefore Rule 12 is ultra vires the Act.
Learned counsel appearing for the respondents urged that Rule 12 is unreasonable and violative of Article 14 of the Constitution, as it does not provide for any period of limitation for the recovery of duty.
He urged that in the absence of any prescribed period for recovery of the duty as contemplated by Rule 12, the officer may act arbitrarily in recovering the amount after lapse of long period of time.
we find no substance in the submission.
While it is true that Rule 12 does not prescribe any period within which recovery of any duty as contemplated by the Rule is to be made, but that by itself does not render the Rule unreasonable or violative of Article 14 of the Constitution.
In the absence of any period of limitation it is settled that every author ity is to exercise the power within a reasonable period.
What would be reasonable period, would depend upon the facts of each case.
Whenever a question regarding the inordinate delay in issuance of notice of demand is raised, it would be open to the assessee to contend that it is bad on the ground of delay and it will be for the relevant officer to consider the question whether in the facts and circumstances of the case notice or demand for recovery was made within reasona ble 471 period.
No hard and fast rules can be laid down in this regard as the determination of the question will depend upon the facts of each case.
In view of the above discussion, we allow the appeals and set aside the judgment and order of the High Court of Madras dated 2.8.
There will be no order as to costs.
T.N.A. Appeals allowed.
| The respondents were manufacturing various medicinal preparations and in that process were using tincture con taining alcohol.
On the enforcement of the they became liable to pay duty and also to obtain licence but they continued their manufacture without doing so.
The Commercial Tax Officer issued demand notices under Rule 12 of the Medicinal and Toilet Preparations (Excise Duties) Rules, 1956 requiring payment of the duty which the respondents had failed to pay.
The respondents filed writ petitions in the High Court challenging the aforesaid notices, and the proceedings for recovery of duty.
Allowing the writ petitions the Division Bench quashed the notices as well as the proceedings for recovery on the ground that the Act was silent on the ques tion of levy of duty on escaped turnover, and hence Rule 12 which provides for recovery of escaped duty was outside the purview and scope of the Act and, therefore, ultra vires.
In these appeals it was contended that Rule 12 was invalid and 466 unreasonable and violative of Article 14 of the Constitution because it does not provide for any period of limitation for the recovery of duty.
Allowing the appeals and setting aside the judgment of the High Court, this Court, HELD: 1.
The liability to pay tax is created by the charging section 3 and Rule 12 confers, power on the autho rised officer to recover duty if the same has not been paid on account of any short levy or deficiency or any other reason.
Rule 12 is referable to section 19(2)(i) of the Act and carries out the purposes of the Act as it seeks to provide for recovery of duty as contemplated by section 3(3) of the Act.
It is designed to confer residuary power for recovery of duty if unpaid on account of short levy or deficiency or for any reason it remains unpaid.
If recovery of duty or any amount of sum payable to the Government under the Act is not covered by any specific Rule, additional supplementing provision is made for its recovery by this Rule.
This Rule does not create any additional charge or liability on the manufacturer for the payment of the duty.
The High Court Committed error in holding that the Rule is ultra vires the Act.
[470C D, 470A B] 2.
Rule 12 does not prescribe any period within which recovery of any duty as contemplated by the Rule is to be made, but that by itself does not render the Rule unreasona ble or violative of Article 14 of the Constitution.
In the absence of any period of limitation it is settled that every authority is to exercise the power within a reasonable period.
What would be reasonable period, would depend upon the facts of each case.
Whenever a question regarding the inordinate delay in issuance of notice of demand is raised, it would be open to the assessee to contend that it is bad on the ground of delay and it will be for the relevant officer to consider the question whether in the facts and circumstances of the case notice or demand for recovery was made within reasonable period.
No hard and fast rules can be laid down in this regard as the determination of the ques tion will depend upon the facts of each case.
[470F, G, H, 471A]
|
ivil Appeal No. 289 of 1982.
1003 From the Judgment and Order dated 17.7.
1981 of the Delhi High Court in S.A.O. No. 249 of 1981.
Soli J. Sorabji, Anil Kumar Gupta and Brij Bhushan for the Appellant.
B.R. Agarwala for the Respondent.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
This appeal by special leave arises from the order of the High Court of Delhi dated 17th of July, 1981 dismissing the second appeal in limine against the ' order dated 2nd July.
1981 in RCA No. 87 1 of 1980 of the Rent Control Tribunal, Delhi.
The order of eviction in this case on the ground of bona fide requirement of the landlord was passed by the Rent Controller on or about 15th of October, 1960.
There was an appeal from the said order of the Rent Controller and the appeal was dismissed on or about 9th October, 1961 by the 2Rent Tribunal.
In May 1962 the respondent filed an applica tion before the Competent Authority under section 19 of the Slum Areas (Improvement of Clearance) Act, 1956 (hereinafter called 'the Slum Act ') for permission to execute the order of eviction.
On or about 21st of March, 1963 the said application was dismissed by the Competent Authority under the Slum Act.
In the meantime in January, 1964.
the came into operation.
On the 19th of April.
1978, the respondent filed a second application before the Competent Authority for permission to execute the order of eviction.
In June, 1979 permission was granted by the appropriate authority under the Slum Act.
On 28th of August, 1979 the appeal from the said Rent Controller was dismissed by the High Court.
Thereafter on or about 25th of September, 1979 the respond ent herein filed an application before the Rent Controller for execution of the decree.
Objections under section 47, Order 21 Rule 22 and section 15 1, Code of Civil Procedure were filed on behalf of the appellant.
On 22nd of August, 1980 order was passed by the Rent Controller that the execu tion application was not barred by limitation.
Execution was stayed, however, to decide the question of fresh tenancy.
There was an appeal under section 38 of the Delhi Rent Control Act, 1958 filed by the appellant against the order of 22nd of August, 1004 1980.
Thereafter the Tribunal in July 1981 ordered that the execution was maintainable and was not barred by limitation and it was further held that supplementary objections were not maintainable.
On 17th of July, 1981 the High Court dismissed in limine the second appeal from the same as aforesaid.
The question that falls for consideration is whether the decree for eviction of the tenant under the Rent Act passed against the appellant was executable by the respondent or whether the same had become barred by limitation or by principles of res judicata.
As mentioned hereinbefore the decree holder had filed an application under section 19 of the Slum Act to obtain the permission from the competent authority in the year 1962.
The permission was not granted and the application was dismissed in the year 1963.
The decree holder filed a fresh application seeking permission from the competent authority in the year 1978.
The permis sion was granted by the order dated 18th of June, 1979.
Thereafter on 25th September, 1979 the decree holder filed application seeking execution of the order of eviction.
The main objection raised by the appellant on the point of limitation was firstly, that the decree in question was passed in 1960 and therefore the decee holder ought to have got it executed within 12 years by 1970.
Secondly, it was contended that the application under section 19 of the Slum Act was filed in the month of March, 1975 but the decree holder did not take any steps for 12 years which expired before 20th of March, 1975 to obtain permission from the Competent Authority and from that aspect also the execution application was time barred.
There are two aspects of the matter which have to be borne in mind, one was, when the decree became executable in the facts and circumstances of the case and what would be the period applicable for such execution.
On the other aspect of the matter, it is necessary to consider the ques tion whether once permission under the Slum Act was refused, does it create resjudicata for the second application? As mentioned hereinbefore the Rent Controller by the impugned order held that the execution application was not barred by time because in the opinion of the said Rent Controller till such time the permission of the Competent Authority (Slums) was obtained, no execution application could have been filed.
The Trial Court further held that the amendment to section 19 of the Slum Act did not affect 1005 the pending execution application, or in other words, limi tation would not have started running.
However, the trial court held that in regard to dispute about the creation of fresh tenancy the matter required investigation and after holding that execution application was within the time adjourned the case for evidence of the appellant and stayed the execution during the pendency of the said objections.
The said objections have been overruled and these are not subject matter of this appeal.
Aggrieved by,the said order the appellant filed appeal before the Rent Tribunal.
The Tribunal noted the relevant provisions of the Slum Act.
Section 19(1) as it stood before the amendment read as follows: "19(1) Notwithstanding anything contained in any other law for the time being in force, no person who has obtained any decree or order for the eviction of a tenant from any buildings in a slum area shall be entitled to execute such decree or order except with the previous permission in writing of the Competent Authority.
" Section 19(1) of the said Act now reads as follows: "19(1) Notwithstanding anything contained in any other law for the time being in force, no person shall except with the previous permission in writing of the Compe tent Authority, (a) institute, after the commencement of the Slum Areas (Improvement and Clearance) Amend ment Act, 1964, any suit or proceeding for obtaining any decree or order for the eviction of a tenant from any building or land in a slum area, or . . . " It is not disputed that 12 years had expired when the execution petition was filed from the date of the order of eviction but not from the date the permission of the Compe tent Authority (Slums) was obtained.
The question, there fore, is whether the Indian Limitation Act 1908 or Limita tion Act, 1963 was applicable to the execution proceedings and whether the limitation would start running from the date the permission of the Competent Authority (Slums) was ob tained.
So far as the first question about the applicability of the Limitation Act, it is necessary to refer to section 42 of the Delhi Rent Control (hereinafter called 'the Act ') which provided that an order of eviction has to be executed like a decree of the Civil Court.
The provisions of the Code of Civil Procedure executing the decree are made applicable by legal fiction recognised by virtue of section 42 of the Act.
In any case procedure of the Small Causes is adopted by the Controllers under the provisions of the Act wherein also in execution the provisions of Code of Civil Procedure are applicable and as such law of limitation would be attracted.
The question is when the limitation starts running.
Once the limitation started running then unless the statute comes to the rescue of a person the period would expire after the efflux of time.
Discussing certain authorities the Rent Tribunal held that the limitation started from the date of the grant of the permission and as such the execution application was well within time.
The Tribunal dismissed the appeal.
The High Court summarily rejected the second appeal.
The question before us is whether this execution was barred by limitation and secondly, whether there was a question of res judicata because a prior application for permission by the Slums Clearance Authority was rejected.
This particular point was considered by a learned single Judge of the Delhi High Court in Des Raj and another vs Noor Khan, (A.I .R. 1985 Delhi 470, where the High Court held that under Article 136 of the Limitation Act of 1963 a decree was executable within 12 years from the date when it became executable.
where the decree when passed, was not enforceable no execution could be levied and hence period of limitation would not commence.
A decree of eviction passed under the Delhi and Ajmer Rent Control Act, 1952 on 19 2 60 according to the said decision became executable only on 8 5 81 in the case when permission under the Slum Act to execute it was obtained and therefore the 12 years ' period prescribed by article 136 to execute the decree was held to have commenced only on 8 5 81 and not on 19 2 60.
The High Court followed a Full Bench decision of the Allahabad High Court and a division bench decision of the Patna High Court.
It was further held that there was no bar under section 19 of the Slum Act to a second or subsequent application seeking permission to execute the order of eviction of tenant obtained under section 13(1)(e) of the Delhi and Ajmer Rent Control Act, 1952, in view of the changed 1007 circumstances entitling grant of the permission being shown.
This decision negates the two principal contentions urged in this case on behalf of the appellant, namely there was no question of res judicata in granting subsequent permission under the Slum Act if changed circumstances so warranted and secondly limitation would start after the permission was granted.
But the Delhi High Court had no occasion to consider the effect of the decision of this Court in Ravi Dutt vs Rattan Lal, ; where it was held that the relevant provisions of the Delhi Rent Act for eviction on the ground of bona fide requirement being in Chapter III A of the said Act had overriding effect and the Slum Act was rendered inapplicable.
If that is the position then no permission under Slum Act was at all necessary in case of a decree for bona fide requirement.
The said princi ple was reiterated in two previous decisions.
If that was so then the decree for eviction having been passed on 15th October, 1960 and the application for execution being filed on or about 25th September, 1979 was clearly barred by limitation.
But the basic question in the instant case as we have noted from the facts of the case is that the decree for eviction under the Rent Act was passed in October, 1960 and the appeal against the same was dismissed in October, 1961 by the Tribunal.
Thereafter an application was made in May, 1962 for permission under section 19 of the Slum Act as it then stood was dismissed in March, 1963.
Thereafter no action was taken upto 1978.
When in 1978 action was initiat ed by filing the second application under the Slum Act 12 years from the dismissal of the application under the Slum Act had passed and the decree had become barred.
The decree had clearly become barred by limitation.
Article 136 of the provides that a decree can be executed within 12 years from the date on which it became executable.
Decree passed by the Rent Controller even if it was not executable and enforceable unless permission under the Slum Act had been taken, which as noticed before was not the position in law the steps for such permission had become barred.
Steps for filing the application under the Slum Act were not taken, on refusal of the first application within 12 years thereof.
It is apparent therefrom that the execu tion of the decree for eviction which was passed on 15th of October, 1960 became time barred on 14th of October, 1963 under Article 182 of the Indian Limitation Act, 1908 as it stood at that time.
Under Section 31(a) of the 1963 Limita tion Act, the provisions of the 1963 Limitation Act would not be availed of in respect of an application for which the period of limitation had expired before the commencement of the 1963 1008 Limitation Act, that is to say, 1.1.64.
But even if article 136 of the was attracted it had become barred after 12 years from the date of the decree, i.e. 15th October, 1960.
In the Bench decision the Calcutta High Court in Lala Baijnath Prosad and others vs Nursingdas Guzrati, A.I.R. 1958 Calcutta 1 at p. 8).
Chakravartti, C.J. speaking for the division bench observed: "The right to enforce the decree, it appears to me, is one thing; the possibility or practicability of exercising the right is another.
If by the terms of a decree, the decreeholder has become entitled to execute it immediately, an instant right to execute it has accrued to him contemporaneously with the passing of the decree.
Even if he is prevented by some external circumstance from enforcing the decree for some time, the right as a right, is nevertheless a present right.
And what is a present right is not merely the right declared by the decree but the right to enforce the decree, because if a decree de clares certain rights in favour of a person and there is nothing in the decree itself by which they are declared with effect from a future date or which postpones the right to execution to some date in the future, there is no reason to say that a present right to enforce the decree does not accrue to the decree holder as soon as the decree is passed.
It may,be that, though entitled under the terms of the decree to enforce it immediately, he cannot in fact do so for some time by reason, say, of having to comply first with some procedural requirement, as in the present case, but that only means that it is not practicable for him yet to enforce the decree and not that a present right to enforce it has not accrued. ' ' The aforesaid principles, in our opinion, would be applicable to the facts and circumstances of the present case.
It has been emphasised that there was no impediment or disability in the way of the respondent in applying for permission from the Competent Authority under the Slum Act.
It was, however, urged that unless the circumstances changed the permission under the Slum Act could not have been grant ed but for the off chance of circumstances changing and thereby giving a right to apply for permission under the Slum Act, a decree cannot be kept in suspended animation.
As we have noted before after the refusal of the application in March, 1963 until April, 1978 there 1009 were no steps taken.
This feature and this aspect, in our opinion, distinguishes this case from the other cases.
quite apart from the fact that in the light of the decision of this Court in Ravi Dutt vs Rattan Lal, (supra) there was no requirement of permission under the Slum Act and as such no impediment in putting the decree dated 15th October, 1960 into execution.
It has further to be borne in mind that respondent had filed a second application for permission after lapse of more than 15 years, there was, in any event.
no legal impediment or legal bar which prevented the re spondent from making the application for permission to the competent authority under the Slum Act before.
It was argued that the respondent did not apply because there was no change of circumstances which would entitle the respondent to obtain permission.
It was argued that the second applica tion was made in 1978 and at that time the law under the Slum Act had altered as we have noticed.
It appears to us that in this case in any event no permission was required to execute the decree.
Therefore the second application was unnecessary.
In that view of the matter in this case it is not necessary to examine whether a second application lay or not.
We are inclined to the view that an application might lie if it was within the period of limitation.
We need not decide in this case the question of res judicata.
It is clear that the order of eviction passed by the Rent Controller as confirmed by the Tribunal in 1961 had become obsolete in 1978 when the second attempt to execute the same was made.
In that view of the matter we are of the opinion that it was not just, equitable and in good conscience to allow such stale claims to be effectuated and that would be contrary to the principles of the as well as Indian Limitation Act, 1908.
In the premises the order dismissing the appeal from the Rent Tribunal must be set aside and the application made for execution must be dismissed.
It must be held that the claim to execute the order of eviction of the Rent Controller in this case dated 15th October, 1960 had become time barred.
The appeal is allowed and the judgment and order of the High Court are set aside.
In the facts and circumstances of the case, however, there will be no order as to costs.
N.P.V. Appeal allowed.
| The Rent Controller passed an order of eviction against the appellant tenant in October, 1960 on the ground of bona fide requirement of the landlord.
The appeal against this order was dismissed by the Rent Tribunal in October, 1961.
The application of the respondentlandlord for permission to execute the order of eviction under Section 19 of the Slum Areas (Improvement of Clearance) Act, 1956 filed in May, 1962 was dismissed by the Competent Authority in March, 1963.
In the meantime in January, 1964 the came into operation.
The respondent filed a second application in April, 1978 for permission to execute the eviction order.
Permission was granted in June 1979.
In September, 1979 the respondent filed an application before the Rent Controller for execution of eviction order.
Objections under Section 47, Order 21 Rule 22 and Section 151 of the Code of Civil Procedure were filed on behalf of the tenant.
The Rent Controller passed an order on August 22, 1980 holding that the execution application was not barred by limitation, but stayed the execution to decide the question of fresh tenancy.
An appeal against this order was filed by the appellant before the Tribunal which held that the execution was main tainable and was not barred by limitation and that supple mentary objections were not maintainable.
The High Court confirmed this order by dismissing the second appeal in limine.
In the appeal by the tenant before this Court, the question for 1002 consideration was whether the decree for eviction under the Rent Act passed against the respondent was executable by the appellant or whether the same had become barred by limita tion or by res judicata Allowing the appeal, this Court, HELD: 1.1 The claim to execute the order of eviction of the Rent Controller dated 15th October, 1960 had become time barred.
[1009G] 1.2 It was not just, equitable and in good conscience to allow such stale claims to be effectuated and that would be contrary to the principles of the as well as the Indian Limitation Act, 1908.
[1009E F] 1.3 The execution of the decree for eviction passed on 15th of October, 1960 became time barred on 14th of October, 1960 under Article 182 of the Indian Limitation Act, 1908 as it stood then.
Under section 31(a) of the 1963 Limitation Act, the provisions of the 1963 Limitation Act would not be availed of in respect of an application for which the period of limitation had expired before the commencement of the 1963 Limitation Act, that it to say, 1.1.1964.
But even if Article 136 of the was attracted it had become barred after 12 years from the date of the decree, i.e. 15th October, 1960.
[1007G H; 1008A] 1.4 There was no requirement of permission under the Slum Act and, as such, no impediment in putting the decree dated 15th October, 1960 into execution.
Second application for permission was filed after a lapse of more than 15 years; there was, in any event, no legal impediment or legal bar which prevented the respondent from making the applica tion for permission to the competent authority under the Slum Act before.
[1009B C] 1.5 The order of eviction passed by the Rent Controller as confirmed by the Tribunal in 1961 had become obsolete in 1978 when the second attempt to execute the same was made.
[1009E] Des Raj and another vs Noor Khan, A.I.R. 1985 Delhi 470; Ravi Dutt vs Rattan Lal, ; and Lala Baijnath Prosad and others vs Nursingdas Guzrati, A.I.R. 1958 Calcut ta 1 at p. 8, referred to.
|
ivil Appeal No. 1360 of 1974.
From the judgment and Order dated 14.12.1973 of the Delhi High Court in suit No. 64 of 1969.
Ms. Suruchi Agarwal and T.V.S.N. Chari for the Appellants.
H.K. Puri and Mrs. Urmila Sirur for the Respondents.
The Judgment of the Court was delivered by DR. A.S.ANAND,J.
This appeal, by special leave, is directed against the judgment of the Full Bench of the Delhi High Court, dated 14.12.1973 in Suit No. 64/69, delivered in a reference made by a learned Single Judge for opinion of the Full Bench.
The questions referred by the learned Single Judge to the Full Bench revolved around the scope and effect of the provisions of Sections 54 and 59B of the Indian Income Tax Act 1922 (hereinafter referred to as the '1922 Act ') and Sections 137 and 138 of the Income Tax Act 1961 (hereinafter referred to as the '1961 Act ') as amended from time to time in 1964 and 1967 in the context of the claim of privilege by the Income Tax Department for the production of the 551 documents relating to assessment of an assessee summoned by the Civil Court.
The following three questions were referred to and considered by the Full Bench: "1.
What is the position of law relating to privilege prior to 1964? 2.
What is the position of law relating to privilege after 1964 ?; and 3.
What is the effect of the production of certified copies relating to income tax assessment records, and how far certified copies can be admitted in evidence ?" The circumstances under which these questions arose, briefly put, are as follows: 2.
The plaintiff, Trilok Chand Jain, instituted a suit for recovery of Rs. 1,39,722.86 against the defendants, M/s. Dagi Ram Pindi Lal and Smt.
Budh Wanti Gulati, w/o Shri Pindi Lal Gulati, the appellants herein.
During the course of proceedings in the suit, when evidence was being recorded, the plaintiff obtained summons from the court requiring the Income Tax Department to produce in the court records relating to the Income Tax Assessment of the defendants, M/s. Dagi Ram Pindi Lal, for the assessment years 1964 65 to 1971 72.
The Income tax officer to whom the summons were issued, sent the record in a sealed cover through an Inspector along with a letter, dated November 1,1972, claiming that the said record was privileged under Section 137 of the 1961 Act.
The plaintiff also applied for and obtained summons requiring the Income tax Officer to produce the Income tax record relating to M/s Borizeon Industrial Products (P) Ltd. and Bishamber Nath Kaul.
That record was also sent by the Income Tax Officer in a sealed cover alongwith a letter in which it was submitted that no disclosure of information regarding income tax pertaining to an income tax assessee could be made.
The plaintiffs, it appears, in the meanwhile filed in the court a number of certified copies of the accounts of the defendants, which he had been able to obtain from the income tax authorities and sought permission of the Court to tender the certified copies in evidence.
Arguments were addressed by the parties before the learned Single Judge on the question of privilege as claimed by the Income Tax officer.
Being of the opinion that the question of privilege, as claimed by the Income Tax officer, was important and likely to arise in 552 the course of trial of suits in future also, a reference was made by the learned Single Judge to the Full Bench.
In dealing with the three questions (supra) referred to it, the Full Bench considered different situations.
It considered the first question in the following four situations: "(a) Where the documents, records, etc.
in respect of which privilege is claimed were filed by an assessee or a third party before April 1,1962, with effect from which date the Indian Income Tax Act, 1922 was repealed, in respect of assessment years up to and including assessment year 1961 62 in proceedings for the said assessment years taking place under the Indian Income tax Act,1922; (b) Where the documents, records, etc. were filed by an assessee or a third party after April 1,1962, but before April 1,1964 in respect of assessment years up to and including assessment year 1961 62 in proceedings for the said assessment years taking place under the Indian Income_tax Act,1922; (c) Where the document, records, etc. were filed by an assessee or a third party after April 1,1962, but before April 1,1964, in respect of assessment years up to and including assessment year 1961 62 in proceedings for the said assessment years taking place under the Income tax Act, 1961;and (d) Where the documents, records, etc. were filed by an assessee or a third party after April 1,1962, but before April 1,1964, in respect of assessment years 1962 63 and 1963 64 in proceedings for the said assessment years taking place under the Income tax Act, 1961." and sustained the claim of privilege by the Income Tax Department in each one of the situations.
The Full Bench while considering the second question, dealt with the following situations: (a) Where the documents, records, etc.
in respect of which privilege is claimed were filed by an assessee or a third party after April 1, 1964, in respect of assessment years up to and including assessment year 1961 62 in proceedings for the said 553 assessment years taking place under the Indian Income tax Act, 1922; (b) Where the documents, records etc.
were filed by an assessee or a third party after April 1, 1964, in respect of assessment years up to and including year 1961 62 in proceedings for the said assessment years taking place under the Indian Income tax Act, 1961; (c) Where the documents, records, etc. were filed by an assessee or a third party after April 1, 1964, in respect of assessment years 1962 63 and 1963 64 in proceedings for the said assessments years taking place under the Income tax Act, 1961; and (d) Where the documents, records, etc. were filed by an assessee or a third party after April 1, 1964, in respect of assessment years 1964 65 onwards.
" The claim of privilege was sustained in all above situations also.
Dealing with the effect of omission of Section 137 and substitution of section 138 (1) (a) and (b), the High Court opined; ". .that when a party to a proceeding in a Court applies for summoning any documents, records etc.
from the income tax authorities, the Court may summon the said documents, records, etc.
But on receipt of summons, it is open to the Commissioner of Income tax to consider the matter as provided under section 138 (1) (b), and decide whether it would be (sic) in the public interest to produce or furnish the documents, records, etc.
summoned for, and submit his view to the Court in answer to the summons.
In case, he is satisfied that the production etc.
would not be in the public interest, his decision is final and the Court to which the said decision is communicated cannot question the same." [EMPHASIS SUPPLIED] The Full Bench, however, did not express any opinion on the third question.
Learned counsel for the appellant has not questioned the findings of the Full Bench in so far as they relate to the claim of privilege in respect 554 of documents filed prior to the repeal of the 1922 Act or before the omission of Section 137 from the 1961 Act.
She has questioned the findings of the Full Bench only as regards the power and jurisdiction of the Court to summon the documents, after the repeal of the 1922 Act and after the deletion of Section 137 from the 1961 Act by the Finance Act, 1964 as also the interpretation placed by the Bench on Section 138 (1) (b) of the Act.
The controversy before us has been confined to the finding of the High Court relating to the claim of privilege for the production of documents which were filed after the repeal of Section 137, with effect from 1.4.1964 in respect of assessment years 1964 65 onwards.
Thus, it is the finding on situation (d) of the second question as rendered by the Full Bench Which alone has been questioned and debated before us.
The precise argument of the learned counsel for the appellant is that after the repeal of Section 137 of the 1961 Act by Act V of 1964, there is no longer any impediment left in the way of a civil court to summon the production of documents filed by an assessee during the assessment proceedings before an Income tax Officer after 1.4.1964 in respect of assessment years 1964 65 onwards, and that the finality attached to an order of the Commissioner with regard to claim of privilege under Section 138 (1) (b) has no relationship to the power of the court to summon that record.
For a proper appreciation of the question debated before us, it would be desirable to refer to the relevant provisions of the 1922 Act and 1961 Act, as amended from time to time, and notice the changes brought about in the matter of claim of privilege by the Income Tax Department.
Section 54 (1) and (2) of the 1922 Act provided as follows: "54.
Disclosure of information by a public servant (1) All particulars contained in any statement made, return furnished or accounts or documents produced under the provisions of this Act or in any evidence given, or affidavit or deposition made, in the course of any proceedings under this Act other than proceedings under this Chapter, or in any record of any assessment proceeding, or any proceeding relating to the recovery of a demand, prepared for the purpose of this Act, shall be treated as confidential, and notwithstanding 555 anything contained in the Indian Evidence Act, 1872(1 of 1872) no Court shall save as provided in this Act, be entitled to require any public servant to produce before it any such return, accounts, documents or record or any part of any such record, or to give evidence before it in respect thereof.
(2) If a public servant discloses any particulars contained in any such statement, return, accounts,documents, evidence, affidavit deposition or record, he shall be punishable with imprisonment which may extend to six months, and shall also be liable to fine.
By Section 9 of the Taxation Laws (Amendment) Act of 1960, Section 59 B was inserted in the 1922 Act with effect from April 1, 1960.
It provided as under: "59 B Disclosure of information regarding tax payable Where a person makes an application to the Commissioner in the prescribed form and after payment of the prescribed fee for information as to the amount of tax determined as payable by any assessee in respect of any assessment made on or after the 1st day of April, 1960, the Commissioner may, notwithstanding anything contained in section 54, if he is satisfied that there are no circumstances justifying its refusal, furnish or cause to be furnished the information asked for.
" Both the aforesaid provisions dealt with the confidential nature of the documents filed, before the Income Tax authorities and the claim of privilege to disclose the same to anyone, including a court of law.
Section 54 (1) declared that the various documents referred to therein shall be treated as confidential and prohibited a court from requiring any public servant to produce before it any such document or to give evidence before it in respect thereof, notwithstanding anything contained in the .
Sub Section (2) of Section 54 made punishable, the disclosure by a public servant, of any information contained in those documents.
the effect of introduction of Section 59 B by Taxation Laws (Amendment) Act 1960 was that it entitled a person to make an application to the Commissioner to obtain information thereafter as to the amount of tax determined, as payable by an assessee in respect of any assessment made 556 on or before April 1, 1960, and authorised the Commissioner to furnish or cause to be furnished the sought for information, if he was satisfied that there were no circumstances justifying its refusal.
This legal position continued to prevail till April 1, 1960, when the 1922 Act was repealed by the 1961 Act.
In the 1961 Act , provisions were made corresponding to sections 54 and 59 B of the 1922 Act in Sections 137 and 138.
The relevant portions of Sections 137 and 138 of the Act provided as follows: "137.
Disclosure of information prohibited (1) All particulars contained in any statement made, return furnished or accounts or documents produced under the provisions of this Act, or in any evidence given or affidavit or deposition made in the course of any proceedings under this Act, other than proceedings under Chapter XXII, or in any record of any assessment proceedings, or any proceedings relating to recovery of a demand, prepared for the purposes of this Act, shall be treated as confidential, and notwithstanding anything contained in the , no Court shall, save as provided in this Act, be entitled to require any public servant to produce before it any such return, accounts, documents or record or any part of any such record, or to give evidence before it in respect thereof.
(2) No public servant shall disclose any particulars contained in any such statement, return, accounts, documents, evidence, affidavit, deposition or record.
(3) . . (4) . . (5) . . "138.
Disclosure of information respecting tax payable WHERE A person makes an application to the Commissioner in the prescribed form and pays the prescribed fee for information as to the amount of tax determined as payable by an assessee in respect of any assessment made either under this Act or the Indian income tax Act, 1922.
On or after the 1st day 557 of April, 1960, the Commissioner may, notwithstanding anything contained in Section 137, if he is satisfied that there are no circumstances justifying its refusal, furnish or cause to be furnished the information asked for.
The provisions of Section 137(1) of the 1961 Act were, as is seen, almost identical to the provisions of sub section (1) of Section 54 of the 1922 Act and Section 137 (2) prohibited a public servant from disclosing the particulars contained in any of the documents mentioned in Section 137 (1).
The provisions of Section 138 of the 1961 Act were almost identical to the provisions of Section 59 B of the 1922 Act.
With effect from April 1, 1964, Section 137 of the 1961 Act was omitted from the Statute vide Section 32 of the Finance Act No. V of 1964, and Section 138 was substituted by a new Section vide Section 33 of the Finance Act No. V of 1964.
The substituted Section 138 reads as under: "138.
Disclosure of information respecting assessees: (1) Where a person makes an application to the Commissioner in the prescribed form for any information relating to any assessee in respect of any assessment made either under this Act or the Indian Income tax Act, 1922, on or after the 1st day of April, 1960, the Commissioner may, if he is satisfied that it is in the public interest so to do, furnish or cause to be furnished the information asked for in respect of that assessment only and his decision in this behalf shall be final and shall not be called in question in any Court of law.
(2) Notwithstanding anything contained in sub section (1) or any other law for the time being in force, the Central Government may, having regard to the practices and usages customary or any other relevant factors, by order notified in the Official Gazette, direct that no information or document shall be furnished or produced by a public servant in respect of such matters relating to such class of assessees or except to such authorities as may be specified in the order.
The scope of Section 138, of the 1961 Act was, as can be seen, enlarged by the substituted provisions of Section 138.
Under the original 558 Section 138 a person could make an application for information only as to the amount of tax determined, as payable by an assessee, under sub section (1) of the substituted Section 138, a person could make an application for any information relating to an assessment.
Again, under the original Section 138, before the necessary information could be furnished or cause to be furnished to an applicant, the Commissioner was to be satisfied that there were no circumstances justifying refusal to furnish the information asked for; under sub Section (1) of the substituted Section 138, the Commissioner was required to be satisfied that it was in the public interest to furnish the information asked for and "his decision in this behalf shall be final and shall not be called in question in any court of law." Vide sub Section (2) of the substituted Section 138, the Central Government was also empowered to direct, by an order notified in the Official Gazette, that no information or document shall be furnished or produced by a public servant in respect of such matters relating to such class of assessees or except to such authorities as may be specified in the order.
10, The substituted Section 138 was once again amended and substituted vide Section 28 of the Finance Act, 1967 with effect from April 1, 1967.
The new sub section (1) of section 138 reads as follows: "(1)(a) The Board or any other income tax authority specified by it by a general or special order in this behalf may furnish or cause to be furnished to (i) any officer, authority or body performing any functions under any law relating to the imposition of any tax, duty of cess, or to dealings in foreign exchange as defined in section 2(d) of the Foreign Exchange Regulation Act, 1947; or (ii)such officer, authority or body performing functions under any other law as the Central Government may, if in its opinion it is necessary so to do in the public interest, specify by notification in the Official Gazette in this behalf, any such information relating to any assessee in respect of any assessment made under this Act or the Indian income tax Act, 1922 as may, in the opinion of the Board or other Income tax authority, be necessary for the purpose of enabling the officer, authority or body to perform his or its functions under that law.
559 (b) Where a person makes an application to the Commissioner in the prescribed form for any information relating to any assessee in respect of any assessment made under this Act or the Indian Income tax Act 1922, on or after the 1st day of April, 1960 the Commissioner may, if he is satisfied that it is in the public interest so to do, furnish or cause to be furnished the information asked for in respect of that assessment only and his decision in this behalf shall be final and shall not be called in question in any court of law.
" The provisions of sub Section (1) of Section 138 as they originally stood were incorporated in clause (b) of the substituted sub Section (1) and a new provision was incorporated in clause (a) of sub Section (1) which empowered the Board or any other income tax authority specified by it by a general or special order in that behalf to furnish or cause to be furnished, information relating to any assessee to such officer, authority or body as is mentioned in the provision to enable him or it to perform its functions under the Act.
Vide clause (b)of the substituted sub Section (1) of Section 138, finality has also been attached to an order of the Commissioner, made on an application filed by any person seeking information relating to an assessee in respect of any assessment.
The Commissioner, has to make an order, after being satisfied that it is in the public interest so to do, to furnish or cause to be furnished such information and that decision of the Commissioner is immune from challenge in any court of law.
The controversy as already noticed, before us is limited to the jurisdiction or lack of it of a civil court to seek production of documents relating to assessments filed after April 1, 1964 in assessment proceedings 1964 65 onwards, after the omission of Section 137 of the Act.
The Full Bench, in the impugned judgment, came to the conclusion that the omission of Section 137 did not make any difference and that the ban on the courts as contained in the repealed Section 137 continued to remain in force by virtue of the provisions of Section 138 (1) and after 1967 by Section 138 (1)(b) of the Act even in respect of the documents filed in the assessment proceeding after April 1, 1964 for assessments relating to the period 1964 65 onwards.
The Full Bench also pressed into aid the provisions of Section 6 of the General Clauses Act to 560 hold that the repeal of Section 137 did not remove the ban on the courts to summon any documents from the income tax authorities, even in respect of documents which had been filed before the Income tax authorities after the repeal of Section 137 after April 1, 1964.
In our opinion the High Court fell in error in coming to that conclusion.
It not only ignored the legislative intent manifest in the omission of Section 137 of the 1961 Act, after the repeal of the 1922 Act, but also ignored the powers of a court under the general law, to summon such documents, record etc.
as is found relevant to a case pending before the court, in the absence of any specific prohibition, under any law for the time being in force.
The High Court assumed that by Section 54 of the 1922 ACt and Section 137 of the 1961 Act, the jurisdiction of the courts to call for documents from the income tax authorities had been taken away for all times to come, notwithstanding the repeal of the 1922 Act or the omission of Section 137 specifically from the 1961 Act.
The High Court appears to have lost sight of the position that under the Code of Civil Procedure, the courts of law have always possessed the jurisdiction to call for the production of documents relevant to the case before the court from anybody having custody of those documents.
Section 54 of the 1922 Act and after its repeal Section 137 of the 1961 Act had only placed fetters on the exercise of that jurisdiction, in respect of the specified documents, by the courts, notwithstanding anything contained in any other law for the time being in force.
The exercise of the jurisdiction to seek production of documents had, thus only been put under a cloud in so far as the record of assessment is concerned.
With the repeal of the 1922 Act and omission of Section 137 of the 1961 Act, the fetters on the exercise of that jurisdiction were removed with the result that the exercise of the jurisdiction to call for the production of documents relevant to the case pending before the court, even from the income tax authorities, revived.
Neither Section 54 of the 1922 Act nor Section 137 of the 1961 Act had taken away for all times the jurisdiction of the courts to call for the record from the income tax authorities.
Those provisions, as already noticed had, only put the exercise of that jurisdiction under a cloud and those fetters were coterminous with the life of Section 54 of the 1922 Act or Section 137 of the 1961 Act.
The finality which has been attached to the order if the Commissioner under Section 138 (1) (b) of the Act is applicable only in cases where application is made to the Commissioner by a party or any other person 561 for receiving documents or information.
It has nothing to do with the powers of the courts to summon the production of assessment record of an assessee, filed after 1.4.1964.
The Privilege as to secrecy, which the assessee had acquired under Section 54 of the 1922 Act remained unimpaired by the repeal of that Act or even by the omission of Section 137 of the 1951 Act in respect of record filed prior to 1.4.1964 and relating to the assessments prior to that date.
That privilege did not extend, after April 1, 1964, to record filed before the income tax authorities, for the assessment years 1964 65 onwards.
Section 6 of the General Clauses Act as well as Section 138 (1) (b) of the 1961 Act cannot extend the ban on the exercise of the jurisdiction by the courts to summon the production of documents from the income tax authorities after April 1, 1964 relating to assessment year 1964 65 in respect of the record filed after April 1, 1964.
Section 6 (C) of the on which reliance was placed by the HIgh Court reads as under: "6.
Where this ACt, or any Central Act or regulation made after the commencement of this Act, repeals any enactment hitherto made or hereafter to be made, then, unless a different intention appears, the repeal shall not . . . (c) affect any right, privilege, obligation or liability acquired or incurred under any enactment so repealed.
" A plain reading of the Section shows that the repeal of any enactment unless a different intention appears, shall not affect any right, privilege, obligation or liability acquired, accrued or incurred under the repealed enactment.
In respect of the documents filed after the repeal of Section 137 of the 1961 Act, with effect from April 1, 1964, relating to assessments for the period 1964 65 onwards, no right, privilege, obligation or liability can be said to have been acquired, accrued or incurred prior to the omission of section 137 of the Act.
Therefore, the ban contained in Section 137 of the 1961 Act on the exercise of the powers of a civil court to call for production of documents etc.
could not be said to have continued to exist, in matters arising subsequent to the omission of that Section with effect from April 1, 1964 and that ban came to an end in respect of the period after April 1, 1964.
The general principle is that an enactment which is repealed, is to be treated, except as to transactions past and closed, as if it had never existed.
The assessee had acquired no right or 562 privilege under the repealed Act, since the provision is only a procedural restriction and did not create any substantive right on the assessee, in respect of assessments for the period after the omission of Section 137 of the 1961 Act.
Thus, reliance placed on the provisions of Section 6 of the to hold the continuation of the ban on the exercise of jurisdiction by the courts was misplaced.
Dealing with the scope of Section 138 (1) (b) of the Act, the High Court held that the said provisions attached a finality to an order of the Income Tax Commissioner and applied to the cases where the record was summoned even by a court of law.
The High Court opined: "The complete omission of the declaration of the confidential nature of the documents, records, etc.
and the removal of the ban on courts and public servants no doubt, suggests that the power of a court under the general law to summon such documents, records,etc.
relevant to the case before it has been restored.
But at the same time, the legislature which empowered the Commissioner of Income tax to furnish the information if he is satisfied that it is in the public interest so to do made the decision of the Commissioner final and un questionable in a Court of law.
When two powers are thus vested in two legal authorities, neither of them can be ignored, and both of them have to be reconciled and given effect to .
In the case of the two powers under consideration, it has to be noted that the power to summon which vests in a court is under the general law, while the power of the Commissioner has been conferred upon him by a special law and has, therefore, to prevail over the former.
In view of the same, it has to be held that while it is open to a court to summon the documents, records etc.
from the Income tax Commissioner, it is equally open to the Commissioner on receiving the summons to consider whether the production/furnishing of the documents, records etc.
would be in the public interest, and submit the same to the court in answer to the summons.
" We are unable to subscribe to the above view.
Clause (b) of sub Section (1) of Section 138 is limited in its scope and application.
Under it, any person can make an application to the 563 Commissioner for any information relating to an assessee in respect of any assessment made either under the 1922 Act or under the 1961 Act on or after the 1st April 1960 and the Commissioner of Income Tax has the authority to furnish or cause to be furnished the information asked for on being satisfied that it is in the public interest so to do and such an order of the Commissioner is final and cannot be called in question in any court of law.
The Commissioner of Income Tax under this clause performs only an administrative function, on his subjective satisfaction as to whether it is in the public interest to furnish the information or not to any person seeking such information and his decision in that behalf is final and the aggrieved person cannot question it in a court of law.
By enacting this provision, the legislature could not be said to have intended that the Commissioner of Income Tax would have the authority to sit in judgment over the requisition made by a court of law requiring the production of record of assessment relating to an assessee in a case pending before the court.
When a court of law, in any matter pending before it desires the production of record relating to any assessment after applying its judicial mind and hearing the parties and on being prima facie satisfied that the record required to be summoned is relevant for the decision of the controversy before it it passes a judicial order summoning the production of that record from the party having possession of the record.
The Commissioner of Income Tax cannot, therefore, refuse to send the record, as he certainly is not authorised to set at naught a judicial order of a court of law.
He must obey the order of the court by sending the record to the court concerned indeed it is open to the Commissioner of Income Tax to claim privilege, in respect of any document or record so summoned by a court of law, under Sections 123 and 124 of the and even then it is for the court to decide whether or not to grant that privilege.
Had the legislature intended that no document from the assessment record of an assessee should be produced in a court on being summoned by it, without the approval of the Commissioner of Income Tax, it would have said so in Section 138 of the Act itself.
The repeal of Section 137 of the Act clearly discloses the legislative intent that it was felt by the legislature that it was no more necessary to keep the records of assessment by the Income Tax Department relating to an assessee as confidential from the courts and the bar with regard to the production of any part of the record was removed in so far as the courts are concerned.
The finality which has 564 been attached to the order of the Commissioner under Section 138(1)(b) of the Act is, thus, restricted to the cases where the information etc.
as contemplated by the Section is called for by any person, other than a court of law by a judicial order.
The High Court, therefore, fell in error in holding that the assessment records of an assessee filed before the income tax authorities, even after April 1, 1964, are immune from production in a court of law on summons for their production being issued by the court and that the disclosure of any information from the record even to the courts is subject to the veto powers of the Commissioner of Income Tax.
Section 138(1)(b) does not affect the powers of the courts to require the production of assessment records or the disclosure of any information therefrom to it, in a case pending before the court when the court, by a judicial order, requires the production of the record, considered relevant by it for decision of a case pending before it.
As a result of the above discussion, we, therefore, find that the answer given by the Full Bench of the High Court in the impugned judgment, to situation (d) of the second question (supra) as formulated by it, is erroneous and we set it aside.
Consequently, we hold that after the repeal of Section 137 of the Act, there is no longer any impediment left in the way of a court to summon the production of documents filed by an assessee before the income tax authorities after April 1, 1964 relating to assessment proceedings for 1964 65 onwards and that the finality attached to an order of the Commissioner under Section 138(1)(b) has no relevance to the exercise of powers by a court to summon the production of documents in a case pending before the Court.
Since, the challenge before us had been confined to the answer given by the High Court to situation (d) of the second question as formulated by it and no other finding of the High Court was called in question, we have refrained from expressing any opinion on the other findings recorded by the Full Bench of the High Court.
The appeal consequently succeeds to the extent indicated above and is allowed.
We, however, make no order as to costs.
V.P.R. Appeal allowed.
| The Plaintiff respondent instituted a suit for recovery of Rs.1,39,722.86 against the defendants appellants.
When evidence was being recorded in the suit proceedings, the plaintiff obtained summons from the court requiring the Income Tax Department to produce in the court records relating to the income tax assessment of the defendants for the assessment years 1964 65 to 1971 72.
The Income Tax Officer produced the record in a sealed cover.
The plaintiff also obtained summons requiring the Income Tax Officer to produce the income tax record relating to two other assessees, which was produced in the Court by the Department in a sealed cover with a submission that no disclosure of information regarding income tax 546 pertaining to an income tax assessee could be made.
The plaintiffs in the meanwhile filed in the court a number of certified copies of the accounts of the defendants, which he had obtained from the Income Tax authorities and sought permission of the Court to tender the certified copies in evidence.
Before a Single Judge of the High Court on the question of privilege as claimed by the Income Tax Department, arguments were addressed by the parties.
The following three questions were referred to the Full Bench (i) What is the position of law relating to privilege prior to 1964? (ii) What is the position of law relating to privilege after 1964? and (iii) What is the effect of the production of certified copies relating to income tax assessment records, and how far certified copies can be admitted in evidence? The Full Bench answered the first and second questions sustaining the claim of the privilege by the Income Tax Department and the Full Bench did not express any opinion on the third question.
Against the judgment of the Full Bench of the High Court, appeal was filed by special leave.
The controversy before this Court was confined to the finding of the High Court relating to the claim of privilege for the production of documents which were filed after the repeal of Section 137, with effect from 1.4.1964 in respect of assessment years 1964 65 onwards.
The appellants (defendants) contended that after the repeal of Section 137 of the Income Tax Act, 1961 by the Finance Act, 1964 there was no longer any impediment left in the way of a civil court to summon the production of documents filed by an assessee during the assessment proceedings before an Income Tax Officer after 1.4.1964 in respect of assessment years 1964 65 onwards, and that the finality attached to an order of the Commissioner with regard to claim of privilege under Section 138(1)(b) had no relationship to the power of the court to summon that record.
Allowing the appeal of the defendants appellants, this Court, 547 HELD:1.01.
Section 54 of the Income Tax Act, 1922 and after its repeal, Section 137 of the Income Tax Act, 1961 had only placed fetters on the exercise of the jurisdiction, in respect of the specified documents, by the courts, notwithstanding anything contained in any other law for the time being in force.
The exercise of the jurisdiction to seek production of documents had, only been put under a cloud in so far as the record of assessment is concerned.
[560E] 1.02.
With the repeal of the 1922 Act and omission of Section 137 of the 1961 Act, the fetters on the exercise of the jurisdiction were removed with the result that the exercise of jurisdiction to call for the production of documents relevant to the case pending before the court, even from the income tax authorities, revived.
[560E F] 1.03.
Neither Section 54 of the 1922 Act nor Section 137 of the 1961 Act had taken away for all times the jurisdiction of the courts to call for the record from the Income Tax authorities.
Those provisions had only put the exercise of that jurisdiction under a cloud and those fetters were coterminous with the life of Section 54 of the 1922 Act or Section 137 of the 1961 Act.
[560F G] 2.01.
Clause (b) of Sub Section (1) of Section 138 is limited in its scope and application.
Under it, any person can make an application to the Commissioner for any information relating to an assessee in respect of any assessment made either under the 1922 Act or under the 1961 Act on or after the 1st April 1960 and the Commissioner of Income Tax has the authority to furnish or cause to be furnished the information asked for on being satisfied that it is in the public interest so to do and such an order of the Commissioner is final and cannot be called in question in any court of law.
The Commissioner of Income Tax under this clause performs only an administrative function, on his subjective satisfaction as to whether it is in the public interest to furnish the information or not to any person seeking such information and his decision in that behalf is final and the aggrieved person cannot question it in a court of law.
By enacting this provision, the legislature could not be said to have intended that the Commissioner of Income Tax would have the authority to sit in judgment over the requisition (Judicial order) made by a court of law requiring the production of record of assessment relating to an assessee in a case pending before the court.
[562H 563D] 548 2.02.
When a court of law, in any matter pending before it, desires the production of record relating to any assessment after applying its judicial mind and hearing the parties and on being prima facie satisfied that the record required to be summoned is relevant for the decision of the controversy before it it passes a judicial order summoning the production of that record from the Party having possession of the record.
The Commissioner of Income Tax cannot, therefore, refuse to send the record, as he certainly is not authorised to set at naught a judicial order of a court law.
He must obey the order of the court by sending the record to the court concerned.
[563D F] 2.03.
It is open to the Commissioner of Income Tax to claim privilege, in respect of any document or record so summoned by a court of law, under Sections 123 and 124 of the and even then it is for the court to decide whether or not to grant that privilege.
Had the legislature intended that no document from the assessment record of an assessee should be produced in a court on being summoned by it, without the approval of the Commissioner of Income Tax, it would have said so in Section 138 of the Act itself.
[563F G] 2.04.
The repeal of Section 137 of the Act clearly discloses the legislative intent that it was felt by the legislature that it was no more necessary to keep the records of assessment by the Income Tax Department relating to an assessee as confidential from the courts and the bar with regard to the production of any part of the record was removed in so far as the courts are concerned.
The finality which has been attached to the order of the Commissioner under Section 138(1)(b) of the Act is restricted to the cases where the information etc.
as contemplated by the section is called for by any person, other than a court of law by a judicial order.
[563G 564A] 2.05 The finality which has been attached to the order of the Commissioner under Section 138(1)(b) of the Act is applicable only in cases where application is made to the Commissioner by a party or any other person for receiving documents or information.
It has nothing to do with the powers of the courts to summon the production of assessment record of an assessee, filed after 1.4.1964.
The privilege as to secrecy, which the assessee had acquired under Section 54 of the 1922 Act remained unimpaired by the repeal of that Act or even by the omission of Section 549 137 of the 1961 Act in respect of record filed prior to 1.4.1964 and relating to the assessments prior to that date.
That privilege did not extend, after April 1,1964.
to record filed before the income tax authorities, for the assessment years 1964 65 onwards.
[560H 561B] 2.06.
Section 138(1)(b) does not effect the powers of the courts to require the production of assessment records or the disclosure of any information therefrom to it, in a case pending before the court when the court, by a judicial order, requires the production of the record, considered relevant by it for decision of a case pending before it.
[564B C] 2.07.
The High Court, therefore, fell in error in holding that the assessment records of an assessee filed before the income tax authorities, even after April 1,1964, are immune from production in a court of law on summons for their production being issued by the court and that the disclosure of any information from the record even to the courts is subject to the veto powers of the Commissioner of Income Tax.
[564B] 3.01.
Section 6 of the General Clauses Act as well as Section 138 (1)(b) of the 1961 Act cannot extend the ban on the exercise of the jurisdiction by the courts to summon the production of documents from the income tax authorities after April 1,1964 relating to assessment year 1964 65 in respect of the record filed after April 1,1964.
[561B C] 3.02.
Section 6 of the General Clauses Act provides that the repeal of any enactment, unless a different intention appears, shall not affect any right, privilege, obligation or liability acquired, accrued or incurred under the repealed enactment.
[561F] 3.03 The general principle is that an enactment which is repealed, is to be treated, except as to transactions past and closed, as if it had never existed.
The assessee had acquired no right or privilege under the repealed Act, since the provision is only a procedural restriction and did not create any substantive right in the assessee, in respect of assessments for the period after the omission of Section 137 of the 1961 Act.
Thus, reliance placed on the provisions of Section 6 of the General Clauses Act to hold the continuation of the ban on the exercise of jurisdiction by the courts was misplaced.
[561H 562B] 3.04.
In respect of the documents filed after the omission of Section 550 137 of the 1961 Act , with effect from April 1,1964, relating to assessments for the period 1964 65 onwards, no right, privilege, obligation or liability can be said to have been acquired accrued or incurred prior to the omission of Section 137 of the Act.
[561F G] 3.05 The ban contained in Section 137 of the 1961 Act on the exercise of the powers of a civil court to call for production of documents etc.
could not be said to have continued to exist, in matters arising subsequent to the omission of that Section with effect from April 1, 1964 and that ban came to an end in respect of the period after April 1, 1964.
[561G] 4.
After the repeal of Section 137 of the act, there is no longer any impediment left in the way of a court to summon the production of documents filed by an assessee before the income tax authorities after April 1,1964 relating to assessment proceedings for 1964 65 onwards and that the finality attached to an order of the Commissioner under Section 138 (1)(b) has no relevance to the exercise of powers by a court to summon the production of documents in a case pending before the Court.
[564D E]
|
ivil Appeal No. 1134 of 1973.
(From the judgment and Order dated 14 7 1972 of the Cal cutta High Court in Appeal from Original Order No. 253 of 1969).
CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No. 319 of 1974.
(Appeal by special leave petition from the judgment and order dated 4 10 1973 of the Delhi High Court in Criminal Revision No.264 of 1973).
CRIMINAL APPEAL No. 358 of 1976.
(Appeal by Special Leave from the Judgment and Order dated 30 7 1976 of the Special Judge Delhi in criminal C.C. No. 16 of 1975).
V.P. Ratnan, D.N. Mukherjee and G.S. Chatterjee, for the appellant in C.A. No. 1134/73.
760 Niren De and N.C. Talukdar, B.M. Bagaria, Dilip Sinha and D.P. Mukherjee, for respondent No. 1, in CA 1134/73.
R.N. Sachthey, for the respondent No. 3 in CA No. 1134/73.
Praveen Kumar, for the appellant in Crl.
A. No. 319/74.
R.N. Sachthey, for respondent No. 1 in Crl.
A. No. 319/74.
R.H. Dhebar and B.V. Desai for the appellant in Crl.
A. No. 358 of 1976.
V.P. Raman and R.N. Sachthey, for the respondents in Crl.
A. No. 385/76.
The Judgment of the Court was delivered by GOSWAMI, J.
In these appeals a common question of law arises for consideration.
We will therefore refer to the facts as appearing in Civil Appeal No. 1134 of 1973 to decide the issue and our decision will govern these appeals.
We are informed that the sole appellant in Criminal Appeal No. 319 of 1974 died.
The said appeal, therefore, abates and is dismissed.
Civil Appeal No. 1/34 of 1973 is directed against the judgment the Division Bench of the Calcutta High Court whereby the earlier judgment of the single Judge was re versed.
The facts so far as material may be briefly stated: On or about May 27, 1967, a case was lodged by the Deputy Superintendent of Police, Central Bureau of Investi gation, Sub Division, Calcuta, against R.C. Bhattacharjee who was an ex Major of the Indian Army and Manmal Bhutoria (hereinafter, the respondent) who was a businessman.
It was alleged that R.C. Bhattacharjee in collusion and conspiracy with the respondent had accepted certain tenders from a fictitious nominee of the.
said respondent for supply of certain stores to the military authorities at a price ex ceeding the price quoted by the other tenderers and thereby caused substantial loss to the Military Authority and to the Government of India.
It was further alleged that the said Bhattacharjee along with the respondent had committed of fence of conspiracy of criminal misconduct by a public servant in dishonestly abusing his position as a public servant for obtaining undue pecuniary advantage which amounted to an offence under section 5(2) of the Prevention of Corruption Act, 1947.
Accused Bhattacharjee was invalidated from the Military service with effect from February 14, 1966, as permanently unfit for any form of military service.
A case under the Prevention of Corruption Act, 1947 (hereinafter, briefly the Act) can be tried only by a spe cial court constituted under the provisions of the West Bengal Criminal Law Amendment (Special Courts) Act, 1949 (West Bengal Act XXI of 1949) (briefly the Bengal Act).
By a notification in the Calcutta Gazette dated June 15, 1967, the State Government allotted the said case to the Fourth 761 Additional Special Court in Calcutta under sub section (2) of Section 4 of the Bengal Act.
When the Special Court fixed the case for trial on 23rd, 24th and 25th November, 1967, the respondent moved the High Court of Calcutta under Article 226 of the Constitution on November 7, 1967, inter alia, contending that (1 ) at the point of time when the case was distributed to the Special Court the co accused, ex Major Bhattacharjee, had ceased to be a public servant and as such the Bengal Act had no application and the said Court had no jurisdiction to entertain the case; (2) a public officer having ceased to be such an officer at the date of allotment of the case the order of allotment by the State Government was without jurisdiction and void; and (3) the Special Court.
had no jurisdiction to try cases in which two private persons were involved and the allotment of the case to the Special Court was thus illegal.
A point regarding absence of sanction was also taken up but was not pressed before us in view of the decision of this Court in S.A. Venkataraman vs The State(1).
The single Judge of the High Court dismissed the writ application but the Division Bench by two concurring judg ments set aside the said judgment and order of the single Judge.
That is how this matter has come before us on cer tificate under Article 133(1) (c) of the Constitution.
P.B. Mukherjee, J. held " . the only solution is to hold that these two acts, namely, the Special Courts Act and the Prevention of Corruption Act do not apply to a public servant who had ceased to be a public servant on the date the court takes cognisance.
This solution seems all the more proper because it seems to steer clear of Article 14 of the Constitution . ".
The learned Judge further observed "Therefore a person who has ceased to be in office, that is, who has ceased to be a public servant, does not come within the ambit of the expression 'public servant ' and conse quently is not governed by the Prevention of Corruption Act and, as such, cannot commit an offence under section 5(2) of the said Act".
The learned Judge again observed "It will appear that though Major Bhat tacharjee had ceased to be a public servant, the state Government by distributing the present case to the Special Court violated the (1) 762 principle of equal protection clause by deny ing the advantages associated with the office of a public servant but imposing on him the disadvantages and/or disabilities associated with the office of a public servant.
Hence the Act is not discriminatory but the action, allotment and distribution of this case to the Special Court of the State Government is discriminatory.
Therefore it is to be struck down and the order of the distribution quashed".
The learned Judge also observed " . but a public servant who has ceased to be a public servant, can neither be prosecuted in respect of any scheduled offence nor of an offence under section 5(2) of the Prevention of Corruption Act and as such, the trial of such a person cannot be in accordance with the provisions of those two statutes".
* * *.
* " . so far as the appellant Manmal Bhutoria is concerned, he never being 'a public servant ' is dearly not triable by the Special Court under the Prevention of Corrup tion Act and West Bengal Criminal Law Amend ment (Special Courts) Act, 1949 and suffer all the handicaps of being presumed to be guilty".
B.C. Mitra, J. in his concurring judgment observed as follows : "On a careful consideration of the various clauses under section 21 of the Penal Code, I have no doubt that a person who was previously a public servant, but who has ceased t0 be such, do not come within the ambit of that section.
Both section 5(1) and section 5(2) deal with public servants only.
There is no provision in this Act whereby a person who was previously a public servant, but has ceased to be a public servant at the relevant time, can be charged with an offence under section 5(1)(d) or section 5(2) of the Prevention Act".
Before we proceed further we may immedi ately set out what this Court has held in venkataraman 's case (supra) since what was held therein has largely influenced the deci sion of the Division Bench.
At page 1044 of the report in that decision this Court ob served as follows : "These provisions of the Act (namely Act 2 of 1947) indicate that it was the intention of the legislature to treat more severely than hitherto corruption on the part of a public servant and not to condone it in any manner whatsoever.
If section 6 had not found a place in the Act it is clear that cognizance of an offence under section 161,164 or section 165 of the Indian Penal Code or under section 5(2) of the Act committed by a 763 public servant could be taken by a court even if he had ceased to be a public servant.
The mere fact that he had ceased to be a public servant after the commission of the offence would not absolve him from his crime.
Section 6 certainly does prohibit the taking of cogni zance of his offence, without a previous sanction, while he is still a public servant but does that prohibition continue after he has ceased to be a public servant" ? Again at page 1048/1049 this Court observed as follows : "In our opinion, in giving effect to the ordinary meaning of the words used in section 6 of the Act, the conclusion is inevitable that at the time a court is asked to take cognizance not only the offence must have been committed by a public servant but the person accused is still a public servant removable from his office by a competent authority before the provisions of section 6 can apply.
In the present appeals, admittedly, the appellants had ceased to be public servants at the time the court took cognizance of the offences alleged to have been committed by them as public serv ants.
Accordingly, the provisions of section 6 of the Act did not apply and the prosecution against them was not vitiated by the lack of a previous sanction by a competent authority".
A similar view was affirmed by the Court in C.R. Bansi vs State of Maharashtra.(1) This Court held therein as follows : "The policy underlying section 6, and similar sections, is that there should not be unneces sary harassment of public servants.
But if a person ceased to be a public servant the question of harassment does not arise.
The fact that an appeal is pending does not make him a public servant.
The appellant ceased to be a public servant when the order of dismiss al was passed.
There is no force in the contention of the learned counsel and the trial cannot be held to be bad for lack of sanction under section 6 of the Act".
Accepting the position that sanction under section 6 of the Act is not necessary if the public servant ceased to be a public servant on the date the court takes cognizance of the offence, the High Court arrived at the conclusion that there would be discrimination between one class of public servants and another similarly situated when those in office will be protected from harassment on account of the require ment of sanction for prosecution whereas the public servants after they ceased to be in office will be prosecuted and harassed in absence of the requirement of the sanction.
It is in that view of the matter the High Court has held that the Special Court has no jurisdiction to try a public serv ant who has ceased to be a public servant on the date the Court was required to take cognizance of the offence, since, according to the High Court, "it cannot be said that in certain respects he (1) ; 764 is a public servant for the offences under the Prevention of Corruption Act and for certain other respects, he is not a public servant".
It is in taking this view that P.B. Mukher jee, J. observed that "this solution seems all, the more proper because it seems to steer clear of Article 14 of the Constitution".
The High Court, however, did not strike down the Act or any provisions of the Act as unconstitutional.
It has only held the order of allotment of the case to the Special Court as illegal as the case of a public servant who has ceased to be a public servant cannot be allotted to the Special Court since, according to the High Court, to hold otherwise would be violative of Article 14 of the Constitu tion.
It is in the background of such a conclusion that Mr. Niren De, counsel for the respondent, submits that tiffs appeal involves the determination of a question as to the constitutional validity, on the basis of Article 14 of the Constitution, of the provisions of the Bengal Act, particu larly the proviso to section 4(1) of that Act.
He further submits that a person who ceased to be a public servant cannot be treated differently from a person who is a public servant in office for the purpose of the Bengal Act.
He, therefore, submits that in view of Article 144(A), as in serted by the 42nd Amendment, this appeal should be heard by a minimum number of seven Judges of this Court and we should therefore, refer the same to a larger Bench.
This submission is supported by Mr. Dhebar who is appearing in.
an identical matter in Criminal Appeal No. 358 of 1976 and he has submit ted an application to urge additional grounds on the basis of Article 14 of the Constitution.
There is some misconception both in the judgment of the High Court as well as in the submission made by counsel on this point.
In view of the decision in Venkataraman 's case (supra) there is no warrant for including in one category public servants in office and public servants who have ceased to be so.
These two classes of public servants are not similarly situated as has been cleared out in Bansi 's case (supra).
The plea of applicability of Article 14 on the basis of the judgment in Venkataraman 's case (supra) is, therefore, wholly misconceived.
It cannot be argued that the, decision in Venkataraman 's case (supra) is violative of Article 14 of the Constitution.
That decision only says that section 6 of the Act is not applicable to a public servant if at the time of taking cognizance by the court he ceases to be so.
Because a particular section is not applicable to a public servant after he has ceased to be in office, the question of the Act being violative.
of Article 14 of the Constitution will not arise.
This Court has clearly placed a public servant, who has ceased to be in office, in a sepa rate category and that classification has held the field all these years without demur.
There is, therefore, no sub stance in the contention that this appeal should be referred to a larger Bench.
Under section 4(1) of the Bengal Act, the scheduled offences which include an offence under section 5 (2) of the Act as also conspiracy to commit that offence shall be triable by Special Courts only.
No other court can, there fore, try these offences.
The provisions of the Bengal Act are clearly different from those of the West Bengal 765 Special Courts Act which were the subject matter in The State of West Bengal vs Anwar Ali Sarkar(1) Proviso to section 4(1) of the Bengal Act is in the following terms: " 'Provided that when trying any case, a Special Court may also try any offence other than an offence specified in the Schedule, with which the accused may under the Code of Criminal Procedure, 1898, be charged at the same trial".
By this proviso the Special Court, when trying a scheduled offence finds that some other offence has also been commit ted and the trial of the same in one trial is permissible under the Code of Criminal Procedure, may try such a charge.
It is difficult to imagine how such a proviso can at all attract Article 14 of the Constitution.
On merits it is submitted 'by Mr. De that the respondent is a complete outsider and is not a public servant at all.
The Bengal Act is not applicable to him.
It is submitted that the Bengal Act provides for reference to the SpeCial Court only offences mentioned in the Schedule to that Act and all the offences mentioned in the Schedule, according to him, are those which may be committed by a public servant.
He draws our attention to the definition of public servant under section 21 o{ the Indian Penal Code which definition is applicable under section 2 of the Act.
He submits that the public servant in 'view of the definition means a public servant in office and not one who has ceased to be in of fice.
It is true that section 21 IPC enumerates various classes of public servants who are or who happen to be in office.
That is, however, not the true test in determining the present controversy.
The crucial date [c: ' the.
purpose of attract ing the provisions of the Act as well as those of the Bengal Act is whether the offence has been committed by a public servant within the definition of section 21.
The date for determining the offence is the date of the commission of the offence when the person arraigned must be a public servant.
Section 6 of the Act provides that no court shall take cognizance.
of an offence specified in that section alleged to have been committed by a public servant except with the previous sanction.
The section itself makes a clear dis tinction between cognizance of an offence and alleged commission of an offence.
Sanction refers to the date when after submission of a report or a complaint the court takes cognizance of the offence.
That date is necessarily subsequent to the date of commission of the offence and sometimes far remote from that date.
Retirement, resigna tion, dismissal or removal of a public servant would not wipe out the offence which he had committed while in serv ice.
Under section 6(1) of the Act, as in the, case of section 190(1) Cr.
P.C. the court takes cognizance of an offence.
and not an offender (see Raghubans Dubey vs State of Bihar(e).
The crucial date, therefore, for taking cogni zance in this case is the date when the case was received by the Special Court on being allotted by the State Government under section 4(2) of the Bengal Act.
(1) ; (2) ; , 428.
766 Mr. De submits that section 10 of the Bengal Act pro vides that the provisions of the Prevention of Corruption Act shall apply to trials under the Bengal Act.
He, there fore, submits that section 6 of the Act must apply and since this Court has held that that section does not apply and section 6 is also not applicable in the case of the respondent, being not a public servant, the Special Court has no jurisdiction to try the offence.
We are clearly of opinion that section 10 of the Bengal Act will apply when the provisions of that section are clearly attracted.
Section 6 is interpreted by this Court not to apply to a public servant who has ceased to be in office.
That would not affect the interpretation of section 10 of the Bengal Act.
There is no merit in the submission that because of section 10 the Special Court cannot be said to have juris diction to try the offence.
in, this case.
Mr. De further submits that since the respondent is not a public, servant he is outside the provisions of the Bengal Act, as well as the Prevention of Corruption Act.
This argument is entirely misconceived.
Even under the Preven tion of Corruption Act, an outsider can be prosecuted under section 5(3) of the Act when a person habitually commits an offence punishable under section 165A of the Indian Penal Code.
Section 165A provides that "whoever, abets any of fence punishable under section 161 or section 165, whether or not that offence is committed in consequence of the abetment, shall be punished . ".
This section is clear ly applicable to an outsider who may abet a public servant.
Item 8 of the Schedule to the Bengal Act mentions any con spiracy to commit or any attempt to commit or any abetment of any of the offences specified '.
in items 1, 2, 3 and 7.
It is, therefore, clear that under item 8 of the Schedule an outsider can be tried along with a public servant if the former abets or commits an offence of conspiracy to commit an offence under section 5 of the Prevention of Corruption Act which is mentioned in item 7 to the Schedule.
There is, therefore, no merit in the submission that the Special Court cannot try the offence under section 5(2) of the Act read with section 120B IPC against the respondent.
All the submissions of counsel for the respondent fail.
The judgment and order of the Division.
Bench are set aside.
The appeal is allowed but there will be no order as to costs.
In Criminal Appeal No. 358 of 1976 the appellant was charged under section 5(2) read with section 5(1)(e) of the Prevention of Corruption Act.
At the time of commission of the offence he was admittedly a public servant.
He, howev er, ceased to be a public servant on October 30, 1974, when the chargesheet against him was put up before the Special Judge.
The offences are triable only by the Special Judge under the provisions of the Criminal Law Amendment Act 1952 (Act XI, VI of 1952).
For the reasons given above in con nection with Civil Appeal No. 1134 of 1973, the trial before the Special Judge cannot be questioned as illegal.
The appeal fails and is dismissed.
P.B.R. Appeal dis missed.
| The appellant was convicted along with two other accused under section 302 I.P.C. and sentenced to death while the other two were sentenced to life imprisonment.
In appeal to this Court against the orders of the High Court confirming the death sentence imposed, the special leave was granted limit ed to sentence.
Allowing the Criminal Appeal No. 337 of 1976 in part and modifying the death sentence to one of life imprisonment, the Court, HELD: (1) The object of section is to give a fresh opportunity to the convicted person to bring to the notice of the court such circumstances as may help the court in awarding an appropriate sentence have regard to the per sonal, social and other circumstances of the case.[712 D] (2) Failure to give an opportunity under s" 235(2) Cr.
P.C. will not affect the conviction under any circum stance.
In a murder case where the charge is made out the limited question is as between the two sentences prescribed under the Penal Code.
If the minimum sentence is imposed.
question of providing an opportunity under section 235 would not arise.
[712 F] (3) The hearing contemplated by section 235(2) is not con fined merely to hearing oral submissions but extend giving an opportunity to the prosecution and the accused to place before the court facts and materials of sentence and;if they are contested by either side then to produce evidence for the purpose of establishing the same.
[712 G] Santa Singh vs State of Punjab A.I.R. 1976 S C 2386, reiter ated.
(4) To save time and expense and help produce prompt justice, it may be more appropriate for the appellate court to give an opportunity to the parties in terms of section 235(2) to produce the materials they wish to adduce instead of going through the exercise of sending the case back to the trial court.
1713 A] In the instant case, the Court modified the death sen tence to one of life imprisonment in view of the facts: (i) The death sentence has been inflicted nearly two years ago, and the agony of such a sentence has been an exCruciating experience suffered by the convict for a long period; (ii) The appellant had two other assailants with him who have been awarded life imprisonment; (iii) There was no motive for the appellant to kill the innocent child; and (iv) The other circumstances present indicate that the ends of justice would be met by awarding life imprisonment.
[713 G E] E. Annamma vs State of Andhra Pradesh ; , referred to
|
Civil Appeal No. 988 of 1968.
(From the Judgment and order dated the 8 4 1965 of the Punjab High Court, Circuit Bench Delhi now the High Court of Delhi in Civil Writ No. 228 G of 1962).
Hardyal Hardy, B. P. Maheshwari, Suresh Sethi and Bikaramjit Nayar; for the appellant.
A. K. Sen, D. P. Bhandare, Mrs. Laxmi Arvind Mathur and section section Khanduja; for the respondents.
The Judgment of the Court was delivered by GUPTA, J.
Respondent Kalu Ram was pavement vendor in Connaught place, New Delhi.
In 1950 the appellant.
New Delhi Municipal Committee, provided a number of displaced persons with small pre fabricated stalls to enable them to do their business.
Kalu 88 Ram who was also a displaced person was allotted one such stall on Irwin Road.
Rupees thirty was the licencee fee payable per month by the allottees of these stalls.
Later, the allottees, including the respondent, applied to the Rent Controller for reducing the rent.
It is not necessary to refer to the various proceedings arising from these applications for fixation of standard rent which were ultimately dismissed by the Circuit Bench of the Punjab High Court at Delhi as not maintainable.
In the meantime, many of the allottees fell in arrears in paying the licence fees.
So far as the respondent is concerned, the appellant took no steps to recover the dues till December 1960 when it demanded the entire amount in arrears from May 1950 to April 1957.
The respondent not having paid, the appellant asked the Estate Officer, appointed under section 3 of the , to take steps to recover the amount in arrears under section 7 of that Act.
The Estate Officer, who is the second respondent herein, made an order on September 28, 1961 under section 7(1) of the Act asking the respondent to pay the sum overruling his objection that the claim was barred by limitation.
The respondent 's appeal to the Additional District Judge from the Estate Officer 's order was disallowed.
The respondent then filed a writ petition before the Circuit Bench of the Punjab High Court at Delhi challenging the order against him.
One of the grounds of challenge was that section 7 could not be resorted to for recovery of the sum as the claim was time barred.
The High Court accepted the contention and allowed the petition.
In this appeal by certificate, the appellant, New Delhi Municipal Committee, questions the correctness of the High Court 's decision.
The only contention raised before us by Mr. Hardy appearing for the appellant is that the High Court was wrong in holding that the amount in question could not be recovered under section 7 because the time for instituting a suit to recover the sum had expired.
Admittedly, any suit instituted on the date when the Estate Officer made his order under section 7(1) would have been barred by time.
Mr. Hardy argued that the Limitation Act only barred the remedy by way of suit and did not extinguish the right, and section 7 of the providing a different and special mode of recovery was therefore available to recover rent in arrears beyond three years.
Section 7 as it stood at the relevant time reads : Power to recover rent or damages in respect of public premises as arrears of land revenue.
(1) Where any person is in arrears of rent payable in respect of any public premises, the estate officer may, by order, require that person to pay the same within such time and in such instalments as may be specified in the order.
(2) Where any person is, or has at any time been in unauthorised occupation of any public premises, the 89 estate officer may, having regard to such principles of assessment of damages as may be prescribed, assess the damages on account of the use and occupation of such premises and may, by order, require that person to pay the damages within such time and in such instalments as may be specified in the order: Provided that no such order shall be made until after the issue of a notice in writing to the person calling upon him to show cause within such time as may be specified in the notice why such order should not be made, and until his objections, if any, and any evidence he may produce in support of the same, have been considered by the estate officer.
(3) If any person refuses or fails to pay the arrears of rent or any instalments thereof payable under sub section (1) or the damages or any instalment thereof payable under sub section (2) within the time specified in the order relating thereto the estate officer may issue a certificate for the amount due to the Collector who shall proceed to recover the same as an arrear of land revenue.
" As would appear from the terms of the section, it provides a summary procedure for the recovery of arrears of rent.
It was argued that since section 7 did not put a time limit for taking steps under that section and as the limitation prescribed for a suit to recover the amount did not apply to a proceeding under this section, the High Court was in error in upholding the respondent 's objection.
In support of his contention that a debt remained due though barred by limitation, Mr. Hardy relied on a number of authorities, both Indian and English.
We do not consider it necessary to refer to these decisions because the proposition is not disputed that the statute of limitation bars the remedy without touching the right.
Section 28 of the Indian Limitation Act, 1908 which was in force at the relevant time however provided that the right to any property was extinguished on the expiry of the period prescribed by the Act for instituting a suit for possession of the property.
But on the facts of this case no question of a suit for possession of any property arises and section 28 has no application.
It is not questioned that a creditor whose suit is barred by limitation, if he has any other legal remedy permitting him to enforce his claim, would be free to avail of it.
But the question in every such case is whether the particular statute permits such a course.
Does section 7 of the create a right to realise arrears of rent without any limitation of time ? Under section 7 the Estate Officer may order any person who is in arrears of rent 'payable ' in respect of any public premises to pay the same within such time and in such instalments as he may specify in the order.
Before however the order is made, a notice must issue calling upon the defaulter to show cause way such order should not he made and, if he raised any objection, the Estate Officer must consider the same and the evidence produced in support of it.
Thus the Estate Officer has to determine 90 upon hearing the objection the amount of rent in arrears which is 'payable. ' The word 'payable ' is somewhat indefinite in import and its meaning must he gathered from the context in which it occurs.
'Payable ' generally means that which should be paid.
If the person in arrears raises a dispute as to the amount, the Estate Officer in determining the amount payable cannot ignore the existing laws.
If the recovery of any amount is barred by the law of limitation, it is difficult to hold that the Estate Officer could still insist that the said amount was payable.
When a duty is cast on an authority to determine the arrears of rent, the determination must be in accordance with law.
Section 7 only provides a special procedure for the realisation of rent in arrears and does not constitute a source or foundation of a right to claim a debt otherwise time barred.
Construing the expression "any money due" in section 186 of the Indian Companies Act, 1913 the Privy Council held in Hans Raj Gupta and others vs Official Liquidators of the Dehradun Mussorie Electric Tramway Company Ltd.(1) that this meant moneys due and recoverable in suit by the company, and observed: "it is a section which creates a special procedure for obtaining payment of moneys; it is not a section which purports to create a foundation upon which to base a claim for payment.
It creates no new rights.
" We are clear that the word "payable" in section 7, in the context in which its occurs, means "legally recoverable." Admittedly a suit to recover the arrears instituted on the day the order under section 7 was made would have been barred by limitation.
The amount in question was therefore irrecoverable.
This being the position, the appeal fails and is dismissed with costs.
M.R. Appeal dismissed.
| In 1950, the appellant allotted small pre fabricated stalls to several displaced persons including the respondent, at the licence fee of rupee thirty payable per month.
Later, these allottees applied for a fixation of standard rent but ultimately lost in the Punjab High Court at Delhi, Meanwhile, the respondent fell in arrears in paying the licence fee.
In December, 1960, the appellant demanded from him the entire amount in arrears from May 1950 to April 1957 but he failed to pay.
In September 1961, the Estate Officer ordered the respondent under section 7(1) of the Act, to pay the sum, overruling his objection that the claim was barred by limitation.
The respondent 's appeal to the Additional District Judge was rejected, but the Punjab High Court at Delhi allowed his writ petition on the ground that section 7 could not be availed in case of time barred claims.
The appellant contended before this Court that the Limitation Act only barred the remedy by way of suit and did not extinguish the right which could still be exercised through section 7 of the Act.
Section 7 did not put a time limit for taking action under it, and was, therefore, not subject to the limitation prescribed for a suit to recover the amount.
Dismissing the appeal, the Court, ^ HELD: Section 7 only provides a special procedure for the realisation of rent in arrears and does not constitute a source or foundation of a right to claim a debt otherwise time barred.
The word "payable" in Section 7 in the context in which it occurs, means "legally recoverable".
[90 B & D] Hans Raj Gupta and others vs Official Liquidator of the Dehradun Mussoorie Electric Tramway Co. Ltd. 60 I.A. 13, followed.
|
Civil Appeal No. 2083 of 1974.
From the judgment and order dated 10. 9. 1974 of the Delhi High Court in Civil W. P. No. 460/1973.
L.M. Singhavi, Mrs. Anjali Verma, R.C. Chawla, N.K Bhuraria and L. K. Pandey for the appellant.
section C. Manchanda and R. N. Poddar for the Respondents.
The appellant carries on business as a dealer in the re sale of cotton yarn.
As a dealer he has been registered under the Bengal Finance (Sales Tax) Act, 1941 as applied to the Union Territory of Delhi (hereinafter referred to as the 'State Act ').
The appellant says that he purchases cotton yarn and sells it to registered dealers, unregistered dealers and consumers.
For the assessment year 1968 69 the appellant submitted his return of turnover under the state Act and claimed exemption in respect of the turnover of sales of cotton thread on the ground that it was an exempted item under Entry No. 21 of the Second Schedule.
The Sales Tax Officer, by his order dated October 29,1970, held that the sales were effected in respect of 988 cotton yarn and, therefore, they were liable to tax at one per cent on appeal, the Assistant (commissioner of Sales Tax took a contrary view and on his finding that the transactions were in respect of cotton thread he allowed the appeal and struck the assessment down.
Acting suo motu in the exercise of his revisional jurisdiction, the Deputy Commissioner of Sales Tax made an order under Sub section
(3) of section 20 of the State Act reversing the order of the Assistant Commissioner and restoring that of the Sales Tax Officer on the ground that what was sold was cotton yarn.
The appellant now applied in revision to the Financial commissioner, Delhi Administration, and the Financial Commissioner, proceeding on the basis that the sales were in respect of cotton yarn, which was a declared item under section 14 of the Central Sales Tax Act, held that they could not be subjected to sales tax because one of the conditions prescribed by section 15 of that Act had not been complied with, that is to say, the law had omitted to prescribe the single point at which the levy could alone be imposed.
Accordingly, the Financial Commissioner allowed the revision petition and quashed the assessment.
The Commissioner of Sales Tax thereupon filed Civil Writ Petition No. 460 of 1973 in the High Court of Delhi praying for the quashing of the order of the Financial Commissioner.
The writ petition was allowed by the High Court by its judgment and order dated September 10, 1974.
Against that judgment and order the appellant has filed the present appeal.
section 14 of the Central S ales Tax Act enumerates the commodities declared to be goods of special importance in inter State trade or commerce.
Among the goods so declared is cotton yarn.
section 15 of the provides : 15.
Every sales tax law of a State shall, in so far as it imposes or authorises the imposition of a tax on the sale or purchase of declared goods, be subject to the following restrictions and conditions, namely : (a) the tax payable under that law in respect of any sale or purchase of such goods inside the State shall not exceed three per cent of the sale or purchase price thereof, and such tax shall not be levied at more than one stage.
" The tax is payable by a dealer under the State Act on taxable turnover, and sub section
(2) of section 5 provides; 989 "(2) In this Act, the expression "taxable turnover" means that part of a dealer 's gross turnover during any period, which remains after deducting thereform (a) his turnover during that period on (i) the sale of goods declared tax free under section 6, (ii) sale to a registered dealer of goods of the class or classes specified in the certificate of registration of such dealer, as being intended for re sale by him, or for use by him as raw materials in the manufacture of goods for sale; and of containers or other materials for the packing of goods of the class or classes so specified for sale: Provided that in the case of such sales, a declaration duly filled up and signed by the registered dealer to whom the goods are sold and containing the prescribed particulars on a prescribed form obtainable from the prescribed authority is furnished in the prescribed manner by the dealer who sells the good; Provided further that where any goods specified in the certificate of registration are purchased by a registered dealer as being intended for re sale by him or for use by him as raw materials in the manufacture of goods for sale, but are utilised by him for any other purpose, the price of the goods so purchased shall be allowed to be deducted from the gross turnover of the selling dealer but shall be included in the taxable turnover of the purchasing dealer.
" In the instant case, we are concerned with the taxation of goods which under section 14 of the have been declared to be of special importance in inter State trade or commerce.
Where the turnover of such goods is subjected to tax under the sales tax law of a State, section 15 prescribes the maximum rate at which such tax may be imposed and requires that such tax shall not be levied at more than one point.
The two conditions have been imposed in order to ensure that inter State trade or commerce in such goods is not hampered by heavy taxation within the State occasioned by an excessive rate of tax or bymulti point taxation.
section 990 15 enacts restrictions and conditions which are essential to the validity of an impost by the State on such goods.
If either of the two conditions are not satisfied, the impost will be invalid.
Now in order that tax should not be levied at more than ond stage it is imperative that the sales tax law of the State should specify either expressly or be, necessary implication the single point at which the tax may be levied.
Alternatively, it may empower a statutory authority to prescribe such single point for the purpose.
Where such point is not prescribed, either by the statute or by the statutory delegate, no compliance is possible with s 15.
the single point at which the tax may be imposed must be a definite ascertainable point so that both the dealer and the sales tax authorities may know clearly the point at which the tax is to be levied.
The components which enter into the concept of a tax are well known.
The first is the character of the imposition known by its nature which prescribes the taxable event attracting the levy, the second is a clear indication of the person on whom the levy is imposed and who is obliged to pay the tax, the third is the rate at which the tax is imposed, and the fourth is the measure or value to which the rate will be applied for computing the tax liability.
If those components are not clearly and definitely ascertainable, it is difficult to say that the levy exists in point of law.
Any uncertainty or vagueness ill the legislative scheme defining any of those components of the levy will be fatal to its validity.
The charging provision, section 4, of the State Act enacts that every dealer whose gross turnover during the year exceeds the taxable quantum shall be liable to pay tax.
The ordinary rule under .
the State Act appears to be that the scale made by every dealer in a series of sales by successive dealers is liable to tax.
That is multi point taxation.
In a scheme of single point taxation, the levy is confined to a single point in a series of sales by successive dealers.
According to the Revenue, the present levy falls in the latter category, and sub cl.
(ii) of cl.
(a) of sub section
(2) of s.5 implies the single point at which the turnover of goods may be taxed.
That argument from favour with the High Court, and it held the single point in a series of sales to be the sale made by the last registered dealer among successive dealers when he sold the goods to an unregistered dealer or a consumer In this connection, the High Court relied on the construction placed by it on sub cl.
(ii) of cl.
(a) of sub section
(2) of 991 s.5 in Fitwell Engineers vs Financial Commissioner, Delhi Administration, Delhi, and Another ' (1) In that case, the High Court had held that it was for the purpose of taxing the goods at least at one point that sub cl.
(ii) of c1.
(a) of sub section
(2) of s.5 of the State Act had been enacted, that there would be a taxable sale when the registered dealer sold the goods to an unregistered dealer or to a consumer, and that in order that such resale by the registered dealer should attract tax the resale to an unregistered dealer or to a consumer had to be effected in Delhi, because if the resale was effected outside the Union Territory of Delhi the Union Territory of Delhi would have no legislative competence to tax the resale.
Now the question whether the expression "resale" in sub cl.
(ii) of cl.
(a) of sub section
(2) of s.5 of the State Act was confined to a resale in the Union Territory of Delhi by the last registered dealer was subsequently considered by this Court in Polestar Electronic (P) Ltd. vs Additional Commissioner, Sales Tax And Another.(2) Overruling the decision of the High Court in Fitwell Engineers (supra) this Court held that the expression "resale" was not confined to a resale in the Union Territory of Delhi and could include a resale outside it.
That was the position upto May 28, 1972 when sub cl.
(ii) of cl.
(a) of sub section
(2) of s.5 was amended by the Finance Act, 1972.
This Court observed that the position before the amendment in 1972 was not affected by the possibility that on the construction preferred by the Court the Union Territory of Delhi would be unable to re cover any tax.
The Court said: "It is true that if the purchasing dealer resells the goods outside Delhi, the Union Territory of Delhi would not be able to recover any tax since the sale to the purchasing dealer would be exempt from tax under section 5 (2) (a) (ii) and the resale by the purchasing dealer would also be free from tax by reason of section 27.
But that is not such a consequence as would compel us to read the word "resale" as limited to resale inside Delhi.
The argument of the revenue was that the legislature could never have intended that the Union Territory of Delhi should be altogether deprived of tax in cases of this kind.
The legislative intent could only be to exempt the sale to the purchasing (1) [1975] 35 section T. C. 66.
(2) [1978] 41 S, T. C. 409.
992 dealer in those cases where the Union Territory of Delhi would be able to recover tax on resale of the goods by the purchasing dealer.
The goods must be taxed at least at one point and it could not have been intended that they should not be taxable at all at any point by the Union Territory of Delhi.
The revenue urged that it was for the purpose of taxing the goods at least at one point that the second proviso was enacted by the legislature.
We do not think this contention based on the presumed intention of the legislature is well founded." And again, "The intention of the legislature was clearly not that the Union Territory of Delhi should be entitled to tax the goods at least at one point so that if the sale to the purchasing dealer is exempt, the resale by the purchasing dealer should be taxable.
We do not find evidence of such legislative intent in any provision of the Act" (Emphasis supplied) Further on, in the same passage, the Court reiterated: "It will, therefore, be seen that it is not possible to discover any legislative intent to tax the goods at least at one point and to exempt the sale to the purchasing dealer only if the resale by the purchasing dealer is liable to tax.
" On the construction which found favour with this Court in Polestar Electronic (P) Ltd, (supra) it is apparent that no support can be found for the proposition that sub cl.
(ii) of cl.
(a) of sub section
(2) of s.5 of the State Act implies that the single point of taxation is fixed by the State Act at the resale by a registered dealer to an unregistered dealer or to a consumer.
As that is the reasoning on which the High Court has proceeded in the judgment under appeal, we must hold that the basis underlying the decision of the High Court cannot be accepted.
It may be noted that the State Act as applied to the Union Territory of Delhi was amended by Parliament in 1959, and section 5A, was inserted.
section SA provides: "Notwithstanding anything to the contrary in this Act, the Chief Commissioner may, by notification in the Official 993 Gazette, specify the point in the series of sales by successive dealers at which any goods or class of goods may be taxed." That provision clearly empowers the Chief Commissioner to specify the single point in a series of sales at which single point taxation may be levied.
The widest amplitude of power has been conferred on the Chief Commissioner in the matter of selecting the point for taxation in a series of sales and, if that is so, clearly no single point can be spelled out, even by implication, from the provision of sub cl.
(ii) of cl.
(a) of sub section
(2) of section 5.
For to do so would mean either accepting an inconsistency between the two provisions or narrowing down correspondingly the scope of section 5A.
We have already pointed out that the provision for single point taxation cannot, in the view of this Court expressed in Polestar Electronic (P) Ltd. (supra), be discovered in sub cl.
(ii) of cl.
(a) of sub s (2) of s.5 of the State Act.
To our mind, provision has been made in that behalf in the statute by the insertion of s.5A.
The High Court has referred to the Statement of Objects and Reasons attached to the Bengal Finance (Sales Tax) (Delhi Amendment) Act 1959 in support of its conclusion that s.5A was inserted only to provide for the levy of tax at any point other that the point of last sale so that sales tax may be levied at the first point on certain items which were manufactured in factories.
It is well settled that when the language of the statute is clear and admits to no ambiguity, recourse to the Statement of Objects and Reasons for the purpose of construing a statuory provision is not permissible.
We are of opinion that there is ample power under s 5A of the State Act enabling the Chief Commissioner to specify the single point at which tax may be levied in a series of sales.
This can, however, be done by a him only by a notification in the Official Gazette.
No such notification has been placed before us which could relate to the assessment year under consideration.
We hold therefore that a vital prerequisite of section 15 of the , namely, that the tax shall not be levied at more than one stage, has not been satisfied in respect of the turnover of cotton yarn, and accordingly the assessment complained of is liable to be quashed.
While concluding, we may point out that a somewhat similar question arose before this Court in Bhawani Cotton Mills Ltd. vs The 994 State of Punjab and Another, (1) the question being whether the second proviso to section (i) of s.5 and sub cl (vi) of cl.
(a) of sub section
(2) of section 5 of the Punjab General Sales Tax Act 1948 implied the single point at which goods were taxable.
The contention was negatived by This Court.
That is how that decision was understood by this Court subsequently in Rattan Lal and Co. And Another vs The Assessing Authority And Another.(2) Accordingly, we hold that the assessment of the turnover of cotton yarn for the assessment ytra 1968 1969 under the Bengal Finance (Sales Tax) Act, 1941 as applied to the Union Territory of Delhi cannot be sustained.
In the result, the appeal is allowed, the judgment and order of the High Court of Delhi are set aside and the assessment of the turnover of cotton yarn is quashed.
The appellant is entitled to its costs.
M. L. A. Appeal allowed.
[1967] 20 section T. C. 290.
11970] 25 S, T. C. 136.
| Pursuant to an investigative report in the "Indian Express" dated September 14, 1982, one of the advocates practising in the Supreme Court addressed a letter to one of the Judges of the Supreme Court depicting the horrid plight of bonded labour from Tamil Nadu working in the stone quarries at Raisen in Madhya Pradesh.
It was alleged: (a) Everyone recruited were paid a reimbursible advance of Rs. 1,000/ but the method of accounting is so manipulated that the debt instead of getting wiped out, increased in geometrical proportion and no workmen can have the employment until the entire debt repaid which is beyond the reach of the workmen; (b) The working conditions were bad.
There was no weekly holiday.
Sanitary conditions were in deplorable state.
The workmen were not paid any wages during rainy seasons, since the mines were shut off; (c) Not a single legislation enacted for the welfare of labour is implemented or respected and (d) Due to the inaction of the Labour Department of the Centre and the State like absence of a notification specifying minimum wages for the labour force employed in the mines, resulting in poultry and meagre payment there is naked and unabashed exploitation of workmen.
The report called for by the Supreme Court from the District Judge Bhopal confirmed the said allegations and further revealed that (a) on a complaint preferred 48 labourers were released by the Labour Department of Madhya Pradesh; (b) a complaint has been lodged with the police under the ; (c) two or three cases against the Contractors were instituted in fact and the said cases were pending; (d) the piece rate method of paying wages for digging a standard 'Khanti ' has resulted sometime to no payment at all for both the male and female labour employed; (e) a team of police force arrived from Tamil Nadu and liberated the workmen and repatriated them to Tamil Nadu and (f) the newspaper publicity had a very salutary and desired effect in as much as various contractors have given up efforts to recover the advances which was a good achievement.
The State of Madhya Pradesh admitted the findings of the District Judge, Bhopal and pointed out that in respect of flagstone mines, the appropriate Government is the Central Government under the payment of 127 Bonus Act, 1965 and the .
The Tamil Nadu Government have clarified as to how the labourers were duped and taken to Madhya Pradesh and confirmed the release of the labourers by their State Police.
The Court in the circumstances directed the Union of India as appropriate Government to issue a preliminary notification under section 5 of the setting out its proposal for information of persons likely to be affected thereby and specifying a date not less than two months from the date of the Notification on which proposals will be taken into consideration.
The Union of India accordingly issued necessary notification dated March 24,1982 and October 31, 1983 setting out the minimum piece rate of wages for various occupations in flagstone mines.
Disposing of the petition, the Court ^ HELD: 1.
Undoubtedly, mines have to work in larger public and national interest.
Therefore, in the very nature of things, there will be contractors and the workmen.
Contractor as is his wont, to augment his profit which motivates him to take contract and who is not shown to be altruistic, is bound to exploit the workmen.
The notorious method of exploitation is, pay as much less as possible despite all pretensions of Minimum Wages and Payment of Wages Act, take work for longer hours, prohibited by beneficent statutes like the Mines Act, the Factories Act and like statutes.
Both these when jointly practised enlarges the profit.
The law is that no employer can pay less than the minimum wages.
But this remains a paper promise unless an effective implementation machinery not overawed by these wealthy and generally unscrupulous contractors who can spread their tentacles over officials is set up.
[133 H; 134 A B; D] (The court expressed the hope that such a machinery would be set up jointly by the Union of India and the Government of the State of Madhya Pradesh.) [134 E] 2.
The State in discharge of its obligation under Articles 38, 41, 42 and 43 must extend the umbrella of protection to these poor and needy and unprotected workmen who are unable to negotiate on terms of equality and who may accept any terms to stave of hunger and destitution.
It is the State which must interpose between these two unequals to eschew exploitation.
[134 B C]
|
No. 2381 of 1968.
(From the Judgment and Order dated the 30th March 1965 of the Andhra Pradesh High Court in Appeal against Order No. 443 of 1963) P. Ram Reddy, K. Jayaram and K. Ram Kumar, for the appellant.
B.R. Agarwala, for respondents.
The Judgment of the Court was delivered by FAZAL ALI, J.
This appeal by certificate arises out of execution proceedings in respect of a decree obtained by the respondents/decreeholders.
It appears that the 5th re spondent/decree holder Siddam Pedda Rami Reddi hereinafter referred to as "SP" Reddi obtained a decree in O.S. No. 15 of 1949 from the Court of Sub Judge Kurnool against the judgment debtor Pujari Subbarayudu hereinafter referred to as "Pujari" or "judgment debtor".
The 5th respondent had also obtained another money decree against Pujari in another suit being O.S. No. 19 of 1953.
The 5th respondent/decree holder filed Execution Proceedings No. 24 of 1953 in the Trial Court for selling the properties be longing to the judgment debtor in order to satisfy the decree in O.S. No. 15 of 1949 and he also applied for per mission to bid at the auction sale.
The first sale was held on October 12, 1954 at which the lands situated in villages Devanoor and Gudipadu were put to sale.
But this sale was set aside as there was some delay in payment of the sale price.
Consequently a second sale was held on March 2, 1955 at which the 5th respondent SPR Reddi purchased the lands situated in village Davanoor and the appellant/auc tion purchaser T.P.S. Reddy purchased the lands in village Gudipadu.
It is also not disputed that in the warrant of sale as also the sale proclamation, the decretal amount for which the properties were to be sold was mentioned as Rs. 16,715 8 0.
The sale of lands in village 694 Devanoor alone fetched a sum of Rs. 16,880/ at which the sale was knocked down.
Thus it would appear that the sale proceeds of the lands in village Devanoor were sufficient to satisfy the decretal amount mentioned in the proclamation of sale.
Despite this fact, the Court proceeded to sell the properties of the judgment debtor in village Gudipadu which fetched Rs. 12,500/ and which were purchased by the appellant/auction purchaser.
On April 20, 1955 the decree holder obtained an order from the Court for rateable distribution of the sale pro ceeds.
In other words, this order was passed by the Court not before the sale so that the entire decretal amount could have been mentioned in the sale proclamation but a few days after the sale had already taken place.
This is rather an important aspect of the matter which appears to have been completely overlooked by the Trial Court.
On March 31, 1955 the judgment debtor Pujari filed an application to set aside the sale on various grounds, namely, that the sale was vitiated by material irregularities which caused serious prejudice to the judgment debtor and that the properties sold by the Court were valuable properties and the same were grossly undervalued in the sale proclamation.
Finally it was contended by the judgment debtor that once the sale of the properties in village Devanoor was sufficient to satisfy the amount mentioned in the sale proclamation, the Court should have stopped the sale as required by the mandatory provisions of 0.21 r. 64 of the Code of Civil Procedure hereinafter referred to as the Code instead of continuing the sale of the properties in village Gudipadu.
The Trial Court, however, after heating the objections of the decree holder rejected the application of the judgment debtor.
Thereafter the judgment debtor preferred an appeal before the High Court which, while negativing the grounds taken by the judgment debtor regarding the material irregularities in the conduct of sale or the under valuation of the properties, accepted the plea of the judgment debtor regarding the non compliance with the provisions of 0.21 r. 64 of the Code.
The High Court held, and in our opinion rightly, that as the sale of the properties in village Devanoor fetched an amount which was sufficient to satisfy the amount mentioned in the sale warrant, the Executing Court was not justified in proceeding with the sale of the properties in village Gudipadu and should have stopped the sale.
The High Court accordingly accepted the plea of the judgment debtor and set aside the sale with respect to the properties situated in village Gudipadu, but granted a certificate to the appellant to file an appeal in this Court and hence this appeal before us.
In this appeal the facts are more or less undisputed and the only serious point argued by the appellant is that the High Court was in error in setting aside the sale because even if the entire decretal amount was not mentioned in the sale proclamation, that was at best an irregularity which did not cause any prejudice to the judgment debtor.
It was also argued by learned counsel for the appellant that the judgment debtor did not raise any objection before the Executing Court against continuing the sale of other proper ties situated in village Gudipadu.
It was next submitted that the 5th respondent/decreeholder had obtained another decree in O.S 19 of 1953 and the total 695 amount under the two decrees fully justified the selling of the properties in village Gudipadu also, particularly when the decree holder had taken an order from the Executing Court for rateable distribution of the sale proceeds.
It is true that the High Court has not considered this aspect of the matter, but in our opinion the contentions raised by the appellant are wholly untenable.
It is not disputed that the warrant of sale was prepared long after the 5th respondent/decreeholder had obtained the second decree in O.S. 19 of 1953 and yet no attempt was made by the decree holder to approach the Court for amending the decretal amount mentioned in the sale proclamation, so as to include the decretal amount not only of the decree in the first suit No. O.S. 15 of 1949 but also of the decree in the second suit in O.S. 19 of 1953.
In these circumstances, therefore, under the provisions of 0.21 r. 64 of the Code when the amount as specified in the sale proclamation was fully satisfied by the sale of the properties in village Devanoor, the Court should have stopped the sale of further items of the properties.
It is manifest that where the amount specified in the proclamation of sale for the recov ery of which the sale was ordered is realised by sale of certain items, the sale of further items should be stopped.
This, in our opinion, is the logical corollary which flows from O.21 r. 64.of the Code which may be extracted thus: "Any Court executing a decree may order that any property attached by it and liable to sale, or such portion thereof as may seem necessary to satisfy the decree, shah be sold, and that the proceeds of such sale, or a sufficient portion thereof, shall be paid to the party entitled under the decree to receive the same.
" Under this provision the Executing Court derives jurisdic tion to sell properties attached only to the point at which the decree is fully satisfied.
The words "necessary to satisfy the decree" clearly indicate that no sale can be allowed beyond the decretal amount mentioned in the sale proclamation.
In other words, where the sale fetches a price equal to or higher than the amount mentioned in the sale proclamation and is sufficient to satisfy the decree, no further sale should be held and the Court should stop at that stage.
In the instant case, we have already indicated that the sale of lands in village Devanoor alone fetched a sum of Rs. 16880 which was more than sufficient to satis fy the amount of Rs, 16,715 8 0 mentioned in the sate proclamation.
It is true that the decree holder had ob tained another decree in O.S. No. 19 of 1953, but there is nothing to show that the decree holder had approached the Court for including the second decretal amount in the proc lamation of sale.
In these circumstances, therefore, we are clearly of the opinion that the Executing Court was not justified, in the facts and circumstances of the present case, in selling the properties situated in village Gudipa du.
The fact that the judgment debtor did not raise an objection on this ground before the Executing Court is not sufficient to put him out of Court because this was a matter which went to the very root of the jurisdiction of the Executing Court to sell the properties and the non compliance with the provisions of O. 21 r. 64 of the Code was sufficient to vitiate the same so far as the 696 properties situated in village Gudipadu were concerned.
For these reasons the contentions raised by counsel for the appellant must be overruled.
This, however, does not put an end to the issue, be cause the High Court, while setting aside the sale, has passed no order for adjusting the equities between the parties.
According to the appellant he had taken possession of the properties purchased by him at the auction sale and had made substantial improvements.
If the sale of these properties is to be set aside, the appellant will have to return these properties to the judgment debtor, but he will be entitled to receive the value of improvement 's made by him during the time he was in possession of those properties in addition to the return of the sum of Rs. 12,500/ .
The Executing Court will have to hold an inquiry into the matter and determine the value of the improvements made by the appellant which will have to be paid to him.
The appellant will not be entitled to any interest on the value of the improvements if he is found to be in possession of the properties.
If, however, the Executing Court finds that the auction purchaser was not in possession of the properties and the properties continued to be in possession of the judgment debtor, then the question of the value of improve ments will naturally not arise.
In that event the judg ment debtor will have to refund the amount of Rs. 12,500/ to the appellant with interest at the rate of 12% per annum from the date of sale upto the date of refund.
For these reasons, therefore, the appeal is dismissed with the modification indicated above and the case is sent back to the Executing Court to hold an inquiry into the matter.
In the special and peculiar circumstances of the present case, we make no order as to costs.
S.R. Appeal dismissed.
| The respondent was convicted for an offence under section 5(2) read with section 5(1)(d) of the Prevention of Corruption Act, 1947 and section 161 of the I.P.C.
The conviction was set aside by the High Court on the sole ground that the sanction for his prosecution was not accorded by a competent authority.
The respondent was a Civilian in the Defence Services in the rank of temporary Superintendent, Building and oRads Grade I. The prosecution case was that he had accepted illegal gratification of Rs. 300/ from one Brij Bhushan Lal,Contractor, as a motive or reward for doing an official act.
The sanction for the prosecution of the re spondent was accorded by Brig.
Naresh Prasad Chief Engineer, North Western Zone, Chandigarh.
The High Court held that Brig.
Naresh Prasad had no authority under the relevant rules either plenary or dele gated to appoint a person to a post in class III service at the time when he passed the order for sanction of prose cution.
That such a power was delegated to him subsequent ly.
The learned Judge held that the authority was the Chief Engineer, Western Command and not the Zonal Chief Engineer.
Section 6(1) of the Prevention of Corruption Act pro vides that no Court shall take cognizance of the offence in question alleged to have been committed by a public servant except with the previous sanction of the officer enumerated in clauses (a), (b) and (c) of that section.
Sub section 2 of section 6 further provides that where for any reason whatsoever any doubt arises whether the previous sanction as required under sub section (1) should be given by the Central or State Government or any other authority such sanction shall be given by that Government or authority which would have been competent to remove the public servant from his office at the time when the offence was alleged to have been committed.
The appellant contended that by an order communicated by letter dated 27 4 1956 (subsequently reiterated in letter dr. 23 1 1963) made under rule 10 the Engineer in Chief had empowered all Chief Engineers in Military Engg.
Service to make first appointments and that the operation of the said order was preserved by the saving clause in rule 34(1) of the 1965 Rules.
The appellant further contended that the fetter placed on the power given to the Chief Engineers in the matter of removal or dismissal of Class III servants operates only in case of persons appointed by the Engineer in Chief and not where he was appointed by the Chief Engi neer of a Command.
In the present case, the respondent was appointed not by Engineer in Chief but by the Chief Engi neer, Western Command.
The respondent contended that the order dated 27 4 1956 expressly delegates the power of making first appointments only to the Chief Engineers of the three commands then in existence and of the 'other departments specified therein.
In 1956, when the order was made there were no zonal Chief Enginers, which 594 came into existence in December, 1962 as a class apart working under the overall administrative control of the Chief Engineers of Commands.
A general delegation of the power in favour of the Chief Engineers of Commands as a class cannot by any reckoning amount to a delegation in favour of the Zonal Engineers also working under the control of the Chief Engineers of Commands.
Secondly, the letter dated 23 1 1963 was not issued under the signature of the Engineer in Chief nor can it be construed as a delegation of the power of appointment under rule 10.
Alternatively, the power delegated by the Engineer in Chief to the Chief Engi neers was a qualified one inasmuch as no power was given to them to dismiss or remove a Government servant of Class III service.
Dismissing the appeal, HELD: (1 ) Unless a different intention appears the power to appoint to an office includes the power to dis miss or remove from that office as provided in section 16 of General Clauses Act.
The post which the respondent was holding is a post of Class III service and the members of the service are governed by Central CiVil Services (Classi fication, Control and Appeal) Rules, 1965.
1965 Rules repeal the earlier 1952 Rules and any notification or orders issued thereunder in so far as they were inconsistent with the 1965 rules.
Under rule 10, appointments to Class III and Class IV Civilian Service are to be made by the officers empowered by the Engineer in Chief.
Thus the appointing authority is competent to delegate the power of appointment.
[596 B, C, G H, 597D] (2) A perusal of the letter dated 27 4 1956 communicat ing the order of the Engineer in Chief shows that it is addressed to the Chief Engineers, Southern Command, Eastern Command and Western Command.
On the date of this letter there were only 3 Commands; two Commands were created subse quently.
There were no Zones or Zonal Chief Engineers at that time.
Therefore, the Chief Engineers to whom the powers have been delegated under this letter could only be the Chief Engineers of the Commands as a class and it would cover Chief Engineers of the Commands which were subsequent ly created.
But it would not include the Chief Engineers of Zone.
Zonal Chief Engineers have, to work under the Command and technical control of Chief Engineers of Com mands.
Zonal Chief Engineers are a class apart from the Chief Engineers of Commands.
They are under the administra tive control of the Chief Engineers of Command.
Thus the delegation is to the Chief Engineers of Commands and not to the Zonal Chief Engineers.
[600 A B, F H 601 A B] (3) The letter dated 23 1 1963 is not signed by the Engineer in Chief.
It appears to have been signed by some other person for Engineer in Chief.
Nor does it purport to have been issued pursuant to any separately passed order of the Engineer in Chief expressly delegating the powers of appointment to posts in Class III service under Rule 10.
There is nothing in the letter to show that the delegation was to the Zonal Chief Engineers.
On the contrary, para 8 of the letter talks of the Command Chief Engineers.
The way in which the Engineer in Chief has construed the letter is not relevant.
[601 G H, 602AB] (4) Brig.
Naresh Prasad, Zonal Chief Engineer was not competent to remove the respondent and as such, the order sanctioning the prosecution of the respondent was bad in law.
[602 C]
|
Civil Appeal No. 1633 of 1968.
Appeal by special leave from the judgment and order dated the 2nd December, 1967 of the Government of India, Ministry of Steel, Mines and Metals (Department of Mines and Metals) at New Delhi in No. M.V. 1 (141)/67.
section K. Mehta and K. R. Nagaraia, for the appellant.
section P. Nayar and Girish Chandra, for respondent No. 1.
U. P. Singh and Shambhu Nath Jha, for respondent No. 2.
The judgment of the Court was delivered by BHAGWATI, J.
This appeal can be disposed of on a very narrow point and we will, therefore, set out only so much of the facts giving rise t(s the appeal as bear on this point and omit what is unnecessary.
Since 23rd December, 1959 the appellants had a sub lease from the Receiver in Suit No. 203 of 1905 for extracting phosphate from 1043 an area of 400 hectares situate in Singhbhum District in the State of Bihar.
This sub lease, according to the State of Bihar, came to an end from 1st September, 1964 and the appellants, therefore, made an application to the State of Bihar on 22nd/24th March, 1965 for a grant of fresh mining lease for extraction of apatite and phosphate from the same area under Rule 22 of the Mineral Concession Rules, 1960 made by the Central Government under section 13 of the Mines Minerals (Regulation Development) Act, 1957.
The State Government failed to dispose of the application within a period of nine months from the date of its receipt and hence under Rule 24(3) of the Mineral Concession Rules, 1960 the application was deemed to have been refused by the State Government.
The appellants preferred a revision application to the Central Government on 16th February, 1966 against the deemed refusal of their application under Rule 54 of the Mineral Concession Rules, 1960.
The Central Government disposed of the revision application by an order dated 31st December, 1966 directing the State Government to consider the application of the appellants and to decide it on merits.
The State Government thereafter by an order dated 9th February, 1967 rejected the application of the appellants on the ground that the State Government had already taken a decision not to grant lease for phosphate ore to any individual or private party as it had decided "to work this mineral in the public sector".
The appellants again filed a revision application to the Central Government against the order of the State Government rejecting their application.
The Central Government invited comments of the State Government on the revision application and on the comments submitted by the State Government, the appellants were given an opportunity to submit their cross comments which they did on 8th August, 1967.
Whilst the revision application was pending, the appellants read an advertisement in the issue of Statesman dated 13th September, 1967 to the following effect: "Government of Bihar Department of Mines & Geology, Patna.
Mining and beatification of low grade apatite of Singhbhum.
A reserve of a little over 1 million tonnes of low grade Apatite Mineral with average 16% P.O. has been proved in a belt consisting of several mouzas in the Singhbhum District of Bihar.
The representative bulk samples of the minerals have laboratory Jamshedpur, and it has been found that the mineral can be suitably upgraded by benefication, to yield Apatite concentrate with 36% to 40% P.O., suitable for use as raw material for the manufacture of Phosphetic fertiliser.
Report of economic feasibility studies available.
The State Government may consider giving tax holidays for a filed period and also may guarantee the safety of the investment invested parties capable of making investment to the tuner of 40 to 50 lakhs in undertaking to above project may obtain further particulars from the 1044 Mines Commissioner, Department of Mines and Geology, Government of Bihar.
Patna.
Sd/ K. ABRAHAM, Commissioner of Mines & Geology.
" The appellant immediately addressed a communication dated 26th September, 1967 to the Central Government enclosing a copy of the advertisement and pointing out that it was clear from the advertisement that the State Government had abandoned the idea of working apatite and phosphate in the public sector and that the ground for rejecting the application of the appellants for mining lease no longer existed.
The Central Government, however by an order dated 2nd December, 1967 rejected the revision application stating that: ". the Central Government have come to conclusion that as the State`Government are anxious to do phosphate mining for their own fertilizer factory in public sector, there is no valid ground for interfering with the decision of the State Government rejecting your application for grant of mining lease for apatite and phosphate in Singhbhum district.
" The appellants thereupon preferred the present appeal against the order of the Central Government with special leave obtained from this Court.
It is apparent from the order of the Central Government dated 2nd December, 1967 that the Central Government rejected the revision application of the appellants on the ground that the State Government was anxious to do phosphate mining for its own fertilizer factory in the public sector.
This was undoubtedly the original ground put forward by the State Government for rejecting the application of the appellants for mining lease.
But it does appear prime facie from the advertisement in the issue of the Statesman dated 13th September, 1967 that the proposal of the State Government to mine apatite and phosphate for its own fertilizer factory in the public sector was abandoned and the State Government was prepared to give mining lease to a party which was prepared to undertake a project of setting up a plant for beatification of this mineral so as to make it suitable for use as raw material for the manufacture of phosphatic fertilizer.
The appellants brought this advertisement to the notice of the Central Government by their representation dated 26th September, 1967 and this was done before the revision application was disposed of by the Central Government.
Even so, the Central Government failed to take into consideration this advertisement which appeared to indicate a change in the stand of the State Government and made its order dated 2nd December, 1967 in complete disregard of it.
The order of the Central Government dated 2nd December, 1967 clearly shows that the Central Government failed to apply its mind to this advertisement though it was brought to its notice in time and proceeded to dispose of the revision application as if no such advertisement had been issued by the State Government.
The Central Government did not even care to invite the comments of the State 1045 Government in regard to the advertisement and ignored it altogether A in making its order rejecting the revision application.
This was clear non application of mind on the part of the Central Government to a very material circumstance which was brought to its notice before it disposed of the revision application.
The order of the Central Government, therefore, suffers from a patent error and it must be quashed and set aside and the matter must go back to the Central Government for fresh determination.
We accordingly set aside the order dated 2nd December, 1967 passed by the Central Government and remand the case to the Central Government with a direction to dispose of the revision application, after taking into account the entire material before it, including the advertisement given by the State Government in the issue of Statesman dated 13th September, 1967 and giving an opportunity to the State Government to offer its comments in regard to this advertisement and a further opportunity to the appellants to make their submissions on the comments, if any, offered by the State Government.
The State of Bihar will pay the costs of the appeal to the appellants.
M.R. Appeal allowed.
| The appellant was a Veterinary Compounder serving under the Panehayat Samiti, Hansi.
The Zilla Parishad Tribunaul tranferred him from Hansi to Singhani.
The Chairman of the Panchayat Samiti.
Hansi requested the Chairman of Zilla Parishad Tribunal served a notice on the appellant to show cause why he should not be dismissed for not having handed over the charge of the dispensary to the person who was appointed in his place and also on the ground that when the Secretary of the Zilla Parishaod Tribunal with the help of the compounder, who was directed to take charge from the appellant, was prepaering a list of stock, the appellant and others entered the office and one of the persons out of the appellant 's group snatched the papers from the Secretry and manhandled him.
The appellant submitted an interim explanation and reserved his right to submit a final reply after inspection of certain records was given to him.
The Zilla Parishad Tribunal did not give any opportunity to the appellant for inspecation of record nor sent any communication to him rejecting the request giving any justifiable reasons.
However, the appellant was served with a letter dismissisng him from service.
Section 124(2) of the Punjab Panchayat.
Samitis & Zilla Parishad.
Act, 1961, authorises the Tribunal to impose any punishment including the punishment of dismissal on any servant of the Panchayat Samiti or Zilla Parishad.
The proviso,howvever.
requires the Tribunal before passing any order of dismissal or removal to give a notice to the servant to show cause against the action proposed to be taken against him The appellant filed a writ petition in the High Court challengaing the dismissal order.
The High Court dismissed the writ petition.
Allowing the appeal by special leave, ^ HELD: (1) A perusal of section 124(2) goes to show that before any action is taken for dismissal or removal of an employee the Tribunal has to enquire into his conduct justifying such action.
This enquiry must necessarily be made in the presence of the employee giving him an opportunity to rebut the allegations made against him.
It is only after affourding him a reasonable opportunity to rebut the allegations in the charge and after the Tribunal is satisfied that the misconduct is established, the question of final punitive action either of dismissal or removal has to be considered.
The employee must be given a full and fair.
reasonable opportunity to meet the charges.
[633D E] (2) In the instant case apart from giving the show cause notice no other communication was made to the appellant except the order of dismissal.
This is a clear case where the reasonable opportunity envisaged under section 124(2) has not been afforded to the appellant for making an effective representation to establish his innocence.
Even in respect of the incident of 15 8 1967, the appellant was acquitted in a criminal case lodged against him.
In the instant case the provisions of section 124(2) which embody the principles of natural justice and which are of a mandatory character have been violated vitiating the order of dismissal.
[633G. 634A C] (3) In the ordinary course it would have been open to the authority to institute a fresh enquiry after the reinstatement.
But in this case, that procedure was not permitted because the appellant was dismissed in December, 1967, and 631 has been out of employment for over 8 years.
Secondly, he does not have many years to serve.
Thirdly, the serious allegations regarding the incident of 15 8 1967 have not been found to be established in a judicial trial.
The Court, therefore, quashed the order of dismissal and directed that the appellant should be treated on leave without pay and further directed that no further enquiry into the allegations forming the subject matter of charge should be made.
[634C E]
|
Appeal No. 302 of 1955.
Appeal by special leave from the judgment and order dated April 3, 1954, of the Mysore High Court in Regular Appeal No. 195 of 1951 52.
S.A. Gopala Rao and B. R. L. Iyengar, for the appellants.
Mirle N. Lakshminaranappa, P. Ram Reddy, R. Thiagarajan and C. V. L. Narayan, for the respondent.
September 8.
The Judgment of the Court was delivered by KAPUR J.
This appeal has little substance and must, therefore, be dismissed.
The appellants are the decree holders and the respondent is the judgment debtor.
On February 3, 1941, by a registered deed the father of the appellants leased to the respondent the house in dispute for a period of 10 years with an option of renewal for further periods for as long as the respondent wanted.
This house was used by the respondent for his hotel.
The father died on January 25, 1945.
On December 21, 1945, the appellants filed a suit for a declaration that the deed of lease of February 3, 1941, executed by their father was not for legal necessity or for the benefit of the family, that the alienation was not binding on them and the option of renewal under the lease was void and unenforceable on account of uncertainty.
The appellants further prayed for delivery of possession and for a decree for a sum of Rs. 2,655 as past mesne profits and future mesne profits at Rs. 250 per mensem as from December 1, 1945.
The respondent filed his written statement on March 11, 1946, and an additional written statement on November 26, 1946, whereby he raised an objection to the jurisdiction of the court by reason of the Mysore House Rent Control Order of 1945.
The trial judge upheld the preliminary objection and dismissed the suit.
On appeal, the High Court set aside the decree on the ground that the 594 nature and scope of the suit had been misconceived by the trial court and that it was not based on relationship of landlord and tenant and therefore section 8(1) of the Mysore House Rent Control Order was inapplicable and the case was remanded for retrial.
On August 23, 1948, the suit was decreed.
The trial court held that the lease was binding for the first period of ten years as from May 1, 1941, as it was supported by legal necessity; but the option of renewal was void and unenforceable for uncertainty and therefore a decree for possession was passed to be operative on the expiry of ten years, i.e., May 1, 1951.
On appeal the High Court confirmed that decree on August 22, 1950.
On July 9, '1951, the appellants took out execution of the decree and on July 22, 195 1, possession was delivered to them.
The order for delivery was made without notice to and in the absence of the respondent.
The proceedings, "spot mahazar" that the respondent came to the spot after delivery of the major portion of the property in dispute had been delivered to the appellants.
On August 13, 1951, the respondent made an application in the Executing Court, the District Judge, under sections 47, 144 and 151 of the Code of Civil Procedure for setting aside the ex parte order of delivery and for redelivery of possession of the house to him and in the alternative for an order to the appellants to give facilities to him (respondent) to remove the various moveables and articles mentioned in the petition.
The appellants pleaded that the application was not maintainable.
The District Judge, on November 14, 1951, upheld this contention and dismissed the application.
An appeal was taken to the High Court and it reversed the order of the Executing Court and directed the appellants to return possession of the house in dispute to the respondent along with the moveables which were in the house at the time respondent was evicted.
The High Court held that the Executing Court had no jurisdiction to order the eviction of the respondent because of the provisions of Mysore House Rent and Accommodation Control 595 Order, 1948, which was in operation on the date of eviction, The High Court having refused to give a certificate under article 133 the appellants obtained special leave to appeal from this Court on January 12, 1955, and this is how the matter has come to this Court.
The question for decision mainly turns upon the applicability of the provisions of the two House Rent Control Orders of 1945 and 1948 and how far they were applicable to the proceedings in the suit and execution.
The Mysore House Rent Control Order of 1945 came into force on November 6, 1945, and by section 8(1) of this Act a restriction was imposed on the eviction of tenants and the relevant part of this section was: Section 8 "(1) A tenant in possession of a house shall not be evicted therefrom, whether in execution of a decree or otherwise before or after the termination of the tenancy, except in accordance with the provisions of this clause; (2)A landlord wishing to evict a tenant in possession shall apply to the Controller for a direction in that behalf.
If the Controller after giving the tenant a reasonable opportunity of showing cause against the application, is satisfied This Order was replaced by the Mysore Rent and Accommodation Control Order of 1948 which came into force on July 1, 1948.
The relevant provisions of this Order, i. e., sections 9 and 16 which are applicable to the present appeal are as follows: Section 9 " (1) A tenant in possession of a house shall not be evicted therefrom whether in execution of a decree or otherwise except in accordance with the provisions of this clause (2)A landlord who seeks to evict a tenant in possession shall apply to the Controller for a direction in that behalf If the Controller, after giving tenant a suitable opportunity of showing cause against such application , is satisfied: this Order shall Prevent 596 a landlord from filing a suit for eviction of a tenant before a competent civil court, provided that no decree for eviction of a tenant, passed by a civil court shall be executed unless a certificate to that effect is obtained from the Controller " It was argued on behalf of the appellants before the High Court and that argument was repeated before us that the Mysore House Rent Control Order of 1948 was repugnant to the provisions of the (Act IV of 1882) which was brought into force in the State of Mysore by Part B States (Laws) Act, 1951 (Act III of 1951).
This Act was enacted on February 22, 1951, and came into force on April 1, 1951, which was termed the appointed day.
It was contended therefore that the House Control Order could not operate on the rights of the parties on the day when the Executing Court made the. order for delivery of possession to the appellants, i.e., July 9, 1951, or when the delivery was actually given, i.e., on July 22, 1951.
To test the force of this argument it is necessary to examine the provisions of Part B States (Laws) Act and how and when as a consequence of it the became effective and operative in the State of Mysore.
Section 3 of that Act deals with the extension and amendment of certain Acts and Ordinances.
The Acts and the Ordinances specified in the Schedule were amended and became applicable as specified and as a consequence the fourth paragraph of section 1 for the words " Bombay ' Punjab or Delhi ", the words " that the said States " were substituted.
Therefore the effect of the Part B States (Laws) Act merely was that qua the , the State of Mysore was placed on the same footing as the States of Bombay, Punjab or Delhi.
It was by virtue of a Notification No. 2676 Cts.
46 51 5 dated September 12, 1951, that the was extended to the State of Mysore as from October 1, 1951.
Consequently the laws of the State applying to leases which would include the Mysore House Rent Control Order of 1948 continued to be in force and applicable to cases that were pending till it was repealed by the 597 Mysore Rent Control Act of 1951 which received the President 's assent on August 16, 1951.
The argument, therefore, that as from April 1, 1951, as a result of repugnancy the House Rent Control Order of 1948 stood repealed must be repelled as unsound and cannot be sustained, because it was an existing law which was saved by article 372 of the Constitution and remained unaffected by article 254.
The Punjab High Court in M/s. Tilakram Rambaksh vs Bank of Patiala (1) discussing the effect of Part B States (Laws) Act on the application of the to PEPSU said: " All that Central Act III of 1951 has done is to make it possible for Part B States to extend the Act to any part of territory by notification.
Actually, however, this wag never done by PEPSU or Punjab and the is not as such in force there.
It is unnecessary in the circumstances to examine the argument further ".
Although the question of repugnancy was raised in the High Court at the time of the hearing of the appeal, the true effect of section 3 of the Part B States (Laws) Act was not brought to the notice of the learned Judges nor was the Notification placed before them, but it was discussed by the High Court in its order refusing certificate under article 133(1) of the Constitution.
The argument of repugnancy, therefore, is wholly inefficacious in this appeal.
The inapplicability of section 47 to the proceedings out of which the appeal has arisen was also raised before us, but that contention is equally unsubstantial because the question whether the decree was completely satisfied and therefore the court became functus officio is a matter relating to execution, satisfaction and discharge of the decree.
It was held by this Court in Ramanna vs Nallaparaju (2) that: " When a sale in execution of a decree is impugned on the ground that it is not warranted by the terms thereof, that question could be agitated, when it arises between parties to the decree, only by an application under section 47, and not in a separate suit ".
(1) A.I.R. 1959 Pb.
440, 447.
(2) A.I.R. 1956 $.C. 87, 91.
598 See also J. Marret vs Mohammad Shirazi & Sons (1) where the facts were that an order was made by the Executing Court directing contrary to the terms of the decree the payment of a certain fund to the decree holder.
The Madras High Court in K. Mohammad Sikri Sahib vs Madhava Kurup (2) held that where the Executing Court was not aware of the amendment of the Rent Restriction Act by which the execution of a decree was prohibited and passed an ejectment order against a tenant, the Executing Court could not execute the decree and any possession given under an ex parte order passed in execution of such a decree, could be set aside under section 151 of the Code of Civil Procedure.
The prohibition is equally puissant in the present case and section 47 read with section 151 would be equally effective to sustain the order of redelivery made in favour of the respondent.
The applicability of res judicata and the defenses of waiver and estoppel were also raised by the appellants.
The contention of res judicata was based on the plea taken by the respondent in his written statement, dated March 11, 1946, where he pleaded that the civil court had no jurisdiction to order eviction because of the House Rent Control Order, 1945, to which the reply of the appellants was that considering the nature of the suit and the consequential remedy that they were seeking, the plea of jurisdiction of the court was not open to the respondent.
Thereupon the trial court raised a new 'issue " whether this court has jurisdiction to try the suit, in view of the House Rent Control Order " which was decided against the respondent and a decree in favour of the appellants was passed on August 23,1945.
This judgment formed the basis of the argument before us that the plea of in executability of the decree could not be raised because it was barred on the principle of res judicata.
The plea of res judicata is not available to the appellants as the prohibition on account of the House Rent Control Order was not against the passing of the decree but against its execution and therefore the objection to the executability could only be taken (1) A.I.R. 1930 P.C. 86, (2) A.I.R. 1949 Mad.
599 at the time of the execution of the decree which in the instant case could not be done because the order for delivery by the Executing Court was passed without notice to the respondent.
We must, therefore, repel the contention based on the ground of res judicata.
The argument of waiver and estoppel is also devoid of force.
This plea was based on a letter which the respondent 's lawyer sent in reply to the respondent asking to make arrangements to put the appellants in possession.
The former replied thereto that his client ' was making arrangements and as soon as he could do go, he would hand over possession to the appellants.
This is slender basis for the sustainability of the plea of waiver and estoppel.
There is no conduct on the part of the respondent which has induced the appellants to change their position or has in any way affected their rights and the plea of non executability which has been taken is based on statute and against statute there cannot be an estoppel.
This ground taken by the appellants is equally unsound and must be rejected.
The contention raised that ignoring sections 9(1) and 16 of the 1948 House Rent Control Order is no more than an error in the exercise of jurisdiction does not appear to be sound because those sections are a fetter on the executability of the decree and not merely an error in the exercise of the jurisdiction.
In the present case the two sections mentioned above were a restriction on the power of the court to execute the decree and therefore this argument must also be, rejected.
In the result this appeal fails and is dismissed with costs.
Appeal dismissed.
| The appellant, at the time a resident of Lahore, was asses sed to income tax on an income of Rs. 49,047 for the assessment year 1944 45 by the Income tax Officer, Lahore.
After the partition in 1947 he shifted to Delhi and resided there.
He was one of the three share holders of a company called Indra Singh and Sons Ltd. of Calcutta, the shares of all the three shareholders being equal.
The company at a meeting held oil April 17, 1943, passed its accounts for the year ending March 31, 1942, but declared no dividends although the accounts disclosed large profits.
On June 11, 1947, the Income tax Officer, Calcutta, passed an order under section 23A of the Income tax Act that the sum of Rs. 4,74,370, being the appellant 's share of the undistributed assessable income of the company, be included in his income for the assessment year 1944 45.
Thereupon the Income tax Officer, Delhi, on April 10, 1948, issued a notice to the appellant, who was then working as the Defence Minister of India and residing in Delhi, under section 34 of the Act to file a revised return, which he did under protest, reopened the earlier assessment and by a fresh order made on March 25, 1949, assessed the appellant on an income of Rs. 5,23,417 for the year in question.
It was contended on behalf of the appellant that the proceeding under section 34 could be held only in Lahore and not in India at all.
The question for determination was whether the Income tax Officer, Delhi, could validly reassess the appellant under section 34 of the Act.
Held, that the issue of a notice under section 34 of the Income tax Act, 1922, under the provision of the section itself, attracted such provisions of the Act as might apply to a notice issued under section 22(2) of the Act and since section 64 of the Act was the only provision under which the place of assessment upon a notice under section 22(2) could be determined, in absence of anything to the contrary in the Act, section 64 applied to an assessment under section 34 of the Act.
The appellant was, therefore, rightly assessed by the Income tax Officer, Delhi, under section 64(2) of the Act.
483 C. V.Govindarajulu vs Commissioner of Income tax, Madras, I.L.R. and Lakshminarain Bhadani vs Commissioner of Income tax, Bihar and Orissa, , held inapplicable.
The time specified by the proviso to section 64(3) could have no application since the contention in the present case was that the assessment under section 34 could be made only in Lahore and not in India at all.
Section 23A of the Act, as it then stood, raised only one fiction, and not two, and that was of an income arising on a specific date in the past with the purpose that such income might be included in the income of a share holder for assessment.
That income must, therefore, be deemed to have existed on the date for the purpose of assessment and, if not included in the assessment for the relevant year, must be taken to have actually escaped assessment so as to attract section 34 of the Act.
Dodworth vs Dale, , D. & G. R. Rankine vs Com missioners of Inland Revenue, and Chatturam Horliram Ltd. vs Commissioner of Income tax, Bihar and Orissa, ; , held inapplicable.
There is no warrant for the proposition that section 23A of the Act was meant to apply only to cases where pending assessment for any year, an order is made under that section creating a fictional income that year.
Such an order could, therefore, be made even after the assessment of the income of the share holder for the year concerned had already been completed.
But section 23A does not itself provide for any assessment being made and that has to be made under other provisions of the Act authorising assessment including section 34.
It is not correct to say that section 23A(1), as it then stood, was beyond the competence of the Legislature and was as such unconstitutional.
Under Entry 54 of List I of the Seventh Schedule to the Government of India Act, 1935, the Legislature could pass not only a law imposing a, tax on a person on his own income but also a law preventing him from evading the tax payable on his income and there can be no doubt that section 23A, properly construed, was meant to prevent such evasion.
|
Appeal No. 1787 of 1966.
Appeal from the judgment and decree dated May 18, 1964 of the Kerala High Court in Appeal Suit No. 591 of 1963.
125 D. Narsaraju and A. section Nambiar, for the appellants.
W.S. Badingay, R. Mahalingier and Ganpat Rai, for respondents Nos. 1 and 2.
The Judgment of the Court was delivered by Ray, J.
This is an appeal from the judgment dated 18 May, 1964 of the High Court of Kerala allowing the appeal in part and allowing declaration to the effect that the plaintiffs are next in the line of succession to V.L. Lazar and T.V. John respectively and that they are entitled to claim an appointment as trustees.
The High Court, however, concluded by saying that such appointment could be made in a properly framed suit under section 92 of the Code of Civil Procedure.
Counsel for the appellants contended that the High Court was in error in making the declaration particularly when the High Court said that such appointment could be made only in a properly framed suit under section 92 of the Code.
In order to appreciate the matters in controversy it is necessary to refer to a few facts and the frame of the suit.
The plaintiffs filed this suit in 1961 for a declaration that defendants numbered 4 to 9 were "trespassers" on the trust and that all acts and proceedings of defendants numbered 1 to 9 done since the resignation of T.V. John and V.L. Lazar in respect of the administration of the trust are invalid and void; that the plaintiffs be appointed as trustees; that defendants numbered 10 to 11 be declared to be, and to have always been, lawful trustees and for injunction restraining defendants numbered 4 to 9 from interfering with the trust; that an enquiry be made into their administration and accounts, recovery of properties and funds misused, wasted, disbursed or appropriated, and that defendant numbered 1 to 3 be declared to be unfit to continue as trustees.
There was a deed of settlement dated 20 December, 1953 executed by a Christian T.V. Kochuvareed called "Thattil Kochuvareed Educational and Charitable Trust".
Apart from the settlor, V.L. Lazar father of the first plaintiff and T.V. John father of the second plaintiff and defendants numbered 1 to 3, 10 and 11 were trustees.
On 27 May, 1957 V.L. Lazar resigned from the trusteeship.
On 12 March, 1960 T.V. John followed suit.
The settlor and the rest of the trustees appointed six more trustees being defendants numbered 4 to 9 inclusive.
The settlor Kochuvareed died on 26 July, 1961.
On 28 November, 1961 respondents numbered 1 and 2 namely, John son of V.L. Lazar and Varghese son of T.V. John the 126 plaintiffs filed suit O.S. No. 115 of 1961 claiming, inter alia, that the plaintiffs be appointed as trustees.
At the trial two preliminary issues were framed: Whether the suit was maintainable due to want of compliance with section 92 of the Code of Civil Procedure and whether the Court had jurisdiction to try this suit relating to trust.
The trial Court came to the conclusion that the suit was within the mischief of non compliance with the provisions of section 92 of the Code of Civil Procedure.
The trial Court on 12 March, 1962 dismissed the suit and held that the suit had to be instituted after obtaining sanction under section 92 of the Code.
The plaintiffs filed an appeal.
On appeal the High Court on 20 August, 1962 allowed the appeal in part and set aside the dismissal of the suit in so far as it related to prayer 'e ' and remanded the suit to the trial Court for trial in respect of that claim.
The trial Court on remand by judgment dated 23 August, 1963 held that the suit as flamed was maintainable and the plaintiffs were entitled to be declared as rightful trustees but the second plaintiff would have to exercise rights as trustee only on attaining majority.
Prayer 'e ' in the plaint was as follows : "That plaintiffs be appointed to their rightful place as trustees and the second plaintiff being a minor now, be permitted to exercise his rights and safeguard his interests until he attains majority, through his 'Next Friend, namely his father".
The appellants, viz., defendants numbered 4 to 9 preferred an appeal.
The High Court on 18 May, 1964 allowed the appeal in part and altered the declaration to the effect that the plaintiffs were next in the line of succession and that they were entitled to claim appointment as trustees, but such appointment could be only in a properly framed suit.
Counsel for the appellants contended that prayer 'e ' was within the mischief of section 92 of the Code of Civil Procedure.
It was further said that the plaintiffs (respondents 1 and 2) filed a fresh suit O.S. No. 1 of 1965 in the District Court, Trichur under section 92 of the Code of Civil Procedure praying, inter alia, for reliefs of removal of defendants numbered 4 to 9 and appointment of the plaintiffs as trustees in place of their respective fathers who resigned from such office and for other reliefs.
Counsel for the appellants contended that the finding in the present appeal that the plaintiffs were entitled to a declaration for appointment would constitute res judicata unless the same finding was set aside and 127 the matter was kept entirely open in the new suit filed by respondents 1 and 2.
Counsel for the respondents contended that the decision of the High Court could be upheld because all that it said was that the plaintiffs were entitled to a right and the question of appointment would be canvassed in the suit.
This contention is unacceptable because a suit for a bare declaration of right without further relief for possession and other reliefs as the facts and circumstances would require is not supportable.
The provisions of section 92 of the Code of Civil Procedure indicate, inter alia, that a suit for appointment of new trustees is competent only after compliance with the provisions of section 92 of the Code.
The plaintiffs, namely, respondents 1 and 2 in the present case, alleged that defendants numbered 4 to 9 were strangers and "trespassers" in relation to the trust, and that the other defendants illegally introduced defendants numbered 4 to 9 into the Board of Trustees.
The plaintiffs further alleged that defendants numbered 1 to 9 were guilty of waste and misappropriation.
The plaintiffs further alleged that they had exclusive right to be appointed trustees.
Section 92 of the Code of Civil Procedure prohibits a plaintiff from obtaining relief of appointment of new trustees without the compliance with the provision of the said section of the Code.
The only question is whether prayer 'e ' in the plaint can be said to be one for appointment of new trustees.
The plaintiffs asked for appointment.
It was said by counsel for the respondents that the plaintiffs under the deed of trust could be appointed trustees.
Reliance was placed on clause (6) of the deed of trust which, inter alia, stated that in the case of a vacancy, the remaining trustees were to appoint a new trustee.
It, therefore, follows that even under clause (6) of the deed of trust it would be an appointment of new trustees.
The trustees in the present case did not appoint new trustees.
The plaintiffs, therefore, came to court.
The reason why the plaintiffs sought the aid of the Court is the appointment of trustees.
It is only because the other trustees did not appoint a new trustee that the plaintiffs took recourse to the institution of the suit for the appointment of trustees.
Further, unless the defendants are removed there cannot be an appointment of new trustees.
We are, therefore, of opion that prayer 'e ' in the present case, viz. the plaintiffs be appointed as trustees falls within the provisions of section 92 of the Code.
If as we held that the appointment of new trustees falls within section 92 of the Code can it yet be said that the plaintiffs will be entitled to a bare declaration of their right to be appointed.
In the first place, it will be granting them the right to be appointed 128 which itself is the foundation of appointment.
If the appointment fails within the vice of section 92 any decision giving them the right "to be appointed will be prejudging the question and will be an impediment as far as the defendants are concerned in questioning the right of the plaintiffs to be appointed as trustees.
Secondly, it is well settled that if any matter is directly prohibited, the same cannot be achieved indirectly.
The appointment of new trustees is prohibited ' in the absence of the compliance with the provisions of section 92 of the Code.
If a right is granted to the plaintiffs to be appointed as trustees it will amount to an indirect way of giving the plaintiffs the relief of the right to be appointed.
It will be particularly so because the right will be res inclusa and will, therefore, be res judicata.
The right will not be open to be questioned in subsequent proceedings.
Thirdly, if the appointment of new trustees cannot be proceeded with in the absence of compliance with the provisions of section 92 of the Code and when a suit has been instituted by the plaintiffs for the self same reliefs after compliance with section 92 of the Code it is all the more necessary that the entire question of appointment which presupposes as its foundation the right to be appointed should be gone into the newly instituted suit in 1965 to which reference is made earlier.
Fourthly, a bare declaration of right will be within the mischief of section 42 of the and section 34 of the .
We are, therefore, of opinion that the judgment of the High Court giving the plaintiffs the right to be appointed trustees should be set aside.
It is made clear that contentions of the rival parties in the newly instituted suit are left open.
The finding of the High Court and the: declaration granted by the High Court are both set aside.
The suit is, therefore, dismissed.
For these reasons, the appeal is accepted and is allowed.
The appellants will be entitled to costs.
V.P.S. Appeal allowed.
| By a deed of settlement, the settlor appointed besides himself, the father of the first plaintiff, the father of the second plaintiff, and defendants 1 to 3 and 10 and 11, as.
trustees of an Educational and Charitable Trust.
On the resignation of the fathers of the two plaintiffs, the remaining trustees appointed defendants 4 to 9 as trustees.
The plaintiffs flied a suit making allegations against defendants 1 to 9 and claimed that they should be appointed as trustees.
The High Court, in 'appeal, gave a declaration to the effect that the plaintiffs were; next in the line of succession, that they were entitled to claim appointment as trustees, but that such appointment could be made only in a properly framed suit after complying with the requirements of section 92, Civil Procedure Code.
The plaintiffs thereupon filed a fresh suit under section 92, C.P.C.
Meanwhile, the defendants in the ,earlier suit filed an appeal against the judgment of the High Court, to this Court.
HELD: The suit was for appointment of the plaintiffs as trustees and fell within the provisions of section 92, C.P.C.
Therefore, the judgment of the High Court giving the plaintiffs the right to be appointed as trustees, when the provisions of the section were not complied with, should be set aside.
[127 H; 128 E] (a) If the appointment fell within the vice of section 92 any decision giving the plaintiffs the right to be appointed will be prejudging the question and would be an impediment as far as the defendants are concerned, in questioning, in the second suit, the right of the plaintiffs to be appointed as trustees.
[128 A B] (b) If the right to be appointed as trustees were to be granted 10 the plaintiffs in the absence of compliance with the provisions of the section, it would amount to an indirect way of giving what was directly prohibited.
[128 B] (c) If the declaration were 'allowed to stand it would operate as res judicata and it would not be open to the defendants to question it in the subsequent proceedings.
flied for the same relief after compliance with the section.
[128 B C] (d) A hare declaration of the right without consequential relief will be within the mischief of section 42 of the or section 34 of the .
[128 D E]
|
vil Appeal No. 215 of 1964.
Appeal from the judgment and order dated August 24, 1961 of the Madras High Court in Case referred No. 102 of 1957.
Niren De, Additional Solicitor General, R. Ganapathy Iyer and R.N. Sachthey, for the appellant.
R. Thiagarajan, for the respondent.
The Judgment of the Court was delivered by Shah, J.
The respondent is a private limited Company.
It carried on business in hides and skins, minerals, tobacco and other commodities, and also acted as managing agents for the Nellor Power and Light Company Ltd. and for two other Companies.
T.M. Ayyadurai, T.M. Rangachari and P.C. Chakrabarti were directors of the Company.
Each director was paid a fixed remuneration of Rs. 4,800/ per annum for attending to the business of the Company.
On June 21, 1951 the respondent was appointed by the Central Government as its agent for buying, checking, weighing, leaf drying.
storing.
transporting, retaining and reselling tobacco under and in accordance with the directions issued from time to time.
The Central Government agreed to pay to the respondent price of the tobacco purchased, charge at the rate of one anna per lb.
for tobacco not redried, and at the rate of two annas per lb.
for tobacco redried.
and commission on all purchases.
On June 22, 1951 the respondent passed a resolution placing T.M. Ayyadurai in "special charge" for arranging purchases of tobacco on credit, 694 inspecting tobacco at Guntur and at Madras Port, and for supervising shipment of tobacco, and agreed to pay him 30 per cent of the net profit as remuneration.
Under the contract with the Government of India Rs. 1,38,454/ became due to the respondent as commission in the account year ending March 31.
After providing Rs. 41,473/ for expenses, 30 per cent of the balance being Rs. 29,094/ was paid to T.M. Ayyadurai as commission and was claimed in the assessment year 1952 53 as a permissible deduction under section 10(2)(xv) of the Indian Income tax Act, 1922.
The Income tax Officer allowed only 10 per cent of the net profit for the services rendered by T.M. Ayyadurai in the contract for tobacco purchase and sale.
and disallowed Rs. 19,796/ out of the amount claimed by the respondent.
The managing agency agreement of the respondent with the Nellore Power and Light Company Ltd., was terminated with effect from September 28, 1951 when the Government of the State of Madras in exercise of the powers conferred upon it by the Electrical Undertakings Acquisition Act, 1949 compulsorily ac quired the undertaking of that Company, and the respondent was paid Rs. 17,346/ as compensation for premature termination of its agency.
This amount was taken into account by the Income tax Officer in computing the income of the respondent in the assessment year ending March 31. 1952.
Appeals against the order passed by the Income tax Officer to the Appellate Assistant Commissioner and to the Tribunal challenging the disallowance of part of the commission and inclusion of compensation for termination of the managing agency agreement were unsuccessful.
The Tribunal thereafter being directed by the High Court of Judicature, Madras under section 66(2) of the Indian Income tax Act, drew up a statement of the case and referred the following two questions to the High Court: "(1) Whether on the facts and in the circumstances of the case the disallowance of a sum of Rs. 19,796/ out of the remuneration paid to Mr. T.M. Ayyadurai is justifiable; and (2) Whether a sum of Rs. 17,346/ which represented compensation received by the assessee for the loss of the managing agency of the Nellore Power and Light Company Ltd. is income liable to tax?" The High Court answered both the questions in the negative.
Allowance in respect of the amount covered by the first question was sought by the respondent under section 10(2)(xv) of the Income tax Act, 1922, which provided: "any expenditure not being an allowance of the nature described in any of the clauses (i) to (xiv) inclusive.
and 695 not being in the nature of capital expenditure or personal expenses of the assessee laid out or expended wholly and exclusively for the purpose of such business, profession or vocation.
" The question whether an amount claimed as expenditure was laid out or expended wholly and exclusively for the purpose of such business, profession or vocation has to be decided on the facts and in the light of circumstances of each case.
But as observed by this Court in Eastern Investments Ltd. vs Commissioner of Income tax, West Bengal(1) the final conclusion on the admissibility of an allowance claimed is one of law.
The High Court had therefore power to call upon the Tribunal to submit a statement of the case under section 66(2) of the Indian Income tax Act.
In considering whether the expenditure to remunerate a person for services rendered is allowable under section 10(2)(xv) the Income tax Officer must have regard to all the circumstances, such as, nature and special character of the service, practice if any in the trade for payment of a percentage of profit to an employee in similar circumstances, qualifications of the employee for rendering the service, amount if any paid by the assessee to another person for rendering similar service, normalcy of the allowance having regard to the practice in the trade, existence of any other extraordinary and abnormal circumstances in the arrangement or special reasons or circumstances which may suggest that the transaction was abnormal, and the like.
The normal business of the respondent was in hides and skins, minerals and tobacco.
It does not appear, however, that the turnover of the Company was large.
The contract to purchase tobacco on behalf of the Government of India was apparently out of the way of the normal business of the respondent and demanded the setting up of a special organisation.
Under the terms of the contract the respondent was to be the agent of the Central Government for buying, checking, weighing, leaf drying, storing, transporting, retaining and reselling tobacco under and in accordance with the directions given to it from time to time by the Government.
The respondent agreed to buy tobacco within the ceiling price fixed as and when directed by the Government, and was responsible for buying proper grades of tobacco, for correctly checking the weights, for taking delivery from the sellers, for redrying it whenever so directed, for securing proper packing for transport by rail road or sea so as to conform to standards of packing usually employed in the export of tobacco or standards to the satisfaction of the purchaser, and for getting the tobacco inspected by the Tobacco Grading Inspectorate of the Indian Central Tobacco Committee according to the AGMARK standards.
The respondent had to place a go down at the disposal of the Government within their premises at Guntur.
The respondent had to use its best (1) 20 I.T.R. I. 696 endeavour to buy as cheaply as possible within the ceilings prescribed and to sell it for such maximum price as may be obtainable, not being below the price prescribed by the Government, to re sell tobacco which the Government may direct it to sell by instructions in writing, in such manner and at such price as may be specified by the Government, and to finance the entire transaction of purchasing tobacco in the first instance out of its own funds.
The respondcat was to take all necessary steps to safeguard the stocks and to maintain fire fighting services.
Goods purchased by the respondent if not of the grade or quality were liable to be rejected by order of the Tobacco Grading Inspector.
Performance of the contract evidently required expert knowledge of the practical side of the business of purchasing tobacco, getting it redried if it was raw, and of packing, storing, transporting and shipping it.
The respondent had entered into a profitable contract, but any negligence in purchasing, storing, packing, transporting and shipping the goods might have resulted in serious losses to the respondent.
The Income tax Officer accepted that the expenditure for payment of remuneration for attending to the contract was laid out for the purpose of the business of the respondent, but reduced the stipulated rate to 10 per cent on two grounds: that T.M. Ayyadurai was the brother of T.M. Rangachari, and that he was, as a director of the Company, bound to attend to all the activities of the Company including the contract.
There is no evidence that the agreement was motivated by considerations other than strictly business considerations.
There is also no evidence that as a director T.M. Ayyadurai was bound to attend to all the activities of the Company including the special contract with the Central Government.
The duties which the director was bound to perform for earning the remuneration of Rs. 400/ per month are not on the record, but even in the opinion of the taxing authorities the duties of T.M. Ayyadurai as director did not cover attendance to the contract with the Government.
T.M. Ayyadurai and T.M. Rangachari are brothers, but that by itself is not sufficient to justify an inference that unreasonable or excessive remuneration was agreed to be paid.
The person who was called upon to attend to a contract of this magnitude was required to have expert knowledge of the business, apply his time exclusively thereto, travel from time to time, maintain supervision and control at the stage of purchase, redrying, packing, transport and loading for shipment.
Presumably T.M. Ayyadurai was such a person, and that is why he was selected for earning for the respondent a large amount of commission by duly performing the contract.
The Appellate Assistant Commissioner merely paraphrased the decision of the Income tax Officer and regarded 10 per cent of the net profits as reasonable.
The Appellate Tribunal observed that the Appellate Assistant Commissioner had given "clear and 697 convincing reasons in support of the disallowance" to which they had nothing more to add.
An analysis of the reasons given by the Income tax Officer discloses no grounds to support the view that remuneration at a rate exceeding 10 per cent of the net profit was excessive or unreasonable.
We are of the view that the contract with the Government was for the respondent an important contract requiring constant and vigilant application and supervision by a person well acquainted with the practical details of the business.
If the management of the respondent as prudent businessmen for advancing the interest of the respondent bona fide regarded 30 per cent of the net profits as reasonable remuneration, the revenue authorities were not justified in reviewing their opinion and reducing the rate of remuneration.
It is true that if on a consideration of the relevant materials, the Appellate Tribunal is of the opinion that a particular remuneration stipulated to be paid is not bona fide, or is unreasonable, the High Court in exercising its advisory jurisdiction has no power to interfere with that opinion.
But the material circumstances relating to the nature of the contract, the services to be performed and the nature of the duties by the employee were not at all taken into account by the Tribunal and the income tax authorities.
We therefore agree with the High Court that the first question should be answered in the negative.
The contract under which the respondent Company was appointed managing agent for the Nellore Power and Light Company Ltd., was to ensure till 1960, but it had to be prematurely terminated because the Government of Madras exercising its powers under the Madras Electrical Undertakings Acquisition Act, 1949 had compulsorily acquired the electricity undertaking.
With the acquisition of that undertaking the right of the respondent as managing agent ceased.
Under section 15 of the Electrical Undertakings Acquisition Act, the Government was bound to pay compensation which would include compensation for termination of the managing agency agreement.
The respondent received Rs. 17,346/as compensation for termination of the agency, computed in the manner laid down in section 15 of that Act.
Prima facie, such a receipt being in lieu of extinction of an asset of the assessee, is a capital receipt.
It was urged, however, on behalf of the revenue that the respondent was carrying on business of taking up managing agencies and that by the extinction of one of the managing agencies, the business structure of the respondent was not impaired.
In a recent judgment delivered by this Court in Kettlewell Bullen and Company Ltd., vs Commissioner of Income tax, Calcutta(1).
it was pointed out that: "It may be broadly stated that what is received for loss of capital is a capital receipt: what is received as profit in a trading transaction is taxable income.
But the (1) 698 difficulty arises in ascertainting whether what is received in a given case is compensation for loss of a source of income, or profit in a trading transaction.
" The Court further observed: "It cannot be said as a general rule.
that what is determinative of the nature of the receipt is extinction or compulsory cessation of an agency or office.
Nor can it be said that compensation received for extinction of an agency may always be equated with price received on sale of goodwill of a business.
The test applicable to contracts for termination of agencies is: what has the assessee parted with in lieu of money or money 's worth received by him which is sought to be taxed? If compensation is paid for cancellation of a contract of agency.
which does not affect the trading structure of the business of the recipient, or involve loss of an enduring asset, leaving the taxpayer free to carry on his trade released from the contract which is cancelled, the receipt will be a trading receipt: where the cancellation of a contract of agency impairs the trading structure, or involves loss of an enduring asset, the amount paid for compensating the loss is capital.
" Turning to the facts of the present ease, it must in the first instance be observed that it is for the revenue to establish that a particular receipt is income liable to tax, and beyond stating that the respondent was the managing agent of the Nellore Power and Light Company Ltd. and of two other Companies, there is no other evidence about the nature of the business of the two other Companies of which the respondent was the managing agent.
about their relative importance qua the managing agency of the Nellore Power and Light Company Ltd., and whether by reason of the extinction of the managing agency of the Nellore Power and Light Company Ltd., any enduring asset was lost to the respondent, or its trading organisation was adversely affected.
The Income tax Officer observed that the "Company 's business of Managing Agency as such had not come to an end", the Company still continues as "managing agents of other companies".
Even after surrender of one of the agencies, the Company carries on business as before, its structure not being affected" and therefore "the receipt is to be considered as revenue, in accordance with the decision in Kelsal Parsons and Company vs
C.I.R. 21 T.C. No. 608.", and with that view the Appellate Assistant Commissioner and the Tribunal agreed.
But in the absence of evidence as to what effect the determination of the managing agency of the Nellore Power and Light Company Ltd., had upon the business of the respondent, the mere circumstance that the respondent had managing agencies of two other companies without more will not bring the ease within Kelsal Parsons and Company vs Commissioners of Inland Reve 699 nue(1).
In Kettlewell Bullen and Company 's case(2) this Court pointed out that ordinarily compensation for loss of office or agency is regarded as a capital receipt, but the rule is subject to an exception that payment received even for termination of an agency agreement, where the agency is one of many which the assessee holds, and the termination of the agency does not impair the profit making structure of the assessee, but is within the framework of the business, it being a necessary incident of the business.
that existing agencies may be terminated, and fresh agencies may be taken, is revenue and not capital.
Kelsal Parsons and Company 's case(1) falls within the exception to the ordinary rule, and circumstances which brought the case of the respondent within the exception must be clearly established.
The High Court was of the opinion that compensation received for taking over the Nellore Power and Light Company Ltd., was a capital receipt not liable to be taxed, and on the materials placed before us, we are unable to disagree with the High Court on this question.
The appeal therefore fails and is dismissed with costs.
Appeal dismissed, (1) 21T.C. 608.
| The respondent executed a deed of trust in respect of certain shares owned by him in a company.
The deed directed the trustees to apply the income and property of the trust in the first instance for paying off the settlor 's debts, and thereafter for other purposes of the trust.
In proceedings under the Indian Income tax Act, 1922 it was held by the Income tax Officer that the trust was a fictitious transaction.
The Appellate Assistant Commissioner held that the transfer of the shares for the purpose of the trust was not irrevocable and therefore under the proviso to section 16(1)(c) the respondent could not escape liability.
The Tribunal upheld the order of the Assistant Commissioner but referred to the High Court, inter alia, the question whether the income from the trust property could be taxed in the hands of the assessee.
The High Court answered the question in the negative.
The Commissioner of Income tax, appealed to this Court.
HELD: After the execution of the deed of settlement the income from the shares arose to the trustees and was liable to be applied for the purposes mentioned in the de.ed.
The income had first to be applied for satisfaction of debts which the settlor was under an obligation to pay, but this did not amount to a re transfer of the income or assets to the settlor, nor did it invest the settlor with a power to re assume the income or assets.
The assests and the income were unmistakably impressed with the obligations arising out of the trust.
The settlor certainly obtained a benefit from the trust consequent upon the satisfaction of his liability but on that account the first proviso to section 16(1) was not attracted.
[690D F] The proviso contemplates cases in which there is a provision for retransfer of the income or assets and such provision is for retransfer directly or indirectly.
It also contemplates cases where there is a provision which confers a right upon the settler to reassume power over the income or assets directly or indirectly.
It is the provision for retransfer directly or indirectly of income or assets or for reassumption of power directly, or indirectly over income or assets which brings the case within the proviso.
Cases in which there is a settlement, but there is no provision in the settlement for retransfer or right to reassume power do not fall within the proviso, even if as a result of the settlement, the settler obtains some benefit.
1[690G, H] Ramji, Keshavji vs C.I.T. Bombay, and D.R. Shahapura vs C.I.T., Bombay approved.
|
Civil Appeal No. 5(NT) of 1975.
From the Judgment and Order dated 15.9.
1971 of the Allahabad High Court in Civil Misc.
Writ Petition No. 5324 of 1970.
Prithvi Raj, Mrs. Rekha Joshi and Ashok K. Srivastava for the Appellants.
Manoj Swarup, 'Ms. Lalita Kohli and Pramod Swarup for the Respondent.
The Judgment of the Court was delivered by 759 SABYASACHI MUKHARJI, J.
The question involved in this appeal is whether the respondent herein M/s. Kasturi Lal Hat Lal is liable to the State of Uttar Pradesh for payment of the Central Sales Tax in respect of the transactions of sale of coal.
The Sales Tax Officer in this case passed an order making the respondent liable for the payment of tax on certain transactions during the period from 1st October, 1965 to 31st March, 1966 amounting to Rs.9,08,548.81 and tax liability was imposed at the rate of 2% thereof amounting to Rs. 18,170 98.
The Sales Tax Officer found that the assessee carried on business in coal.
The Sales Tax Officer noted that the Bilties, concerning this kind of sale of coal had been prepared in the name of the dealer.
The dealer endorsed these Bilties (R.Rs) and gave these to the diverse parties in U.P.
The parties in U.P. on receiving these Bilties got the goods released.
The dealer admitted that the Bilties (R.Rs.) having been endorsed to the parties in U.P. were given to them at the time, while the goods were in the state of movement between Bihar and U.P. The bills connected with Bilties (R.Rs.) of this kind had also been prepared by the dealer and the money had been realised by the dealer from the purchasing parties.
The Sales Tax Officer was of the view that the sale of coal effected in that manner came under interstate sale and as such was liable under section 3(b) of the , by transfer of document when the goods were in movement.
It was the case of the dealer that the goods had been sold to an unregistered dealer and he too was not a registered dealer for the year 1965 66.
Therefore, there was no question of imposition of any Sales Tax.
The Sales Tax Officer did not agree with this view and imposed liability for the said Rs. 18 170 98.
Challenging the said imposition an application was moved before the High Court under Article 226 of the Constitution by the dealer.
The application was allowed and the order of assessment was set aside.
The High Court having considered the facts and circum stances of this case noted that the main contention raised on behalf of the assessee was that inasmuch as the movement of the goods had started from the State of Bihar, the tax if any, payable on such sales, was assessable in Bihar and the Sales Tax Officer, Lucknow had no jurisdiction to make the order of assessment.
The High Court in the light of Section 9(1) of the was of the view that the "appropriate State" would be the Sales Tax Officer in Bihar and as such the imposition was not possible in the manner it was done.
The assessee succeeded before the High Court on this ground.
The question for determination is whether that is so? 760 The High Court noted that in the previous case of Karam Chand Thapar and Bros. (Coal Sales) Ltd. vs The Sales Tax Officer, Moradabad and others, (Civil Miscellaneous Writ No. 4356 of 1969) the High Court had taken the same view on more or less identical facts on 24th of July, 1970.
We were told at the Bar that in the said matter leave had been granted under Article 136 of the Constitution by this Court.
We wanted to know whether the matter had been disposed of by this Court and if so what was the fate of the same and had adjourned this appeal on this account.
Neither the assessee nor the revenue has been able to enlighten us on this point.
Under the (hereinafter called 'the Act '), Section 2(a) stipulates that the "appro priate State" means (i) in relation to a dealer who has one or more places of business situate in the same State, that State; (ii) in relation to a dealer who has places of busi ness situate in different States, every such State with respect to the place or places of business situate within its territory.
On the other hand clause (b) of section 2 defines "dealer" to mean any person who carries on (whether regularly or otherwise) the business of buying and selling, in the manner indicated in sub clause (b).
It is not con fined to a registered dealer only.
Section 3 is the charging section and is in Chapter II dealing with the formulation of principles for determining when a sale or purchase of goods takes place in the course of interState trade or commerce or outside a State or in the course of import or export.
Sec tion 3 stipulates that a sale or purchase of goods shall be deemed to take place in the course of inter State trade or commerce if the sale or purchase (a) occasions the movement of goods from one State to another, or (b) is effected by a transfer of documents of title to the goods during their movement from one State to another.
There are two explana tions to that section and explanation 1 provides that where goods are delivered to a carrier or other bailee for trans mission, the movement of the goods shall, for the purposes of clause (b), be deemed to commence at the time of such delivery and terminate at the time when delivery is taken from such carrier or bailee.
Explanation 2 enjoins that if the movement of goods commences and terminates in the same State it shall not be deemed to be a movement of goods from one State to another by reason merely of the fact that in the course of such movement the goods pass through the territory of any other State.
Section 6 deals with the liability to tax on inter State sales.
Section 6(1) provides that subject to the other provisions contained in the Act, every dealer is liable to pay tax under the Act on all sales effected by him in the course of inter State trade or com merce during any year on and from the date so notified.
Sub section (1A) of section 761 6 provides that a dealer shall be liable to pay tax under the Act on sale of any goods effected by him in the course of inter State trade or commerce notwithstanding that no tax would have been leviable (whether on the seller or the purchaser) under the sales tax law of the appropriate State if that sale had taken place inside that State.
Subsection (2) of section 6 stipulates that notwithstanding anything contained in sub section (1) or sub section (1A), where a sale of any goods in the course of inter State trade or commerce has either occasioned the movement of such goods from one State to another or has been effected by a transfer of documents of title to such goods during their movement from one State to another, any subsequent sale during such movement effected by transfer of documents of title to such goods to the Government or to a registered dealer other than the Government, if the goods are of the description referred to in sub section (3) of section 8, shall be exempt from tax under the Act.
Sub section (2) of section 6 provides that no such subsequent sale shall be exempt from tax under that sub section unless the dealer effecting the sale furnishes to the prescribed authority in the prescribed manner and within the prescribed time or within such further time as that authority may, for sufficient cause, permit, (a) a certificate duly filled and signed by the registered dealer from whom the goods were purchased containing the prescribed particulars in the prescribed form obtained from the pre scribed authority; and (b) if the subsequent sale is made (i) to a registered dealer, a declaration referred to in clause (a) of sub section (4) of section 8, or (ii) to the Government, not being a registered dealer, a certificate referred to in clause (b) of sub section (4) of section 8.
Sub section (1) and sub section (2) of section 9 of the Act are material for our present purpose and read as follows: "9(1) The tax payable by any dealer under this Act on sales of goods effected by him in the course of inter State trade or commerce, whether such sales fail within clause (a) or clause (b) of section 3, shall be levied by the Government of India and the tax so levied shall be collected by that Government in accordance with the provisions of subsection (2), in the State from which the movement of the goods commenced; (2) Subject to the other provisions of this Act and the rules made thereunder, the authorities for the time being empowered to assess, re assess, collect and enforce payment of any tax under general sales tax law of the appropriate State shall, on behalf of the Government of 762 India, assess, re assess, collect and enforce payment of taX, including any penalty, payable by a dealer under this Act as if the tax or penalty payable by such a dealer under this Act is a tax or penalty payable under the general sales tax law of the State; and for this purpose they may exercise all or any of the powers they have under the general sales tax law of the State; and the provisions of such law, including provisions relating to returns, provisional assessment, advance payment of tax, registration of the transferee of any business, imposition of the tax liabil ity of a person carrying on business on the transferee of, or successor to, such business, transfer of liability of any firm or Hindu undivided family to pay tax in the event of the dissolution of such firm or partition of such family, recovery of tax from third par ties, appeals, reviews, revisions, references, compounding of offences and treatment of documents furnished by a dealer as confiden tial, shall apply accordingly: Provided that if in any State or part thereof there is no general sales tax law in force, the Central Government may, by rules made in this behalf make necessary provision for all or any of the matters specified in this sub section.
" It is clear from the analysis of the scheme of the Act that the Central Government imposes tax and it is by the Central Government the tax is imposed for inter State sale but it is collected by the Government in accordance with the provisions of sub section (2) of section 9 of the Act in the State.
It will be clear from sub section (2) of section 9 that the "appropriate State" imposes and collects the tax on behalf of the Government of India.
The question is which is the "appropriate State" in a transaction of the nature or the type with which we are concerned Where tax on inter State sale was sought to be imposed.
In order to be a sale or inter State transaction the sale must occasion the move ment of goods.
Here in the instant case, it appears that there were Railway receipts which were endorsed in favour of the parties in U.P.
It is by that endorsement that title was transferred to the purchases and that transaction occasioned the movement of the goods, in other words, caused inter State sales to take place, namely, the sale which occasions the movement of goods from one State to another from the State of Bihar to the State of U.P. Counsel for the revenue sought to urge at one point of time that as the railway receipts were endorsed in U.P. in favour of different 763 parties such a sale would not be an inter State sale that would have occasioned the movement of goods.
If that is the position here which counsel for the revenue sought to urge then a tax on such sales as an internal sale might have been levied under the U.P. Sales Tax Act.
But that would not be the case of sale on a transaction which occasions the move ment.
For this purpose section 9 provides for the collection and levy by the "appropriate Government".
The "appropriate Government" means in relation to a dealer who has one or more places of business situate in the same State, that State or in relation to a dealer who has places of business situate in different States, every such State with respect to the place or places of business situate within its tern tory.
It is not the position in the instant case.
It was contended on behalf of the revenue that in the State of Uttar Pradesh, the concerned Sales Tax Officer was fully competent to make the assessment.
The High Court was of the view that this argument proceeded on an omission to consider the opening words of section 2 which is the definition clause, and which makes the definitions given thereunder subject to the context.
Sub section (1) of section 9 confers jurisdiction to make the levy and collection of the tax on the State where the movement of the goods commences, and so the determinative test for discovering the jurisdiction of a particular State, in an inter State sale, is the place where the movement of the goods commences.
The words "appropriate Government" given in sub section (3) of that section must necessarily refer to the State which by section 9(1) has been conferred jurisdiction to levy and collect the tax.
The provisions must be harmonised.
It was next contended that the case of the respondent fell within the ambit of the proviso to Section 9(1).
We have.noted that the provisions of the proviso can apply only if the sale is by a registered dealer.
Here the admitted position is that the dealer is not a registered one.
It was urged on behalf of the revenue that inasmuch as section 7 of the Act required every dealer to obtain registration within the prescribed period and in the event of not obtaining such a registration, penal conse quences ensue under section 10 of the Act, the words "regis tered dealer" as used in the proviso to section 9 do not refer necessarily to a dealer who has obtained registration under section 7, but to a dealer who should have obtained such a registration.
In other words, counsel tried to import the equitable maxim by stating an argument in the manner that if registration in the facts of a particular case was compulsory then such registration should be deemed to have been made as by law enjoined that it should have been made.
Equity, it was said the maxim long time ago "looks upon a thing as done which ought to have been done.
" But that is not the position in a fiscal statute.
The fiscal statute with which we are concerned recognised registration and 764 non registration and imposes liabilities on registration and consequences for non registration.
It is not, therefore, possible to look upon a thing as done which ought to have been done for which Legislature has separately featured differently in a fiscal statute of this nature.
The Act provides machinery provisions for the imposition and reali sation of the Central Sales Tax.
It must be read in a com monsense point of view.
It is clear here that registration of dealer is impor tant because the proviso states that in the case of sale of goods during their movement from one State to another, the sale subsequent to first sale in respect of the same goods being also a sale which fell under sub section (2) of sec tion 6, the tax shall be levied and collected on a subse quent sale which had been effected by a transfer of docu ments of title to such goods by a registered dealer in the State from which the registered dealer obtained or as the case may be could have obtained the form prescribed in clause (a) of sub section (4) of section 8 of the Act in connection with purchase of such goods.
Sub section (2) of section 6 provides that where a sale of goods in the course of inter State trade or commerce has either occasioned the movement of such goods from one State to another or has been effected by a transfer of documents of title to such goods during their movement from one State to another, any subse quent sale during such movement effected by a transfer of documents of title to such goods to the Government or to a registered dealer other than the government, if the goods are of the description referred to in sub section (3) of section 8, shall be exempt from tax under this Act.
The proviso stipulates that no such subsequent sale shall be exempt from tax under this sub section unless the dealer effecting the sale furnishes to the prescribed authority in the prescribed manner and within the prescribed time, a certificate as mentioned therein.
In this case, the subse quent sale if there be any in U.P. did not occasion the movement of the goods.
It is therefore, not subject to inter State sales tax.
In that view of the matter we are of the opinion that the Sales Tax Officer in U.P. was not the appropriate au thority either to impose or collect the duty on inter State sale.
The High Court was right in the view it took.
This appeal must therefore, be dismissed with costs.
H.L.C. Appeal dis missed.
| Section 3 of the stipulates that a sale or purchase of goods shall be deemed to take place in the course of inter State trade or commerce if the sale or purchase(a) occasions the movement of goods from one State to another, or (b) is effected by a transfer of docu ments of title to the goods during their movement from one State to another.
Sub section
(1) of section 9 provides that the tax payable by any dealer under this Act on sales of goods effected by him in the course of inter State trade or com merce, whether such sales fall within clause (a) or clause (b) of section 3, shall be levied by the Government of India and the tax so levied shall be collected by that Government in accordance with the provisions of sub section (2), in the State I from which the movement of the goods commenced and sub section
(2) thereof provides that the authorities for the time being empowered to assess, re assess, collect and enforce payment of any tax under general sales tax law of the appropriate State shall, on behalf of the Government of India,assess, re assess, collect and enforce payment of tax, including any , etc.
The respondent, a dealer in coal, had effected certain transactions by endorsing Bilties (Railway Receipts made out in its name to various parties in Uttar Pradesh while the goods relating to the Bilties were in a state of movement from Bihar to Uttar Pradesh.
The bills connected with such Bilties had also been prepared by the respondent which had realised the money from the purchasing parties.
The Sales Tax Officer, Lucknow was of the view that the sale of coal effected in this manner came under inter State sale and as such was liable under section 3(b) of the .
Disagreeing with the contention of the respondent that the goods having been sold to an unregistered dealer, the respondent too being not a registered dealer during the particular year.
there was no question of imposition of any sales tax, the Sales Tax 757 Officer imposed the liability under that provision which was challenged by the respondent by a writ petition.
The High Court, allowing the petition, set aside the order of assess ment.
Dismissing the appeal, HELD: The Sales Tax Officer in Uttar Pradesh was not the appropriate authority either to impose or collect the duty on inter State sale.
[764G] (i) Sub s.(1) of section 9 confers jurisdiction to make the levy and collect the tax on the State where the movement of the goods commences, and so the determinative test for discovering the jurisdiction of a particular State, in an inter State sale, is the place where the movement of the goods commences.
The words "appropriate Government" given in sub section
(2) of that section must necessarily refer to the State which by section 9(1) has been conferred jurisdiction to levy and collect the tax.
[763D E] (ii) It is clear from an analysis of the scheme of the that it is the Central Govern ment which imposes tax on inter State sale but it is col lected by the Government in accordance with the provisions of sub section
(2) of section 9 of the Act in the State.
It is clear from sub section
(2) of section 9 that the "appropriate State" imposes and collects the tax on behalf of the Government of India.
In order to be a sale or inter State transaction the sale must occasion the movement of goods.
In the instant case, there were Railway receipts which were endorsed in favour of the parties in U.P.
It is by that endorsement that title was transferred to the purchasers and that transaction occa sioned the movement of the goods, in other words, caused inter State sales to take place, namely, the sale which occasions the movement of goods from one State to another, from the State of Bihar to the State of U.P. [762E G] (iii) The proviso to section 9(1) can apply only if the sale is by a registered dealer.
Here the admitted position is that the dealer is not a registered one.
It was urged on behalf of the revenue that inasmuch as section 7 required every dealer to obtain registration within the prescribed period and in the event of not obtaining such a registration, penal consequences ensue under section 10, the words "registered deal er" as used in the proviso to section 9 do not refer necessarily to a dealer who has obtained registration under section 7, but to a dealer who should have obtained such a registration.
In other words, counsel tried to import the equitable maxim by stating an argument in the manner that if registra 758 tion in the facts of a particular case was compulsory then such registration should be deemed to have been made as by law enjoined that it should have been made.
Equity, it was said, "looks upon a thing as done which ought to have been done".
But that is not the position in a fiscal statute.
The fiscal statute with which we are concerned recognises regis tration and non registration and imposes liabilities on registration and consequences for non registration.
It is not, therefore, possible to look upon a thing as done which ought to have been done for which Legislature has separately featured differently in a fiscal statute of this nature.
The Act provides machinery provisions for the imposition and realisation of the Central Sales Tax.
It must be read in a commonsense point of view.
[763E H; 764A B] (iv) Sub section
(2) of section 6 provides that where a sale of goods in the course of inter State trade or commerce has either occasioned the movement of such goods from one State to another or has been effected by a transfer of documents of title to such goods during their movement from one State to another, any subsequent sale during such movement effect ed by a transfer of documents of title to such goods to the Government or to a registered dealer other than the govern ment, if the goods are of the description referred to in sub section (3) of section 8, shall be exempt from tax under this Act.
The proviso stipulates that no such subsequent sale shall be exempt from tax under this sub section unless the dealer effecting the sale furnishes to the prescribed authority in the prescribed manner and within the prescribed time, a certificate as mentioned therein.
In this case, the subsequent sale if there be any in U.P. did not occasion the movement of the goods.
It is therefore, not subject to inter State sales tax.
[764D F]
|
Civil Appeal No. 183 of 1956.
Appeal from the judgment and order dated September 11, 1953, of the Bombay High Court, in Income tax Reference No. 23 of 1953.
A. V. Viswanatha Sastri, section, N. Andley and J. B. Dadachanji, for the appellants.
M. C. Setalvad, Attorney General for India, K. N. Rajagopal Sastri, and D. Gupta, for the respondent.
August 4.
The Judgment of the Court was delivered by DAS C. J.
This is an appeal from the judgment and order of the High Court of Bombay delivered on September 11, 1953, on a reference made by the Income tax Appellate Tribunal under section 66 (1) of the Indian Income tax Act, whereby the High Court answered the referred question in the affirmative and directed the appellant to pay the costs of the respondent.
The appellant, which is a registered firm and is hereinafter referred to as " the assessee firm ", was appointed the managing agent of Godrej Soaps Limited (hereinafter called the " managed company ").
It has been working as such managing agent since October 1928 upon the terms and conditions recorded originally in an agreement dated October 28, 1928, 529 which was subsequently substituted by another agreement dated December 8, 1933, (hereinafter referred to as " the Principal Agreement ").
Under the Principal Agreement the assessee firm was appointed Managing Agent for a period of thirty years from November 9, 1933.
Clause 2 of that Agreement provided as follows: " The Company shall during the subsistence of this agreement pay to the said firm and the said firm shall receive from the company the following remuneration, that is to say: (a) A commission during every year at the rate of twenty per cent.
on the net profits of the said company after providing for interest on loans, advances and debentures (if any), working expenses, repairs, outgoings and depreciation but without any deduction being made for income tax and super tax and for expenditure on capital account or on account of any sum which may be set aside in each year out of profits as reserved fund.
(b) In case such net profits of the Company after providing for interest on loans, advances and debentures (if any), working expenses, depreciation, repairs and outgoings and after deduction therefrom the commission provided for by sub clause (a) shall during any year exceed a sum of rupees one lac the amount of such excess over rupees one lac up to a limit of rupees twenty four thousand.
(c) In case such net profits of the Company after providing for interest on loans, advances and debentures (if any), working expenses, depreciation, repairs and outgoings and after also deducting therefrom the commission provided for by subclause (a) shall during any year exceed a sum of rupees one lac and twenty four thousand one half of such excess over rupees one lac and twenty four thousand shall be paid to the firm and the other half to the shareholders.
" Some of the shareholders and directors of the managed company felt that the scale of remuneration paid to the assessee firm under cl.
(2) of the Principal Agreement was extraordinarily excessive and unusual and 530 should be modified.
Accordingly negotiation were started for a reduction of the remuneration and, after some discussion, the assessee firm and the managed company arrived at certain agreed modifications which were eventually recorded in a special resolution passed at the extraordinary general meeting of the managed company held on October 22, 1946.
That, resolution was in the following terms: " Resolved that the agreement arrived at between the managing agents on the one hand and the directors of your Company on the other hand, that the managing agents, in consideration of the Company paying Rs. 7,50,000 as compensation, for releasing the Company from the onerous term as to remuneration contained in the present managing agency agreement should accept as remuneration for the remaining term of their managing agency ten per cent.
of the net annual profits of the Company as defined in section 87C, Sub section (3) of the Indian Companies Act in lieu of the higher remuneration to which they are now entitled under the provisions of the existing managing agency agreement be and the same is hereby approved and confirmed.
Resolved that the Company and the managing agents do execute the necessary document modifying the terms of the original managing agency agreement in accordance with the above agreement arrived at between them.
Such document be prepared by the Company 's solicitors and approved by the managing agents and the directors shall carry the same into effect with or without modification as they shall think fit." The agreed modifications were thereafter embodied in a Supplementary Agreement made between the assessee firm and managed company on March 24, 1948.
After reciting the appointment of the assessee firm as the Managing Agent upon terms contained in the Principal Agreement and further reciting the agreement arrived at between the parties and the resolution referred to above, it was agreed and declared as follows 531 " 1.
That the remuneration of the Managing Agents as from the 1st day of September 1946 shall be ten per cent.
of the net annual profits of the Company as defined in section 87C, sub section (3) of the Indian Companies Act, 1913, in lieu of the higher remuneration as provided in the above recited cl.
(2) of the Principal Agreement.
Subject only to the variations herein contained and such other alterations as may be necessary to make the Principal Agreement consistent with these presents the principal agreement shall remain in full force and effect and shall be read and construed and be enforceable as if the terms of these presents were inserted therein by way of substitution.
" The sum of Rs. 7,50,000 was paid by the managed company and received by the assessee firm in the calendar year 1947 which was the accounting year for the assessment year 1948 49.
In the course of the assessment proceedings for the assessment year 1948 49, it was contended by the departmental representative, (i) that though the payment of Rs. 7,50,000 had been described as compensation, the real object and consideration for the payment was the reduction of remuneration, (ii) that being the character of payment, it was a lump sum payment in consideration of the variation of the terms of employment and was, therefore, not a capital receipt but was a revenue receipt, and (iii) that there was, in fact, no break in service and the payment was made in course of the continuation of the service and, therefore, represented a revenue receipt of the managing agency business of the assessee firm.
The assessee firm, on the other hand, maintained that the sum of Rs. 7,50,000 was a payment made by the managed company to the assessee firm wholly in discharge of its contingent liability to pay the higher remuneration and in order to discharge itself of an onerous contingent obligation to pay higher_ remuneration and it was, therefore, a capital expenditure incurred by the managed company and a capital receipt obtained by the assessee firm and was as such not liable to tax.
532 The Income tax Officer treated the sum of Rs. 7,50,000 as a revenue receipt in the hands of the assessee firm and taxed it as such.
On appeal this decision was confirmed by the Appellate Assistant Commissioner and thereafter, on further appeal, was upheld by the Tribunal by its order dated July 23, 1952.
At the instance of the assessee firm the Tribunal, under section 66(1) of the Act, made a reference to the High Court raising the following question of law: " Whether on the facts and in the circumstances of the case the sum of Rs. 7,50,000 is a revenue receipt liable to tax.
The said reference was heard by the High Court and by its judgment, pronounced on September 11, 1953, the High Court answered the referred question in the affirmative and directed the assessee firm to pay the costs of the reference.
The High Court, however, gave to the assessee firm a certificate of fitness for appeal to this Court and that is how the appeal has come before us.
As has been said by this Court in Commissioner of Income tax and Excess Profits Tax, Madras vs The South India Pictures Ltd.(1), " it is not always easy to decide whether a particular payment received by a person is his income or whether it is to be regarded as his capital receipt".
Eminent Judges have observed that " income " is a word of the broadest connotation and that it is difficult, and perhaps impossible, to define it by any precise general formula.
Though in general the distinction between an income and a capital receipt is well recognised, cases do arise where the item lies on the borderline and the problem has to be solved on the particular facts of each case.
No infallible criterion or test has been or can be laid down and the decided cases are only helpful in that they indicate the kind of consideration which may relevantly be borne in mind in approaching the problem.
The character of payment received may vary according to the circumstances.
Thus, the amount received as consideration for the sale of a plot of land may ordinarily be capital; but if the business of the recipient is to (1) ; 228.
533 buy and sell lands, it may well be his income.
It is, therefore, necessary to approach the problem keeping in view the particular facts and circumstances in which it has arisen.
There can be no doubt that by paying this sum of Rs. 7,50,000 the managed company has secured for itself a release from the obligation to pay a higher remuneration to the assesee firm for the rest of the period of managing agency covered by the Principal Agreement.
Prima facie, this release from liability to pay a higher remuneration for over 17 years must be an advantage gained by the managed company for the benefit of its business and the immunity thus obtained by the managed company may well be regarded as the acquisition of an asset of enduring value by means of a capital outlay which will be a capital expenditure according to the test laid down by Viscount Cave, L.C., in Atherton vs British Insulated and Helsby Cables Limited(1) referred to in the judgment of this Court in Assam Bengal Cement Co. Ltd. vs Commissioner of Income tax (2).
If the sum of Rs. 7,50,000 represented a capital expenditure incurred by the managed company, it should, according to learned counsel for the assessee firm, be a capital receipt in the hands of the assessee firm, for the intrinsic characteristics of capital sums and revenue items respectively are essentially the same for receipts as for expenditure.
(See Simon 's Income tax, II Edn., Vol. 1, para. 44, p. 31).
But, as pointed out by the learned author in that very paragraph, this cannot be an invariable proposition, for there is always the possibility of a particular sum changing its quality according as the circumstances of the payer or the recipient are in question.
Accordingly, the learned Attorney General appearing for the respondent contends that we are not concerned in this appeal with the problem, whether, from the point of view of the managed company, the sum represented a capital expenditure or not but that we are called upon to determine whether this sum represented a capital receipt in the hands of the assessee firm.
(1) (2) [19551 1 S.C.R. 972.
68 534 In the Resolution adopted by the managed company as well as in the recitals set out in the Supplementary Agreement this sum has been stated to be a payment "as compensation for releasing the company from the onerous term as to remuneration contained" in the Principal Agreement.
It is true, as said by the High Court and as reiterated by the learned Attorney General, that the language used in the document is not decisive and the question has to be determined by a consideration of all the attending circumstances; nevertheless, the language cannot be ignored altogether but must be taken into consideration along with other relevant circumstances.
This sum of Rs. 7,50,000 has undoubtedly not been paid as compensation for the termination or cancellation of an ordinary business contract which is a part of the stock in trade of the assessee and cannot, therefore, be regarded as income, as the amounts received by the assessee in The Commissioner of Income tax and Excess Profits Tax vs The South India Pictures Ltd. (1) and in The Commissioner of Income tax, Nagpur vs Rai Bahadur Jairam Valji (2) had been held to be.
Nor can this amount be said to have been paid as compensation for the cancellation or cessation of the managing agency of the assessee firm, for the managing agency continued and, therefore, the decision of the Judicial Committee of the Privy Council in The Commissioner of Income tax vs Shaw Wallace and Co.(1) cannot be invoked.
It is, however, urged that for the purpose of rendering the sum paid as compensation to be regarded as a capital receipt, it is not necessary that the entire managing agency should be acquired.
If the amount was paid as the price for the sterilisation of even a part of a capital asset which is the framework or entire structure of the assessee 's profit making apparatus, then the amount must also be regarded as a capital receipt, for, as said by Lord Wrenbury in Glenboig Union Fireclay Co. Ltd. vs The Commissioners of Inland Revenue (4), "what is true of the whole must be equally true of part " a principle which has been adopted by (1) ; , 228.
(3) (1932) L.R. 59 I.A. 206.
(2) ; (4) 535 this Court in The Commissioner of Income tax, Hyderabad Deccan vs Messrs. Vazir Sultan and Sons(1).
The learned Attorney General, however, contends that this case is not governed by the decisions in Shaw Wallace 's case (2) or Messrs. Vazir Sultan and Sons ' case(1) because in the present case there was no acquisition of the entire managing agency business or sterilisation of any part of the capital asset and the business structure or the profit making apparatus, namely, the managing agency, remains unaffected.
There is no destruction or sterilisation of any part of the business structure.
The amount in question was paid in consideration of the assessee firm agreeing to continue to serve as the managing agent on a reduced remuneration and, therefore, it bears the same character as that of remuneration and, therefore, a revenue receipt.
We do not accept this contention.
If this argument were correct, then, on a parity of reasoning, our decision in Messrs. Vazir Sultan and Sons ' case (1) would have been different, for, there also the agency continued as before except that the territories were reduced to their original extent.
In that case also the agent agreed to continue to serve with the extent of his field of activity limited to the State of Hyderabad only.
To regard such an agreement as a mere variation in the terms of remuneration is only to take a superficial view of the matter and to ignore the effect of such variation on what has been called the profit making apparatus.
A managing agency yielding a remuneration calculated at the rate of 20 per cent.
of the profits is not the same thing as a managing agency yielding a remuneration calculated at 10 per cent.
of the profits.
There is a distinct deterioration in the character and quality of the managing agency viewed as a profit making apparatus and this deterioration is of an enduring kind.
The reduced remuneration having been separately provided, the sum of Rs. 7,50,000 must be regarded as having been paid as compensation for this injury to or deterioration of the managing agency just as the amounts paid in Glenboig 's case (3) (1) Civil Appeal NO. 346 of 1957, decided (2) (1932) L.R. 59 I. A. 206.
on March 20, 1959 ; (3) 536 or Messrs. Vazir Sultan 's case(1) were held to be.
This is also very nearly covered by the majority decision of the English House of Lords in Hunter vs Dewhurst(2).
It is true that in the later English cases of Prendergast vs Cameron(3) and Wales Tilley (4), the decision in Hunter vs Dewharst(2) was distinguished as being of an exceptional and special nature but those later decisions turned on the words used in r. 1 of Sch.
E. to the English Act.
Further, they were cases of continuation of personal service on reduced remuneration simpliciter and not of acquisition, wholly or in part, of any managing agency viewed as a profit making apparatus and consequently the effect of the agreements in question under which the payment was made upon the profit making apparatus, did not come under consideration at all.
On a construction of the agreements it was held that the payments made were simply remuneration paid in advance representing the difference between the higher rate of remuneration and the reduced remuneration and as such a revenue receipt.
The question of the character of the payment made for compensation for the acquisition, wholly or in part, of any managing agency or injury to or deterioration of the managing agency as a profit making apparatus is covered by our decisions hereinbefore referred to.
In the light of those decisions the sum of Rs. 7,50,000 was paid and received not to make up the difference.
between the higher remuneration and the reduced remieration but was in reality paid and received as compensation for releasing the company from the onerous terms as to remuneration as it was in terms expressed to be.
In other words, so far as the managed company was concerned, it, was paid for see tiring immunity from the liability to pay highser remuneration to the assessee firm for the rest of the term of the managing agency and, therefore, a capital expenditure and so far as the assessee firm was concerned, it was received as compen sation for the deterioration or injury to the managing agency by reason of the release of its rights to get higher remuneration and, therefore, a capital receipt (1) Civil Appeal No. 346 of 1957.
decided on March 20, 1959; (2) (3) (4) ; 537 within the decisions of this Court in the earlier cases referred to above.
In the light of the above discussion it follows, therefore, that the answer to the referred question should by in the negative.
The result, therefore, is that this appeal is allowed, the answer given by the High Court to the question is set aside and the question is answered in the negative.
The appellant must get the costs of the reference in the High Court and in this Court.
Appeal allowed.
| The term "foodstuff" is ambiguous.
In one sense it has a narrow meaning and is limited to articles which are eaten as food for purposes of nutrition and nourishment and so would exclude condiments and spices such as yeast, salt, pepper, baking powder and turmeric.
In a wider sense it includes everything that goes toto the preparation of food proper (as understood in the narrow sense) to make it more palatable and digestible.
Whether the term is used in a particular statute in its wider or narrower sense cannot be answered in the abstract 878 but must be answered with due regard to the background and context.
Turmeric is a "foodstuff" within the meaning of cl.
(3) of the Spices (Forward Contract Prohibition) Order of 1944, read with s.2 (a)of the Essential Supplies (Temporary Powers) Act (XXIV of 1946).
The said order of 1944 falls within the purview of section 5 of Ordinance No. XVIII of 1946, which was later reenacted as Act XXIV of 1946, and it is equally saved by section 17 (2) of the Act.
James vs Jones , Hinde vs Allmond (87 L.J. K.B. 893), Sainsbury vs Saunders referred to.
|
ivil Appeal No. 8295 of 1983.
From the Judgment and Order dated 29.7.
1982 of the Calcutta High Court in Appellate Decree No. 385 of 1979.
D.N. Mukherjee and N.R. Choudhary for the Appellant.
Dr. Shankar Ghosh, P.R. Seetharaman and M.T. George for the Respondent.
The Judgment of the Court was delivered by OZA, J.
This is an appeal preferred by the appellant after getting leave from this court against the judgment and decree passed by the High Court of Calcutta wherein the High Court allowed the appeal of the respondent tenant and set aside the decree for eviction granted by the courts below in favour of the appellant.
The appellant landlord filed a suit for recovery of posses sion of 1167 the 2nd floor rear portion of the premises 248, C.I.T. Road, Calcutta which was let out to the respondent defendant as a monthly tenant on the ground that the landlord reasonably required the suit premises for his own occupation and had no other reasonably suitable accommodation in the town.
The decree was also sought on other grounds which is not rele vant for the purposes of this appeal.
Both the courts the Trial Court and the First Appellate Court found that the suit premises were reasonably required for the personal use and occupation of the appellant land lord and his family which consisted of his wife one son one daughter and therefore the decree was granted in accordance with West Bengal Premises Tenancy Act, 1956.
What was urged by the appellant plaintiff in support of genuine requirement was that he is a Medical practitioner and was appointed as a Physician in Ghana (Africa in 1964) where he has been residing temporarily.
In Ghana after some time his family could not stay and his wife and children have come back and are residing in Calcutta.
His service in Ghana was terminable by giving a notice of 3 months and the plaintiff landlord desires to come back to India and settle down in medical practice in this locality where the house is situated.
It was also alleged in the plaint that he could not come back as the accommodation was not available, and that after taking retirement from Ghana they will settle down in Calcutta in this house in dispute.
The requirement of the family also was alleged on the ground that the son and the daughter of the appellant have also grown and they also need rooms for their use.
It was also alleged that apart from the residential portion he also needs one room for his medical practice.
The trial court and the first Appellate Court accepting this contention of the plaintiff appellant granted decree for eviction.
It appears that during the pendency of this litigation the present appellant also had entered into an agreement with some construction company for a flat in South Calcutta and ultimately in October 1978 he got possession of that flat.
The First Appellate Court i.e. the Court of Additional District Judge maintained the decree in favour of the appel lant by its judgment dated 29th September 1978 and against this judgment the respondent tenant preferred a second appeal before the High Court.
During the pendency of this appeal in the High Court the respondent tenant submitted an application for consideration of subsequent events i.e. the acquisition of the flat in South 1168 Calcutta suggesting that the need of the appellant landlord has been satisfied and therefore the decree of eviction should be set aside.
The High Court permitted this applica tion for amendment and permitted parties to lead additional evidence and in consequence the appellant landlord also was examined once again and it is not disputed that apart from his statement which was recorded earlier additional evidence was recorded and it is on this evidence that the High Court came to the conclusion that as now alternative accommodation i.e. a flat in South Calcutta which was acquired in 1978 available the decree of eviction was set aside and it is against this judgment of the High Court that the present appeal has been preferred.
Learned counsel appearing for the appellant contended that while in service in Ghana since 1975 the appellant wanted to come back but could not because the premises were not available and therefore the suit was filed.
During this period out of some savings from the earnings that the appel lant made in Ghana, he booked a flat and ultimately a flat was practically ready in 1978.
It was contended that after the judgment of the power Appellate Court where the decree was confirmed the appellant felt secured that he will now get the premises in suit where he wanted to settle down in practice and where in fact in part of the premises his family was staying and as the appellant had no sufficient funds he let out this flat in South Calcutta and it is the tenant who invested some money and got it completed.
Accord ing to learned counsel the alternative accommodation should be reasonably suitable and available and it is only then it could be said that as the alternative accommodation which is reasonably suitable is available that the decree for evic tion could be refused when the two courts the court of facts have found it in favour of the appellant that he required the premises in question for his bona fide use.
Learned counsel contended that admittedly the flat which was allotted was a flat on the 13th floor in South Calcutta which is a posh locality.
For the appellant who is a M.B.B.S. and who bad been living and practising in C.I.T. Road in the suit premises for him at this stage in life it was not possible to start practice in South Calcutta on 13th floor.
It was also contended that the wife .of the appellant is also working as a teacher in one of the schools in the locality and it would not be convenient and possible for her to live in South Calcutta and come to this area for dis charge of her duties.
According to learned counsel although the flat was acquired but it was not at all suitable and therefore the High Court was not right on this basis to interfere with 1169 the concurrent findings of facts arrived at by the courts below.
Learned counsel by reference to certain decisions of this court contended that mere fact that the landlord had purchased or acquired an accommodation is not sufficient to negative the genuine requirements but it has further to be found that the premises so acquired are reasonably conven ient and in this regard it was contended that the learned Judge of the High Court omitted to consider these circum stances.
It was also contended that the learned Judge omit ted to consider the positive evidence and drove inference from the fact that the flat was acquired on the basis of agreement that it is being acquired for residential purposes and further averment made to indicate that the appellant landlord intended to start some laboratory in the fiat in South Calcutta.
Learned counsel for the respondent contended that after the additional facts came to the knowledge of the respondent tenant it was pleaded an additional evidence produced.
The respondent produced evidence that in fact all other purchas ers of the flats got possession of the flats in 1977 whereas the present appellant got it in October 1978 when the judg ment in lower appellate court was pronounced on 29th Septem ber 1978.
It was contended that the present appellant de layed taking of possession just to wait till the decree for eviction was affirmed by the Appellate Court.
He further contended that there is no evidence to indicate that this alternative accommodation acquired is not reasonably suit able.
According to the learned counsel South Calcutta where this flat is situated is one of the posh localities of Calcutta and after having acquired a flat almost of the same area which is in possession of the respondent in the suit premises, the High Court was right in coming to the conclu sion that the alternative accommodation satisfies the need of the landlord appellant.
Learned counsel further contended that the fact that the appellant 's wife is in service and for her it will not be convenient if they stay in South Calcutta and the fact that for practice of the appellant it will not be convenient are facts which have not been stated by the appellant.
When after the amendment fresh evidence was recorded and the appellant was given an opportunity and he in fact examined himself and gave additional evidence but only fact that he stated in the additional evidence is that the flat is not suitable for his purpose.
It was therefore contended that the High Court was ,right in coming to the conclusion that the need of the appellant landlord is satisfied.
Learned counsel also referred to some decisions for their above stated preposition.
1170 So far as the law on the question is concerned it is well settled that the alternative accommodation must be reasonably suitable and if it is not so then more availabil ity of alternative accommodation will not be a ground to refuse a decree for eviction if otherwise the courts are satisfied about the genuine requirement of the landlord and to this counsel for both the parties also agreed but the main contention was that on the facts appearing in evidence in this case whether the inference could be drawn that the flat on the 13th floor in South Calcutta was reasonably suitable to satisfy the need of the appellant landlord.
As regards evidence it is no doubt true that after these facts were pleaded in the statement of the appellant the only statement in regard to suitability is that "the flat is not suitable for my purpose".
It is not disputed that this is a flat on the 13th floor in South Calcutta and learned counsel for parties conceded that from C.I.T. Road where premises in question are situated this place where the flat is situated in South Calcutta will be a distant place.
Although learned counsel for the respondent emphasised that the above quoted statement is the only statement made by the appellant in additional evidence.
It is true that this is the only statement when he was examined afresh after these facts were brought in the pleading by way of addition al evidence.
But it could not be doubted that whatever was in evidence earlier could not be brushed aside and it is also clear that on the basis of evidence which was recorded earlier the 2 courts of facts came to the conclusion that plaintiff has established his genuine requirement.
Before these facts were introduced by amendment it was clearly stated that the appellant wanted to start his prac tice after taking retirement from his service in Ghana.
It was also stated that he intended to start private practice as a medical practitioner in Calcutta.
It is also clear that before going to Ghana the appellant was living in the said premises and was practising.
It had also come in evidence that his wife was also serving in some nearby institution.
On this basis his genuine requirement was held to have been proved and the learned Judge of the High Court also accepted this concurrent finding of fact.
The only consideration which weighed with the High Court was the acquisition of this flat on the 13th floor in South Calcutta.
It could not be disputed that if the medical practition er is an old resident of a particular locality and had practised in that locality it will not be easy for him at a stage in life after retirement to start afresh practice in some new area and that too on 13th floor in a modern flat.
1171 What has weighed with the learned Judge of the High Court was the statement made by the appellant that he intended to start a laboratory after retirement in the flat which he acquired and the other fact which weighed was the agreement which stated that the flat was required for residence.
Apparently not much could be drawn from these facts as starting a laboratory admittedly is much different from starting private practice as the medical practitioner and signing an agreement which talks of residence is nothing but a mere formality if he at all intended to acquire a flat.
It is clear that there is nothing else in the evidence on the basis of which it could be said that this flat is reasonably suitable.
Learned counsel for the respondent contended that the appellant said nothing else except the statement that this flat is not suitable for his purpose but it is very significant that this statement made by the appellant when he was examined additionally after the plead ings were amended.
This statement is not challenged by way of cross examination at all and it clearly states that for the purpose for which the appellant needs the premises and he sought eviction this flat is not at all suitable for that purpose which also is apparent from the situation and the circumstances discussed above.
Both the learned counsel emphasised the date of the judgment of the Lower Appellate Court and the date of acqui sition of the flat as it is apparent that the judgment of the Lower Appellate Court was delivered on 29th September, 1978 and the possession of the flat was given on 5th Octo ber, 1978.
On the one hand the counsel for the appellant contended that the Appellate Court having affirmed the decree of eviction the appellant knew that now there is no problem and this additional flat which he acquired out of the savings of his service in Ghana he could utilise to have some earning which may help the family at this stage in life and therefore he let it out so that he may earn Something out of it whereas learned counsel for the respondent con tended that all others got the possession of the flat in 1977 but this appellant waited till he secured a decree of eviction affirmed by the Appellate Court and it is only then that he took possession of the flat so that a reasonable explanation is possible for having let it out because the decree for eviction was already passed.
The circumstances discussed above and the suitability and the requirement of the appellant the age and nature of practice possible for a retired doctor with only an MBBS degree establish that the premises in question are suitable and so far as this is concerned there is no dispute but in the context of the facts and circumstances discussed above it could not be 1172 held that flat in South Calcutta on 13th floor could be said to be a reasonably suitable accommodation for the require ment of the appellant landlord and in the context of these facts and circumstances not much could be made out from the two dates i.e. the judgment of the Lower Appellate Court and the date on which the appellant got possession of the flat.
It is therefore clear that the learned Judge of the High Court was not justified in second appeal under Sec. 100 to interfere with the finding of fact unless there were facts established to hold that this alternative accommodation acquired after the decree of eviction in favour of the appellant was reasonably suitable.
Learned Judge of the High Court only drew inference from the fact that the appellant wanted to start a laboratory and the fact that he signed the agreement for acquiring the fiat which was meant for residence and in drawing inferences from these two facts, the learned Judge omitted to consider the positive evidence and a positive statement not challenged that this flat was not suitable for the purpose of the appellant landlord.
The judgment of the High Court can not be maintained.
The appeal is therefore allowed.
The judgment of the High Court is set aside and the decree of eviction passed by the two courts below is maintained.
In the circum stances of the case the decree for eviction shall not be executed against the respondent upto 31.3.88 on respondent filing an undertaking in the usual form and also paying rents and mesns profits upto date within four weeks.
If respondent fails to deliver possession on or before 31.3.88 the appellant shall be entitled to execute the decree for eviction.
In the circumstances of the case no order as to costs.
S.L. Appeal allowed.
| The appellant landlord.
a medical practitioner, filed a suit for recovery of possession of the 2nd floor.
rear portion of premises, 248, C.I.T. Road, Calcutta, let out to the respondent defendant, on the ground of the reasonable requirement of the landlord for his own occupation as he had no other reasonably suitable accommodation in the town.
The appellant contended that he had been residing in Ghana, Africa, where he had been temporarily appointed as a Physi cian, and he wanted to come back to India after retirement and settle down in medical practice in the locality where his house was situated.
The trial court granted the decree for eviction in accordance with the West Bengal Premises Tenancy Act, 1956.
The first appellate court the Court of the Additional District Judge maintained the decree in favour of the appellant by its judgment dated September 29, 1978.
During the pendency of this litigation, the appellant had entered into an agreement with some construction company for a flat in South Calcutta, and got the flat in October, 1978.
This flat was on the 13th floor in South Calcutta, a posh locality.
The respondent tenant preferred a second appeal before the High Court against the judgment of the first appellate court. 'During the pendency of this appeal, the respondent tenant submitted an application for consideration of the subsequent events, i.e. the acquisition of a flat by the landlord suggesting that the need of the appellant landlord had been satisfied, etc.
The High Court permitted this application for amendment and permitted the parties to lead additional evidence, and in consequence, the appellant landlord also was examined once again.
On consideration of the evidence, the High Court came to the conclu 1165 sion that now as alternative accommodation The flat in South Calcutta was available, and, therefore, it set aside the decree of eviction.
Aggrieved by the decision of the High Court, the appellant landlord appealed to this Court for relief by special leave.
Allowing the appeal, the Court, HELD: It is well settled that the alternative accommoda tion must be reasonably suitable and if it is not so, then, the mere availability of the alternative accommodation will not be a ground to refuse a decree for eviction, if other wise, the courts are satisfied about the genuine requirement of the landlord, and to this, counsel for both the parties also agreed, but the main contention was whether on the facts appearing in evidence in the case, the inference could be drawn that the flat on the 13th floor in South Calcutta was reasonably suitable to satisfy the need of the appellant landlord.
Counsel for the appellant had contended inter alia that for the appellant, who had lived and practised (as a doctor) in the suit premises in the C.I.T. Road, it was not possible at that stage in life to start practice in South Calcutta on the 13th floor.
Counsel for the parties conceded that from C.I.T. Road where the premises in question were situated, the place where the flat was situated in South Calcutta, would be a distant place.
As regards evidence it was no doubt true that after these facts were pleaded in the statement of the appellant, the only statement in regard to suitability was "the flat is not suitable for my purpose.
" Counsel for the respondent emphasised that the above quoted statement was the only statement made by the appellant in the additional evidence.
It was no doubt true that this was the only statement made by the appellant when he was exam ined afresh after these facts were brought in the pleading by way of additional evidence, but it could not be doubted that whatever was in evidence earlier could not be brushed aside and it was also clear that on the basis of evidence recorded earlier, the two courts of facts came to the con clusion that the appellant plaintiff had established his genuine requirement.
On the basis of the facts, the genuine requirement of the appellant plaintiff was held to have been proved and the High Court also had accepted this concurrent finding of fact.
The only consideration which weighed with the High Court was the acquisition of the flat on the 13th floor in South Calcutta.
[1170A G] It could not be disputed that if a medical practitioner is an old resident of a particular locality and had prac tised in that locality, it would not be easy for him at a stage in life after retirement to start practice afresh in some new area and that too on 13th floor in a modern 1166 flat.
There was nothing in the evidence on the basis of which it could be said that the flat in South Calcutta was reasonably suitable for the appellant.
In the context of the facts and circumstances of the case, it could not be held that the flat in South Calcutta on the 13th floor could be said to be a reasonably suitable accommodation for the requirement of the appellant landlord.
[1170H; 1171A C] The High Court was not justified in the second appeal to interfere with the finding of fact unless there were facts established to hold that alternative accommodation acquired after the decree of eviction in favour of the appellant was reasonably suitable.
The High Court omitted to consider the positive evidence and a positive statement, not challenged, that this fiat (in South Calcutta) was not suitable for the purpose of the appellant landlord.
[1172B C] Judgment of the High Court was set aside.
Decree of eviction passed by the two courts below was maintained.
The court directed in the circumstances of the case that the decree for eviction would not be executed against the re spondent upto 31.3.88 on the respondent 's filing an under taking in the usual form and also paying the rents and mesne profits upto date within four weeks, and that if the re spondent failed to deliver possession on or before 31.3.88, the appellant would be entitled to execute the decree for eviction.
[1172D E]
|
tition Nos.
4480 of 1980 and 2962 of 1981 (Under article 32 of the Constitution of India) S.N. Jha for the Petitioner in W.P. 4480/80.
Girish Chandra for the Petitioner in W.P. 2962/81.
M.M. Abdul Khadar and R.N. Poddar for the Respondent.
The Judgment of the Court was delivered by CHANDRACHUD, C. J.
The petitioners, Prem Prakash and Dal Chand Anand, are members of a scheduled caste.
By these writ petitions under article 32 of the Constitution, they ask for a writ of mandamus directing the respondents to appoint them against 567 the vacancies reserved for members of Scheduled Castes and Scheduled Tribes in the Delhi Judicial Service.
They also ask for a writ of prohibition to the effect that the respondents should not fill up the reserved vacancies for which they competed, either by holding a fresh examination or by appointing candidates who had qualified in any previous examination.
The Union of India, the Administrator of the Union Territory of Delhi and the Registrar of the Delhi High Court are respondents 1, 2 and 3 to these petitions.
On September 26, 1979, the Registrar of the Delhi High Court published a newspaper advertisement that the Delhi High Court will hold an examination for recruitment of officers to the Delhi Judicial Service on January 11, 12 and 13, 1980 in the time scale pay of Rs. 650 1200.
The advertisement stated that the total number of vacancies was 16, out of which 2 were reserved for Scheduled Castes and 1 for Scheduled Tribes.
In addition, according to the advertisement, there were 2 carry forward vacancies for members of Scheduled Tribes.
In case of non availability of Scheduled Tribes candidates, those vacancies were liable to be transferred as reserved vacancies for Scheduled Castes candidates.
A competitive examination was held in pursuance of the said advertisement in accordance with the Delhi Judicial Service Rules, 1970 which were framed by the Lieutenant Governor of Delhi in consultation with the High Court of Delhi.
Rules 18 and 28 read thus: "Rule 18 The Selection Committee shall prepare a list of candidates in order of merit.
Such list will be forwarded to the Administrator for filling the vacancies then existing or any vacancy that may occur within a period of one year of the preparation of the list." "Rule 28 Appointments made to the Service by competitive examination shall be subject to order regarding special representation in the Service for Scheduled Castes and Scheduled Tribes issued by the Central Government from time to time.
" The Brochure on 'Reservation for Scheduled Castes and Scheduled Tribes in Services ', (5th ed., 1978) issued by the Government of India, Dept. of Personnel and Administrative Reforms, Ministry of Home Affairs contains orders and instructions issued by 568 the Government of India from time to time on the question of reservation of vacancies for Scheduled Castes and Scheduled Tribes candidates.
The relevant paragraphs of that Brochure read as follows: "2.1 Subject to Exemptions and Exclusions referred in Chapter 3, the following reservations are in force in favour of SC and ST in filling vacancies in posts and services under the Govt.
of India.
(1) Direct recruitment on an all India basis: SC ST (a) By open competition(i.e., 15% 71/2% through the UPSC or by means of open competi tive test held by any other authority)".
"4.2 The actual number of vacancies to be reserved for SC and ST in any recruitment should be determined on the basis of the points in the roster and also taking into account the reservations brought forward from the previous year, the total number of reservations not exceeding normally 50% of the total number of vacancies filled in that year.
However, the carry forward reserved vacancies would be available together with the current reserved vacancies for utilisation even where the total number of such reserved vacancies exceed 50% of the vacancies filled in that year provided, the over all representation of SC/ST in the total strength of the concerned grade or cadre is found to be inadequate, i.e., the total number of SC/ST candidates in that grade has not reached the prescribed percentage of reservation for SC/ST respectively, in the grade, as a whole".
"9.2 Advertisement of reserved vacancies for posts filled by direct recruitment through examination: Where direct recruitment is made through examination, for reserved as well as unreserved vacancies, a single advertisement would be issued for such examination but the number of the vacancies reserved for SC and ST would 569 be specified clearly in it and in case the required number of SC or ST candidates are not available even by applying relaxed standards for the vacancy/vacancies reserved for them, the remaining vacancy/vacancies should be filled by general candidate after dereservation of such vacancy/vacancies, subject to the reservations being carried forward as required." "11.1 Carry over of reservations: If a sufficient number of reserved communities candidates fit for appointments against reserved vacancies are not forthcoming, such vacancies can be dereserved after following prescribed procedure for dereservation as in Chapter 10 and thereafter they can be filled by candidates of other communities, but the reservations shall be carried forward to subsequent three years of recruitment (except in the case of. . . . . ) where there will be no carry forward of unfilled reserved vacancies, the total number of reservations not exceeding normally 50% of the total number of vacancies to be filled in that year.
The surplus, if any, above 50% when the ceiling of 50% is applied, shall be carried forward to the subsequent year of recruitment, subject, however, to the condition that the particular vacancies carried forward do not become time barred due to their becoming more than three years old.
However, the carried forward reserved vacancies would be available together with the current reserved vacancies for utilisation even where the total number of such reserved vacancies exceeds 50% of the vacancies filled in that year provided, the overall representation of SC & ST in the total strength of the concerned grade or cadre is found to be inadequate, i.e., the total number of SC/ST candidates in that grade has not reached the prescribed percentage of reservation for SC/ST respectively, in the grade, as a whole".
"Note (2): Any recruitment of SC/ST candidates will first be counted against the additional quota brought forward from the previous years in their chronological order.
If SC/ST candidates are not available for all the vacancies, the older, carried forward vacancies should be filled first 570 and the comparatively later carried forward vacancies should be further carried forward".
The petitioners appeared for the examination and passed it, though by relaxation of the minimum standard prescribed for passing the examination.
They were then asked to appear at the viva voce test conducted by the Selection Committee, which they did.
Since, only seven open candidates and four Scheduled Caste candidates qualified in these tests, the High Court prepared a merit list of 11 candidates as against 16 vacancies which were advertised.
Dal Chand Anand, who is petitioner in Writ Petition No. 2962 of 1981, was 10th in the merit list while Prem Prakash, who is petitioner in Writ Petition No. 4480 of 1980, was 11th in that list.
They were respectively 3rd and 4th in the merit list amongst the 4 Scheduled Caste Candidates.
Since they did not figure in the final list of candidates selected by the Administrator, they have filed these petitions to challenge their exclusion and non appointment.
A counter affidavit has been filed on behalf of respondent 3 by Shri Ramesh Sharma, Assistant Registrar of the Delhi High Court.
The position taken up by the Delhi High Court in that affidavit may be summarized thus: The Delhi Judicial Service was constituted on August 2, 1971.
Rule 28, which provides for special representation for members of the Scheduled Castes and Scheduled Tribes, is applicable to the recruitment made through a competitive examination only and, therefore, no reservations were made either in favour of Scheduled Castes or Scheduled Tribes at the stage of the initial recruitment to the Service, which was not by competitive examination.
Representations were, however, made to the Ministry of Law and Justice as a result of which, the Delhi Administration was instructed administratively to take suitable steps, if necessary by amendment of the recruitment Rules, so as to provide for reservations for the Scheduled Castes and Scheduled Tribes at the initial constitution of the Service also.
In a meeting of officers of the Ministry of Law and Justice, the Delhi Administration and the High Court, which was held in November, 1971, it was decided that 15 per cent of the vacancies filled in the Delhi Judicial Service should be reserved for Scheduled Castes and 71/2 per cent for Scheduled Tribes and that, vacancies which ought to have been reserved for these categories at the initial recruitment should be carried forward to the following year.
The statutory rules were not amended in pursuance of this decision, which is but one instance of the wide chasm which exists between the lip service paid to the need for 571 reservations for backward classes and the actual performance in terms of social awareness.
The counter affidavit says that the 6th competitive examination at which the petitioners appeared was held in 1980.
16 Vacancies were notified, out of which 11 were for open candidates, 2 for Scheduled Castes and 3 for Scheduled Tribes.
Two out of the three vacancies reserved for Scheduled Tribes were interchangeable in the sense that, if candidates from Scheduled Tribes were not available, those vacancies could be added to the quota reserved for Scheduled Castes.
The counter affidavit of the High Court contains a candid admission in paragraph 17 that when, in 1980 and 1981, the High Court examined the question of reservation of vacancies for Scheduled Castes and Scheduled Tribes right from the stage of initial constitution of the Service in 1971, it found that "there was apparently a violation of statutory Rules and the vacancies had been wrongly calculated by the Registry of the High Court".
The High Court rectified its error by recommending the appointment of 2 Scheduled Caste candidates for the 1980 vacancies from amongst the candidates who had qualified in the 1979 competitive examination but who, on account of a mistaken calculation, were not appointed to the reserved seats.
We are happy to find that consistency in adhering to errors is not the hobgoblin of our High Courts.
The factual position which emerges out of the averments in the Writ Petitions and the counter affidavit filed on behalf of the High Court is that though 16 vacancies were advertised, only 11 vacancies could possibly be filled up.
The reason is that only 11 candidates passed the competitive examination.
Seven out of these 11 had competed for open seats while four had competed for seats reserved for the Scheduled Castes If the four reserved seats could be filled up by the appointment thereto of candidates who appeared in the 1980 examination, there would be no difficulty in accommodating the petitioners because.
they are 10th and 11th in the merit list of 1980.
Normally, vacancies which are intended to be filled by holding an examination in any particular year, are filled from amongst candidates who had appeared for that examination.
The situation in this case is, however, complicated by the fact that two Scheduled Caste candidates, Ajaib Singh and Ram Swarup, who had appeared for the competitive examination in the previous year, that is in 1979, were wrongly denied appointments.
They had 572 passed the examination and reserved vacancies were available in which they could and ought to have been appointed.
Ajaib Singh filed a Writ Petition in this Court (No 312 of 1980) which was allowed by us by an order dated September 2, 1981.
That order reads thus : "We are informed that the Delhi High Court has decided in a full Court meeting to recommend the names of the petitioner Ajaib Singh and another candidate Ram Swarup, for appointment to the post for which they had applied, namely, the post of the Sub Judge.
The duration of the panel which was prepared for the year 1979 expired on August 16, 1980, That makes it necessary to direct that the names of the petitioner Ajaib Singh and the other candidate Ram Swarup should be included in the panel for the year 1979 and the appointment of these persons be made by the Delhi Administration despite the expiration of the period of that panel." The High Court took the particular decision in a full Court meeting because it found, and rightly so, that Ajaib Singh and Ram Swarup were denied appointments due to an error on the part of its Registry in calculating the number of reserved seats which were available in the year 1979.
The error committed by the High Court Registry is to be regretted and we hope that errors which betray lack of care in matters which make or mar a person will not be repeated.
But the question which arose for the administrative consideration of the High Court was whether the injustice done to the two candidates should be perpetuated on the specious plea that, after all, the High Court had taken a certain decision and that decision must be respected, whether it is administrative or judicial.
We are glad to find that the High Court did not stand on a false sense of prestige and rectified the injustice done to the two candidates by correcting an error for which they were not to blame.
On our part, we considered it unfair that they should be denied appointments and be made to suffer injustice for the error of the Registry in applying the reservation formula.
The counter affidavit filed on behalf of the High Court shows that the first two seats, from out of the four seats which were available to the Scheduled Caste candidates in the year 1980, have been allotted to Ajaib Singh and Ram Swarup, subject to the result of these writ petitions.
It is ironical that the rectification of injustice done to some 573 two persons should result in injustice to two others.
But, that is exactly what has happened in this case, as if to illustrate that one man 's food is another man 's poison.
The contention of the High Court is that though the petitioners were in the merit list of 11 persons for the year 1980, they could not be appointed as Sub Judges because, Ajaib Singh and Ram Swarup who were wrongly excluded from the reserved appointments of 1979 had to be accommodated in the merit list of 1980 and, after adjusting them against the reserved vacancies of 1980, no reserved vacancies were left for the candidates who were placed in the merit list of 1980.
When, in furtherance of the decision taken by the Full Court meeting of the High Court, we directed on September 2, 1981 that the two candidates of 1979 must be included in the 1979 panel and appointed as Sub Judges despite the expiry of the duration of that panel, little did we realise, and it was not so stated before us, that the appointment of those two candidates of 1979 will mean the ouster of these two candidates of 1980.
Such a strange result is to be avoided, if not at all costs, at least within the framework of the Rules and the administrative instructions governing this matter.
Justice to one group at the expense of injustice to another is perpetuation of injustice in some form or the other.
The counter affidavit of the Assistant Registrar explains the arithmetic of the High Court decision as to why the petitioners were excluded from the selections of 1980.
History has the habit of repeating itself and, with great respect, the High Court has once again fallen into an error while deciding whether, after accommodating Ajaib Singh and Ram Swarup in the 1980 selection, reserved vacancies were still available in which the petitioners could be appointed.
The explanation of the High Court may best be stated in the words of its Assistant Registrar.
He says in paragraph 21 of his counter affidavit : "It is submitted that in view of the fact that only 11 candidates qualified in the examination of which 7 were general candidates.
Therefore, in accordance with the advice contained in the D. O. letter No. 36034/19/79 Est (SCT) dated August 13, 1979 of the Department of Personnel and Administrative Reforms, as against 7 general candidates only one Scheduled Caste candidate could be taken and accordingly, 7 general candidates and 1 Scheduled Caste candidate and in addition 2 more Scheduled Caste candidates as against 2 carried forward exchangeable vacancies 574 of Scheduled Tribes were recommended for appointment to the Delhi Judicial Service.
" The counter affidavit says that the name of Dal Chand Anand, who is petitioner in Writ Petition No. 2962 of 1981, was recommended for appointment since he was 3rd amongst the four Scheduled Caste candidates but that the, said recommendation was made under an erroneous belief that a vacancy was available in which he could be appointed.
When the mistake was realised by the High Court, his name was dropped.
In so far as the other petitioner, Prem Prakash, is concerned, the explanation of the Assistant Registrar is that no vacancy was available at all in which he could be appointed since, he was 4th in the list of Scheduled Caste candidates.
The error from which the calculation of the High Court suffers is that the number of vacancies available for the Scheduled Caste candidates was fixed by it according to the number of candidates who qualified for the general seats.
The counter affidavit states expressly that the availability of vacancies for candidates of the reserved category was determined on the basis that only 7 candidates had qualified for the general seats.
This, according to us, is neither justified by the Rules and administrative instructions nor indeed does such a method of fixation of reserved vacancies disclose any acceptable basis.
16 Vacancies were advertised in the first instance out of which, 11 were for general candidates and 5 for reserved categories.
It may be assumed that the Administration is not bound to fill all the vacancies which are advertised and indeed, if the number of candidates who qualify in the competitive examination is less than the number of vacancies which are advertised, it is obvious that the vacancies which can be filled will be less than the vacancies which are advertised.
But the availability of vacancies for the reserved categories cannot be made to depend upon the accidental circumstance of how many candidates have qualified for general seats.
In the first place, that would be contrary to the instructions contained in paragraphs 4.2 and 9.2 of the Brochure of 1978.
Secondly, such a method will lead to the absurd and undesirable consequence that no candidate of the reserved category will be appointed at all, if only one or two candidates from the general category qualify in the examination.
The correct approach is to fix the number of vacancies available for the reserved candidates on the basis of the total number of vacancies which are intended to be filled at any particular point of time.
According to paragraph 575 2.1 of the Brochure, 15% of the total vacancies are required to be reserved for the Scheduled Caste candidates and 7 1/2% for the Scheduled Tribe candidates.
Therefore, the High Court could not have fixed the number of vacancies available to the reserved candidates on the basis that only 7 persons had qualified for the general seats.
If a decision was taken to fill 10 or 11 posts only, the number of reserved vacancies should have been fixed upon that basis and not on the basis that only 7 candidates had qualified for the general seats.
The High Court should have corrected its error in these two cases with the same alacrity with which it corrected its error in the case of the two Scheduled Caste candidates who had qualified in 1979.
There is an additional reason in support of the view which we are disposed to take.
On February 8, 1982 the Ministry of Home Affairs, Department of Personnel and Administrative reforms, issued a notification to the following effect : "Sub: Validity period of lists of selected candidates prepared on the basis of direct recruitment/Department competitive Examination.
The undersigned is directed to say that reference are being received from time to time from Ministries/Deptts.
enquiring as to what should be the validity period of a list of selected candidates prepared on the basis of direct recruitment or Departmental competitive Examination Normally, in the case of direct recruitment a list of selected candidates is prepared to the extent of the number of vacancies (other persons found suitable being put on a reserve list, in case some of the persons on the list of selected candidates do not become available for appointment).
Similarly, in the case of Departmental competitive Examinations the list of selected candidates has to be based on the number of vacancies on the date of declaration of results, as the examination is competitive and selection is based on merit.
A problem may arise when there is a fluctuation in the vacancies after the list of selected candidates is announced.
The matter has been carefully considered.
Normally, recruitment whether from the open market or through a 576 Departmental competitive Examination should take place only when there are no candidates available from an earlier list of selected candidates.
However, there is a likelihood of vacancies arising in future: in case, names of selected candidates are already available, there should either be no further recruitment till the available selected candidates are absorbed or the declared vacancies for the next examination should take into account the number of persons already in the list of selected candidates awaiting appointment.
Thus, there would be no limit on the period of validity of the list of selected candidates prepared to the extent of declared vacancies, either by the method of direct recruitment or through a Departmental Competitive Examination.
Once a person is declared successful according to the merit list of selected candidates, which is based on the declared number of vacancies, the appointing authority has the responsibility to appoint him even if the number of the vacancies undergoes a change, after his name has been included in the list of selected candidates.
Thus, where selected candidates are awaiting appointment, recruitment should either be postponed till all the selected candidates are accommodated or alternatively intake for the next recruitment reduced by the number of candidates already awaiting appointment and the candidates awaiting appointment from a fresh list from the subsequent recruitment or examination.
Ministry of Finance, etc.
are requested to bring the above instructions to the notice of all the appointing authorities under them for information and guidance.
Sd/ (J. K. Sarma) Director.
" It is clear from this notification that if selected candidates are available from the previous list, there should either be no further recruitment until those candidates are absorbed or, in the alternative, vacancies which are declared for the subsequent years should take into account the number of persons who are already in the list of selected candidates who are still awaiting appointment.
The notification further shows that there should be no limit on the period of validity of the list of selected candidates prepared to the extent 577 of declared vacancies.
Once a person is declared successful according to the merit list of selected candidates, the appointing authority as the responsibility to appoint him, even if the number of vacancies undergoes a change after his name is included in the list of selected candidates.
We must record our dissatisfaction at the fact that the Rules of the Delhi Judicial Service have not been amended so as to bring them in conformity with the administrative instructions and notifications which have been issued by the Ministry of Home Affairs, Department of Personnel and Administrative Reforms, from time to time.
The situation is virtually chaotic for which, we must clarify, the High Court of Delhi cannot be blamed.
It is surprising that though 13 years have gone by since the Delhi Judicial Service was established, no attention whatsoever has been paid to a matter which concerns the future of a large number of young men and women who aspire for posts in the Judiciary.
The instant case and the cases of Ajaib Singh and Ram Swarup show that the worst sufferers of this inaction are members of the Scheduled Castes and Scheduled Tribes.
Sooner the Rules are amended, easier will it be for the High Court to administer and superintend the affairs of the subordinate Judiciary with the object of achieving the ideals enshrined in Articles 16 (4), 38 and 46 of the Constitution.
Though the Rules ought to be amended, that does not mean that administrative instructions can be ignored by the High Court until that is done.
The Assistant Registrar says in paragraph 9 of his counter affidavit that "administrative instructions cannot be allowed to prevail over the statutory rules.
" That would be correct provided that the administrative instructions are contrary to the statutory rules.
In this case, Rule 28 itself says that "Appointments made to the service by competitive examination shall be subject to order regarding special representation in the service for Scheduled Castes and Scheduled Tribes issued by the Central Government from time to time.
" Therefore, far from their being any inconsistency between the statutory rules and the administrative instructions it is clear that the two have to be read together.
These writ petitions must therefore succeed.
Our reasons for allowing the petitions may be summed up thus: In the first place. , in the process of remedying injustice which was done to the two scheduled caste candidates of 1979, no injustice can be caused to the petitioners who had qualified for the reserved seats in the exami 578 nation held in 1980.
Secondly, the quota of seats available for reserved candidates cannot be made to depend on the fortuitous circumstance as to how many candidates have qualified for the general seats.
The reserved quota must be fixed on the basis of the total number of vacancies which are to be filled at a given point of time.
Thirdly, the notification of 1982 is good authority for adjusting the petitioners against the reserved vacancies for the year 1980.
The statutory rules and administrative instructions have to be read together by reason of Rule 28.
We accordingly direct that the High Court and the Delhi Administration will take expeditious steps for notifying the appointments of the petitioners, Dal Chand Anand and Prem Prakash, to the Delhi Judicial Service.
For purposes of seniority the former will rank higher than the latter because that was their orders of seniority in the original merit list of 1980.
Since they have not actually worked as Sub Judges during the intervening period, they will not be entitled to any remuneration for that period.
They will however rank for seniority in the Delhi Judicial Service on the footing that they were appointed when they ought to have been appointed, that is to say, when the other candidates were appointed on the basis of the result of the 1980 examination.
In all other respects, including probation, their appointment will be subject to the provisions of the relevant rules and regulations.
In the result, the writ petitions are allowed to the extent indicated above.
Respondents 1 and 2 will pay to the petitioners the costs of these petitions.
M.L.A. Petitions allowed.
| Rule 18 of the Delhi Judicial Service Rules, 1970 (for short, the Rules) says that the Selection Committee shall prepare a list of candidates in order of merit and forward it to the Administrator for filling the vacancies then existing or any vacancy that may occur within a period of one year of the preparation of the list.
Rule 28 of the Rules lays down that appointments made to the Service by competitive examination shall be subject to order regarding special representation in the Service for Scheduled Castes and Scheduled Tribes issued by the Central Government from time to time.
Paragraph 2.1 of the Brochure on "Reservation for Scheduled Castes and Scheduled Tribes in Services" issued by the Central Government requires that 15 per cent of the total vacancies are to be reserved for Scheduled Caste candidates and 71/2 for Scheduled Tribe candidates.
Paragraph 4.2 of the Brochure prescribes that the actual number of vacancies to be reserved for Scheduled Castes and Scheduled Tribes in any recruitment should be determined on the basis of points in the roster and also taking into account the reservations brought forward from the previous year.
On 8th February, 1982, the Government of India issued a Notification declaring that there would be no limit on the period of validity of the list of selected candidates prepared to the extent of declared vacancies either by the method of direct recruitment or through a departmental competitive examination and that once a person is declared successful according to the merit list of selected candidates which is based on the declared number of vacancies, the appointing authority has the responsibility to appoint him even if the number of vacancies undergoes a change after his name has been included in the list of selected candidates.
565 In 1980, Respondent No. 3, High Court of Delhi notified 16 vacancies of Sub Judges for being filled through competitive examination in the Delhi Judicial Service 11 vacancies were for open candidates, 2 for Scheduled Castes and 3 for Scheduled Tribes which included two carried forward vacancies also.
The carried forward vacancies were interchangeable in the sense that if candidates from Scheduled Tribes were not available, the vacancies could be added to the quota reserved for Scheduled Castes.
The petitioners, Dal Chand Anand and Prem Prakash, who were members of Scheduled Caste secured 10th and 11th position respectively in the merit list of 11 candidates who qualified the examination and viva voce test held in pursuance of the above notification.
They were Serial No. 3 Scheduled Caste candidates.
Since the petitioners did not figure in the final list of candidates selected by the Administrator, Respondent No. 2, they filed present writ petitions under article 32 of the Constitution to challenge their exclusion and non appointment.
Respondent No. 3 contended (1) that the petitioners were excluded from the selections of 1980, on account of the fact that only 11 candidates qualified in the examination of which 7 were general candidates and therefore as against 7 general candidates only 1 Schedule Caste candidate could be appointed; and (ii) That though the petitioners were in the merit list of 11 persons for the year 1980, they could not be appointed as Sub Judges because two Scheduled Caste candidates who were wrongly excluded from the reserved appointments of 1979 had to be accommodated in the merit list of 1980 and after adjusting them against the reserved vacancies of 1980, no reserved vacancies were left for the petitioners.
Allowing the Writ Petitions, ^ HELD: (1) The error from which the calculation of the High Court suffers is that the number of vacancies available for the Scheduled Caste candidates was fixed by it according to the number of candidates who qualified for the general seats.
This is neither justified by the Rules and administrative instructions nor indeed does such a method of fixation of reserved vacancies disclose any acceptable basis.
The quota of seats available for reserved candidates cannot be made to depend on the fortuitous circumstance as to how many candidates have qualified for the general seats, since that would be contrary to the instructions contained in paragraph 4.2 and 9.2 of the Brochure of 1978 and such a method will also lead to the absurd and undesirable consequence that no candidate of the reserved category will be appointed at all if only one or two candidates from the general category qualify in the examination.
The correct approach is to fix the number of vacancies available for the reserved candidates on the basis of the total number of vacancies which are intended to be filled at any particular point of time.
Therefore, the High Court could not have fixed the number of vacancies available to the reserved candidates on the basis that only seven persons had qualified for general seats.
If a decision was taken to fill 10 or 11 posts only, the number of reserved vacancies should have been fixed upon that basis and not on the basis that only 7 candidates had qualified for the general seats.
[574D E, G H, 575A B] 566 (2) In the process of remedying injustice which was done to the 2 Scheduled Caste candidates of 1979, no injustice can be caused to the petitioners who had qualified for the reserved seats in the examination held in 1980.
Such a strange result is to be avoided if not at all costs, at least within the framework of the Rules and the administrative instructions governing the matter.
Justice to one group at the expense of injustice to another is perpetuation of injustice in some form or the other.
[577H, 57 D] (3) The statutory rules and administrative instructions have to be read together unless they are contrary to each other.
In the instant case, since there is no in consistency between the statutory rules and the administrative instructions, it is clear that the two have to be read together by reason of Rule 28.
Though the Rules of the Delhi Judicial Service have not been amended so as to bring them inconformity with the administrative instructions and notifications which have been issued by the Ministry of Home Affairs, Department of Personnel and Administrative Reforms, from time to time, that does not mean that administrative instructions can be ignored by the High Court until that is done.
Therefore, the Notification of 1982 is good authority for adjusting the petitioners against the reserved vacancies for the year 1980, since it is clear from the Notification (i) that if selected candidates are available from the previous list, there should either be no further recruitment until those candidates are absorbed or, in the alternative, vacancies which are declared for the subsequent years should take into account the number of persons who are already in the list of selected candidates who are still awaiting appointment and (ii) that there should be no limit on the period of validity of the list of selected candidates prepared to the extent of declared vacancies and once a person is declared successful according to the merit list of selected candidates, the appointing authority has the responsibility to appoint him, even if the number of vacancies undergoes a change after his name is included in the list of selected candidates.
[577G, B D, 576G H; 577A]
|
(Crl.) No. 270 of 1986 Under Article 32 of the Constitution of India.
178 Mrs. K. Hingorani for the Petitioner.
Kapil Sibal, Karanjawala, Mrs. Karanjawala and C.V. Subba Rao for the Respondents.
The Judgment of the Court was delivered by BALAKRISHNA ERADI, J.
Immediately on conclusion of the hearing of arguments in the above Writ Petition on June 11, 1986, having regard to the urgency of the matter, we passed the following order: "We allow the Writ Petition and direct that the minor boy, Dustan be restored forthwith to the custody of the petitioner i.e. the mother with liberty to the petitioner to take him to the United States.
The child will be a ward of the concerned Court in Michigan and it will be open to the father, first respondent herein to move that Court for a review of the custody of the child, if he is so advised.
Detailed reasons will follow.
The passport of the child which is in deposit with the Registrar of this Court will be returned to the petitioner i.e. the mother of the child today itself.
The concerned authori ties of the Govt.
of India will afford all facilities to the mother to take the child back to the United States pursuant to the order passed by this Court.
" We now proceed to state in this judgment our reasons in support of the order.
The petitioner, Mrs. Elizabeth Dinshaw is a citizen of the United States of America residing in the State of Michi gan.
She is employed as a case worker for the State of Michigan in Genesee County Department of Social Services, Flint Michigan.
The first respondent, Mr. Arvand M. Dinshaw, who is an Indian citizen was a student at Northern Michigan University in 1971.
During that period the petitioner was also studying there.
What started as a friendship between them on the campus later developed into love and the peti tioner was married to the first respondent in a civil mar riage before a legal magistrate in Negaunee, Michigan on February 26, 1972.
The first respondent thereafter settled down in the United States more or less on a permanent basis having secured employment as an Accountant for the Control ler 's Office in Genesee County.
and having obtained a perma nent 179 immigration Visa.
A male child, Dustan, was born to the couple on August 30, 1978 in Rochester, Michigan, United States of America where they were having their marital home.
Unfortunately, differences arose between the two spouses late in the year 1980 and on December 23, 1980, the peti tioner along with her son took up separate residence in a women 's shelter in Saginaw, Michigan.
She filed a petition for divorce on January 2, 1981 in the Circuit Court for the County of Saginaw, Michigan.
By a decree dated April 23, 1982, the Circuit Court held that it had been established that there had been a breakdown in the marriage relationship to the extent that the objects of matrimony had been de stroyed and there remained no reasonable likelihood that the marriage could be preserved and hence it declared the mar riage as dissolved and granted a divorce to the petitioner as prayed for.
By the same decree, it was directed that the petitioner shall have the care, custody and control of the minor child of the parties until he reaches the age of 18 years or until the further orders of that Court.
The first respondent, the father was given visitation rights by the decree and it was provided that he shall 'have visitation with the minor child from approximately 5 P.M. to 8 P.M. on the Wednesday of every week during which he does not have a weekend visitation.
It was further ordered that the father shall have visitation with the minor child on alternate weekends from 5 P.M. on Friday until the following Monday morning when he should return the child to his day care centre.
On the subject of travel with the minor child to any place outside the United States, it was specifically direct ed in the decree as follows: "IT IS FURTHER ORDERED AND ADJUDGED THAT should the Defendant ARVAND M. DINSHAW.
wish to travel with the minor child outside the territorial limits of the United States.
he shall bring a petition before this Court.
setting forth the conditions under which he intends to leave the country with the minor child.
The court shall then make a determina tion as to whether such travel is in the best interests of the minor child.
and what condi tions shall be set forth to ensure the child 's return.
" Taking advantage of the weekend visitation rights grant ed to him by the above decree, the first respondent picked up Dustan from his school on January 10, 1986 and secretly left the United States of America for India on January 11, 1986.
at about 8.30 in the night.
He 180 had not intimated the Court about his intention to take the child out of its jurisdiction and outside country nor had he given the slightest indication to the petitioner about.his intention to leave the United States of America permanently for India.
It may be stated that immediately before leaving for India, the first respondent had sold away the immovable property consisting of a house and its premises owned by him in Seymour, Lindan, Michigan, where he had been residing and it was only from the Airport that he posted a letter tender ing his resigation from his job as Accountant in the Coun try.
In this context it is significant to recall that the decree of the Circuit Court contained the following direc tions: .
"IT IS FURTHER ORDERED AND ADJUDGED that the Defendant shall notify the Office of the Friend of the Court promptly concerning any changes in his address.
The Court further finds that the Defendant is presently residing at 14155 Seymour, Lindan, Michigan.
" It was only late in the day on Monday, January 13., 1986 that the petitioner came to know that the minor child, Dustan had not been returned to the day care centre by the first respondent.
She immediately moved the Michigan Circuit Court complaining against the violation by the first re spondent of the terms of its decree.
A warrant of arrest was issued by the Michigan Circuit Court against the first respondent on January 16, 1986 on the ground of unlawful taking and retaining the child outside the State.
This was later followed by the issue of a Federal warrant of arrest against the first respondent on the January 28, 1986 on the ground of unlawful flight to avoid prosecution.
Since the first respondent had already come over to India with the minor child, these warrants could not be executed in .the
United States.
The first respondent has his ancestral home in Pune where his parents are residing.
The petitioner made frantic efforts through American Consulate General at Bombay to trace out the whereabouts of Dustan.
She received a reply that the Consular Officer, American Consulate General, Bombay travelled to Pune on Friday, March 7, 1986 and though she was able to visit the residence of the first respond ent 's parents and she spoke with them, the minor child, Dustan was not present there and the grand parents reported that Dustan and his father had gone North, possible, to Kashmir and that they were not aware of the exact where abouts of Dustan and the first respondent.
The petitioner finding herself totally helpless to recover back the custody of her minor child, whom she had brought up for more than 7 181 years, thereafter arranged to have this petition tiled in this Court seeking the issuance of writ of Habeas Corpus directing the respondents to produce in Court her minor child, Dustan and to handover his custody to her as the person entitled to his custody under the order of a compe tent foreign Court.
In response to the notice issued by this Court directing production of the child before the Court, the first respond ent appeared and produced the child in Court.
He has filed a counter affidavit but significantly there is absolutely no satisfactory explanation given there for his conduct in abducting the child from America without seeking permission of the Court in that country of which the minor child, was ward.
His only explanation is that his father was seriously ill and he wanted that his father in his ailing condition to see Dustan.
He has further stated that his son Dustan has told him on an enquiry that he would prefer to stay with him in Pune and hence he had got Dustan admitted in St. Helena 's School in Standard III.
According to him he had not deliber ately done anything wrong in bringing Dustan with him from the United States and that now the minor child is well settled here in India and it will be in the interest of the child that he should be allowed to reside with him in India as per the child 's desire.
The conduct of the first respondent in taking the child from the custody of the person to whom it had been entrusted by the Court was undoubtedly most repprehensible.
The expla nation sought to be given by him namely, his father 's ill ness, is far from convincing and does not in any way justify such gross violation and contempt of the order of the Cir cuit Court in Michigan.
Whenever a question arises before Court pertaining to the custody of a minor child, the matter is to be decided not on considerations of the legal rights of parties but on the sole and predominant criterion of what would best serve the interest and welfare of the minor.
We have twice inter viewed Dustan in our Chambers and talked with him.
We found him to be too tender in age and totally immature to be able to form any independent opinion of his own as to which parent he should stay with.
The child is an American citi zen.
Excepting for the last few months that have elapsed since his being brought to India by the process of illegal abduction by the father, he has spent the rest of his life in the United States of America and he was doing well in school there.
In our considered opinion it will be in the best interests and welfare of Dustan that he should go back to the United States of America and continue his education there under the custody and guar 182 dianship of the mother to whom such custody and guardianship have been entrusted by a competent Court in that country.
We are also satisfied that the petitioner who is the mother, is full of genuine love and affection for the child and she can be safely trusted to lookafter him, educate him and attend in every possible way to his proper upbringing.
The child has not taken root in this country and he is still accus tomed and acclimatized to the conditions and environments obtaining in the place of his origin in the United States of America.
The child 's presence in India is the result of an illegal act of abduction and the father who is guilty of the said act cannot claim any advantage by stating that he has already put the child to some school in Pune.
The conduct of the father has not been such as to inspire confidence in us that he is a fit and suitable person to be entrusted with the custody and guardianship of the child for the present.
In Re. H. (infants) , the Court of Appeal in England had occasion to consider a somewhat simi lar question.
That case concerned the abduction to England of two minor boys who were American citizens.
The father was a natural born American citizen and the mother, though of Scottish origin, had been resident for 20 years in the United States of America.
They were divorced in 1953 by a decree in Mexico, which embodied provisions entrusting the custody of the two bOys to the mother with liberal access to the father.
By an amendment made in that order in December, 1964, a provisions was incorporated that the boys should reside at all times in the State of New York and should at all times be under the control and jurisdiction of the State of New York.
In March, 1965, the mother removed the boys to England, without having obtained the approval of the New York court, and without having consulted the father; she purchased a house in England with the intention of remaining there permanently and of cutting off all contacts with the father.
She ignored an order made in June, 1965, by the Supreme Court of New York State to return the boys there.
On a motion on notice given by the father in the Chancery Division of the Court in England, the trial ' judge Cross, J. directed that since the children were American children and the American Court was the proper Court to decide the issue of custody, and as it was the duty of courts in all coun tries to see that a parent doing wrong by removing children out of their country did not gain any advantage by his or her wrongdoing, the Court without going into the merits of the question as to where and with whom the children should live, would order that the children should go back to Ameri ca.
In the appeal filed against the said judgment in the Court of Appeal, Willmer 183 L.J. while dismissing the appeal extracted with approval the following passage from the judgment of Cross, J. : "The sudden and unauthorised removal of chil dren from one country to another is far too frequent nowadays, and as it seems to me, it is the duty of all courts in all countries to do all they can to ensure that the wrongdoer does not gain an advantage by his wrongdoing.
The Courts in all countries ought, as I see it, to be careful not:to do anything to 'encourage this tendency.
This substitution of self help for due process of law in this field can only harm the interests of wards general ly, and a judge should, as I see it, pay regard to the orders of the proper foreign Court unless he is satisfied beyond reasonable doubt that to do so would inflict serious harm on the child.
" With respect we are in complete agreement with the aforesaid enunciation of the principles of law to be applied by the Courts in situations such as this.
As already observed by us, quite independently of this consideration we have come to the firm conclusion that it will be in the best interests of the minor child that he should go back with his mother to the :United States of America and continue there as a ward of the concerned Court having jurisdiction in the State of Michigan.
The first respondent has tendered before this Court in an affidavit filed by him an unconditional apology for having illegally brought Dustan over to India from the United States in violation of the order of the competent Court in that coun try.
The proper step to be taken by him is to tender such an apology to the Court whose order he has violated.
It was brought to our notice that by an order passed by the Circuit Court, Saginaw, Michigan on February 11, 1986, the first respondent has been found to be in contempt of that Court for violation of its order and the Court has consequently terminated the visitation rights which had been conferred on the first respondent by the decree dated April 23, 1982.
It will be open to the first respondent, if he is so advised, to move the Saginaw County Circuit Court in the State of Michigan for modification of this order on tendering his unconditional apology to that Court, and if he is able to satisfy that Court that there is genuine 184 contrition and regret on his part for the wrong that he has done, we have no doubt that the Circuit Court will take a lenient view and pass appropriate orders working out justice between the parties keeping in mind the important aspect that it will not be in the interest of the minor child to completely alienate him from his father for whom the child has developed genuine affection.
We have also no doubt that the petitioner will not take a vindictive attitude but would forget and forgive what has happened in the past and cooper ate with the father in the matter of enabling him to have restricted visitation rights in America with all necessary, proper and adequate safeguards and that the petitioner would also extend her cooperation for the withdrawal of the war rants of arrest outstanding against the first respondent in case he approaches her with such a request.
For the reasons stated above, the Writ Petition is disposed of with the directions issued by our order dated June 11, 1986.
A.P.J. Petition disposed of.
| The appellant Corporation sought to assess the land and buildings of the respondent club to genera1 tax under section 202 of the Hyderabad Municipal Corporation Act, 1955.
The re spondent claimed exemption on the ground that occupation and user of the property for running horse races and training the horses etc.
constituted occupation and user of the property for a 'charitable purpose ' within the meaning of section 202(1)(b), which was refused.
The respondent approached the High Court and succeeded.
Partly allowing the appeal by the Corporation, HELD: 1.
For determining whether exemption under section 202(1) (b) of the Hyderabad Municipal Corporation Act, 1955, was available, the test to apply is to seek answer to the question: to what use is the property put or for what pur pose is the property pat and to ascertain whether such occupation or user is for 'charitable purpose '.
[197F] 2.
The expression 'charitable ' in the context of section 202(1)(b) means a benevolent activity calculated to benefit the poor or, the deprived.
Horse racing is surely not such a benevolent activity, however charitable a view is taken.
It must be the very activity which is carried on the property which must be charitable and not the application of the income of such activity.
[197H 198A] 3.
The High Court has completely failed to realize that the 'occupation ' of the land and buildings or the 'user ' must be for 'charitable purpose ' and that it is altogether irrelevant as to the manner in which the income of the club is utilised.
Section 202(1)(b) makes no reference to the question as regards the employment of the income of the club or the purpose for which the income is so employed.
Exemp tion is granted 196 only in respect of buildings which are 'solely ' and exclu sively used for charitable purpose.
[198B] 4.
In the instant case, the user of the premises for the Race Course Club will not constitute occupation or user for a 'charitable purpose ' within the meaning of section 202(1)(b) and of Race Course Club will not be entitled to claim exemp tion from levy of the general tax.
[198F] 5.
The High Court has rightly taken a view adverse to the appellant as regards the levy for the assessment year 1966 67, on an appreciation of evidence and there is no warrant to disturb the said finding.
There is also no reason to interfere with the valuation of the property as made by the Small Causes Court and confirmed by the High Court.
[198G H] 6.
The order passed by the High Court in so far as it is held that the property is exempt from levy of general tax under section 202(1)(b) is set aside.
The appellant would be entitled to levy general tax from 1967 68 onwards in accord ance with law.
[199B]
|
Appeal No. 165 of 1953.
Appeal by special leave from the judgment and order dated October 3, 1950, of the former Travancore Cochin High Court in A. section No. 288 of 1120(T) arising out of the judgment and order dated the 3rd Thulum 1120 of the 2nd Judge, District Court, Quilon in C.M.P. No. 2391 dated 15 8 1103 in I.P. 3/1100.
K. section Krishnaswamy Iyengar, Alladi Kuppuswami and M. section K. Sastri, for the appellant.
N. C. Chatterjee, M. R. Krishna Pillai and Sardar Bahadur, for respondent No. 1. 1957, May 24.
The Judgment of the Court was delivered by SINHA J.
This appeal by special leave is directed against the concurrent orders of the Courts below allowing the Official Receiver 's application under section 35 of Travancore Regulation VIII of 1090 (= 1915), to which we shall refer in the course of this judgment as the Insolvency Regulation, for annulling the usufructuary mortgage (exhibit I) for Rs. 75,000 dated August 18, 1924, executed by a number of persons who may now be conveniently described as the insolvents.
The main question for determination in this appeal on behalf of the transferee is whether the transaction in his favour is within the third exception to section 35 aforesaid.
(In this judgment we shall use the dates with reference to the Gregorian Calendar equivalent to the dates maintained under the Malayalam Calendar).
259 In order to appreciate the arguments in this appeal it is necessary to state the following facts.
Koya Kunju was a flourishing merchant at Quilon carrying on trade in piece goods, yarn, provisions etc.
He died in or about the year 1921 leaving him surviving his widow, two sons and two daughters, who jointly carried on the ancestral business through the eldest son under a power of attorney.
They added to the family business a tile factory and an oil mill.
In June July 1924 the sons approached the appellant 's father, who was a flourishing money lender living about fifty to sixty miles away from Quilon at a place called Mankompu.
He agreed to advance the sum of Rs. 75,000 on the usufructuary mortgage of certain immovable properties in and near Quilon belonging to the family, for the purpose of carrying on their trade and business after his two sons had made certain enquiries at Quilon about the status and means of the borrowers and whether the transaction would be worth their while.
After a draft had been made at the instance of the creditor, the mortgage bond and a lease deed granting a lease of the mortgaged properties to the mortgagors themselves bearing the same date, namely, August 18, 1924, were executed and registered by the heirs aforesaid.said of Koya Kunju.
The purpose of the loan is stated in the document to be the family necessity, namely, carrying on trade etc.
In lieu of interest on the Rs. 75,000 advanced at the rate of nine per cent.
per annum for a period of three years the mortgaged properties, namely, buildings, fields and coconut orchards etc., were said to have been delivered to the mortgagee who in his turn granted a lease back to the mortgagors on payment of a stated sum by way of annual rents, viz., Rs. 6,750, equivalent to interest at nine per cent.
on the principal sum advanced.
It was also stipulated in the lease deed that if rent was in arrears for two years, the lessees would surrender the properties to the lessor and accrued arrears of rent also would be a charge on those properties.
It is common ground that the mortgaged properties were unencumbered at the date of the transaction, but soon after a hypothecation deed in favour of a third party named Kadir Moideen 260 Rowther was executed on August 30, 1924, for the sum of Rs. 78,859 15 0, hypothecating the equity of redemption in respect of the properties mortgaged to the appellant and certain other properties.
The second bond which will hereinafter be called the hypothecation bond, to distinguish it from the usufructuary mortgage bond in question, was admittedly executed to liquidate the outstanding debts due to the hypothecatee himself in respect of dealings in cloth, yarn and iron goods between the parties to that transaction.
It appears that those two parties were having dealings in those commodities from about the year 1911.
Hence they were very well known to each other on account of their business dealings, whereas the mortgagee in respect of the usufructuary mortgage bond in question was a complete stranger to the family of the mortgagors.
On September 15, 1924, one of the business creditors of the family of the mortgagors,S. M. Sheikh Mohideen Rowther, made an application in the District Court of Quilon for adjudicating them as insolvents.
He implement the mortgagors, the five heirs aforesaid of Koya Kunju.
Amongst the acts of insolvency were mentioned the transactions between the insolvents and the appellant and the hypothecation bond aforesaid.
In his affidavit in answer, the first counter petitioner for himself and as agent of the other members of the family admitted their joint trading business and the debts incurred by his firm.
He also admitted the debts due under the usufructuary mortgage bond in question and the hypothecation bond aforesaid and ended by saying that the debts of the counter petitioners including the debts covered by the said usufructuary mortgage bond and the hypothecation bond amounted to two and a half lakhs of rupees and that their assets were worth not less than seven lakhs of rupees.
He denied that they had committed any acts of insolvency or had done anything to delay or defeat their creditors and expressed their readiness to pay the debts due to the petitioning creditor.
A number of other creditors also made similar applications for adjudicating the mortgagors as insolvents.
All those proceedings appear to have been 261 consolidated and the District Judge by his orders dated August 29, 1927, adjudged the counter petitioners insolvents.
About the contents and effect of this order of adjudication something more will have to be said in the course of this judgment while dealing with the most important question of law raised by the learned counsel for the Official Receiver.
By his orders dated October 19, 1924, the District Judge appointed the Official Receiver as the interim receiver in respect of the insolvent 's properties to take immediate possession thereof.
The interim receiver, Sri V. N. Narayana Pillai, made a report to the court on February 11, 1925, stating inter alia that the total yield of the properties mortgaged to the appellant could be estimated at Rs. 1,600 per year and that the insolvents were not prepared to continue in possession of the mortgaged property at a rent of Rs. 6,750 as stipulated in the lease deed aforesaid; and that, therefore, the mortgaged property was not expected to fetch an income equivalent to nine per cent.
on the mortgage bond as stipulated.
The rent having fallen in arrears over two years, the mortgagee instituted a suit against the mortgagors, impleading the Official Receiver also for recovery of arrears of rent with interest, as also for recovery_ of possession of the mortgaged property ; and the suit appears to have been decreed for the reliefs prayed for.
Since then the mortgagee appears to have been in direct possession of the property.
It does not appear that in that suit any question as to the want of consideration or of bona fides of the mortgage bond was raised either by the mortgagors themselves or by the Official Receiver.
It was on March 28, 1928, that the Official Receiver made his application to the court praying "that the court may be pleased to declare the transfers described in schedule A, void as against your petitioner".
Schedule A comprised the usufructuary mortgage bond aforesaid and the lease deed, as also the hypothecation bond for Rs. 78,859 15 0.
It is remarkable that no allegations of fact bearing on the bona fides of the transactions impeached are made in respect of the mortgage bond in question.
After stating the insolvency 262 proceedings and the fact of the execution of the deeds in schedule A and that the insolvency petition on which the order of adjudication was passed had been filed in court within two years after the dates of transfer, the only relevant statement made in the petition is para.
4 to the following effect: "That the said transfers are void as against your petitioner under sections 35 and 36 of the Insolvency Regulation.
" This petition of the Official Receiver was opposed by the mortgagee 's son, N. Krishna Iyer, on his father 's behalf, ' chiefly on the ground that the mortgage was a bona fide transaction for valuable consideration which was not affected by the Insolvency Regulation, that there was a misjoinder of parties and causes of action, apparently objecting to the Receiver filing a single petition in respect of the usufructuary mortgage deed arid.
the hypothecation bond; and that it was barred by limitation and estoppel.
A number of issues were raised on July 24, 1929, the most important of them being the first issue to the following effect : " Whether the otti and lease deeds impeached by the Receiver were executed in good faith and for valuable consideration ?" Other issues related to the formal issues in bar of the proceedings.
Before the learned District Judge (Mrs. Anna Chandy) a preliminary objection was raised on behalf of the Receiver to the effect that in view of the decision of the Judicial Committee of the Privy Council in Mahomed Siddique Yousuf vs Official Assignee of Calcutta (1), the matter was res judicata between the parties and the order of adjudication could be questioned only by an appeal against it, which had not been done.
The learned Judge gave effect to that objection and held that the transferee was precluded from agitating the matter and that his only remedy was by way of appeal against the order of adjudication.
This point has been very prominently raised by the learned counsel for the respondent, the Official Receiver, at the forefront of his arguments and will (1) (1943) L. R. 70 I. A. 93.
263 have to be dealt with at the proper place.
The learned Judge held on the merits that exhibit I, the usufructuary mortgage bond, was not for the full consideration stated in the deed but that only Rs. 20,000 had been paid to the mortgagors and that in any event the transaction did not represent a bona fide transfer.
As the hypothecation bond is not the subject matter of this appeal, it is no more necessary to follow the course of the proceedings in respect of that transaction.
The Receiver 's application was therefore allowed, both on the ground of incompetency of the transferee to challenge the adjudication order and on the finding that it was a "fraudulent transfer".
On appeal by the mortgagee, the learned Judges of the High Court dis agreed with the trial Judge and held that the decision in Mahomed Siddique YOUSUF 's case (1) could not stand in the way of the appellant and that the entire consideration of Rs. 75,000 had been proved to have been paid to the mortgagors but agreed with the trial Judge in holding that the transaction was not made in good faith in the sense that it had not been entered into with due care and attention.
In the result the appeal was dismissed.
The transferee prayed for a certificate of fitness to appeal to this Court, but the High Court refused that application.
The appellant then moved this Court and obtained special leave to appeal.
A number of points were raised on behalf of the appellant and at the threshold of the arguments it was contended, and in our opinion rightly, that the courts below had erred in throwing the burden on the transferee of proving affirmatively that the transaction impeached, namely, the usufructuary mortgage bond dated August 18, 1924, was supported by good faith and valuable consideration.
The Judicial Committee of the Privy Council laid it down in the case of Official Assignee vs Khoo Saw Cheow (2), that upon a true construction of the Bankruptcy Ordinance of the Straits Settlements, section 50, sub section
(3), which in terms is similar to the provisions of section 35 of the Insolvency Regulation, the onus is upon the Official Assignee to prove that a conveyance which he was seeking to set aside was not made in good faith and for valuable consideration.
In (1) (1943) L.R. 70 I.A. 93.
(2) 264 that case the trial Judge had ruled that the onus of proof lay upon the transferee and had set aside the transaction upon failure of proof led by the transferee.
On appeal it was held that the trial Judge had misdirected himself as to the onus and that as the result of the misdirection was very serious in that it had coloured the whole outlook as to the facts and had substantially prejudiced the appellant 's case a retrial was necessary.
The Privy Council affirmed the decision of the Appeal Court and dismissed the Official Assignee 's appeal, the respondent transferee not appearing before the Judicial Committee.
In the same year the Judicial Committee followed the aforesaid precedent in the case of Official Receiver vs P.L.K.M.R.M. Chettyar Firm (1), which was a case under the .
On a consideration of the provisions of section 53 of the Act their Lordships reaffirmed the proposition laid down in the earlier case of that very year reported in Official Assignee vs Khoo.
Saw Cheow(2).
Their Lordships examined the terms of section 53 and section 50 of Ordinance No. 44 of the Straits Settlements dealt with in that previous decision and came to the conclusion that they were in substance the same.
The third decision of their Lordships of the Privy Council to the same effect is reported in Pope vs Official Assignee, Rangoon (3).
This case went up in appeal from a decision of the Rangoon High Court under the provisions of section 55 of the Presidency Towns Insolvency Act.
In this case their Lordships observed further that if the transaction impeached was a real and not fictitious one, the receiver could not be said to have brought the case within the section unless he proved that the transferee knew that the transferor was insolvent at the time the transfer was made, even though the transfer was of the entire assets of the transferor.
These three decisions of the Judicial Committee settled the law in this country contrary to what had been the consensus of judicial opinion previously, that the initial burden of proving that the transaction impeached had not been made (1) (1930) L. R.58 1.
A. 115.
(2) (3) (1933) L.R. 60 I.A. 362, 265 in good faith and for valuable consideration lies on the party seeking to set aside the transaction.
The learned counsel for the respondent was not able to adduce any reasons to the contrary and it must therefore be taken that it is settled law in insolvency proceedings that the burden of proof lies on the Official Assignee or Receiver who challenges the transaction.
In this case, as already pointed out, the issue framed in terms laid the burden of proof on the transferee, the appellant.
He led the evidence recording of which began on November 21, 1930, and the evidence of his witnesses, C. P. Ws.
1 to 7 was recorded between November 21, 1930 and November 20, 1932, on different dates.
C. P. W. 8, one of the insolvents, appears to have been examined in the interest of the second mortgagee, that is to say, in support of the hypothecation bond.
He was crossed on behalf of the petitioning creditor, as also of the appellant.
He was examined and crossexamined in February and March 1933.
It was then for the first time that it was alleged on behalf of the mortgagors that only Rs. 20,000 out of Rs. 75,000 secured under the mortgage in question had actually been paid and that the remaining Rs. 55,000 had so far remained unpaid.
More will have to be said about this aspect of the case later.
C. P. W. 10, one of the other mortgagors was examined on the same lines as his brother, C.P.W. 8.
C.P.W. 12 is the younger brother of S.K. Kadir Moideen Rowther, the second mortgagee, who had taken the hypothecation bond.
He was examined on October 9, 1935.
Curiously enough, nothing appears to have happened until the first Official Receiver, V. N. Narayana Pillai, aged 64 years, was examined as C.P.W. 13 on November 29,1943.
It was he who had started the annulment proceedings in respect of the mortgage bond in question.
His evidence and conduct of the proceedings will have to be dealt with presently.
We have pointed out the extremely dilatory way in which the proceedings in the Insolvency Court were conducted.
The annulment proceedings commenced in 1928 and were determined by the Court of first instance by its orders dated October 19, 1944, 34 For a period of more than sixteen years the annulment proceedings were kept hanging.
For whose benefit it does not appear.
We would fain believe that this extremely dilatory way of dealing with litigation involving the business community is not a habit in that part of the country and that the present case is only an exception.
On appeal the High Court has noticed the delay but without any apparent disapproval.
We have not been able to discover any reasons, valid or otherwise, for this callous disregard of public time and litigants ' interest.
Realising that the annulment proceedings had taken a dubious course on an issue wrongly throwing the onus of proof on the transferee, the learned counsel for the Receiver sought to support the order annulling the encumbrance on the short ground that the matter was res judicata between the Receiver and the incumbrancer on the authority of the decision of the Privy Council in Mahomed Siddique Yousuf vs Official Assignee of Calcutta (1).
That was an appeal from the Calcutta High Court in a case arising under the Presidency Towns Insolvency Act, III of 1909.
In that case the Judicial Committee, following the well established rule in England as laid down in the leading case of Ex parte Learoyd In re Foulds (2), has held that the order of adjudication based on the allegation that one of the several acts of insolvency was the impugned transfer was conclusive against the transferee in subsequent proceedings taken by the Official Assignee to set aside the transfer by virtue of section 116, sub section
(2) of the Presidency Towns Insolvency Act, 1909.
Their Lordships have pointed out in the course of their judgment that the provisions of the Presidency Towns Insolvency Act then before their Lordships were in terms similar to those of the Bankruptcy Act of 1869 which had been repeated in the subsequent Acts of 1883 and 1914.
They also point out that it is rather anomalous that the decision should adversely affect a party who was not before the court when the adjudication order was made.
But they held that the words of the statute and the requirements of public policy in relation to (1) (1943) L.R. 70, I.A. 93.
(2) 267 adjudication proceedings were enough to outweigh any considerations of hardship to individuals.
On this view they affirmed the decision of the Calcutta High Court and overruled that of the Madras High Court in Official Assignee of Madras vs O.R.M.O.R.S. Firm(1).
Naturally very strong reliance was placed by the learned counsel for the respondent Receiver on that case.
It was argued that as the order of adjudication dated August 29, 1927, had with reference to the transaction in question, amongst others, held that the debtors had committed acts of insolvency by executing the deed (exhibit I) with a view to defeat or delay their creditors, it was no more an open controversy and the findings then recorded were conclusive in the present proceedings.
There are, in our opinion, insurmountable difficulties in the way of the respondents on this aspect of the case.
It was stated by the petitioning creditors that the counter petitioners (insolvents) had executed the usufructuary mortgage bond in question and the hypothecation deed in respect of almost all their properties with a view to defeat or delay the other creditors.
Issue 5 was raised in these terms: " Have the defendants committed acts of insolvency as alleged in the petition ? " and the finding of the court was that those were acts of insolvency " with intent to defeat or delay their creditors.
" It is said that these findings are resjudicata between the Receiver and the appellant.
Even so, there is no finding that the transferee was privy to such acts.
It was not necessary to find at that stage, and it has not in terms been found, that the transaction impugned in this case was not bonafide so far as the transferee is concerned or without consideration matters which directly arise for determination in the annulment proceedings leading up to this appeal.
Hence, even assuming that the rule laid down by their Lordships of the Judicial Committee in Mohomed Siddique Yousuf vs Official Assignee of Calculta(2) in a case arising under the Presidency Towns Insolvency Act, applies to a case like the present governed by the Insolvency Regulation, which follows more closely the (1) Mad. 541.
(2) (1943) L.R. 70 I.A. 93.
268 and not the Presidency Towns Insolvency Act, the present controversy is not barred by any finding in the order of adjudication.
In this appeal we are concerned with the bona fides of the transferee.
Nor has it been found that there was no valuable consideration for the mortgage.
Hence, without pronouncing on the applicability of the decision aforesaid of the Judicial Committee it must be held that the question under section 35 is still open.
Having disposed of the preliminary questions raised on behalf of the parties, we have now to determine the main question in controversy, namely, whether it has been proved that the usufructuary mortgage bond dated August 18,1924, was not made in good faith and for valuable consideration.
Section 35 of Travancore Regulation VIII of 1090 (= 1915) is in these terms: "Any transfer of property not being(i) a transfer made before, or at, and in consideration of, marriage, (ii)or a transfer made to, or for, the wife or children of the transferor of property that has accrued to the transferor in consideration of the marriage or in right of his wife, (iii)or a transfer made in favour of a purchaser or incumbrancer in good faith and for valuable consideration, shall, if the transferor is adjudged insolvent within two years after the date of the transfer, be void against the receiver, and may be annulled by the Court.
" This section is equivalent to section 36 of the (III of 1907) and to section 53 of the (V of 1920), except for the addition of the second exception which was apparently added in the Travancore law to make it in consonance with local laws relating to devolution of family property, and secondly that the word "void" in the last clause of the section in the Insolvency Regulation and in section 36 of the of 1907 has been changed into "voidable".
Regulation VIII of 1915 aforesaid has been replaced by Travancore 269 Regulation VIII of 1108 (1932).
Section 53 of the latter has taken the place of section 35 of the former and is exactly in the same terms except for the fact that the word "void" has been changed into "voidable", thus bringing the Regulation of 1932 in line with the Act of 1920.
It is not necessary for the purposes of this case to go into the question of whether any legal significance attaches to the change of the word " void" into " voidable ".
The legislative history of the law relating to annulment of transfers or encumbrances made or created by a person who has since been declared insolvent, indicated above, shows that the law in the united State of Travancore and Cochin was the same as the law in what used to be called British India.
The question now is, has the Receiver on whom the burden of proof lay, as shown above, been successful in discharging that burden.
It has not been argued before us by the learned counsel for the Receiver that the courts below were not in error in discussing the evidence and deciding this controversy on the basis that the burden Jay on the transferee to prove that the transfer in his favour was bona fide and for consideration.
If the burden lay on the transferee, he would have to show not only that he paid some consideration but that he paid valuable consideration and that consideration was paid bona fide.
As to what is the legal import of " bona fide" will be discussed presently.
But we are in this case proceeding on the law so far settled in this country after the decisions aforesaid of the Privy Council that the burden lies on the Receiver.
The contrary proposition has not been pressed upon us and we need not therefore pronounce upon that.
If the burden lay on the Receiver, in our opinion, his application for annulment can be allowed on proof either that there was no consideration for the transaction or that the consideration was so inadequate as to raise the presumption of want of good faith.
Alternatively, the Receiver may also succeed on showing that though there was valuable consideration for the transaction impeached, there was want of good faith in the sense 270 that the transferee knowing all the circumstances of the,, transferor who had since been adjudged an insolvent entered into the transaction with a view to screening the assets of the insolvent from the Receiver in whom the insolvent 's property vests for the benefit of the creditors.
Such will be mostly cases of benami transactions in favour of some relative of the insolvent or a person in whom he has full confidence that he will hold it ultimately for the benefit of the insolvent or persons in whom he may be interested.
Or it may be that a person finding himself over head and ears in debts wishes to convert his assets into liquid assets with the collusion or connivance of the transferee.
In both cases the intention clearly is to shield the assets against the claims of creditors and in such cases, though the transfer may have been for consideration, either adequate or otherwise, but having been entered into with a view to defraud or delay the creditors, the transferor and the transferee sharing the common intention, the transaction must be annulled and the assets must be brought into the common hotchpotch for the benefit of the insolvent 's creditors.
Though the learned District Judge held that only Rs. 20,000 had been paid by the mortgagee to the insolvents and Rs. 55,000 out of Rs. 75,000, the stated amount of the mortgage money, had remained unpaid, the High Court has found that the entire consideration passed.
If this finding is correct, then the fact that such a large amount had been paid by the mortgagee would take him a long way to success in proving the bona fides of the transaction.
But it has been argued by the learned counsel for the respondent Receiver that, finding is not correct.
It has been strenuously argued on behalf of the respondent that the mortgage bond in question was without consideration.
The Official Receiver had also filed a memorandum of objections in the High Court challenging the correctness of the finding by the learned District Judge that Rs. 20,000 had as a matter of fact been paid to the transferors.
As on the question of consideration the two courts below have materially differed in their conclusions, the question is open 271 before us.
We have, therefore, to examine how far the transaction in question was for valuable consideration.
Before advancing this large sum of money the creditor had deputed his two advocate sons, C.P. Ws. 1 and 2, to make enquiries into the antecedents of the persons who had applied for the loan and as to whether they were financially sound and otherwise desirable persons to deal with.
The two young men who had just entered upon their legal career went and stayed with a relation of theirs who has been examined as C. P. W. 6, Venkitarama Iyer Ramakrishna Iyer, who was at the relevant dates posted as Assistant Excise Commissioner at Quilon.
This gentleman being interested in the welfare of the family of the intending lenders, claims to have made confidential enquiries from respectable merchants at Quilon and told his two young guests that the borrowers were persons of position and good business reputation and that they had ample unencumbered properties on the security of which advance up to a lakh of rupees could be made.
The two sons of the mortgagee having satisfied themselves that the proposed mortgagors were persons of good status in society and sound financial position reported to their father who on the strength of the reports by his sons agreed to lend Rs. 75,000 on a first mortgage of properties reportedly worth more than at least a lakh of rupees.
The mortgagee also examined himself as C.P.W. 7.
The father and the two sons have given evidence in support of their case that out of the Rs. 75,000 agreed to be advanced on the mortgage when some of the mortgagors went with the registered document to the mortgagee 's place, Rs. 55,000 was paid in cash to them on the basis of the receipt (exhibit LIV) dated August 20, 1924.
The remaining Rs. 20,000, according to the evidence, was paid later.
Those payments were made in six instalments between September 1, and September 9, 1924, as evidenced by receipts (Exs. LVII and LVIII) and endorsements on letters, Exs. LIX(a), LXI(a), LXIV(a) and LXV(a).
All these payments are also supported by the corresponding entries in the books of account regularly kept by 272 the mortgagee and proved in court as Exs.
LXVII to LXXII series.
Of the six instalments paid as aforesaid, some of them were paid to the mortgagors ' creditors and some of those creditors have been examined.
C.P.W. 4 admits having received Rs. 2,500 and endorsed receipt of the same, exhibit LIX(a).
C.P.W. 3 similarly speaks of having received Rs. 1,500 and endorsed receipt of the same, exhibit LXIV(a) and is corroborated by his accountant, C.P.W. 9, who proves the ledger and day book, Exs.
LXXX and LXXXI.
Thus we have not only the evidence of the mortgagee and his relations but also of third parties, creditors of the insolvents, proving the passing of consideration.
The case does not rest only upon oral testimony.
It is amply corroborated by contemporaneous entries in books of account maintained by the lender himself and by third parties who have been paid by him on account of the mortgagors.
This considerable body of oral and documentary evidence is supported by the admissions of the mortgagors, not in the mortgage bond itself which stand rebutted, but by a series of admissions of receipt of the entire consideration money in the several receipts and endorsements made by some of them.
All this voluminous evidence has been very carefully considered by the learned Chief Justice at pages 31 to 34 of the judgment of the High Court.
We need not repeat all that has been said by the High Court for recording the finding that it was coiistrained to differ from the conclusions of the learned District Judge and to hold that exhibit I "is fully supported by consideration ".
As already indicated, neither the mortgagors themselves nor the Official Receiver in their pleadings made out a case that the transaction was unsupported by consideration or that the consideration paid was not full amount shown in the document as having been advanced or that a much smaller sum like only Rs. 20,000 had been actually paid.
It has been shown above with reference to the dates of the examination of witnesses that C.P. Ws. 1 to 7 had been examined and their evidence recorded between November 21, 1930, and November 20, 1932.
Until that date it was not even suggested to those 273 witnesses in cross examination that only Rs. 20,000 had been paid and no more.
For the first time on February 4, 1933, when one of the mortgagors was examined as C.P.W. 8, it was alleged that only Rs. 20,000 had been received by the mortgagors, which amount they paid to their creditors.
C.P.W. 10, the second of the mortgagors, was examined on June 12, 1933.
He does not in any way improve the Receiver 's case that the transaction was without con sideration.
He does not even say that only Rs. 20,000 out of the consideration stated in the mortgage bond had been received by the mortgagors.
Lastly, the then Receiver himself was examined as C. P. W. 13 on November 29, 1943.
This gentleman, who is described in the judgments below as one of the leading advocates, does not appear to have taken his duty as a Receiver very seriously.
He does not appear to have examined the insolvents themselves or their books of account carefully to find out the exact financial position of this trading family.
He seems to suggest in his evidence that at the material dates the Quilon Bank was functioning and that the insolvents "did not get additional accommodation in the said bank or the other hundi shops during 1099" (1923 24).
These statements, to put it mildly, are disingenuous.
In the first instance, they would suggest that the insolvents had borrowings from the Quilon Bank or other hundi shops and secondly that their financial position was so embarrassed that the said bank or other hundi shops had refused to give them any further advance of money.
As a matter of fact, it is nobody 's case that the insolvents had at any time any dealings with the Quilon Bank.
We know from the evidence that the insolvents owed to the Imperial Bank anything between Rs. 30,000 to, Rs. 40,000.
Either a portion or the whole of the dues of the Bank have been liquidated.
The evidence is not specific.
One of the mortgagors claims to have paid a portion of the Imperial Bank 's dues by selling ornaments of the ladies of his family, thereby directly suggesting that no portion of the mortgagee 's money was utilised for payment of the dues of the Imperial 35 274 Bank.
The High Court rightly refused to accept the mortgagors ' belated attempt to prove by their bare testimony that any amount out of the consideration of the mortgage bond in question had remained unpaid.
The Receiver 's evidence was directed mostly to making statements suggesting that the mortgagee had not made such enquiry about the financial position and status of the mortgagors as a reasonable man of business would do.
He has not made any definite statement that the mortgage bond in question was without consideration.
In cross examination he has been constrained to admit that he did not remember to have examined the mortgagor who was in charge of the business (first counter petitioner).
He admits that it is usual for an Official Receiver to examine the insolvent.
He has said further that he did not consider it necessary to examine the insolvents regarding the subject matter of the petition for annulment.
He also admitted that he had not examined any of the accounts to see whether the insolvents had received the entire consideration of the mortgage in question, and that "the mortgagee Nilakanta Iyer is a very rich man.
My information is that the insolvents had no dealings with him before the insolvency.
" He was also questioned as to the insolvents ' dealings with the Imperial Bank and he gave the very vague answer that he was not sure as to what amount was due to the bank.
He also admitted that he had never seen the mortgagee under exhibit 1, nor bad he asked him anything in connection with the mortgage, and that the mortgagee had obtained a decree and in execution of the said decree he took delivery of the property which was in his possession as Receiver.
According to him, the properties covered by the usufructuary mortgage bond and the hypothecation bond would be worth about a lakh and a half rupees.
It would thus appear from the statements of the Receiver himself as C.P.W. 13 examined about 19 years after the insolvency proceedings began, that he had not made such enquiries as he was bound to make as Official Receiver.
From what has been said above there cannot be the least doubt that if the burden lay on the Receiver 275 to prove that the transaction in question was without consideration, he has hopelessly failed to discharge that burden.
We are prepared to go further and say that even if the burden were on the transferee to show affirmatively that he had paid the full consideration, we would have no hesitation in confirming the findings of the High Court on this part of the case which have been arrived at after a very full and fair consideration of the evidence on the record, pro and con, though there is very little evidence adduced in support of the allegation that the mortgage bond in question was without consideration or full consideration.
The finding on the question of consideration being entirely in favour of the appellant mortgagee, the, only other serious question which remains to be considered is whether the transaction was bona fide.
We have already indicated that it is settled law not only of the Insolvency Acts in England but also in this country that it is not necessary in annulment proceedings to prove that the transferor who has been subsequently adjudged an insolvent should have been honest and straightforward in the matter of the transaction impeached.
If lie was really so, there would not be much difficulty in coming to the conclusion that the transaction as a whole was bona fide.
Even if the mortgagors were wanting in bona fides and assuming that to be so in the present case, the crucial question still remains to be answered.
Unless it is found that the transferee was wanting in bona fides in respect of the transaction in question, he cannot be affected by the dishonest course of conduct of the transferor.
Has it been shown by the evidence on the record that the mortgagee was a party or privy to the dishonest intentions of the mortgagors in so far as they may have intended to defeat or delay their creditors by executing the mortgage bond? The courts below, and particularly the High Court, have taken the view that the mortgagee had failed affirmatively to prove his bona fides.
This conclusion is based upon the consideration that the General Clauses Act (II of 1072)=(1897), in cl.
(6) of section 2 provides that "Nothing is said to be done or believed in good faith which is done or believed 276 without due care and attention.
" Applying this definition of "good faith" to the present case, the High Court came to the conclusion that the mortgagee has not proved that the mortgage transaction was entered into with "due care and attention".
The United State of Travancore and Cochin Interpretation and General Clauses Act (VII of 1125)=(1950) repeats the same definition which appears to have been taken from the definition of the term from the Madras General Clauses Act (1 of 1891).
The definition of "good faith" in the Indian General Clauses Act (X of 1897) is in these terms: " A thing shall be deemed to be done in good faith where it is in fact done honestly, whether it is done negligently or not." The High Court was of the opinion that if the definition of "good faith" contained in the Indian General Clauses Act quoted above were to apply to the case, different considerations might arise.
But the definition of that term as quoted above in the Travancore Cochin Act is different.
Applying that definition to the present case, the High Court 's conclusion was that the appellant mortgagee had not shown due care and attention while entering into the transaction.
In this connection it is necessary to determine whether the High Court was right in applying the test aforesaid in determining the question of bona fides.
We have to find which of the two tests, the one laid down in the General Clauses Act of Travancore Cochin or the other laid down in the Indian Act, is more appropriate to proceedings in insolvency.
Act 11 of 1070 (1897), even as Act VII of 1125 (1950), contains the following saving clause "Unless there be something repugnant in the subject or context.
" As a matter of fact, these words or words to similar effect are to be found in all General Clauses Acts.
The question, therefore, naturally arises whether there is anything in the subject or context of the Insolvency Regulation which is repugnant to the idea of applying the test of due care and attention.
The law of insolvency aims at a just and equal distribution of the assets of a person, who has suffered loss 277 in trade or business or otherwise, amongst his creditors whose debts are provable under the law; and provides a machinery for expeditious disposal of his assets amongst those entitled.
The law is calculated to advance the interest of the business community.
On the one hand, it protects the creditors by compelling the insolvent to place all his assets at the disposal of the court without concealing any of his assets.
Similarly it protects the interests of an honest alienee or an honest secured creditor of the insolvent.
On the other hand, it protects an honest debtor from harassment by creditors who may take simultaneous proceedings for realization of their debts from their common debtor even by sending him to civil prison.
It is necessary for the promotion of trade and commerce that an honest debtor should be released from his multifarious obligations as soon as his assets have been placed at the disposal of the court for the benefit of his creditors.
It also lays down penal provisions for punishing a dishonest debtor.
It also makes provisions for saving the debtor and his creditors from the unscrupulous conduct of persons who may have entered into unconscionable bargains with a person who is financially involved.
The law of insolvency is aimed against a dishonest debtor but not necessarily against a debtor who has suffered loss in his trade or business as a result of transactions which may not have been done with due care and attention.
Business sometimes is an adventure and very often involves risks which cannot be easily foreseen even by persons of common prudence.
Annulment proceedings are aimed at transactions between a debtor who has become insolvent and a creditor who, knowing the true state of the debtor 's crashing business, has taken undue advantage of the embarrassed financial position of the debtor.
In view of these considerations, in our opinion, the test of honesty is more appropriate than the test of due care and attention.
It may be added that a General Clauses Act is enacted in order to shorten language used in parliamentary legislation and to avoid repetition of the same words in the course of the same piece of legislation.
Such an Act is not meant to give 278 a hide bound meaning to terms and phrases generally occurring in legislation.
That is the reason why the definition section contains words like "Unless there is anything repugnant in the subject or context.
" Words and phrases have either a very narrow significance or a very wide significance according as the context and subject of the legislation requires the one or the other meaning to be attached to those words or phrases.
The books contain many illustrations showing that the same words have been used in different senses in different contexts.
The significance attaching to the expression " good faith " in the Travancore Cochin General Clauses Act is, in terms of the definition of that phrase in the Indian Penal Code and in the Indian Limitation Act.
The Indian General Clauses Act applies to all legislation after the coming into effect of that Act.
The definition of "good faith" in the Indian General Clauses Act would have been applicable to the Indian Limitation Act also but the legislature in its wisdom has given a special definition of "good faith " different from the one in the Indian General Clauses Act advisedly.
The Indian Penal Code which came into existence earlier than the Indian General Clauses Act contains its own definitions to serve its own special purposes.
The Travancore Cochin General Clauses Act, 1950, of course, applies by virtue of s.2 to all enactments then in force or passed after the commencement of the Act unless there was anything repugnant in the subject or context.
Hence it cannot be said that the definition of " good faith " as contained in the General Clauses Act of 1950 must apply in the same sense to every piece of legislation to which it may apply irrespective of the subject or the context.
The Insolvency Regulation is on the same lines as the and therefore must be understood in the same sense.
If that is the correct approach to the law of in solvency, a secured creditor who has advanced money to a debtor honestly, even though he may not have taken all due precautions, would not come within the mischief of section 35.
It must, therefore, be held that the test of good faith as laid down in the law generally applicable to Indian 279 Statutes is more appropriate to proceedings under the insolvency law.
That being so it must also be held that the courts below have approached the question of bona fides from a wrong standpoint and have applied a wrong test.
Having come to the conclusion that honesty is the test to be applied in judging the bona fides of the creditor, a secured creditor in this case, we have to see how far he has satisfied that test.
In this connection it has to be remembered that it is common ground that the mortgagee had absolutely nothing to do with the mortgagors before the mortgage transaction was concluded.
There is no blood relationship or any other kind of relationship which could be urged as the motive for entering into a dishonest transaction in the sense that the creditor had joined hands with the debtors in screening the property against the claims of the latters ' creditors.
It may be that the debtors were financially involved; but there is no evidence on the record even to suggest that the mortgagee was aware or apprised of their true financial position.
We have no doubt in our mind that if the mortgagee had the least suspicion that he would have to face a prolonged litigation to realise his money from the debtors, he would have been the last person to enter into the transaction in question.
He was certainly interested in earning good interest on his capital.
But that is not the same thing as saying that he had entered into a dishonest deal with persons who were about to crash in their business.
It is also noteworthy that the insolvent 's ancestor had died only about three years before the transaction in question.
During this period of three years they had added to their business by having a file factory and an oil mill.
That is not the conduct of a family which was about to crash.
It may be that they were much too ambitious to become rich quickly.
But it has not been suggested or found that they had indulged in unscrupulous dealings in the way of their business.
At least that was not their reputation at about the time the mortgage transaction was entered into.
Otherwise C.P.W. 6, the Assistant Commissioner of Excise, the mortgagee 's 280 relation, would certainly not have advised them, being their well wisher, to enter into a hazardous transaction.
We have not been shown any evidence which could lead us to believe that the insolvents ' reputation at that time in the way of their trade and business was anything but sound, notwithstanding the ipse dixits of the receiver, the last witness, examined 19 years after the proceedings had started.
It is very easy to be wise after the event.
But there were no indications until August 1924, so far as the mortgagee is concerned, that he was dealing with a party who was about to crash.
Whatever may have been the intentions or the course of conduct of the insolvents, there is nothing to attribute that intention or course of conduct to the mortgagee.
His evidence, as also of his two sons who helped him in entering into this transaction, has impressed us as truthful and straightforward.
Assuming that the courts below were right in applying the test of due care and attention, what is there to show that the mortgagee was wanting in that respect ? Being a complete stranger to the family of the borrowers, he deputed his young lawyer sons to make such enquiries as they could from persons who were expected to know them and their business dealings and after satisfying themselves that the borrowers had a good reputation and had unencumbered properties of much greater value than the sum proposed to be advanced, the mortgage transaction was finalized.
It must be remembered in this connection that even the test applied to a lender while lending money to the karta of a joint Hindu family does not insist upon the creditor seeing to the application of the funds advanced.
In the instant case the borrowers represented to the creditor that they required funds in the way of their business.
Their enquiry yielded the information that they had borrowings to the extent of Rs. 30,000 to Rs. 40,000 and outstanding claims against their debtors to a much larger extent.
That is the state of affairs in a normal trading family.
The fact that all their immovable properties worth, according to the Receiver, more than a lakh and a half rupees till then were unencumbered was another indication of the 281 apparent solvency of the family.
But it has been argued on behalf of the respondent that the mortgagee was put on his enquiry by the very fact that the debtors ' account books disclosed debts against them.
Therefore, it is said, the mortgagee should have pursued his enquiry further.
It was suggested that the business houses in the town of Quilon and the Quilon Bank itself should have been contacted in order to ascertain the financial position of the debtors.
It has already been pointed out that they had no business dealings with that Bank.
The mortgagee 's sons have deposed that they made enquiries of respectable persons named, as also of two leading hundi houses which may have been expected to know about the financial position of the borrowers ' family.
It was further argued that it was not specifically stated in the mortgage bond itself that the money was intended for payment to creditors specifically named.
Ordinarily a trading firm has no fixed list of its creditors or its debtors.
It is always a floating list.
Hence when it was said that money was being borrowed with a view to carrying on the business of the trading family, that was comprehensive enough to include the necessity of paying the outstanding debts of the firm.
Unless the lender had reasons to suspect that the money was not intended for carrying on the business of the firm but was meant to corner the same with a view to defeating or delaying creditors, it would not ordinarily be the look out of the lender dealing at arm 's length to try to pry into the business secrets of the borrower.
In our opinion, therefore, it was not necessary for the lender either to insist upon a list of the borrower 's creditors to be specifically mentioned in the deed or upon paying the money directly to those creditors.
That would be throwing too great a burden on a lender honestly dealing with a trading family and it would be equally an irksome thing for a trading family to be dealt with on those terms.
It cannot, therefore, be said that the lender had not shown such care and attention as a reasonable person in those circumstances would do.
The learned counsel for the respondent further pointed out certain discrepancies in the statements in the 36 282 mortgage deed and in the oral evidence adduced by the mortgagee as pointing to the conclusion that the lender had not been careful and cautious and was therefore wanting in good faith.
Those are very speculative arguments which cannot be the foundation for a finding that the Receiver had succeeded in disproving good faith.
In this connection it was also pointed out that there was no satisfactory evidence as to how the lender raised Rs. 55,000 which he paid soon after the registered mortgage bond was delivered to him.
There is evidence in the shape of an entry in the passbook in the name of the mortgagee issued by a respectable hundi shop in Alleppey, exhibit LXVI (a), showing that Rs. 40,000 was withdrawn by him on August 19, 1924, just the day previous to the date of payment of Rs. 55,000.
It is the mortgagee 's case that he paid the sum of Rs. 55,000 to the mortgagors with the amount of Rs. 40,000 thus withdrawn to which was added Rs. 15,000 which he had with him already.
There is no reason to doubt the truth of this version which has been accepted by the High Court.
It must, therefore, be held that the evidence adduced by the mortgagee apart from the question of burden of proof has affirmatively proved the passing of consideration for the mortgage and that there are no circumstances which could throw any suspicion on the bona fides of the transaction.
It had been argued on behalf of the appellant that his case had been seriously prejudiced by the joint trial, so to say, of the issue relating to his transaction with the one relating to the hypothecation bond dated August 30, 1924.
It was also argued that the mortgage bond in question had been executed and registered and given effect to beyond two years from the date of adjudication and that therefore this transaction could not be brought within the mischief of section 35 of the Insolvency Regulation.
In view of our findings on the other and more direct and important issues it is not necessary to pronounce upon these additional grounds urged on behalf of the appellant.
In view of our findings on the main issues in the case, the appeal must be allowed, the judgments and 283 orders of the courts below annulling the usufructuary mortgage bond in question set aside and the transaction held binding on the estate of the insolvents.
It follows that the lease back to the mortgagors being a part of the same transaction is equally binding on the estate of the insolvents.
The appellant is entitled to his costs throughout, to come out of the estate in the hands of the Official Receiver who must pay his own costs.
Appeal allowed.
| An usufructuary mortgage in favour of the appellant 's predecessor in interest was sought to be annulled by the Official Receiver as having been executed within two years of the adjudication of the mortgagors as insolvents, under section 35(iii) of the Travancore Regulation VIII of 1090 (=1915) as not having been entered into in good faith and for valuable consideration.
By an issue framed in the case the burden of proving affirmatively that the transfer was supported by good faith and valuable consideration was thrown on the transferee.
There was also a preliminary objection by the Receiver that the usufructuary mortgage having been found to be an act of insolvency in the insolvency proceedings, that finding was res judicata between him and the transferee.
The trial judge found in favour of the Receiver.
On appeal by the transferee, the High Court affirmed the order of the trial judge allowing the Receiver 's application for annulment solely on the ground that the appellant had failed to prove his bona fides in the sense that he had entered into the transaction without due care and attention within the meaning of section 2(6) of the Travancore and Cochin General Clauses Act.
Held: that the courts below had erred in placing the onus on the transferee and their orders must be set aside.
It is the settled law in insolvency proceedings that the burden of proving that a particular transaction is not supported by good faith and valuable consideration lies on the Official Receiver who challenges the transaction.
Official Assignee vs Khoo Saw Cheow, , Official Receiver vs P.L.K.M.R.M. Chettyar Firm, (1930) L.R. 58 I.A. 115 and Pope vs Official Assignee, Rangoon, (1933) L.R. 60 I.A. 362, relied on.
Held further, that there was no scope for the application of the principle of res judicata in the instant case as the matter that directly arose for determination in it was whether the impugned transaction was not bona fide or for valuable consideration so far as the transferee was concerned and that was not in issue in the 33 258 insolvency proceedings, nor had he been found in such pro ceedings to be privy to any act of insolvency intended to defeat or delay the creditors.
Mahomed Siddique Yousuf vs official Assignee of Calcutta, (1943) L.R. 70 I.A. 93, considered.
The crucial question for decision in such a case would be whether the transferee was wanting in bona fides in respect of the transfer sought to be annulled and the correct test would be the one of honesty as laid down by section 2(22) Of the Indian General Clauses Act and not that of due care and attention as contemplated by section 2(6) of the Travancore and Cochin General Clauses Act.
|
: Criminal Appeal No. 43 of 1972.
From the Judgment and Order dated 11 5 71 of the Rajasthan High Court in D.B. Criminal Appeal No. 478/67.
Nemo: for the Appellant.
S.M. Jain for the Respondent.
The Judgment of the Court was delivered by JASWANT SINGH, J.
This appeal under section 2(a) of the (Act 28 of 1970) raises a short question as to the nature of the offence made out against the appellant on the basis of the evidence adduced in Sessions Case No. 64 of 1966.
The Sessions Judge, Udaipur, who tried the appellant found on a consideration of the evidence led in the case including the direct testimony of Mst.
Jelki (P.W. 3) and Mst.
Modan (P.W. 8) that the appellant attacked his wife, Mst.
Gajri with dagger (Exh. 1) and caused injuries on her person out of which injury No. 2 which had injured the liver and caused the perforation of the large colon was sufficient to cause her death in the ordinary course of nature.
Despite this finding, the Sessions Judge convicted the appellant under section 304 of the Indian Penal Code and acquitted him of the charge under section 302 of the Penal Code in view of the fact that Dr. Laxmi Narain (P.W. 1) who conducted the post mortem examination of the body of Mst.
Gajri had said in the course of his examination that if immediate expert treatment had been available and emergency operation had been performed, there were chances of her survival.
The Sessions Judge agreeing with the contention raised on behalf of the defence also found that according to the case of the prosecution itself, the accused had gone to the village of his in laws to fetch Mst.
Gajri and it was only on her refusal to accompany him that the incident took place; that he had no intention to kill Mst.
Gajri and that at best what could be attributed to the appellant was the knowledge that the injury he was inflicting on the deceased was likely to cause her death.
746 On the matter being taken in appeal by the State, the High Court found that the Sessions Judge was in error in acquitting the appellant of the offence under section 302 of the Indian Penal Code ignoring the evidence to the effect that a penetrating wound 11/2" X1/2" was caused by the appellant with a dagger on the posterior axillary line 10" from the top of the shoulder and 5" from the spine which had caused injury to the liver and perforation of the large colon and was sufficient to cause death in the ordinary course of nature.
Accordingly, the High Court altered the conviction of the appellant from the one under section 304 Part II of the Indian Penal Code to that under section 302 of the Penal Code and sentenced him to imprisonment for life.
Mr. K.K. Luthra who was appointed as amicus curiae in the case not having cared to appear despite long and anxious waiting, we have gone through the entire record with the assistance of counsel for the respondent.
The grounds of appeal submitted by the appellant which are very inartistically drafted can at best be interpreted to urge only one thing viz. that the High Court went wrong in upsetting the judgment and order of the Sessions Judge and convicting the appellant under section 302 of the Indian Penal Code instead of under section 304 Part II of the Penal Code as ordered by the Sessions Judge.
This contention, in our judgment, is entirely misconceived.
It completely overlooks the circumstances attending the commission of the offence viz. that the appellant went armed with a dagger and despite the willingness expressed by Mst.
Gajri to accompany him next morning, he inflicted without the slightest provocation two injuries on her person (1) which landed on her right palm 3/4" above the second metacarpo phalangeal joint in the process of warding off the blow and (2) a penetrating wound, as stated above.
The whole affair appears to be pre planned and pre meditated and as such the case squarely falls within the purview of clause thirdly of section 300 of the Indian Penal Code.
We are fortified in this view by two decisions of this Court viz. Virsa Singh vs The State of Punjab and State of Andhra Pradesh vs Rayavarapu Punnayya & Anr.
In Virsa Singh vs The State of Punjab (supra) where the accused thrust a spear into the abdomen of the deceased which resulted in his death and in the opinion of the doctor, the injury was sufficient to cause death in the ordinary course of nature, it was held that even if the intention of the accused was limited to the infliction of a bodily injury sufficient to cause death in the ordinary course of nature and did not extend to the intention 747 of causing death, the offence would be murder.
The following observations made by this Court in that case are worth quoting: "If there is an intention to inflict an injury that is sufficient to cause death in the ordinary course of nature, then the intention is to kill and in that event, clause 'thirdly ' would be unnecessary because the act would fall under the first part of the section, namely "If the act by which the death is caused is done with the intention of causing death.
" In our opinion, the two clauses are disjunctive and separate.
The first is subjective to the offender: "If it is done with the intention of causing bodily injury to any person.
" It must, of course, first be found that bodily injury was caused and the nature of the injury must be established, that is to say, whether the injury is on the leg or the arm or the stomach, how deep it penetrated, whether any vital organs were cut and so forth.
These are purely objective facts and leave no room for interference or deduction: to that extent the enquiry is objective; but when it comes to the question of intention, that is subjective to the offender and it must be proved that he had an intention to cause the bodily injury that is found to be present.
Once that is found, the enquiry shifts to the next clause "and the bodily injury intended to be inflicted is sufficient in the ordinary course of nature to cause death.
" The first part of this is descriptive of the earlier part of the section, namely, the infliction of bodily injury with the intention to inflict it, that is to say, if the circumstances justify an inference that a man 's intention was only to inflict a blow on the lower part of the leg, or some lesser blow, and it can be shown that the blow landed in the region of the heart by accident, then, though an injury to the heart is shown to be present, the intention to inflict an injury in that region, or of that nature, is not proved.
In that case, the first part of the clause does not come into play.
But once it is proved that there was an intention to inflict the injury that is found to be present, then the earlier part of the clause we are now examining 748 "and the bodily injury intended to be inflicted" is merely descriptive.
All it means is that it is not enough to prove that the injury found to be present is sufficient to cause death in the ordinary course of nature; it must in addition be shown that the injury is of the kind that falls within the earlier clause, namely, that the injury found to be present was the injury that was intended to be inflicted.
Whether it was sufficient to cause death in the ordinary course of nature is a matter of inference or deduction from the proved facts about the nature of the injury and has nothing to do with the question of intention.
In considering whether the intention was to inflict the injury found to have been inflicted, the enquiry necessarily proceeds on broad lines as, for example, whether there was an intention to strike at a vital or a dangerous spot, and whether with sufficient force to cause the kind of injury found to have been inflicted.
It is, of course, not necessary to enquire into every last detail as, for instance, whether the prisoner intended to have the bowels fall out, or whether he intended to penetrate the liver or the kidneys or the heart.
Otherwise, a man who has no knowledge of anatomy could never be convicted, for if he does not know that there is a heart or a kidney or bowels, he cannot be said to have intended to injure them.
Of course, that is not the kind of enquiry.
It is broad based and simple and based on commonsense: the kind of enquiry that "twelve good men are true" could readily appreciate and understand.
To put it shortly, the prosecution must prove the following facts before it can bring a case under section 300, "thirdly"; First, it must establish, quite objectively, that a bodily injury is present; Secondly, the nature of the injury must be proved; These are purely objective investigations.
Thirdly, it must be proved that there was an intention to inflict that particular bodily injury, that is to say, that it was not accidental or unintentional, or that some other kind of injury was intended.
Once these three elements are proved to be present, the enquiry proceeds further and, 749 Fourthly, it must be proved that the injury of the type just described made up of the three elements set out above is sufficient to cause death in the ordinary course of nature.
This part of the enquiry is purely objective and inferential and has nothing to do with the intention of the offender.
Once these four elements are established by the prosecution (and, of course, the burden is on the prosecution throughout) the offence is murder under section 300, thirdly.
It does not matter that there was no intention to cause death.
It does not matter that there was no intention even to cause an injury of a kind that is sufficient to cause death in the ordinary course of nature (not that there is any real distinction between the two).
It does not even matter that there is no knowledge that an act of that kind will be likely to cause death.
Once the intention to cause the bodily injury actually found to be present is proved, the rest of the enquiry is purely objective and the only question is whether, as a matter of purely objective inference, the injury is sufficient in the ordinary course of nature to cause death.
No one has a licence to run around inflicting injuries that are sufficient to cause death in the ordinary course of nature and claim that they are not guilty of murder.
If they inflict injuries of that kind, they must face the consequences; and they can only escape if it can be shown, or reasonably deduced that the injury was accidental or otherwise unintentional.
" Similar view was expressed by this Court in State of Andhra Pradesh vs Rayavarapu Punnayya & Anr.
(Supra).
In the present case, the appellant appears to have intended to cause the death of Mst.
Gajri otherwise there was no necessity for him to carry the dagger with him when he went to the village of his in laws to fetch his wife.
That the appellant intended to cause the death of the deceased is further clear from the fact that he inflicted a through and through penetrating wound on the posterior axillary line which seriously injured the vital organs of the deceased viz. the liver and the large colon leading to internal haemorrhage and shock.
The injury in the opinion of the doctor being sufficient in the ordinary course of nature to cause the death of the deceased, the case squarely fell within the ambit of clause thirdly of section 300 of the Indian Penal Code as held by this Court in the decisions referred to above.
The mere fact that if immediate expert treatment had been available and the emergency operation had been performed, there were chances of survival of the deceased can be of no avail to the appellant.
750 Explanation 2 to section 299 of the Indian Penal Code clearly lays down that where death is caused by bodily injury, the person who causes such bodily injury shall be deemed to have caused the death, although by resorting to proper remedies and skilful treatment the death might have been prevented.
For the foregoing reasons, we are of the view that the Sessions Judge was wholly wrong in convicting the appellant under section 304 Part II of the Indian Penal Code and acquitting him of the charge under section 302 of the Penal Code and the High Court was wholly right in convicting the appellant under section 302 of the Penal Code instead of under section 304 Part II of the Penal Code.
In the result, we do not find any merit in this appeal which is dismissed.
S.R. Appeal dismissed.
| The appellants in the above appeal were tried and convicted in respect of the offences inter alia under section 408, 465, 477 and 477A of the Indian Penal Code, 1860 read with section 5 of the Prevention of Corruption Act, 1947 by a special judge.
Both the appellants were members of a registered cooperative society.
The conviction of the appellants, was confirmed by the High Court.
21 of the Indian Penal Code defines a public servant "Members of the Executive Committee or servants of a cooperative society are not embraced by the categories mentioned in sec.
21" Chapter 9 of the Penal Code deals with offences by or relating to public servant.
Sec. 2 of the Prevention of Corruption Act, 1947 adopts definition of public servant from Sec.
21 of the Penal Code.
By the 1952 amendment of the Criminal Procedure Code the provisions of appointment of a Special Judge to try the offences have been provided.
The said 1955 amendment adds certain more offences which are to be tried by a special judge.
The Kerala Criminal Law Amendment Act, 1962 amended Sec.
161 of the Penal Code by adding an explanation thereto.
It provides that for the purpose of the said section and certain other sections a public servant shall denote, besides those who are public servants within the meaning of that section, members of the Board of Directors or the Executive or Managing Committee and other officer or servant of a Co operative Society registered or deemed to be registered under the law relating to co operative societies for the time being in force.
Sec. 3 of the Kerala.
Act provides that for the purpose of the Preventive of Corruption Act, 1947, public servant shall have the meaning assigned to it under the explanation to sec.
161 of the Indian Penal Code as amended by the Kerala Criminal Law Amendment Act, 1962.
(1) The appellants contended that sec.
2 of the Kerala Act brought members of the executive committee or the servants of a registered co operative society within the ambit of the expression "public servant" only for the purpose of Sections 161 to 165A of the Penal Code and for no other purpose.
Therefore, the use of the enlarged definition cannot be made for the purpose of 1947 Act.
(2) If the intention of the legislature was to enlarge the definition for all purposes, whatever, it would have amended section 21 of the Indian Penal Code itself.
Dismissing the appeals the Court, ^ HELD: (1) The terms of sec.
2 of the 1947 Act as substituted by sec.
3 of the Kerala Act are absolutely clear and unambiguous and when they lay down that expression public servant shall have a particular meaning for the 798 purpose of the Act, that meaning must be given to the expression wherever it occurs in the Act.
"For the purpose of the Act" surely means for the purpose of all and not only some of the provisions of the Act.
[803E] (2) The Kerala Act carried out amendment of the 1947 Act insofar as the State of Kerala was concerned.
The 1947 Act deals not only with offences under sec.
161 to 165A of the Penal Code but also and mainly with those falling under various clauses of sub section 1 to 5 of the 1947 Act.
No reasonable line of distinction between the offences under sec.
161 to 165A of the Code on the one hand and those punishable under sec.
5 of the 1947 Act on the other appears feasible for the purpose of conferment of exclusive jurisdiction on special judges to try them.
From this point of view also interpretation canvassed on behalf of the appellants is untenable.
[804C E] (3) The arguments that the legislature would have incorporated the additional definition under sec.
21 if it desired to extend the scope for all purposes is without substance.
If the definition had been enlarged by amendment of sec.
21 it would have made the new categories of persons brought by it within the ambit of the expression "public servant" liable to punishment not only for Offences under sec.
161 to 165A of the Code but also for numerous other offences specified in the code relating to public servants as also to offences so related and created by other Acts wherein the definition of public servant occurring in sec.
21 of the Code has been adopted.
[804F H]
|
ivil Appeal Nos.
2526/77 and 2413/78.
From the Judgment and order dated 17 5 1975 of the Punjab and Haryana High Court in LPA Nos. 633, 671, 694/73 and 609/73.
AND Writ Petition Nos.
520 524 of 1980.
(Under Article 32 of the Constitution) Jawahar Lal Gupta and section Ghose for the Appellant in CA 2526/77 P. R. Mridul, M. R. Agnihotri and P. C. Bhartari for the Appellant in CA 2413/78.
O. P. Sharma and M. section Dhillon for the State of Punjab in both the appeals.
464 Lal Narain Sinha Att.
Abdul Khader and Miss section Subashini for the Union of India in all the appeals.
H. L. Sibal, R. K. Garg and R. section Sodhi for Respondent No. 10 in CA 2526 and RR11 in CA 2413.
R. K. Garg and R. section Sodhi ' for the Petitioners in WP Nos.
520 524 of 1980.
The Judgment of the Court was delivered by CHINNAPPA REDDY, J.
In these appeals we have once again to consider career conscious competing claims to seniority which appear so much to dominate the lives and careers of our Civil Servants that a large bulk of the cases in this Court relate to the resolution of problems arising out of such claims.
So much of our time is taken up in discovering the precise facts of these intricate problems that we wonder whether the constitution of a fact finding administrative tribunal who should invariably be approached in the first instance will not better serve the cause of successful administration.
An administrative tribunal possessing the necessary expertise and familiarity with administrative procedures and rules may be able to deal with the problems in a satisfactory way.
At least the facts will be found and the relevant rules will be known.
Thereafter aggrieved parties may approach the Courts for further relief within the confines of Articles 226 and 32 of the Constitution.
On selection by the Punjab Public Service Commission, B. R. Kapur and Harjeet Singh were directly recruited, in 1951, as Deputy Superintendents of Police in the Punjab Police Service.
They are the appellants in Civil Appeal Nos. 2413 of 1978 and 2526 of 1977 respectively.
B. R. Kapur was senior to Harjeet Singh as Deputy Superintendent of Police.
In 1960 both of them were included in the Select List prepared under Regulation 7 of the Indian Police Service (Appointment by Promotion) Regulations 1955.
On November 24, 1960, B. R. Kapur was appointed as Assistant Inspector General of Police which post was a cadre post.
In May, 1961, B. R. Kapur was appointed as Director of Sports and Youth Programme and Deputy Secretary to Government, Sports Department.
The post was a non cadre post.
He held this post upto November 18, 1962 and thereafter he was appointed as Additional Controller of Stores, Punjab which was also a non cadre post.
He continued to hold the post of Additional Controller of Stores till 1965.
From July 19, 1965, he was Commandant, 40th Battalion, PAP, J & K, which was a cadre post.
He held the post till July 11, 1966, when he took over as Commandant of 25th Battalion, PAP.
On the reorganisation of the State of Punjab, he 465 was appointed as Assistant Inspector General of Police, State of Punjab from November 1, 1966.
Thereafter he continuously held cadre posts and was finally appointed to the Indian Police Service with effect from September 3, 1969.
Shri Harjeet Singh was appointed to officiate as Superintendent of Police in December, 1960.
The post was a cadre post.
He continued to hold a cadre post till he was appointed to the Indian Police Service with effect from September 3, 1969.
After the two officers were appointed to the Indian Police Service the question of assignment of year of allotment and fixation of seniority arose for the consideration of the Government of India.
Shri B. R. Kapur was allotted to the year 1963 and placed below Sube Singh and above Shri section R. Sharma (direct recruits) in the Indian Police Service Gradation List of Punjab.
The period of his service as Director of Sports and Youth Programme and as Additional Controller of Stores was not taken into consideration as both the posts were non cadre posts.
His service as Commandant of 25th Battalion was also not taken into account on the ground that the 25th Battalion had been taken over by the Government of India and therefore the post of Commandant of the 25th Battalion was a non cadre post.
He was, therefore, treated as having continuously officiated in a senior cadre post from November 1, 1966 only.
On that basis he was allotted to the year 1963.
In the case of Harjeet Singh, though admittedly he officiated continuously in a senior cadre post from December, 1960 he was also allotted to the year 1963 and placed below Shri B. R. Kapur on the ground that he ranked below Shri B. R. Kapur in the select list.
B. R. Kapur and Harjeet Singh filed Writ Petitions in the High Court of Punjab and Haryana questioning the allotment of the year 1963 to them for the purpose of seniority in the Indian Police Service.
The learned Single Judge of the High Court who heard the petitions in the first instance held that there was no reason at all why Harjeet Singh should not be given the full benefit of his continuous officiation in a senior post.
He, therefore, directed the Union and Punjab Governments to redetermine the year of allotment of Harjeet Singh, taking December 17, 1960, as the date from which he continuously officiated in a senior post.
It was also directed that proper seniority should be assigned to him in accordance with the year of allotment so determined.
In the case of B. R. Kapur it was held that July 29, 1965, should be treated as the date of his continuous officiation in a senior post.
It was held that the Government of India and the Government of Punjab had all the time treated the post of Commandant, 466 25th Battalion as a cadre post and therefore, B. R. Kapur was entitled to have his service in the post of Commandant, 25th Battalion as officiation in a Senior post.
A direction was issued that the year of allotment and seniority should be re determined.
It was further directed that before redetermining the seniority of the two officers, the respondents to the Writ Petitions who were direct recruits, should be afforded an opportunity to make their representations.
Appeals under Clause 10 of the Letters Patent were filed by the affected direct recruits as also by B. R. Kapur.
Before the Division Bench the case took a new turn.
It was argued before the Division Bench on behalf of the direct recruits that neither B. R. Kapur nor Harjeet Singh would have ever started officiating in the senior post on the dates from which they officiated or claimed to have officiated in senior posts, if the State Government had not created artificial vacancies by excessive utilisation of 'the deputation and central reserve ' quota in contravention of the Cadre Rules and the Cadre strength Regulations.
It was apparently sought to be argued before the Division Bench that the period of service attributable to over utilisation of 'deputation and central reserve ' quota should not be treated as service in a senior post for the purpose of determining the year of allotment of officers promoted to the Indian Police Service.
The argument was accepted by the Division Bench and a direction was issued to the Central Government to reconsider the question of year of allotment after taking into consideration the question of over utilisation and its effect.
The finding of the learned Single Judge that B. R. Kapur was entitled to have his service as Commandant 25th Battalion as officiation in a senior post was however affirmed.
Shri Jawahar Lal Gupta, learned counsel for Harjeet Singh argued that the service of Harjeet Singh in a senior cadre post was approved by the Government of India and once it was so approved the question whether there was over utilisation of deputation and central reserve quota was irrelevant for the purpose of determining the year of allotment.
The only relevant question was whether the appellant had continuously officiated in a senior post and, from what date.
There after the year of allotment was to be determined by the simple and mechanical application of rule 3(3) (b) of the Indian Police Service (Regulation of Seniority) Rules.
He further submitted that the circumstance that B. R. Kapur was senior to Harjeet Singh in the Select List was also irrelevant in considering the question of year of allotment.
It was only if both of them were given the same year of allotment that their inter se seniority in the Select List would become relevant.
Shri Mridul, learned counsel for B. R. Kapur, argued that 467 the single Judge of the High Court was wrong in excluding the period of service of B. R. Kapur as Director of Sports and as Additional Controller of Stores in determining the year of allotment.
He further contended that in any event the case of B. R. Kapur was an appropriate one for the exercise by the Central Government of its power to relax the rules and that this Court should give a direction to the Central Government to relax the rules so as to enable that part of Kapur 's service to be treated as service in a senior post.
Shri H. L. Sibal, learned counsel for one of the respondents argued that the number of cadre officers who could be deputed by the Central and State Governments for service elsewhere was limited and fixed by the Indian Police Service (Fixation of Cadre Strength) Regulations.
By deputing more cadre officers than authorised by those Regulations and appointing non cadre officers to artificial vacancies so created in cadre posts, the State Government had adopted a device to enable the officers of the State Police Service to continuously officiate in Senior posts longer than justified.
The Cadre Strength Regulations were thereby contravened and the Cadre Rules which provide for the temporary appointment of non cadre officers to cadre posts circumvented.
He submitted that officiating service rendered by a non cadre officer in a Senior post where the vacancy in the cadre post was the result of over utilisation of the deputation quota could not be taken into account under the Indian Police Service Regulation of Seniority Rules.
Shri R. K. Garg, who appeared for the remaining respondents urged that to permit promoted officers to take advantage of the deviation from the Cadre Rules and the Cadre Fixation of Strength Regulations for the purpose of gaining an advantage under the Seniority Rules would be a denial of the equal protection of the laws to the direct recruits who would be affected by such procedure.
He also urged that Rule 3 of the Seniority Rules if so interpreted as to take into account officiation against the rules must be held to contravene Articles 14 and 16 of the constitution.
In order to appreciate the rival contentions it is necessary to examine the relevant statutory provisions, rules and regulations.
Article 312(1) empowers Parliament to provide, by law, for the creation of All India Services common to the Union and the States.
Article 312(2) declares that the services known at the commencement of the Constitution as the Indian Administrative Service and the Indian Police Service shall be deemed to be services created by Parliament under article 312(1).
468 section 2 of the All India Services Act, 1951 defines an "All India Service" as meaning the service known as the Indian Administrative Service or the service known as the Indian Police Service or any other service specified in section 2(A).
3 enables the Central Government after consultation with the Government of the States concerned to make rules for the regulation of recruitment, and the conditions of service of persons appointed to an All India Service.
The Indian Police Service (Cadre) Rules, 1954, made in exercise of the powers conferred by section 3 (1) of the All India Services Act, provide for the constitution of Cadres and certain connected matters.
A Cadre Officer is defined as a member of the Indian Police Service and a Cadre post is defined as any of the posts specified under item 1 of each cadre in the schedule to the Indian Police Service (Fixation of Cadre Strength) Regulations, 1955.
Rule 4(1) provides that the strength and composition of a cadre constituted for each State or group of States shall be as determined by Regulations made by the Central Government in consultation with the State Governments.
Rule 4(2) requires the Central Government to re examine the strength and composition of each such cadre at intervals of every three years in consultation with the State Government concerned and to make such alterations as it deems fit.
The first proviso to Rule 4(2) expressly stipulates that the power of the Central Government to alter the strength and composition of any cadre at any other time is not affected by rule 4(2).
The second proviso to r. 4(2) enables the State Government to add, for a period not exceeding one year, and with the approval of the Central Government for a further period not exceeding two years, to a State cadre one or more posts carrying duties or responsibilities of a like nature to a cadre post.
Rule 6 authorises the deputation of cadre officers for service under the Central Government or another State Government or under a Company, Association or body of individuals, whether incorporated or not, which is wholly or substantially owned or controlled by the Central Government or a State Government, a Municipal Corporation or a Local body or an international organisation etc.
Rule 8 prescribes "save as otherwise provided in these rules, every cadre post shall be filled by a cadre officer".
Rule 9(1) provides for the temporary appointment of a non cadre officer to a cadre post if the State Government is satisfied that the vacancy is not likely to last for more than three months or if there is no suitable cadre officer available for filling the vacancy.
Where a non cadre officer is appointed to a cadre post for a period exceeding three months the State Government is required forthwith to report the fact to the Central Government together with their reasons for making the 469 appointment.
The Central Government may then direct the State Government to terminate the appointment of such person and to appoint a cadre officer to the post, in which case the State Government is bound to give effect to the direction.
Where a cadre post is likely to be filled by a non cadre officer for a period exceeding six months the Central Government is required to report the full facts to the Union Public Service Commission and may thereafter give appropriate directions to the State Government in the light of the advice given by the Union Public Service Commission.
Pursuant to the powers conferred by R. 4(1) of the Indian Police Service Cadre Rules, the Central Government has made the Indian Police Service (Fixation of Cadre Strength) Regulations 1955, determining the strength and composition of the cadres of each of the States.
In the schedule the total authorised cadre strength for the State of Punjab is mentioned as 70 consisting of 34 Senior Posts under the State Government, 14 Senior posts under the Central Government, 7 Deputation Reserve posts, 6 Leave Reserve posts and 7 Junior posts and 4 Training Reserve posts.
The thirty four senior posts under the State Government are also particularly specified.
Thirty six out of the total of forty eight Senior posts under the Central and State Governments, the deputation Reserve posts, the Leave Reserve posts, the Junior posts and the Training Reserve posts are all stated to be `direct recruitment posts ' while the remaining 12 Senior posts under the Central and State Governments are stated to be "promotion posts".
It is necessary to mention here that the thirty four posts specified as "Senior posts under the State Government" are shown as item 1 of the schedule and the fourteen Senior posts under the Central Government are shown as item 2 of the schedule.
The Indian Police Service (Recruitment) Rules, 1954 provide for recruitment to the Service (a) by a competitive service and (b) by promotion of substantive members of a State Police Service.
Rule 9(1) empowers the Central Government to recruit to the Indian Police Service persons by promotion from amongst the substantive members of the State Police Service in accordance with Regulations made by the Central Government.
The recruitment is required to be made on the recommendation of the State Government concerned and in consultation with the Union Public Service Commission.
Rule 9(2) provides that the total number of persons recruited by promotion shall not at any time exceed 25% of the number of posts shown against item No. 1 and 2 of the cadre in the schedule to the Indian Police Service (Fixation of Cadre Strength) Regulation.
Items 1 and 2, we have already mentioned are Senior posts under the State and the Central Governments.
470 The Indian Police Service (Appointment by Promotion) Regulations 1955, made pursuant to Rule 9(1) of the Indian Police Service Recruitment Rules 1954 prescribes a very elaborate procedure for making appointments by promotion to the Indian Police Service.
A Selection Committee is required to be constituted for each State consisting of the Chairman or any other member of the Union Public Service Commission and other members specified in the schedule.
In the case of Punjab the other members are the Chief Secretary to the Government of Punjab, the Secretary to the Government of Punjab in the Home Department, the Inspector General of Police and a nominee of the Government of India not below the rank of Joint Secretary.
The Selection Committee is required to meet at intervals ordinarily not exceeding one year and to consider the cases of all eligible substantive members of the State Police Service.
The Committee is required to prepare a list of such eligible members of the State Police Service who are suitable for promotion to the Indian Police Service The selection for inclusion in the list is to be based on merit and suitability in all respects with due regard to seniority but the names of the officers included in the list are required to be arranged in order of seniority in the State Police Service.
The list prepared by the Selection Committee is then to be forwarded to the Union Public Service Commission by the State Government with all relevant records, the reasons recorded by the Committee for any proposed supersession of any member of the State Police Service and the observation of the State Government on the recommendation of the Committee.
Thereafter the Union Public Service Commission is to consider the list prepared by the Committee and to make any changes considered by them, to be necessary, after informing the State Government of the proposed changes.
The list as finally approved by the Commission is to form `the Select List of the members of the State Police Service. ' All appointments of members of the State Police Service from the Select List to posts borne on the State cadre are to be made in accordance with the provisions of R. 9 of the Cadre Rules.
In making the appointments the State Government is to follow the order in which the names of such officers appear in the Select List except where administrative exigencies require otherwise and the vacancy is not likely to last for more than three months.
Appointments of members to the Indian Police Service are to be made by the Central Government on the recommendation of the State Government in the order in which the names of the members of the State Police Service appear in the Select List for the time being in force.
We arrive finally at the Indian Police Service (Regulation of Seniority) Rules 1954.
Rules 3 provides that every officer shall be assigned 471 a year of allotment in accordance with the provisions of that rule.
Rule 3(3)(b) prescribes that the year of allotment of an officer who is appointed to the service by promotion in accordance with rule 9 of the Recruitment rules, shall be the year of allotment of the junior most among the officers recruited by competitive examination who officiated continuously in a Senior post from a date earlier than the date of commencement of such officiation by the officer appointed to the service by promotion.
`Senior post ' was originally defined as a post included and specified under item 1 of the cadre of each State in the Schedule to the Indian Police Service (Fixation of Cadre Strength) Regulation and as including posts declared by the State Government as equivalent to such posts.
The definition was amended with effect from April 22, 1967 and the present definition does not include posts declared equivalent by the State Government to cadre posts.
Rule 4(1) provides that the seniority of officers inter se shall be determined in accordance with the provisions of the rules.
Rule 4(4) provides that the Seniority of officers who are assigned the same year of allotment shall be in the order of the dates on which they started officiating continuously in the Senior post, but in the case of Officers appointed to the service by promotion, the dates of officiation shall be the same as the dates taken into account for the purpose of assignment of year of allotment under rule 3(3).
Where the dates of commencement of continuous officiation in a Senior post of more than one Officer appointed to the service by promotion is the same their seniority inter se shall be in the order of their dates of appointment to the service and where the date of appointment is also the same it shall be in the order in which their names are arranged on the date of their appointment to the service in the Select List.
These are the Statutory provisions, Rules and Regulations with which we are concerned in the present appeals.
What are primarily in question are the year of allotment and the Seniority of the two officers, Harjeet Singh and B. R. Kapur.
So, therefore, our primary concern is with the Indian Police Service (Regulation of Seniority) Rules, 1954.
Rule 3(3) (b) as well as rule 4(4) throw up the date of continuous officiation of an officer in a cadre post as the most important factor both for the purpose of assignment of year of allotment and for the purpose of assignment of seniority.
For the purpose of assignment of year of allotment the date of continuous officiation in a senior post is the only relevant factor while for the purpose of assignment of seniority, first, the date of continuous officiation in a senior post is the only relevant factor while for the if the date of commencement of continuous officiation in a Senior 472 post of more than one officer is the same and, finally, the order in the Select List if the date of appointment is also the same, are the several relevant factors in that order.
Thus the order in the Select List is irrelevant for the purpose of determining the year of allotment and is relevant in determining the seniority, only if the year of allotment of the Officers is the same and their date of appointment is also the same.
Since the order in the Select List is dependent on the seniority in the State Service, it follows that seniority in the State Police Service is irrelevant for the purpose of determining the year of allotment and is relevant for the purpose of determining the seniority only if the year of allotment and the date of appointment of two or more officers are the same.
It must, therefore, necessarily follow that an officer who is junior to another in the State Police Service but, who starts continuous officiation in a Senior post from a date earlier than the other, may frog leap and gain Seniority by the consequential assignment of an earlier year of allotment.
There is nothing in the Indian Police Service (Regulation of Seniority) Rules, which has the effect of depriving an officer the benefit of continuous officiation on the ground that some one senior to him in the State Police Service did not so continuously officiate.
Nor are we able to discover any other rule in the innumerable Rules and Regulations governing the recruitment, appointment and Regulation of Seniority of officers of the Indian Police Service which is designed to deprive an officer, the benefit of continuous officiation in a Senior post.
One of the submissions made to us by the respondents was that the Select List having been prepared on grounds of merit and ability, the order in which officers were ranked in the Select List should not be disturbed after they were actually promoted to the Indian Police Service.
This submission is without substance.
Though under the Indian Police Service (Appointment by Promotion) Regulations, the Select List is prepared on the basis of merit and ability, the order in which officers are placed in the Select List is according to seniority in the State Police Service and not according to merit and ability.
Merit and ability are considered for the purpose of inclusion in the Select List but thereafter seniority in the State Police Service takes over and the names of Officers are arranged in the order of that seniority.
We, are, therefore, satisfied that the benefit of continuous officiation in a Senior post cannot be denied to an officer appointed to the Indian Police Service merely on the ground that an officer senior to him in the State Police Service did not so continuously officiate.
It is, however, true that under Regulation 8 of the Indian Police Service (Appointment by Promotion) Regulations, appointments to 473 cadre posts from among non cadre officers should be made according to the order in which the names of such officers appear in the Select List.
A deviation from the order is permissible if administrative exigencies require it and if the vacancy is not likely to last for more than three months.
Of course, the Regulation does not license uninhibited deviation to favour individual non cadre officers.
If that is done the deviation is liable to challenge.
But where there is no such allegation, there is no reason why a junior non cadre officer should lose the benefit of his continuous officiation in a cadre post merely because a non cadre officer senior to him in the Select List did not continuously officiate likewise.
In such a situation, it would be for the Government of India to consider whether the relevant rules may not be so relaxed as to enable such non cadre officer to add his officiation in a non cadre post to his officiation in a cadre post, regard being had to the circumstances under which the officer had to work in a non cadre post while his junior in the Select List was made to fill the cadre post.
But, surely, it cannot work to the prejudice of the junior officer in the Select List so as to nullify the actual, continuous, officiating service rendered by him.
In the present case there is no allegation that B. R. Kapur was appointed to the non cadre posts of Director of Sports and Additional Controller of Stores with a view to favour Harjeet Singh.
Now, the question for consideration is whether non cadre officers are to be denied the benefit of continuous officiation in senior post merely because cadre officers were appointed on deputation elsewhere in excess of the number of posts specified against `Deputation Reserve ' in the schedule to the Cadre Fixation of Strength Regulation.
We are unable to discover any provision in the Seniority Rules, Recruitment Rules, Cadre Rules or the Cadre Regulations which would lead to such a consequence.
To begin with it has to be borne in mind that the Fixation of Cadre Strength Regulations are made in exercise of the powers conferred on the Central Government by Rule 4(1) of the Cadre Rules and are, therefore, subordinate to the Cadre rules even as rules made in exercise of powers conferred by a Statute are necessarily subordinate to the Statute.
Rule 6 of the Cadre Rules provides for the deputation of Cadre Officers and Rule 9 of the same rules provides for the temporary appointment of non cadre officers to cadre posts.
In making appointments of non cadre officers to cadre posts the rule prescribes the fulfillment of certain conditions.
It is not disputed that the conditions prescribed by Rule 9 of the Cadre Rules were fulfilled.
That the conditions were fulfilled is also apparent from the very impugned order.
If non cadre officers are appointed to cadre posts in accordance with Rule 9 of the Cadre Rules, is there 474 any justification for denying the non cadre officer the benefit of officiation in the cadre post on the ground that more cadre officers than the number specified in the Fixation of Cadre Strength Regulations had been deputed for service elsewhere ? It is not disputed that the deputation of cadre officers was in accordance with Rule 6 of the Cadre Rules.
True, Rule 4(1) of the Cadre Rule enables the Central Government to make Regulations determining the strength and composition of the Cadre of each State.
It is also true that a definite number of posts is specified against `Deputation Reserve ' in the schedule to the Fixation of Cadre Strength Regulations.
But if owing to the situational demands and exigencies of the administration the number is exceeded and the State Government is compelled to utilise the services of experienced non cadre officers to fill cadre posts in strict compliance with the Cadre Rules, we see no reason to hold that the service rendered by the non cadre officers in such posts should be ignored.
On the other hand we think that the Fixation of Cadre Strength Regulations made under Rule 4 of the Cadre Rules do not over ride the Recruitment Rule, the remaining Cadre Rules and the Seniority Rules so as to render invalid any service rendered by a non cadre officer in a cadre post on the mere ground of breach of the Fixation of Cadre Strength Regulations, when there has been strict compliance with Rule 9 of the Cadre Rules.
We think that fixation of Cadre strength is the exclusive concern of the Central and the State Governments and the Regulations are made for their convenience and better relationship.
Excessive utilisation of `Deputation or Central Reserve ' is a matter for adjustment and controversy between the Central and the State Governments and is of no concern to any member of the Service.
For example no cadre officer who is asked to fill a deputation post can refuse to join the post on the ground that the `Deputation Reserve ' has already been exceeded.
The Regulations are not intended to and do not confer any right on any member of the Service, unlike some other Rules which do confer or create rights in the members of the Services.
Among other Rules, for instance, Rule 9(2) of the Recruitment Rules stipulates that the total number of persons recruited by promotion shall not at any time exceed 25% of the posts shown against item Nos. 1 and 2 of the cadre in the schedule to the Fixation of Cadre Strength Regulations.
Now, if at a point of time this limit is exceeded, direct recruits may have a just cause for complaint and it may perhaps be held that to the extent of the excess the appointments by promotion are invalid and confer no rights of seniority over direct recruits.
But, as we said, the Fixation of Strength Regulation confer no rights on members of the Service and a mere breach of the Regulation furnishes no cause of action to any member of the service 475 On the ground that his seniority is affected in some round about way.
We may add that there is no suggestion that Rule 9(2) of the Recruitment Rules was contravened.
It was brought to our notice that several Senior cadre officers had to be deputed to organise Battalions of the Punjab Armed Police which came to be formed after the Chinese aggression in 1962 and at the time of the Indo Pakistan War in 1965.
It was in the vacancies caused by their deputation that Senior officers of the State Police Services were appointed to cadre posts.
Under Rule 6(A) (2) of the Indian Police Service Recruitment Rules a direct recruit in the junior time scale of pay can be appointed to a post in the Senior time scale of pay if having regard to his length of service, experience and performance he is found to be suitable for appointment to a post in the Senior time scale of pay.
It appears that, at that time, in Punjab, there was no direct recruit in the Junior time scale of pay who possessed experience of atleast four years who could be thought of for appointment in the Senior post.
The State Government, therefore, had no option except to appoint experienced and suitable non cadre officers to cadre posts.
It was also brought to our notice that no cadre officer who had been so deputed suffered in any manner in the matter of his career.
It was repeatedly suggested that the State Governments were generally in the habit of adopting stratagem of sending cadre officer on deputation in excess of the Deputation Reserve in order to enable Officers of the State Services to officiate in cadre posts so as to further enable them to get the benefit of such continuous officiation when finally appointed to an All India Service.
Whatever truth there may be in the suggestion it has to be remembered firstly that the appointment of non cadre officers to cadre posts is subject to the directions of the Central Government who may terminate such appointment.
The Central Government too is bound to obtain the advice of the Union Public Service Commission if the appointment is to extend beyond six months.
Next, it has also to be borne in mind that non cadre officers of proven merit only are appointed to cadre posts.
They are appointed to cadre posts if they are already in the Select List and the appointments also are made in accordance with the order in which they are placed in the Select List.
We have earlier mentioned how the Select List itself if prepared under the Indian Police Service Recruitment Rules after following an elaborate procedure involving a thorough examination of various levels, of the merit of the officers of the State Police Service.
A State officer whose name appears on the Select List may expect to be appointed to a Cadre post and to be promoted to the Indian Police Service at any time thereafter according to vacancy position.
A direct recruit who ordi 476 narily comes into the picture years after a State Officer 's name appears on the Select List cannot have any real grievance that the promoted officer is given an anterior date for the purpose of seniority since such date can never be earlier than the date from which the junior most direct recruit continuously officiated in a Senior post prior to the commencement of the continuous officiation of the promoted officer.
We are also unable to appreciate the submission of Shri R. K. Garg that every departure from a rule, which departure gives certain advantages to one group of civil servants as against another necessarily involves an encroachment of the Fundamental Rights guaranteed by Articles 14 and 16 of the Constitution.
The proposition is widely stated, far fetched in relation to the facts of the instant case and not supported by N. K. Chauhan & Ors.
vs State of Gujarat(1) on which Shri Garg relied.
In Chauhan 's case the Court was considering the effect of the breach of a 'Quota ' rule fixing the proportion of 'direct recruits ' and 'promotees '.
In the present case, as already noticed by us, there is no allegation of breach of the 'quota ' rule embodied in Rule 9(2) of the Recruitment Rules.
The Fixation of Cadre Strength Regulations cannot be interpreted as comprising any 'Quota ' rule.
The consequential submission of Shri Garg that rule 3(3)(b), if so interpreted as to take into account officiation in contravention of the rules, offends Articles 14 and 16 of the Constitution, therefore, loses all force particularly in view of what we have said about the true nature of the Fixation of Cadre Strength Regulations.
We also notice that the vires of Rule 3(3)(b) of the Indian Administrative Service (Regulation of Seniority) Rules which is in similar terms as rule 3(3)(b) of the Indian Police Service (Regulation of Seniority) Rules was upheld by a Constitution Bench of this Court in A. P. Sharma vs Union of India.(2) In the light of our foregoing discussion we hold that the 'over utilisation ' of 'Deputation and Central Reserve ' does not affect the questions of assignment of the year of allotment and the seniority of the appellants.
The concurrent finding of the learned single judge and the Division Bench that Kapur 's service as Commandant, P.A.P. Battalion No. 25 was service in a Senior post was not challenged before us.
Shri Mridul argued that the records reveal that Kapur 's appointment to the posts of Director of Sports and Additional Controller of Stores was because of his exceptional ability and, therefore, those posts must be treated as cadre posts.
In any event, he suggested that we should invite the Government of India to suitably 477 relax the rules so as to enable Kapur 's service as Director of Sports and Additional Controller of Stores to be reckoned as service in cadre posts.
We cannot of course hold Kapur 's service in non cadre posts as service in cadre posts.
Nor can we give the direction sought by Shri Mridul.
It is of course open to Kapur to invoke the power of the Government of India to relax the rules and it is for the Government to take a just decision in the matter.
We have no advice to offer.
Both the Civil Appeals are allowed, the Judgment of the Division Bench is set aside and the judgment of the Single Judge is restored.
Writ Petition Nos.
520 524 have been filed by some of the direct recruits questioning the vires of rule 3(3)(b) of the Indian Police Service (Regulation of Seniority) Rules and Rule 3 of the All India Services (Conditions of Service Residuary Matter) Rules, 1960 which vests in the Government of India the power to relax.
We have upheld the validity of Rule 3(3)(b) of the Indian Police Service (Regulation of Seniority) Rules and the question of the vires of Rule 3 of the All India Service (Conditions of Service residuary matters) rules does not arise at present.
The Writ Petitions are also dismissed.
S.R. Appeals allowed and Petitions dismissed.
| Allowing the petition the Court ^ HELD: Per Iyer J. (on behalf of Chinnappa Reddy J. and himself).
The guarantee of human dignity forms part of an Constitutional culture and the positive provisions of Articles 14, 19 and 21 spring into action to disshackle any man since to manacle man is more than to mortify him; it is to dehumanize him and, therefore, to violate his very personhood, too often using the mask of 'dangerousness ' and security.
Even a prisoner is a person not an animal, and an under trial prisoner is a fortiori so.
Our nations founding document admits of no exception.
Therefore, all measures authorised by the law must be taken by the Court to keep the stream of prison justice unsullied.
[862 D F, 863 E F] Sunil Batra vs Delhi Administration and ors.
; ; followed .
The Supreme Court is the functional sentinel on the qui vive where "habeas" justice is in jeopardy.
If iron enters the soul of law and of the enforcing agents of law rather, if it is credibly alleged so the Supreme Court must fling aside forms of procedure and defend the complaining individual 's personal liberty under Articles 14 19 and 21 after due investigation.
Access to human justice is the essence of Article 32.
[864 A B] 3.
Where personal freedom is at stake or torture is in store to read down the law is to write off the law and to rise to the remedial demand of the manacled man is to break human bondage.
if within the reach of judicial process.
[864 F G] 4.
There cannot be a quasi caste system among prisoners in the egalitarian context of Article 14.
In plain language, to say that the "better class under trial be not handcuffed without recording the reasons in the daily diary for considering the necessity of the use on such a prisoner while escort to and from court" means that ordinary Indian under trials shall be rentively handcuffed during transit between jail and court auld the better class prisoner 856 shall be so confined only if reasonably apprehended to be violent or rescued and is against the express provisions of Article 21.
[863 D E, 865 G H] Maneka Gandhi vs Union of India [1978] 2 SCR 621 @ 647; applied.
Vishwanath vs State Crl.
Main No. 430 of 1978 decided on 6 4 79 (Delhi High Court), overruled.
Though circumscribed by the constraints of lawful detention, the indwelling essence and inalienable attributes of man qua man are entitled to the great rights guaranteed by the Constitution.
That is why in India, as in the similar jurisdiction in America, the broader horizons of habeas corpus spread out, beyond the orbit of release from illegal custody, into every trauma and torture on persons in legal custody, if the cruelty is contrary to law, degrades human dignity or defiles his personhood to a degree that violates Articles 21, 14 and 19 enlivened by the Preamble.
[868 A B, 867 G H] 6.
The collection of handcuff law, namely, Prisoners (Attendance in Courts) Act, 1955; Punjab Police Rules, 1934, (Vol.
III) Rules 26: 22(i) (a) to (f); 26.21A, 27.12, Standing order 44, Instruction on handcuffs of November, 1977, and orders of April 1979, must meet the demands of Articles 14, 19 and 21.
Irons forced on under trials in transit must conform to the humane imperatives of the triple Articles.
Official cruelty, sans constitutionality degenerates into criminality.
Rules, standing orders, Instructions and Circulars must bow before Part III of the Constitution.
[872 B D] The Preamble sets the human tone and temper of the Founding Document and highlights justice, Equality and the dignity of the individual.
Article 14 interdicts arbitrary treatment, discriminatory dealings and capricious cruelty.
Article 19 prescribes restrictions on free movement unless in the interests of the general public.
Article 21 is the sanctuary of human values, prescribes fair procedure and forbids barbarities, punitive or procedural.
such is the apercu.
[872 C E] Maneka Gandhi vs Union of India, [1978] 2 SCR 621 @ 647; Sunil Batra vs Delhi Administration, [1978] 4 S.C.C. 494 @ 545; reiterated.
Handcuffing is prima facie inhuman and, therefore, unreasonable, is over harsh And at the first blush, arbitrary.
Absent fair procedure and objective monitoring to inflict "irons" is to resort to zoological strategies repugnant to Article 21.
Surely, the competing claims of securing the prisoner from fleeing and protecting his personality from barbarity have to be harmonized.
To prevent the escape of an under trial is in public interest, reasonable, just and cannot, by itself be castigated.
But to bind a man hand and foot, fetter his limbs with hoops of steel, shuffle him along in the streets and stand him for hours in the courts is to torture him, defile his dignity, vulgarise society and foul the soul of our Constitutional culture.
[872 F G] 8.
Insurance against escape does not compulsorily required handcuffing.
There are other measures whereby an escort can keep safe custody of a detenu without the indignity and cruelty implicit in handcuffs or other iron In contraptions.
Indeed, binding together either the hands or feet or both has not merely a preventive impact but also a punitive hurtfulness.
Manacles are mayhem on the human person and inflict humiliation on the bearer.
857 The three components of "irons" forced on the human person are: to handcuff i.e., to hoop harshly to punish humiliatingly and to vulgarise the viewers also.
Iron straps are insult and pain writ large, animalising victim and keepers.
Since there are other ways of ensuring safety as a rule handcuffs or other fetters shall not be forced on the person of an under trial prisoner ordinarily.
As necessarily implicit in Articles 14 and 19, when there is no compulsive need to fetter a person 's limbs it is sadistic, capricious, despotic and demoralizing to humble a man by manacling him.
Such arbitrary conduct surely slaps Article 14 on the face.
The animal freedom of movement, which even a detained is entitled to under Article 19, cannot be cut down cruelly by application of handcuffs or other hoops.
lt will be unreasonable so to do unless the State is able to make out that no other practical way of forbidding escape is available, the prisoner being so dangerous and desperate and the circumstances so hostile to safe keeping.
[872 G H, 873 A E] 9.
Once the Supreme Court make it a constitutional mandate and law that no prisoner shall be handcuffed or fettered routinely or merely for the convenience of the custodian or escort, the distinction between classes of prisoners become constitutionally obsolete.
Apart from the fact that economic an i social importance cannot be the basis for classifying prisoners for purposes of handcuffs or otherwise, a rich criminal or under trial is in no way different from a poor or pariah convict or under trial in the matter of security risk.
An affluent in custody may be as dangerous or desperate as an indigent, if not more.
He may be more prone to be rescued than an ordinary person.
Therefore, it is arbitrary and irrational to classify prisoners for purposes of handcuffs, into 'B ' class and ordinary class.
No one shall be fettered in any form based on superior class differential as the law heats them equally.
It is brutalising to handcuff a person in public and so is unreasonable to do so.
Of course, the police escort will find it comfortable to fetter their charges and be at ease, but that is not a relevant consideration.
[873 E H] 10.
The only circumstance which validates incapacitation by irons an extreme measure is that otherwise there is no other reasonable way of preventing his escape, in the given circumstances.
Securing the prisoner being a necessity of judicial trial, the State must take steps in this behalf.
But even here, the policeman 's easy assumption or scary apprehension or subjective satisfaction of likely escape if fetters are not fitted on the prisoner is not enough.
The heavy deprivation of personal liberty must be justifiable as reasonable restriction in the circumstances.
Ignominy, inhumanity and affliction, implicit in chains and shackles are permissible, as not unreasonable, only if every other less cruel means is fraught with risks or beyond availability.
So it is that to be consistent with articles 14 an(l 19 handcuffs must be the last refuge, not the routine regimen.
If a few more guards will suffice, then no handcuffs.
If a close watch by armed policemen will do, then no handcuffs.
If alternative measures may be provided, then no iron bondage.
This is the legal norm.
[874 A C] Functional compulsions of security must reach that dismal degree that no alternative will work except manacles.
Our Fundamental Rights are heavily loaded in favour or personal liberty even in prison, and so, the traditional approaches without reverence for the worth of the human person are obsolete, although they die hard.
Discipline can be exaggerated by prison 858 keepers; dangerousness can be physically worked up by escorts and sadistic disposition, where higher awareness of constitutional rights is absent, may overpower the finer values of dignity and humanity.
[874 D E] Therefore, there must first be well grounded basis for drawing a strong inference that the prisoner is likely to jump jail or break out of custody or play the vanishing trick.
The belief in this behalf must be based on antecedents which must be recorded and proneness to violence must be authentic Vague surmises or general averments that the under trial is a crook or desperado, rowdy or maniac, cannot suffice.
In short, save in rare cases of concrete proof readily available of the dangerousness of the prisoner in transit the onus of proof of which is on him who puts the person under irons the police escort will be committing personal assault or mayhem if he handcuffs or fetters his charge.
It is disgusting to see the mechanical way in which callous policemen, cavalier fashion, handcuff prisoner in their charge, indifferently keeping them company assured by the thought that the detainee is under 'iron ' restraint.
[874 F H] 11.
Even orders of superiors are no valid justification as constitutional rights cannot be kept in suspense by superior orders, unless there is material, sufficiently stringent, to satisfy a reasonable mind that dangerous and desperate is the prisoner who is being transported and further that by adding to the escort party or other strategy he cannot be kept under control.
It is hard to imagine such situations.
It is unconscionable, indeed outrageous, to make the strange classification between better class prisoners and ordinary prisoners in the matter of handcuffing.
This elitist concept has no basic except that on the assumption the ordinary Indian is a sub citizen and freedoms under Part III of the Constitution are the privilege of the upper sector of society.
[875 A C] Merely because a person is charged with a grave offence he cannot be handcuffed.
He may be very quiet, well behaved, docile or even timid.
Merely because the offence is serious, the inference of escape proneness or desperate character does not follow.
Many other conditions mentioned in the Police Manual are totally incongruous and must fall as unlawful.
Tangible testimony, documentary or other, or desperate behaviour, geared to making good his escape, along will be a valid ground for handcuffing and fettering, and even this may be avoided by increasing the strength of the escorts or taking the prisoners in well protested vans.
And increase in the number of escorts, arming them if necessary special training for escorts police, transport of prisoners in protected vehicles, are easily available alternatives.
[875 C E] 12.
Even in cases where, in extreme circumstances handcuffs have to be put on the prisoner, the escorting authority must record contemporaneously the reasons for doing so.
otherwise under article 21 the procedure will be unfair and bad in law.
Nor will mere recording of the reasons do, as that can be a mechanical process mindlessly made.
The escorting officer, whenever he handcuffs a prisoner produced in court, must show the reasons so recorded to the Presiding Judge and get his approval.
Otherwise, there is no control over possible arbitrariness in applying handcuffs and fetters.
The minions of the police establishment must make good their security recipes by getting judicial approval.
And, once the court directs that handcuffs shall 859 be off, no escorting authority can overrule judicial direction.
This is implicit in article 21 which insists upon fairness, reasonableness and justice in the very procedure which authorises stringent deprivation of life and liberty.
[875 G H, 876 A] Maneka Gandhi vs Union of India [1978] 2 SCR 621, and Sunil Batra vs Delhi Administration ; ; applied. 13.
Punjab Police Manual, in so far as it puts the ordinary Indian beneath the better class breed (paragraphs 26.21A and 26.22 of Chapter XXVI) is untenable and arbitrary and Indian humans shall not be dischotomised and the common run discriminated against regarding handcuffs.
The provisions in para 26.22 that every under trial who is accused of a non bailable offence punishable with more than 3 years prison term shall be routinely handcuffed is violative of articles 14, 19 and 21.
So also para 26.22 (b) and (c).
The nature of the accusation is not the criterion.
The clear and present danger of escape breaking out of the police control is the determinant.
And for this there must be clear material not qlib assumption record of reasons and judicial oversight and summary hearing and direction by the Court where the victim is produced.
Para 26, 22(1)(d), (e) and (f) also hover perilously near unconstitutionality unless read down Handcuffs are not summary punishment vicariously imposed at police level, at once obnoxious and irreversible.
Armed escorts, worth the salt, can overpower any unarmed under trial and extraguards can make up exceptional needs.
In very special situations, the application of irons cannot be ruled out.
The prisoner cannot be tortured because others will demonstrate or attempt his rescue.
The plain law of under trial custody is thus contrary to unedifying escort practice.
[876 C G] 14.
The impossibility of easy recapture supplied the temptation to jump custody, not the nature of the offence or sentence.
Likewise, the habitual or violent 'escape propensities ' proved by past conduct or present attempts are a surer guide to the prospects of ruling away on the sly or by use of force than the offence with which the person is charged or the sentence.
Many a murderer, assuming him to be one, is otherwise a normal, well behaved, even docile, person and it rarely registers in his mind to run away or force his escape.
It is an indifferent escort or incompetent guard, not the Section with which the accused is charged, that must give the clue to the few escapes that occur.
To abscond is a difficult adventure.
"Human rights" seriousness loses it valence where administrator 's convenience prevails over cultural values.
There is no genetic criminal tribe as such among humans.
A disarmed arrestee has no hope of escape from the law if recapture is a certainty.
He heaves a sigh of relief if taken into custody as against the desperate evasions of the chasing and the haunting fear that he may be caught any time It is superstitious to practise the barbarous bigotry of handcuffs as a routine regimen an imperial heritage well preserved.
The problem is to get rid of mind cuffs which make us callous to hand cuffing prisoner who may be a patient even in the hospital bed and tie him up with ropes to the legs of the cot.
[877 A D, 878 A C] 15.
The rule regarding a prisoner in transit between prison house and court house is freedom from handcuffs and the exception, under conditions of judicial supervision will be restraints with irons to be justified before or after.
The judicial officers, before whom the prisoner is Produced shall 860 interrogate the prisoner, as a rule, whether he has been subjected to handcuffs or other 'irons ' treatment and, if he has been, the official concerned shall he asked to explain the action forthwith.
[879 G H, 880 A B] Per Pathak J. (Concurring) 1.
It is an axiom of criminal law that a person alleged to have committed an offence is liable to arrest.
Sections 46 and 49 of the Code of Criminal Procedure define the parameters of the power envisaged in the Code in the matter of arrest.
And section 46, in particular foreshadows the central principle controlling the power to impose restraint on the person of a prisoner while in continued custody.
Restraint may be imposed where it is reasonably apprehended that the prisoner will attempt to escape, and it should not be more than is necessary to prevent him from escaping.
Viewed in the light of the law laid down by this Court in Sunil Batra vs Delhi Administration and ors.
; , ; that a person in custody is not wholly denuded of his fundamental rights, the limitations flowing from that principle acquire a profound significance.
[880 C F] The power to restrain, and the degree of restraint to be employed, are not for arbitrary exercise.
An arbitrary exercise of that power infringes the fundamental rights of the person in custody.
And a malicious use of that power can bring section 220 of the Indian Penal Code into play.
Too often is it forgotten that if a police officer is vested with the power to restrain a person by handcuffing hum or otherwise there is a simultaneous restraint by the law on the police officer as to the exercise of that power.
[880 F G] 2.
Whether a person should be physically restrained and, if so, what should be the degree of restraint, is a matter which affects the person in custody so long as he remains in custody.
Consistent with the fundamental rights of such person the restraint can be imposed, if at all, to a degree no greater than is necessary for preventing his escape.
To prevent his escape is the object of imposing the restraint and that object at once defines that power.
[880 H, 881 A] 3.
Section 9(2)(e) of the Prisoners (Attendance in Court) Act, 1955 empowers the State Government to make rules providing for the escort of persons confined in a prison to and from Courts in which their attendance is required and for their custody during the period of such attendance.
The Punjab Police Rules, 1934 contain Rule 26.22 which classifies those cases in which hand cuffs may be applied.
The classification has been attempted somewhat broadly.
But the classification attempted by some of the clauses of Rule 26.22, particularly (a) to (c) which presume that in every instance covered by any of these clauses the accused will attempt to escape cannot be sustained.
[881 C E] The rule should be that the authority responsible for the prisoners custody should consider the case of each prisoner individually and decide whether the prisoner is a person who having regard to his circumstances, general conduct, behaviour and character will attempt to escape or disturb the peace by becoming violent.
That is the basic criterion, and all provisions relating to the imposition of restraint must be guided by it.
In the ultimate analysis it is that guiding principle which must determine in each individual case whether a restraint should be imposed and to what degree.
[881 E G] 861 4.
Rule 26.22 read with Rule 26.21 A of the Punjab Police Rules 1934 draw a distinction between "better class" under trial prisoners and "ordinary" under trial prisoners, as a basis for determining who should be handcuffed and who should not be.
The social status of a person, his education and habit of life associated with a superior mode of living is intended to protect his dignity of person.
But that dignity is a dignity which belongs to all, rich and poor, of high social status and low, literate and illiterate.
It is the basic assumption that all individuals are entitled to enjoy that dignity that determines the rule that ordinarily no restraint should be imposed except in those cases where there is a reasonable fear of the prisoner attempting to escape or attempting violence.
It is abhorrent to envisage a prisoner being handcuffed merely because it is assumed that he does not belong to "a better class", that he does not possess the basic dignity pertaining to every individual.
Then there is need to guard against a misuse of the power from other motives.
It is grossly objectionable that the power given by the law to impose a restraint, either by applying handcuffs or otherwise, should be seen as an opportunity for exposing the accused to public ridicule and humiliation.
Nor is the power intended to be used vindictively or by way of punishment.
Even Standing order 44 and the instructions on handcuffs of November 1977 operate some what in excess of the object to be observed by the imposition of handcuffs, having regard to the central principle that only he should be handcuffed who can be reasonably apprehended to attempt from escape or become violent.
[881 G H. 882 A D] 5.
Whether handcuffs or other restraint should be imposed on a prisoner is primarily a matter for the decision of the authority responsible for his custody.
It is a judgment to be exercised with reference to each individual case.
It is for that authority to exercise its discretion.
The primary decision should not be that of any other The matter is one where the circumstances may change from one moment to another, and inevitably in some cases it may fall to the decision of the escorting authority midway to decide on imposing a restraint on the prisoner.
The prior decision of an external authority can not be reasonably imposed on the exercise of that power.
But there is room for imposing a supervisory regime over the exercise of that power.
One sector of superviory jurisdiction could appropriately lie with the court trying the accused, and it would be desirable for the custodial authority to inform that court of the circumstances in which, and the justification for, imposing a restraint on the body of the accused.
It should be for the court concerned to work out the modalities of the procedure requisite for the purpose of enforcing such control 882 E G] 6.
In the present case, the question whether the petitioner should be handcuffed should be left to be dealt with by the Magistrate concerned before whom he is brought for trial in the cases instituted against him.
[882 H, 883 A]
|
Petition Nos.
3846/81, 6454 55/80, 230 249, 502 510, 524, 726 27, 777 96, 803, 1069, 1207 09,1326,439 40,1607,1691 93,1702,1703 7,1734.36, 1737 40, 1759 72, 1789 90, 1879, 1946 47, 1948, 1959, 1972 97, 2012 17, 2027 39, 2076, 2077 78, 2125 83, 2194 95, 2204 11, 2284 2326, 2361 62,2363 64, 2365 2404,2405 26, 2444 58, 2459 88,2497 2501, 2503 05,2513 19, 2520 25,2542 73, 2597, 2616 41,2642 48, 2661 63, 2665 66,2698 2700, 2702 21, 2723 26, 2730 44 2756 62, 2766 76, 2779 2802,2803 15, 2818 26, 2847 55, 2856 67, 2885 96, 2897 98, 2912 15,2917 26, 2968 76, 2980 3001, 3002 46, 3047 52, 3070 87, 3088 3102, 3165 3205, 3210 17, 3259 64, 3268 77, 3286, 3305 11, 3312 22,3325,3346, 3355,3357 70, 3371 91, 3403, 3477 82,3484 88, 3492 3504,3505 15, 3516,3517 34,3560, 3572 79, 3637, 3693 3730, 3732 36, 3757 75, 3899 3912,4053 69,4192 4229, 4261,4329, 4495, 4496 4508,4606 09, 4617 21,4622 69, 4846 75, 4978 86, 5218,5349, 5533 43, 5597 5609, 5623, 5626 42, 5728, 5746, 6577 81, 6814, 6934 42,7203, ,217 20,7409,7454 56,7484, 7641,7659,7773,7943, 7944, 8084,8089, 8090, 8192,8195, 8201, 8431, 8436, 8834, 8862, 8878 81, 8924 & 8979 of 1981.
(Under Article 32 of the Constitution) Shanti Bhushan, V.M. Tarkunde, P.A. Francis and G.N. Dikshit.
R.K. Jain, P.B. Jain, Pankaj Kaira, section Mittar, M.G. Gupta, J B.R. Kapoor, Miss, Bhajan Ram Rakhyani, S.R. Srivastava, B.V. Tawakley, Shobha Dikshit, B. Dutta, B.D. Sharma, Miss A. Subhashini, 513 N.N. Sharma, T.C Sharma, A. Ghosh, S.V. Tambwekar and Girish Chandra for the appearing parties.
A The Judgment of the Court was delivered by MISRA J.
In exercise of powers conferred by section 3 of the , Sugar Control order 1966 was issued by the Government of India, Ministry of Agriculture.
Clause S of that order empowered the Central Government to issue directions, inner alia, to recognised dealers regarding production, maintenance of stock, storage, sale, grading, packing, making weighment, disposal, delivery and distribution of sugar.
By Order No. GSR 410 E/Ess.
Com./Sugar dated the 14th of July, 1980 the Central Government issued the following directions: "In exercise of the powers conferred by clause 5 of the Sugar (Control) order, 1966, and in supersession of the order of the Government of India in the Ministry of 'Agriculture (Department of Food) No. GSR 60 (e)/Ess.
Com./Sugar, dated the 26th February, 1980, the Central Government hereby directs that no recognised dealer shall keep in stock at any time (1) Vacuum pan sugar, in the places mentioned below, in excess of the quantities mentioned against each (i) in Calcutta and extended area (a) recognised dealers who import sugar from outside West Bengal 3,500 quintals, (b) other recognised dealers 250 quintals; (ii) in other places (a) in cities and towns with a population of one lakh or more 250 quintals; (b) in other towns with a population of less than one lakh 100 quintals.
514 (2) Khandsari (open pan sugar) in excess of 250 quintals.
Provided that no recognised dealer shall hold any stock of Vacuum pan sugar or Khandsari (open pan sugar) for a period exceeding ten days from the date of receipt by him of such stock of sugar or Khandsari.
Provided further that nothing in this order shall apply to the holding of stocks of sugar (i) on Government account; or (ii) by the recognised dealers nominated by a State Government or an officer authorised by it to hold such stock for distribution through fair price shops; or (iii) by the Food Corporation of India.
Explanation: For the purpose of this order, "Calcutta and extended area" means the areas specified in the Schedule to the notification of the Government of West Bengal No. 7752 F.S./14 R 92/61, dated the 16th December, 1964.
" The petitioners in this groups of petitions, who are dealers in sugar, seek to challenge the constitutional validity of the said order on three grounds; (I) the impugned order is not covered by section 3 of the and is Ultra vires; (2) the impugned order imposes unreasonable restrictions on the right of the petitioners to carry on their trade and so it is violative of Article 19(2)(g) of the Constitution; (3) the impugned order is also violative of Article 14 of the Constitution for two reasons: (as the petitioners have been singled out for hostile treatment from other dealers of sugar at Calcutta, (b) the impugned order is unreasonable and impracticable.
Shri Shanti Bhushan, senior counsel appearing in one of the petitions viz., Writ Petition No. 3846 of 1981, took up the first point.
and urged that the impugned order is not covered by any of the clauses of section 3 of the .
Section 3 of the , insofar as it is material for the purposes of this case, reads: 515 "3.
(1) If the Central Government is of opinion that it is necessary or expedient so to do for maintaining or increasing supplies of any essential commodity or for securing their equitable distribution and availability at fair prices, or for securing any essential commodity for the defence of India or the efficient conduct of military operations it may, by order, provide for regulating or prohibition the production, supply and distribution thereof and trade and commerce therein (2) With prejudice to the generality of the powers conferred by sub section (1), an order made thereunder may provide (a) . . (b) . . (c). . (d) for regulating by licences, permits or otherwise the storage, transport, distribution, disposal, acquisition, use of consumption of, any essential commodity.
" The language of section 3 (1) coupled with clause (d) of subsection (2) of section 3 is wide enough to cover the impugned order.
Section 3 (1) authorises the Central Government to pass an order for regulating or prohibiting the production, supply and distribution of an essential commodity and trade and commerce therein if it is of opinion that it is necessary or expedient to do so for securing the equitable distribution and availability.
at a fair price of the essential commodity.
The same power has been made more specific by clause (d) of sub section (2) of section 3, which provides for regulating by licences.
permits or otherwise, the storage, transport, distribution, disposal, acquisition, use or consumption of, any essential commodity.
Sugar, which term includes khandsari, is an essential commodity and over the years it has become a scarce commodity.
In the public interest it became essential to pass the impugned order to secure its equitable distribution and availability at fair prices.
To that end it became necessary to prevent hoarding and black marketing.
The expression "to secure their equitable distribution and availability at fair prices" is wide enough to cover the impugned order.
Likewise, the expression "storage and distribution" used in clause (d) of sub section (2) of section 3 should be given a liberal construction to give effect to the legislative intent of public welfare.
So construed, the impugned order is fully pro 516 tected and is not ultra vires section 3 of the , 195 5.
This leads us to the second contention, namely, the impugned order being violative of Article 19 (1) (g) of The Constitution inasmuch as it imposed unreasonable restriction on the right of the petitioners to carry on trade or business.
A person has a right to carry on any occupation, trade or business and only restriction on this unfettered right is the authority of the State to make a law imposing reasonable restrictions under clause (6).
The expression 'reasonable restrictions ' signifies that the limitation imposed on a person in enjoyment of that right should not be arbitrary or of an excessive nature beyond what is required in the interest of the public.
No cut and dry test can be applied to each individual statute impugned, nor an abstract standard or general pattern of reasonableness can be laid down as applicable in all cases.
The Court in each case has to strike a proper balance between the freedom guaranteed by Article 19 (1) (g) and the social control permitted by clause (6) of Article 19.
By the impugned order the Central Government has only put an embargo on the dealers on keeping sugar in excess of the quantity specified.
It was passed only with a view to prevent hoarding and black marketing, and to ensure equitable distribution and availability of sugar at fair prices in the open market.
Reliance was placed by Shri Shanti Bhushan on State of Mysore vs H. sanjeeviah.(J) In that Case the State Government of Mysore had framed rules to regulate the transit of timber, firewood, charcoal and bamboos from all lands in exercise of powers conferred by section 37 of the Mysore Forest Act 11 of 1900.
By rule 2 framed on October 13, 1952, it was provided that no person shall import forest produce into, export forest produce from, or move forest produce within, any of the areas specified in Schedule A unless such forest produce is accompanied by permit prescribed in rule 3.
On April 15, 1959 the State of Mysore issued a notification adding a proviso to rule 2 which read as follows: 517 "Provided that no such permit shall authorise any person to transport forest produce between SUN set and sun rise in any of the areas specified in Schedule A." By another notification dated September 14, 1960 the State Government introduced the second proviso to rule 2 which read: "provided further that permission may be granted to timber merchants on their request to transport timber upto 10 p.m. (22 hrs) under the following conditions: (i) the party who wishes to avail of the concession should pay a cash deposit of Rs. 1000 as security for the compliance with the timber transit rules as in force; (ii) that the deposit may be forfeited to government for breach of any of the conditions of the timber transit rules.
" The dealers in timber challenged the two provisos on the grounds inner alia that they were beyond the rule making authority conferred upon the State Government by section 37 of the Mysore Forest Act 11 of 1900 and in any event the provisos imposed unauthorized restrictions on the freedom of trade, commerce and intercourse.
The High Court held that the State Government while seeking to regulate the transport of timber stopped transport altogether.
This Court upholding the order of the High Court observed: "Power to impose restrictions of the nature contemplated by the two provisos to r. 2 is not to be found in any of the clauses of sub section
(2) of section 37.
By sub section
(I) the State Government is invested with the power to regulate trans port of forest produce "in transit by land or water.
" The power which the Stale Government may exercise is however power to regulate transport of forest produce, and not the power to prohibit or restrict transport.
Prima facie, a rule which totally prohibits the movement of forest produce during the period between sun set and sun rise is prohibitory or restrictive of the right to transport forest produce.
A rule regulating transport in its essence permits transport, subject to certain conditions devised to promote trans port.
" 518 This Court further observed: "If the provisos are in truth restrictive of the right to transport the forest produce, however, good the grounds apparently may be for restricting the transport of forest produce, they cannot on that account transform the power conferred by the provisos into a power merely regulatory." The facts of the present cases are materially different from the facts of H. Sanjeeviah 's case (supra).
In that case the impugned provisos to rule 2 completely prohibited the transport of the forest produce between sun set and sun rise.
But in the cases in hand the direction enjoined a recognised dealer not to keep sugar in stock at any time in excess of the quantity specified therein.
It only seeks to regulate the limit of storage of sugar and does not prohibit its storage.
The case of H. Sanjeeviah, therefore, is not of much help to the petitioners herein.
In M/s. Laxmi Khandsari & Ors.
vs State of U.P. & ors.(l) this Court made the following observations about reasonable restrictions on the right conferred by Article 19 (1) (g) of the Constitution in the following terms: "As to what are reasonable restrictions would naturally depend on the nature and circumstances of the case, the character of the statute, the object which it seeks to serve, the existing circumstances, the extent of the evil sought to be remedied as also the nature of restraint or restriction placed on the rights of the citizen.
It is difficult to lay down any hard and fast rule of universal application but in imposing such restrictions the State must adopt an objective standard amounting to a social control by restricting the right of the citizens where the necessities of the situation demand.
The restrictions must be in public interest and are imposed by striking a just balance between the deprivation of right and the danager or evil sought to be avoided.
If the restrictions imposed appear to be consistent with the directive principles of State policy they would have to be upheld as the same would be in public 519 interest and manifestly reasonable.
Further, restrictions may be partial, complete, permanent or temporary but they must bear a close nexus with the object in the interest of which they are imposed.
Another important test is that restriction should not be excessive or arbitrary.
The court must examine the direct and immediate import of the restrictions on the rights of the citizens and determine if the restrictions are in larger public interest while deciding the question that they contain the quality of reasonableness.
In such cases a doctrinaire approach should not be made but care should be taken to see that the real purpose which is sought to be achieved by restricting the rights of the citizens is sub served.
At the same time, the possibility of an alternative scheme which might have been but has not been enforced would not expose the restrictions to challenge on the ground that they are not reasonable.
" Judged in that light and on an overall consideration of the various aspects of the matter, restrictions put by the impugned order can by no means be said to be unreasonable.
It is only regulatory and not prohibitory.
We now take up the last contention, namely, the impugned order being violative of Article 14 of the Constitution.
The learned counsel seeks to invoke Article 14 on two grounds: (1) the impugned order applies two standards, one for the dealers, at Calcutta, who had been authorised to keep 3,500 quintals at one time, while the dealers at other places have been authorised to keep only 250 quintals in cities with a population of one lakh or more, and only 100 quintals in other towns with a population of less than one lakh.
F The fixation of limits for storing sugar in Calcutta and other places is not arbitrary but is based on reasonable classification.
The government is the best judge of the situation in a particular State and that quantity of sugar will meet the exigencies of the situation at a particular place is purely a governmental function.
For one, Calcutta serves as a feeder line to meet the requirements of sugar to the eastern part of the country, and therefore, the stocks of sugar to be held by the dealers in Calcutta are not required for consumption in Calcutta alone Besides, Calcutta being far away from the sugar manufacturing units in Bihar and Uttar Pradesh, from where bulk of supplies are obtained, sugar is transported by the wholesale 520 dealers in railway wagons which take sometime unusually longer time in transit.
These and various other factors have been taken into consideration by the Government while fixing the storage limits of sugar for the dealers in Calcutta.
His second ground for invoking Article 14 of the Constitution is that the impugned order is unreasonable and impracticable in that no dealer can be sure of the sale of sugar on any particular day.
If per chance a dealer is not able to dispose of the excess sugar on a particular.
day he would expose himself to punishment under the Act.
No provision has been made in the order or in the rules for the purchase by the Government of the excess sugar.
For the State it was contended that similar orders with regard to wheat came up for consideration in this Court in Suraj Mal Kailash Chand Ors.
vs Union of India & Anr.
and Bishambhar Dayal Chandra Mohan Ors.
vs State of Uttar Pradesh & ors.
etc.(2) when this Court upheld the validity of these orders.
In view of the decision of this Court in those cases it is not open to Shri Shanti Bhushan to challenge the constitutional validity of the impugned order.
Shri Shanti Bhushan, however, refutes the argument and says that those decisions do not stand in the way of the petitioners.
The situation with regard to wheat was quite different inasmuch .
s clause 25 of the impugned order in Sutlaj Mal 's case (supra) provided that the State Government or the Collector or the Licensing Authority may issue directions to any dealer with regard to purchase, sale, disposal, storage or exhibition of the price and stock list of all or any of the trade articles.
But there is no such provision in the impugned order in the instant case and, therefore, the dealers can expose themselves to punishment merely because at any particular point of time the stock was in excess of the prescribed limits.
Bishambhar Dayal 's case (supra) also related to wheat.
There was a scheme for the procurement of wheat by the State Government but there is no such scheme in respect of sugar.
This fact distinguishes the present case for the facts of the aforesaid decision.
The argument though attractive cannot be accepted.
Over the years sugar has become a scare commodity and people have to 521 purchase it even at a prohibitive price.
In the circumstances it A cannot be expected that the dealers would not be able to sell the sugar in their stock.
There is absolutely no difficulty in selling the sugar at any time at the prevalent market price.
If in a rare case there is difficulty on that score we hope and trust that the concerned Government would allow a reasonable time within which the petitioners are permitted to dispose of the excess quantity of sugar, if any.
In any case, in some given case there may be some hardship but it cannot be said on that account that the impugned order is violative of Article 14 of the Constitution.
For the foregoing discussion the writ petitions must fail.
They are accordingly dismissed.
In the circumstances of the case there shall, however, be no order as to costs.
S.R. Petitions dismissed.
| In exercise of powers conferred by section 3 of the , Sugar Control order 1966 was issued by the Government of India, Ministry of Agriculture Clause 5 of that order empowered the Central Government to issue directions, inter alia, to recognised dealers regarding production, maintenance of stock, storage, sale, grading, packing, making weighment, disposal, delivery and distribution of sugar.
By order No. GSR 410 E/Ess.
Com/Sugar dated 14 7 1980, the Central Government issued directions to the effect that no recognised dealer shall keep in stock at any time (a) Vacuum pan sugar in excess of, (i) in Calcutta and other extended area recognised dealers who import sugar from outside West Bengal, 3500 quintals; other recognised dealers 250 quintals; (ii) in other places in cities and towns with a population of one lakh or more 250 quintals and with a population of less than one lakh 100 quintal and (b) Khandsari (open pan sugar) 250 quintals.
Further no recognised dealer shall hold any stock of vacuum pan sugar or khandsari (open pan sugar) for a period exceeding 10 days from the date of receipt by him of such stock of sugar or khandsari.
The recognised dealers, there fore, assailed the constitutional validity of the said order on three grounds: (I) the impugned order is not covered by section 3 of the and is ultra vires (2) the impugned order imposes unreasonable restrictions on the right of the petitioners to carry on their trade and so it is violative of Article 19 (1) (g) of the Constitution: (3) the impugned order is also violative of Article 14 of the Constitution for two reasons: (a) the petitioners have been singled out for hostile treatment from other dealers of sugar at Calcutta: (b) the impugned order is unreasonable and impracticable.
Dismissing the petitions, the Court ^ HELD: 1, The order dated 14 7 1980 is not ultra vires section 3 of the .
The expression "to secure their equitable 511 distribution and availability at fair prices", is wide enough to cover the impugned order Likewise, the expression "storage and distribution" used in clause (d) of sub section (2) of section 3 of the essential Commodities Act, 1955 should be given a liberal construction to give effect to the legislative intent of public welfare.
Sugar, which term includes khandsari, is an essential commodity and over the years it has become a scarce commodity.
In the public interest it became essential to pass the order to secure its equitable distribution and availability at fair prices.
To that end it became 'necessary to prevent hoarding and black marketing.
[515 F H, 516 A E] 2.
Restrictions put by the impugned order can by no means be said to be unreasonable.
It is only regulatory and not prohibitory.
The direction enjoined recognized dealer not to keep sugar in stock at any time in excess of the quantity specified therein.
It only seeks to regulate the limit of storage of sugar and does not prohibit its storage.
By the Impugned order the Central Government sought to prevent hoarding and black marketing, and to ensure equitable distribution and availability of sugar at fair prices in the open market.[516 E, 519 D] A person has a right to carry on any occupation, trade or business and the only restriction on this unfettered right is the authority of tho State to make a law imposing reasonable restrictions under clause (6).
The expression reasonable restrictions ' signifies that the limitation imposed on a person in eojoyment of that right should not be arbitrary or of an excessive nature beyond what is required in the interest of the public.
No cut and dry test can be applied to each individual statute impugned, nor an abstract standard or general pattern of reasonableness can be laid down as applicable in all cases.
The Supreme Court in each case has to strike a proper balance between the freedom guaranteed by Article 19 (1) (g) and the social control permitted by clause (6) of Article 19.
[516 B D] State of Mysore vs H. Sanjeeviah, , explained and distinguished.
M/s. Laxmi Khandsari & Ors.
vs State of U.P. & Ors., , followed.
The order is not violative of Article 14 of the constitution.
The fixation of limits for storing sugar in Calcutta and other places is not arbitrary but is based on reasonable classification.
The government is the best judge of the situation in a particular State and what quantity of sugar will meet the exigencies of the situation at a particular place is purely a governmental function.
For one, Calcutta serves as a feeder line to meet the requirements of sugar to the eastern part of the country, and therefore, the stocks of sugar to be held by the dealers in Calcutta are not required for consumption in Calcutta alone.
Besides, Calcutta being far away from the sugar manufacturing units in Bihar and Uttar Pradesh, from where bulk of supplies are obtained, sugar is transported by the wholesale dealers in railway wagons which take sometime unusually longer time in transit.
These and various other factors have been taken into consideration by the Government while fixing the storage limits of sugar for the dealers in Calcutta.
[519 F H, 520 A] 512 The fact that over the years sugar has become a scarce commodity and people have to purchase it even at a prohibitive price, the dealers would be able to sell the sugar in their stock without difficulty at any time at the prevalent market price.
In a rare exceptional case there may be some hardship on that score but it cannot be said, on that account, that the order is violative of Article 14 of the Constitution.
In such cases, we hope and trust that the concern ed Government would allow a reasonable time within which the dealers could dispose of the excess quantity of sugar, if any.
[520 G, 5 21 A C] Suraj Mal Kailash Chand & Ors.
vs Union of India & Anr., Writ Petitions Nos.
8334 48 of 1981 decided on September 25, 1981 (unreported case): Bishambhar Dayal Chandra Moharl & ors, etc.
vs State of Uttar Pradesh & Ors. etc.
Writ Petitions Nos.
2907 2908 of 1981 and connected writ petitions (a group of SOS writ petitions) decided on November S, 1981, followed.
|
iminal Appeal No. 41 of 1969, Appeal from the judgment and order dated September 6, 1967, of the Allahabad High Court in Criminal Reference No. 265 of 1965.
O. P. Rana, for the appellant.
Nur ud din Ahmed and P. N. Bhardwaj, for the respondent.
The Judgment of the Court was delivered by P.Jaganmohan Reddy, J.
This Appeal is by Certificate against the order of the High Court of Allahabad quashing the charge framed by the Additional City Magistrate, Kanpur against the accused Respondent for offenses under Sections 78 and 79 of the 43 of 1958 (hereinafter referred to as 'the Act ').
Respondent 1 to Respondent 4 are the partners of the firm M/s. Pannalal Durga Prasad of Nayaganj, Kanpur which is a firm of bullion merchants who have also been minting gold coins with a trade mark said to be similar to the one which is the registered trade mark of M/s. Habib Bank Ltd., Bombay and which was in force on the day when the alleged offence is said to have been committed.
On 24th October 1962 the Inspector of Trade Marks on behalf of the Director of Industries wrote a letter to the Additional City Magistrate I, Kanpur that M/s. Habib Bank Ltd., Bombay which is one of the foremost refiners of gold has been producing coins and pieces of gold of various shapes and sizes for sale commonly known as under a distinct trade mark, the most striking feature of which has always been a device of a lion holding a sword with his forearm against the back ground of a rising sun.
This device of lion is with the word 'Habib Bank Ltd. ' above it and 'Shuddha Sonu ' below it in Gujarati script with a dotted circle along the border on the face of the device of a coin and a wreath 'along the border on the other face with the words 'Habib Bank Ltd., contained in the upper half and 'Pure Gold ' in the lower half of the space within it in English script with the description of weight and quality.
This trade mark it was stated had acquired distinctiveness in respect of old coins and pieces produced by 574 them on account of long and extensive use, that the people in that part of the country particularly the people in the rural areas have always had a great fancy for the gold pieces and coins of Habib Bank Ltd., on account of their fineness for use in preparing ornaments as also as the safest investment of their savings by purchasing and retaining these coins and pieces, and consequently such gold coins continued to be highly popular among the people in the rural areas as well in the bullion trade, and are distinguished on account of the above noted features and trade mark.
It was alleged that M/s. Pannalal Durga Prasad, Kanpur are producing similar coins and pieces of gold and to them they apply a trade mark which is deceptively similar to the above registered trade mark of M/s. Habib Bank Ltd., the only difference between the two was that instead of Habib Bank Ltd., in Gujarati script on one face and English script on the other face, the words 'Habib quality ' are used and the words 'pure gold ' in English script is preceded by the letters P & D.
It was averred that this trade mark adopted by M/s. Panna Lal Durga Prasad is bound to deceive not only the buyers who are ignorant of English and Gujarati scripts, but even unwary purchasers from urban areas are likely to be deceived.
Though by a registered letter the Trade Mark office had drawn the attention of the firm regarding the use of the mark by them and had requested them to indicate the period for which they had been using it and whether the mark had been registered as a trade mark in their name, they had not chosen to reply even though they received the letter.
It was further stated that a goldsmith Shri Pyarelal in Nayaganj market is also falsely applying the registered trade mark of M/s. Habib Bank Ltd., and has in his possession dies and other instruments for being used for falsifying the trade mark.
On these allegations the Magistrate was requested to take necessary action under the law against those mentioned in the letter in respect of offenses under Sections 78 and 79 of the Act, by directing the Police to investigate the case.
On receipt of this letter on the same day namely 24 10 1962 the Magistrate directed the Police to register a case and investigate.
The Sub Inspector of Police thereupon prepared a search Memo in as much as there was no sufficient time to get the warrant of search issued and also because of the possibility of the removal of goods and effected a search of the premises.
The Inspector went to the Silver and Gold factory of Panna Lal Durga Prasad and found that Ram Nath Son of Durga Prasad one of the Respondents was present there.
He made an inspection of the factory in his presence and seized the dies for the manufacture of coins and gold 575 bars found near the place of goldsmith Munna son of Lakhpat.
The Inspector further in the presence of the witnesses caused a gold coin of one tola and another of half tola to be manufactured by way of specimen out of the gold bar found at the place.
These coins were duly seized and preserved, after obtaining the seal of Ram Nath.
It is unnecessary to give, all the, details of the recoveries because that is not relevant for the purposes of this case.
A police report was accordingly made to the Magistrate who adopted the procedure under Sec.
251 A by examining each of the Respondents after which he framed charges against them.
Thereafter he examined Wadia, P.W. 1, a Senior Attorney Clerk of Habib Bank Ltd., Bombay on 1 5 64.
On 29 5 64 before other witnesses could be examined the Respondents filed an application stating that from the evidence of Wadia, P.W. 1, Habib Bank had stopped dealing in gold and does not now manufacture gold coins, that it had also destroyed the dies And since 1954 this trade mark of Habib Bank has become ineffective and is thrown open to the public, as such it was prayed that the case be stayed and the complainant directed to seek remedy ill the civil court so that the accused persons may not be unnecessarily harassed.
The Magistrate rejected this contention because it appeared from the evidence that the registration of the trade mark of Habib Bank was current upto 1967 and that since the Respondents have been charged under Sections 78 and 79 of ' the Act the contention of the accused that in view of Sec.
46 of the said Act where a trade mark is abandoned for more than years, the Respondents cannot be said to have committed an offence, is not tenable.
By a well considered order the Magistrate dismissed the application and directed the production of the entire evidence on the next date, without fail.
Against this a revision was filed before the Sessions Judge of Kanpur.
The Sessions Judge made a reference to the High Court recommending the quashing of the charge on the ground that "The principle of abandonment is given legal recognition in Sec.
46 Trade & Merchandise Marks Act which provides that a registered trade mark may be taken off the register if it was not used for continuous period of five years or longer.
" The High Court held that on the statement of Wadia it is clearly established that Habib Bank Ltd., had stopped dealing in gold and coins since 1954 and there could therefore be no question of the Respondents corn mitting any offence under Sections 78 and 79 of the Act.
On this reference the High Court by its Judgment dated 6 9 67 thought that Sec.
46 had no application inasmuch as, that Section provided that unless the registration had been rectified the propriety rights of the Bank could not be said to have ended only because the trade mark had not been used for a period of more than 5 years.
It observed that there may be cases where the non 576 user of the trade mark may have been occasioned on account of special reasons and such non user was explainable; that clause (iii) of Sec.
47 makes it clear that it is open to the owner to contest the application for rectification of the register, by the plea, that the non user of the trade mark was due to special circumstances in the trade and not due to any intention on his part to abandon or not to use the trade mark in relation to the goods to which the application relates.
Accordingly the learned Judge expressed the view that the proceedings are not vitiated on the ground that the trade mark in question has ceased +to be the property of M/s. Habib Bank Ltd. It appears that a contention was urged before the High Court that since Habib Bank Ltd., was declared to be a foreign Bank in the year 1960 by the Reserve Bank of India as it had become a citizen of Pakistan, it was not a citizen under the Constitution of India and therefore had no proprietory rights in this Country.
The High Court said that this submission of the Respondent 's Advocate had some force as the question raised was a substantial question of law involving the interpretation of the Articles of the Constitution, that could properly be decided in a civil action rather than by a Magistrate in a Criminal case.
For this proposition reliance was placed on a decision of that Court in Karan Singh vs Mohan Lal(1), which following a Full Bench decision of the Calcutta High Court in Ashutosh Das vs Keshav Chandra Ghosh(2) held that a controversy between the parties relating to a complicated question of abandonment of the user and relating to the express or implied consent of the registered holder of the trade mark are questions which should be decided in a civil court rather than by a Criminal Court.
It was also held by the High Court that Since the complaint in the particular case had not been made by a Proprietor of the trade mark, the prosecution of the accused on the complaint of the Trade Marks Inspector and a subsequent investigation by the Police were not tenable under Sections 78 and 79 of the Act in view of the provisions of Sec. 28 of that Act.
An objection seems to have, been taken before the learned Judge that the High Court was not competent to quash the proceedings pending before the Trial Magistrate in that case because no revision petition had been filed against the order of the Magistrate by which the charge was framed against him but it was only after one of the witnesses had been examined that a Revision had been filed which is not competent.
The High Court rejected this contention and held that it had power to exercise revisional powers under Sec.
561 A and accordingly accepted the reference made by the Sessions Judge and quashed the proceedings against the accused for offences under Sections 78 & 79 of the Act.
(1) (2) A.T.R. 577 It appears to us that the High Court had misdirected itself in considering that the submissions which found favour with it, were relevant for the purpose of deciding whether the proceedings for prosecution for offences under Sections 78 and 79 of the Act were not valid either because, the Habib Bank Ltd., being a foreign Bank was not a citizen and as such had no rights or that the prosecution cannot be initiated by the Inspector of Trade Marks or that the, question of the abandonment of trade mark amounted to an express or implied consent was a matter for civil court and cannot be made the subject of a criminal prosecution.
Sections 78 and 79 are contained in Chapter X of the Act.
Section 78 provides that any person who falsifies any trade mark, falsely applies to goods any trade mark; or makes, disposes of, or has in his possession any die, block, machine, plate or other instrument for the purpose of falsifying, or of being used for falsifying a trade mark, applies any false trade description to goods etc.
shall unless he proves that he acted without intent to defraud, be punishable with imprisonment for a term which may extend to two years, or with fine, or with both, while Section 79 makes a person liable to similar punishment if he sells goods or exposes them falsely or for having them in his possession for sale or for any purpose of trade or manufacture any goods or things to which any false trade description is applied.
Trade mark has been defined in Sec. 2 (1) (v) to mean (i) in relation to Chapter X (other than Section 81), a registered trade mark or a mark used in relation to goods for the purpose of indicating or so as to indicate a connection in the course of trade between the goods and some person having the right as proprietor to use the mark; and (ii) in relation to the other provisions of this Act,a mark used or proposed to be used in relation to goods for the purpose of indicating or so as to indicate a connection in the course of trade between the goods and some person having the right, either as proprietor or as registered user, to use the mark whether with or without any indication of the identity of that person and includes a certification trade mark registered as such under the provisions of Chapter VIII.
" It is apparent from this definition that for the purposes of Chapter X of the Act which deals with criminal offenses, a trade mark includes a registered as well as unregistered trade mark.
An offence under Sections 78 or 79 therefore relate to a trade mark whether it is registered or unregistered.
The contention that the 578 registered trade mark of the Habib Bank Ltd., has been abandoned since the said Bank had discontinued its use from 1954 will not absolve the respondents from Criminal liability because even if it was abandoned it can only furnish a ground for a person to make an application under sec.
46 to have the trade mark removed from the registers.
It does not however entitle him to use a trade mark whether it is current or has been removed from the register, or has been abandoned or even if it has never been initially regis tered but has acquired the currency of a trade mark.
The offenses under Sections 78 and 79 consists in the deception and application of a trade mark which is in use and which signifies a particular type of goods containing that mark.
There is, therefore, no validity in the contention that the infringement of the trade mark of Habib Bank Ltd., merely gives rise to a civil action, in respect of which no prosecution will lie.
The provisions contained in Chapter IV in which is contained Sec.
28 relate to the effect of registration and have no bearing on the question before us.
It was neatly urged that the Trade Marks Inspector had no right to make a complaint under Sections 78 and 79 and therefore the prosecution was invalid.
This contention also in our view is misconceived.
A perusal of sub section
(2) of Sec. 89 would show that no Court inferior to that of a Sessions Judge, Presidency Magistrate or Magistrate of the 1st Class shall try an offence under this Act; while sub section
(1) provides that no Court shall take cognizance of an offence under Sec.
or Sec. 83 except on complaint in writing made by the Registrar or any officer authorised by him in writing.
Merely because sub section
(1) of Sec. 89 refers to manner of taking cognizance in respect of offence under the Section specified therein, it does not preclude cognizance of other offenses specified in Chapter X from being taken under the procedure prescribed by the Criminal Procedure Code.
It is apparent that offenses under Sections 78 and 79 are punishable with imprisonment of two years or with three years if they fall under the respective provisos to the said Sections.
In cases where an offence is punishable with imprisonment of one year and upwards but less than 3 years, under Chapter XXIII of Schedule 11 it is non cognizable and is a summons case, triable as already stated under Sec.
89(2) by the Sessions Judge, Presidency Magistrate or a Magistrate of the 1st Class.
In such cases under Sec. 155 of the Criminal Procedure Code when an information is given to an officer incharge of the Police Station of the commission of a non cognizable offence, he has to enter the substance of the information in a book to be kept for the purpose and refer 'the informant to the Magistrate but he cannot under sub section
(2) investigate such a case without the order of a Magistrate.
On receiving such an order any Police officer may exercise the same powers in respect of the investigation (except the power to arrest 579 without warrant) as an Officer in charge of police station may exercise in a cognizable case.
On receipt of a report from the, Police in compliance with such orders, the Magistrate may it the report discloses the commission of an offence try the accused by the procedure prescribed under Sec.
251 A of the Criminal Procedure Code.
This being the legal position in this case the Magistrate in our view has followed the correct procedure.
The information in respect of the commission of an offence under Sections 78 and 79 of the Act was brought to the notice of the Magistrate by a letter from the Trade Marks Inspector, The Magistrate directed the police to register a case and investigate it.
The Police accordingly complied with it and made a report thereon.
On receipt of the report the Magistrate satisfied himself that the respondents had received the, documents referred to in Sec. 173.
After a consideration of those documents he examined the accused and after giving an opportunity to both the prosecution and the accused framed a charge on being satisfied that there was a prima facie case.
The procedure followed therefore is unexceptionable.
The question whether the Habib Bank Ltd., being a foreign Bank is not a citizen and whether it has any right in the trade mark is therefore irrelevant and does not affect the validity of the proceedings or of the charges framed against the accused.
We accordingly allow the appeal, set aside the Judgment of the High Court and direct the Magistrate to proceed with the case in accordance with law.
V.P.S. Appeal allowed.
| The assessee was the sole proprietor of a business in timber and timber products.
He converted the proprietary business into a partnership business by means of a deed of partnership dated August 1, 1963.
The partnership consisted of the assessee and his two daughters.
The capital of the partnership was to be Rs. 4,00 000.
The assessee contributed Rs. 3,50,000 and each of his two daughters, one married and the other unmarried contributed Rs. 25,000.
The contribution of the capital by the daughters was effected by transfer of Rs. 25,000 from the assessee 's account to the account of each of the daughters.
All the assets of the proprietary business were transferred to the partnership.
In these assets the assessee and his daughters were entitled to shares in the proportion of their share capital i.e. the assessee was entitled to a 7/8 share and each of his daughters to 1/16 share.
The profits and losses of the partnership business were to be divided in equal shares between all the three partners.
The assessee was the managing partner of the firm.
The assessee filed a return of gift tax for the assessment year 1964 65 in respect of the gift of Rs. 50,000 in favour of his daughters representing the share capital contributed by his daughters.
The Gift Tax Officer however took the view that in addition to the gift of the aforesaid amount the assessee had gifted 1/3rd portion of the goodwill of his proprietary business to each of his daughters.
Accordingly he added a sum equal to 2/3rd of the goodwill as estimated by him to the gift of Rs. 50,000 admitted by the assessee.
The Appellate Assistant Commissioner dismissed the assessee 's appeal.
The Appellate Tribunal held that only 1/8 of the goodwill was gifted to each of the daughters but the gift was exempt under section 5 (1) (xiv) of the Gift Tax Act.
The High Court in reference held in favour of the assessee.
In appeal by special leave, HELD : The goodwill was a part of the assets which had been transferred to the partnership.
Under section 14 of the Partnership Act, subject to the contract between the partners the property of the firm includes all property and rights and interests in property originally brought into the stock of the firm or acquired by purchase or otherwise by or for the firm and includes also the goodwill of the business.
The departmental authorities in the present case never treated as all the assets and property of the assessee which were transferred to the partnership pertaining to his pro prietary business as a gift nor was it suggested that the property and assets valued at Rs. 4,00,000 were the subject matter of the gift.
The departmental authorities only picked up one of the assets of the assessee 's L3Sup.
C.I./72 818 proprietary business namely its goodwill and regarded that as the subject of gift having been made to the daughters.
There was no justification, for this approach.
Accordingly no gift tax was payable by the assessee on the goodwill of the assessee 's business.
[823A D] (ii)To be exempt under section 5(1)(xiv) a gift should be proved to have been made not only in the course of carrying & the business, profession or vocation but also for the purpose of such business, profession or vocation.
The expression 'in the course of carrying on of business etc. ' means that the gift should have some relationship with the carrying on of the business.
If a donor makes a gift only while he is running the business that may not be sufficient to bring the gift within the first part of el.
(xiv) of section 5(1) of the Act.
It must further be established to bring the gift within that provision, that there was some integral connec tion or relation between the making of the gift and the carrying on of the business.
The meaning of the word 'purpose ' is that which one sets before himself as an object to be obtained; the end or aim to be kept in view in any plan, measures, exertion or operation, design, intention.
Therefore on the plain meaning of the word 'purpose ' as employed in el.
(xiv) the Object, plan or design must have connection or relationship with the business.
[824 A G] In the present case, considering the terms of the partnership dead there was no cogent material to come to the conclusion that the gift of Rs. 25,000 to each of the daughters by the assessee was in the course of carrying on the business of the assessee and was for the purpose of the business.
The real object of the assessee was to benefit the daughters for the natural reason that the father wanted to look to the advancement of his daughters.
Accordingly the assessee who had himself shown the amount of Rs. 50,000 in his return of gift tax could not claim exemption for that amount under section 5 (7) (xiv).
[826 C G] State of Travancore Cochin & Ors.
vs Chanmugha Vilas Cashew Nut Factory & Ors. ; , B. W. Noble Ltd. vs Mitchell ; , Morgan vs Tate & Lyle Ltd. 35 T.C. 367, 378, C.I.T., West Bengal T. Birla Cotton Spinning & Weaving Mills Ltd. dt.
17 8 71 and Commissioner of Gift Tax vs Dr. Grorge Kuruvilla, , applied.
Commissioner of Gift Tax, Kerala vs Dr. George Kuruvilla, , referred to.
|
ivil Appeal No. 1945 of 1974.
From the Judgment and decree dated 9.10.1973 of the Madras High Court in L.P.A. No. 78 of 1969.
section Padmanabhan, K.M.M. Khan and Vineet Kumar for the Appellant.
Vepa Sarathy and Ramesh N. Keshwani for the Respondents.
The Judgment of the Court was delivered by M. FATHIMA BEEVI, J.
1.
This is an appeal by special leave against the judgment and decree dated the 9th October, 1973 of the High Court of Judicature at Madras in Letters Patent Appeal No. 78 of 1969.
The appellant was the first defendant in O.S. No. 53 of 1959 in the Munsiff 's Court Chingleput.
The respondents are the legal representatives of Munisubba Reddi, the plain tiff therein.
That suit was instituted on 11.2.1959 for recovery of possession of the suit property with mesne profits.
The suit was decreed by the trial court on 7.11.1960.
The first appellate court by the revised judgment dated the 5th August, 1961 in A.S. No. 21 of 1961 reversed the decree.
The second appeal preferred by the plaintiff was dismissed by the High Court in S.A. No. 426 of 1965 on 31.1.1969.
However, the Division Bench of the High Court allowed the Letters Patent Appeal filed by the plaintiff.
It is necessary to set out few facts for the purpose of this appeal.
The suit property having an extent of 13 acres and 42 1/2 cents originally belonged to one Dasu Reddi.
He conveyed possession of the land to one Varada Reddi under an oral agreement of sale on 10.7.1946.
A deed of sale was drawn up on 17.7.1947, but Dasu Reddi died before it could be registered.
Thereafter his sons Rajaram Reddi 196 and Ramalinga Reddi executed exhibit A. 1 sale deed in favour of Munisubba Reddi on 6.10.1949.
Varada Reddi, aggrieved, instituted O.S. No. 78 of 1949 against Munisubba Reddi and his vendors for specific performance of the contract for sale, asserting his possession in pursuance of the agreement dated 10.7.1946.
Varada Reddi died pending the suit.
Mu thukrishna Reddi was impleaded as his legal representative.
That suit was decreed in his favour on 13.12.1952.
The decree became final, but was not executed.
In the present suit the plaintiff Munisubba Reddi alleged that he was put in possession of the land by Mu thukrishna Reddi after the said decree under an arrangement evidenced by exhibit A.4 dated 12.12.1955 and while in posses sion, the defendants Achal Reddi and others trespassed into the property in 1956.
Achal Reddi contested the suit denying the petitioner 's title and the alleged trespass and claiming that Muthukrishna Reddy had orally transferred his rights and conveyed possession to him for valuable consideration.
The trial court in granting the petitioner a decree for possession found that the plaintiff 's title under the sale deed of 1949 as against his vendors was made perfect and title did not pass to Muthukrishna Reddi as he did not choose to execute the decree and the petitioner was in possession within 12 years prior to the suit.
It was found that the first defendant Achal Reddi has no title to the suit property and that he is not in possession of the same.
The first appellate court by the judgment dated 5.8.1964 rendered after the remand considered the question of title as well as possession and held: "If Muthukrishna Reddi had enforced the decree in O.S. No. 76/1949 for specific performance against the plaintiff and his vendors, that would have put an end to the title of the plaintiff under exhibit A. 1.
As already stated, the decree was allowed to lapse leaving the title of the plaintiff under exhibit A. 1 unaf fected.
The title that vested in the plaintiff on 6.6.1949 continued to remain with him thereafter for the above reasons.
As against this, the defence contention that the 1st defendant under an oral agreement, became the owner of the properties cannot stand.
My finding, therefore, is that the plaintiff has title to the properties under exhibit A.1." The learned Judge, however, found that the plaintiff was not in possession of the suit land in 1955 and the plaintiff having neither 197 proved possession nor dispossession at anytime was not entitled to a decree.
In S.A. No. 426 of 1965 these concurrent findings of the trial court as well as the first appellate court on the question of plaintiff 's title had not been challenged.
The only question raised therein and considered by the learned Single Judge was whether the plaintiff was in possession within 12 years of suit in order to enable him to recover possession and whether for that purpose he could say that his vendors and before him, Dasu Reddi were in possession of the property and consequently he could add that period to the period before 6.6.1949, the date of sale in his favour.
The learned Judge was of the view that if Varada Reddi 's possession was permissive, then the possession should be deemed to have continued with the original owner Dasu Reddi and thereafter his sons, but if on the other hand the pos session of Varada Reddi was adverse even as against the original owner, the plaintiff would not be entitled to add the period before 6.6.1949 and such possession could not enure to his benefit.
After referring to the decision in Annamalai Chettiar and Another vs Muthiah Chettiar and Another, ILR 19651 Madras 254 the learned Judge held that Varada Reddi 's possession was adverse to Dasu Reddi from 10.7.1946, on the assumption that a sale had been effected orally even on 10.7.1946 leaving only execution of the sale deed to be done later.
This assumption of the learned Single Judge was found to be faulty by the Division Bench.
The Division Bench noticed that all that the plain tiff has to prove is that he or his predecessor in title was in possession at any time between 11.2.1947 and 11.2.1959.
If between 11.2.1947 and 17.7.1947 the possession of Varada Reddi was possession held on behalf of Dasu Reddi then it could be held that the plaintiff 's predecessor in title had been in possession within 12 years prior to the suit.
The Division Bench held that the transaction of 10.7.1946 was in fact and in law only an oral agreement for sale and that on the assumption that it was an oral sale the learned Single Judge failed to apply the legal position as enunciated in Annamalai vs Muthiah, (Supra).
They observed that possession as held by Varada Reddi subsequent to 10.7.1946 and before he instituted the suit in 1949 for specific performance was in the consciousness that it was only possession on behalf of the real owner.
Even if the execution of an infructuous sale deed on 17.7.1947 by Dasu Reddi in favour of Varada Reddi is assumed to have altered the complexion of events in any manner, the possession by Varada Reddi from 1.7.1946 upto 17.7.1947 at least was clearly possession held on behalf 198 of Dasu Reddi, the predecessor in title of the plaintiff.
If the plaintiff 's predecessor had been in possession of the suit property on 17.7.1947, that is to say within 12 years prior to the institution of the present suit on 11.2.1959, there can be little doubt that the plaintiff must succeed on the question of possession as well.
In this view the judg ment of the learned Single Judge was reversed.
There is no controversy that the plaintiff has to establish subsisting title by proving possession within 12 years prior to the suit when the plaintiff alleged dispos session while in possession of the suit property.
The first appellate court as well as the second appellate court pro ceeded on the basis that the plaintiff is not entitled to succeed as such possession has not been proved.
The concur rent findings that the plaintiff had title inspite of the decree for specific performance obtained against him, when that decree had not been executed are not assailed by the appellant in the High Court.
The appellant cannot, there fore, urge before us on the basis of the findings in the earlier suit to which he was not a party that exhibit A. 1 sale deed is one without consideration and does not confer valid title on the plaintiff.
The sole question that has been considered by the High Court is that of subsisting title.
We have to consider whether the question of law as to the character of the possession Varada Reddi had between 10.7.1946 and 17.7.1947 is adverse or only permissive.
In the case of an agreement of sale the party who obtains possession, acknowledges title of the vendor even though the agreement of sale may be invalid.
It is an acknowledgement and recognition of the title of the vendor which excludes the theory of adverse possession.
The well settled rule of law is that if person is in actual possession and has a right to possession under a title involving a due recogni tion of the owner 's title his possession will not be regard ed as adverse in law, even though he claims under another title having regard to the well recognised policy of law that possession is never considered adverse if it is refera ble to a lawful title.
The purchaser who got toto possession under an executory contract of sale in a permissible charac ter cannot be heard to contend that his possession was adverse.
In the conception of adverse possession there is an essential and basic difference between a case in which the other party is put in possession of property by an outright transfer, both parties stipulating for a total divestiture of all the rights of the transferor in the property, and in case in which, there is a mere executory agreement of trans fer both parties contemplating a deed of transfer to be executed at a later point of time.
In the latter case the principle of estoppel applies estopping the transferee from contending that his possession, while the contract remained executory in stage, 199 was in his own right and adversely against the transferor.
Adverse possession implies that it commenced in wrong and is maintained against right.
When the commencement and continu ance of possession is legal and proper, referable to a contract, it cannot be adverse.
In the case of an executory contract of sale where the transferee is put in possession of the property in pursuance of the agreement of sale and where the parties contemplate the execution of a regular registered sale deed the animus of the purchaser throughout is that he is in possession of the property belonging to the vendor and that the former 's title has to be perfected by a duly executed registered deed of sale under which the vendor has to pass on and convey his title.
The purchaser 's possession in such cases is of a derivative character and in clear recognition of and in acknowledgement of the title of the vendor.
The position is different in the case where in pursuance Of an oral transfer or a deed of transfer not registered the owner of a property transfers the property and puts the transferee in possession with the clear animus and on the distinct understanding that from that time onwards he shall have no right of title to the property.
In such a case the owner of the property does not retain any vestige of right in regard to the property and his mental attitude towards the property is that it has ceased to belong to him altogether.
The transferee after getting into possession retains the same with the clean animus that he has become the absolute owner of the property and in complete negation of any right or title of the transferor, his enjoyment is solely as owner in his right and not derivatively or in recognition of the title of any person.
So far as the vendor is concerned both in mind and actual conduct, there is a total divestiture of all his right, title and interest in the property.
This applies only in a case where there is a clear manifestation of the intention of the owner to divest himself of the right over the property.
On the other hand in the case of an executory contract the possession of the transferee until the date of registration of the conveyance is permissive or derivative and in law is deemed to be on behalf of the owner himself.
The correctness of the decision in Annamalai vs Muthiah (supra) cannot, therefore, be doubted.
The parties are concluded by the finding of the Division Bench that the transaction of 10.7.1946 between Dasu Reddi and Varada Reddi is only an agreement for sale and not an oral sale of the property.
If that be so the possession of Varada Reddi in pursuance of such an agreement of sale and in the expectation that there would be a com plete divestiture of all the rights of the owner in his favour on execution of a regular sale deed, until the execu tion of the sale deed, 200 was only possession on behalf of Dasu Reddi.
Such possession having been within a period of 12 years prior to the present suit, the plaintiff succeeds in having established the possession of his predecessor ininterest within 12 years prior to the date of the suit.
The plaintiff is, therefore, entitled to a decree in his favour.
The decision of the Letters Patent Bench of the High Court is correct and we confirm the same.
The appeal is accordingly dismissed with costs.
G.N. Appeal dismissed.
| A, the owner of the land in question, conveyed posses sion of it to B under an oral agreement of sale.
A deed was drawn up within about a week, but before it could be regis tered, A died and his sons executed a sale deed in respect of the land, in favour of C. Aggrieved, B instituted a suit against C and A 's sons for specific performance.
B died during the pendency of the suit and his son D was impleaded as his legal representative.
The suit was decreed in favour of D.
Though the decree became final, it was not executed.
C filed a suit alleging that he was put in possession by D and that E and others trespassed into the property.
E contested the suit on the ground that D had orally trans ferred his rights and conveyed possession to him for valu able consideration.
The Trial Court decreed the suit.
On appeal, the first appellate court held that C was not enti tled to a decree.
On appeal to the High Court, the Learned Single Judge held that B 's possession was adverse to A on the assumption that a sale had been effected orally leaving only execution of the sale deed to be done later and so, C would not be entitled to add the period before the sale in his favour on 6.6.49 for the purpose of calculating the period of posses sion for 12 years, prior to the suit, and that such posses sion could not enure to his benefit under the .
However, the concurrent findings of the Trial Court and the first Appellate Court on the question of C 's title had not been challenged.
The Division Bench reversed the above judgment holding that the Learned Single Judge failed to apply the correct legal position on the assumption that the transaction of 10.7.46 was only an oral sale.
This appeal by special leave has been filed by E against the judgment of the Division Bench.
194 Dismissing the appeal, this Court, HELD: 1.
If a person is in actual possession and has a right to possession under a title involving a due recogni tion of the owner 's title his possession will not be regard ed as adverse in law, even though he claims under another title having regard to the well recognised policy of law that possession is never considered adverse if it is refera ble to a lawful title.
The purchaser who got into possession under an executory contract of sale in a permissible charac ter cannot contend that his possession was adverse.
Adverse possession implies that it commenced in wrong and is main tained against right.
When the commencement and continuance of possession is legal and proper, referable to a contract, it cannot be adverse.
[198F G; 199A] 2.1 In the case of an executory contract of sale where the transferee is put in possession of the property in pursuance of the agreement of sale and where the parties contemplate the execution of a regular registered sale deed and animus of the purchaser throughout is that he is in possession of the property belonging to the vendor and that the former 's title has to be perfected by a duly executed registered deed of sale under which the vendor has to pass on and convey his title.
The purchaser 's possession in such cases is of a derivative character and in clear recognition of and in acknowledgement of the title of the vendor.
The position is different in the case where in pursuance of an oral transfer or a deed of transfer not registered the owner of a property transfers the property and puts the transferee in possession with the clear animus and on the distinct understanding that from that time onwards he shall have no right of title to the property.
In such a case the owner of the property does not retain any vestige of right in regard to the property and his mental attitude towards the property is that it has ceased to belong to him altogether.
The transferee after getting into possession retains the same with the clear animus that he has become the absolute owner of the property and in complete negation of any right or title of the transferor, his enjoyment is solely as owner in his right and not derivatively or in recognition of the title of any person.
So far as the vendor is concerned both in mind and actual conduct, there is a total divestiture of all his right, title and interest in the property.
This applies only in a case where there is a clear manifestation of the intention of the owner to divest himself of the right over the property.
On the other hand in the case of an executory contract the possession of the transferee until the date of registration of the conveyance is permissible or derivative and in law is deemed to be on behalf of the owner himself.
[199B F] 195 2.2 In the instant case, the parties are concluded by the finding of the Division Bench that the transaction of 10.7.46 was only an agreement for sale and not an oral sale of the property.
[199G] Annamalai Chettiar and Another vs Muthiah Chettiar and Another, ILR 19651 Madras 254 approved.
|
ons Nos. 69 and 71 of 1967.
Writ Petition under article 32 of the Constitution of India for the enforcement of fundamental rights.
R. H. Dhebar, R. Gopalakrishnan and section P. Nayar, for the respondent (in both the petitions).
The Judgment of the Court was delivered by Wanchoo, C. J.
These two petitions under Art 32 of the Constitution raise common questions of law and will be dealt with together ' The petitioners were detained under, r 30(1)(b) of the Defence of India Rules, 1962 (hereinafter referred to as the Rules), under orders of the Government of Jammu & Kashmir in March, 1965.
Their detention was continued from time to time after review under r.30A.
One of such reviews was made in February, 1967.
At that time the scope of review was governed by judgment dated June 1, 1965 of Shah J. (Vacation Judge) in Sadhu Singh vs Delhi Administration(1).
In that case it was held that r.30A re lating to re view did not require, a judicial approach to the question (1) ; 199 of continuance of detention.
No opportunity therefore was given to the petitioners to represent their cases when the review was made in February, 1967 and their detention was continued for a further period of six months.
Then came the judgment of this Court in P. L. Lakhanpal vs the Union of India.(1) That judgment overruled the decision of Shah J. and held that the function of review under r.30A was quasi judicial and therefore in exercising it, rules of natural justice had to be complied with.
In view of this judgment what the respondent did was to hold another review in April, 1967.
At that time notice was given to the petitioners and they were given a hearing.
Thereafter order was passed in each case on April 27, 1967 by which the State Government directed the continuance of the detention orders for a further period.
In the meantime the present petitions had been filed on March 30, 1967 and were based on the judgment of this Court in Lakhanpal 's case(1).
It is not disputed on behalf of the respondent that Lakhanpal 's case(1) will apply to the present petitions and the petitioners will be entitled to release because the procedure of a quasi judicial tribunal was not followed when earlier reviews were made from August, 1965 to February, 1967.
Reliance is however placed on behalf of the respondent on the review made in April, 1967 and it is urged that that review was in accordance with the view taken by this Court in Lakhanpal 's(1) case and therefore continuance of detention thereafter is justified.
Further it is urged that even if this contention is not correct the State Government has power to pass a fresh order of detention on the same facts, and even if we allow the present petitions, we should make it clear that the State Government has such power.
It is urged in this connection that the judgment of Bhargava J. in Avtar Singh vs The State of Jammu and Kashmir(1) is not correct.
The first question therefore is whether the orders of review dated April 27, 1967 are sufficient for the continuance of detention, even though the earlier orders of review passed from August, 1965 to February, 1967 were not properly made in view of the judgment of this Court in Lakhanpal 's case(1).
Reliance in this connection is placed on the judgment of this Court in A. K. Gopalan vs The Government of India.(1) In that case it was held that "it is well settled that in dealing with a petition for habeas corpus the court has to see whether the detention on the date on which the application is made is legal if nothing more has intervened between the date of the application and the date of hearing.
" So it is urged for the respondent that as the order passed on review (1) ; (2) W. Ps.
68, 70, 79, 89, 92, of 1967 (decided on June 9, 1967).
(3) ; 200 under r.30A continuing detention on April 27, 1967 was in accordance with the judgment of Lakhanpal 's case(,) the earlier orders of review made between August, 1965 and February, 1967 which were improper made no difference.
We cannot accept this contention.
In Gopalatn 's case(1) what had happened was that a fresh order was made on March 4, 1965 and the detention was under that order.
The principle laid down in that case is unexceptionable; but the question is whether that principle applies to the facts of the present case.
In Gopalan 's case( ' ') the question that arose was whether the fresh order of March 4, 1965 under which detention was made was legal, and the Court did not look at the earlier order which had been cancelled by the fresh order of March 4, 1965.
In the present cases however no fresh order was made on April 27, 1967 and this distinguishes the present cases from Gopalan 's case(1).
Rule 30A of the Rules was originally not in the Rules and was introduced some time later.
Before the introduction of r.30A the position was that a detention made under r.30 would be of indefinite duration.
But r.30A provided for review of detention orders passed under r 30, and such review was to be made at an interval of not more than six months.
On such review the Government had to decide whether detention orders should continue or be cancelled.
The effect of r.30 along with r.30A (9) would therefore be that the detention order passed under r.30 would be good only for six months and unless there was a review and the detention order was continued the detenu would have to be released.
We cannot accept the contention on behalf of the respondent that the detention order would continue even after six months and the detenu may be detained under that order even thereafter without an order under r.30A (9), continuing the order of detention.
It is true that r.30A(9) only says that the Government shall decide whether the detention order should be continued or cancelled.
That however does not mean that if the Government omits to make a review under r.30A within six months the detention order will still continue and the detenu continue to be detained thereunder.
The provisions in r.30A are designed to protect the personal liberty of the citizens of this country and that is why that rule provides that every detention order shall be reviewed at an interval of not more than six months.
This is a mandatory provision and if it is not complied with and the Government omits to review the detention order within six months the order must fall and the detenu must be released.
of course when the Government actually reviews the order it will either continue that order or cancel that order.
That is why r.30A (9) says that on review the Government shall decide whether the order should be continued or cancelled,.
But that does not mean that if for any reason (say, by oversight) the Government omits to review an order within the time provided in the first part of r.30A(9), the detention can continue even though there has been (1) ; (2) ; 201 no review.
What applies to an omission to review an order under r.3OA(9) applies equally to a case where a review is not in accordance with law as held by this Court in Lakhanpal 's case(1).
Where therefore there has been no review under r.30A(9) or a review is not in compliance with the, provisions thereof, as explained in Lakhanpal 's case(1), the result is that the original detention order though it may have been good when it was passed, falls and the detention after the first period of six months becomes illegal.
Further if there is no review of the detention order in the manner provided by law, as explained in Lakhanpal 's case(1) the original order falls after six months and there is nothing to continue thereafter.
In the present cases the orders were passed in March, 1965 and should have been reviewed after every six months in the manner explained in Lakhanpal 's case(1).
That admittedly was not done upto February, 1967, though a number of reviews were made inbetween.
Consequently orders of detention passed in March, 1965 fell after six months and there were no orders to continue thereafter.
When therefore the State Government ordered the continuance of detention orders on review on April 27, 1967, in accordance with the procedure indicated in Lakhanpal 's case(1), there was no order to be continued because in between the reviews were not proper and the detention had become illegal.
In these circumstances, the principle laid down in Gopalan 's case(2) cannot apply to the facts of the present case, for we cannot ignore that between September, 1965 and April, 1967 there was no proper review as required by r.30A(9) and the detention for all that period was illegal and could not be saved by the original order of March,1965 which must be deemed to have come to an end, after six months, in the absence of a proper review under r.30A(9).
So there was no order which could be continued on April, 1967, and therefore the petitioners would be entitled to release on that ground. 'This brings us to the next question, namely.
whether it is open to the State Government to pass a fresh order in the circumstances of the present cases.
In this connection reliance is placed on behalf of the respondent on two cases of this Court Ujagar Singh vs The State of Punjab (3) and Godavari Shamrao Parulekar vs State of Maharashtra and others(4).
The first case was under the Preventive Detention Act (IV of 1950).
In that case it was held that "if the authority making an order is satisfied that the ground on which a detenu was detained on a former occasion is still available and that there was need for detention on its basis no mala fides can be attributed to the authority from the fact that the ground alleged for the second detention is the same as that of the (1) ; (3) ; (2) ; (4) ; 202 first detention.
" In the latter case what had happened was that detenues were first detained under the Preventive Detention Act.
Later 'that order was revoked and they were detained under r.30 of the Rules and the order was served in jail.
The second order of detention was apparently based on the same facts on which the first order of detention was passed.
This Court held that the second order of detention was perfectly valid and its service in jail did not make the detention illegal.
These cases certainly show that a fresh order of detention can be passed on the same facts, if for any reason the earlier order of detention has to be revoked by the Government.
Further we do not find anything in the Defence of India Act (hereinafter referred to as the Act) and the Rules which forbids the State Government to cancel one order of detention and pass another 'in its place.
Equally we do not find anything in the Act or the Rules which will bar the Government from passing a fresh order of detention on the same facts, in case the earlier order of detention or its continuance is held to be defective for any reason.
This is of course subject to the fact that the fresh order of detention is not vitiated by mala fides.
So normally a fresh order of detention can be passed, on the same facts provided it is not mala fide, if for any reason the previous order of detention or its continuance is not legal on account of some technical defect as in the present cases.
This brings us to the consideration of the judgment of our brother Bhargava J. in Avtar Singh 's case(1), to which we have already referred.
Our learned brother held that where the original order of detention, as in these cases, was a good order for the first period of six months, it would not be open to the State Government to pass a fresh order of detention on the same facts after cancelling the order on the expiry of six months, for that would be going round the provisions of r.30 A, and that the only way in which detention could be continued after the first period of six months, where a good order was originally passed, was to make a review in a proper manner as indicated in the case of Lakhanpal.(2) Our learned brother also seems to have held that if a review was not made in a proper manner as indicated in Lakhanpal 's case(2), the Government would be completely powerless and could not detain the persons concerned by a fresh order.
In effect therefore our learned brother held that if a mistake is made by Government in the matter of review it could not correct it and the detenu must go free.
Now there is no doubt that if the Government resorts to the device of a series of fresh orders after every six months and thus continues the detention of a detenu, circumventing the provisions (1) W.Ps.
68, 70, 79, 89, 92, of 1967 (decided on June 9, 1967) (2) ; 203 of r.30 A for review, which, was interpreted by this Court in Lakhanpal 's case(1), gives some protection to the citizens of this country, it would certainly be acting mala fide.
Such a fresh order would be liable to be struck down, not on the ground that the Government has no power to pass it but on the ground that it is mala fide exercise of the power.
But if the Government has power to pass a fresh order of detention on the same facts in case where the earlier order or its continuance fails for any defect, we cannot see why the Government cannot pass such fresh order curing that defect.
In such a case it cannot be said that the fresh order is a mala fide order, passed to circumvent r.30 A. Take the present case itself.
The Government passed the original order of detention in March, 1965.
That order was good for six months and thereafter it could only continue under r.30 A on orders passed under r.30 A(9).
The Government did pass orders under r.30 A (9) and we.
cannot say in view of the judgment in Sadhu Singh 's case(2) that the Government went wrong in the procedure for review.
It was only after the judgment of this Court in Lakhanpal 's case(1) that the manner of review became open to objection, with the result that the continuance of the order in these two cases failed and the detention became illegal.
If in these circumstances the Government passes a fresh order under r.30, it cannot be said that it is doing so mala fide in order to circumvent r.30 A (9).
In actual fact the Government had complied with the provisions of r.30 A(9) and what it did was in accordance with the judgment of this Court in Sadhu Singh 's case(2).
It is true that after Lakhanpal 's case(1) the manner in which the review was made became defective and therefore the continuation of detention became illegal.
Even so, if the Government decides to pass a fresh order in order to cure the defect which has now appeared in view of the judgment of this Court in Lakhanpal 's case(1), it would in our view be not right to say that the Government cannot do so because that would be circumventing r.30 A.
We do not think that we should deprive the Government of this power of correcting a defect particularly in the context of emergency legislation like the Act and the Rules.
The Courts have always the power to strike down an order passed in mala fide exercise of power, and we agree with Bhargava, J. to this extent that if the Government, instead of following the procedure under r.30 A as now laid down in Lakhanpal 's case(1) wants to circumvent that provision by passing fresh orders of detention on the same facts every six months, it will be acting mala fide and the court will have the power to strike down such mala fide exercise of power.
But in cases.
like the present, where the continuance became defective after the judgment of this Court in Lakhanpal 's case,(1) we can see no reason to deny power to Government to rectify the defect by passing a fresh order of detention.
Such an order in such circumstances (1) ; (2) ; 204 cannot be called mala fide, and if the Government has the power to pass it which it undoubtedly has, for there is no bar to a fresh order under the Act or the Rules there is no reason why such a power should be denied to Government so that it can never correct a mistake or defect in the order once passed or in the continuation order once made.
We are therefore of opinion that the view taken in Avtar Singh 's case(1) insofar as it says that no fresh order can be passed even to correct any defect in an order continuing detention under r 30 A(9) is not correct.
We therefore allow the writ petitions and order the release of the petitioners.
But it will be open to the State Government to pass a fresh order of detention if it considers such a course necessary.
Petitions allowed R.K.P.S. (1) W. Pe. 68, 70, 79, 89, 92 of 1967 (decided on June 9, 1967).
| There was a cash credit in November 13, 1947, in the capital, account of the Appellant assessee whose accounting period was from November 13, 1947 to November 1, 1948.
The Income tax Officer assessed the said credit as income from undisclosed sources in the assessment for the assessment year 1949 50.
The Appellate, Assistant Commissioner relying on C.I.T. vs Darolia & Sons.
held that the amount was not taxable in the assessment year 1949 50.
The Income tax Officer thereupon assessed the amount in 1948 49 after having issued in November 1958 a notice under section 34(1) (a) of the Indian Income ' tax Act, 1922.
He rejected the appellant 's contention that notice under the said section was timebarred.
In appeal the Appellate Assistant Commissioner held that in the earlier appeal there was no finding that the credit represented the assessee 's income or that it should be assessed in the year 1948 49 and that consequently the notice under section 34 issued in November 1958, was not saved by the second proviso to section 34(3) of the Act.
The appeal filed by the Revenue was allowed by the Tribunal and in reference the Madras High Court relying on its own ruling in A.S. Khader Ismail vs Income tax Officer, upheld the order of the Tribunal.
The appellant came to this Court and relied on this Court 's decision in Income Tax Officer A Ward Sitapur vs Murlidhar Bhagwandas in which the aforesaid Madras decision had been overruled.
The Revenue urged that in answering the reference the effect of section 2 of the Income tax (Amendment) Act 1959 must be taken into consideration.
To this the appellant objected that the point was outside the scope of the questions of law referred by the Appellate Tribunal to the High Court.
HELD:(i) The view taken by the Madras High Court as to the scope of the word 'finding ' in A. section Khader Ismail 's case and followed by it in the present case had been overruled, by this Court.
Accordingly the department could not take advantage of the second proviso to section 34(3).
[20E F] Income Tax Officer, A Ward Sitapur vs Murlidhar Bhagwan Das, , applied (ii)However, the impact of section 2 of the Amending Act of 1959 had to be considered before the reference could be properly answered.
Although the question had not been raised before the Tribunal or the High Court it was only an aspect of the question of limitation which had been referred.
All that section 66(1) requires is that the question of law which is referred to the High Court and which the High Court is to decide must be the question which was in issue before 18 the Tribunal.
When the question itself was under issue there is no further limitation imposed by the section that the reference should be limited to those aspects of the question which had been argued before the Tribunal and it will be an over refinement of the position to hold that each aspect of a question is itself a distinct question for the purpose of section 66(1) of the Act.
[22B D] C.I.T. Bombay vs Scindia Steam Navigation Co. Ltd. 42 I.T.R. 589, applied.
Onkarmal Mehraj vs C.I.T., Bombay 1, , and section C. Prashar vs Vasantsen Dwarkadas, ; , referred to.
[On the above view the case was remanded to the High Court for examining the question of law referred to it after considering the impact of the Amendment Act of 1959.]
|
Civil Appeal No. 2422 of 1978.
Appeal by Special Leave from the Judgment and Order dated 13 2 1978 of the Kerala High Court in TRC No. 63/76.
M.M. Abdul Khader, V.J. Francis and M.A. Firoz for the Appellant.
The Judgment of the Court was delivered by BHAGWATI, J.
The questions of law which arise for determination in this appeal lie in a very narrow compass and do not present any difficulty in answering them.
They are the usual type of questions that arise under the Sales Tax legislation, namely, whether a particular commodity sold or purchased by the assessee falls within one entry or another.
The assessee always contends that it falls within an entry which attracts lesser rate of tax while the Revenue invariably seeks to bring it within the entry attracting a larger rate of tax.
Two questions arise here for consideration.
One question is whether certain ornaments and other articles of gold purchased by the assessee with a view to melting them and making new ornaments 940 or other articles out of the melted gold fall within Entry 56 in the First Schedule of the Kerala General Sales Tax Act, 1963 (hereinafter referred to as "the Act") which reads "Bullion and Specie".
If the ornaments and other articles of gold purchased by the assessee fall within this Entry, the turn over of purchases of these goods would be liable to be taxed at the rate of 1 per cent, while it would have to suffer tax at the rate of 3 per cent if these goods do not fall within the Entry and are taxable under section 5A read with sec.
5(1) (ii) of the Act.
The other question relates to taxation of the turnover of sales of G.I. Pipes effected by the assessee and it raises the point whether G.I. Pipes sold by the assessee fall within Entry 26A in the First Schedule to the Act which reads "Water Supply and Sanitary Fittings".
If they do not fall within this Entry, the turn over of their sales would be liable to be taxed at the rate of 3 per cent under section 5(1) (ii) of the Act, but if they do, then the rate of tax would be 7 per cent.
The Sales Tax Officer, and in appeal the Appellate Assistant Commissioner decided both the questions against the assessee and taxed the turn over of purchases of ornaments and other articles of gold at the rate of 3 per cent and the turn over of sales of G.I. Pipes at the rate of 7 per cent.
The Tribunal, on further appeal by the assessee, disagreed with the view taken by the tax authorities and holding that the ornaments and other articles of gold purchased by the assessee were "Bullion and specie" within the meaning of Entry 56 and G.I. Pipes sold by the assessee were not covered by the expression "water supply and sanitary fittings" in Entry 26A, taxed the assessee at the lesser rates as claimed by him.
The Revenue thereupon took the matter by way of revision to the High Court, but the High Court also took the same view and affirmed the judgment of the Tribunal.
This decision of the High Court is assailed in the present appeal preferred by the Revenue after obtaining special leave from this Court.
We will first consider the question whether the ornaments and other articles of gold purchased by the assessee fall within the description of "Bullion and specie" given in Entry 56.
There are two expressions in this Entry which require consideration; one is "bullion" and the other is "specie".
Now there is one cardinal rule of interpretation which has always to be borne in mind while interpreting entries in Sales Tax legislation and it is that the words used in the entries must be construed not in any technical sense nor from the scientific point of view but as understood in common parlance.
We must give the words used by the legislature their popular sense meaning "that sense which people conversant with the subject matter with 941 which the statute is dealing would attribute to it".
The word "bullion" must, therefore, be interpreted according to ordinary parlance and must be given a meaning which people conversant with this commodity would ascribe to it.
Now it is obvious that "bullion" in its popular sense cannot include ornaments or other articles of gold.
"Bullion" according to its plain ordinary meaning means gold or silver in the mass.
It connotes gold or silver regarded as raw material and it may be either in the form of raw gold or silver or ingots or bars of gold or silver.
The Shorter Oxford Dictionary gives the meaning of "bullion" as "gold or silver in the lump; also applied to coined or manufactured gold or silver considered as raw material." So also in Jowitt 's Dictionary of English Law and Wharton 's Law Lexicon we find that the following meaning is given for the word "bullion", "uncoined gold and silver in the mass.
These metals are called so, either when melted from the native ore and not perfectly refined, or where they are perfectly refined, but melted down into bars or ingots, or into any unwrought body, of any degree of fineness".
It would, therefore, be seen that ornaments and other articles of gold cannot be regarded as "bullion" because, even if old and antiquated, they are not raw or unwrought gold or gold in the mass, but they represent manufactured or finished products of gold.
Nor do they come within the meaning of the expression "specie".
The word "specie" has a recognised meaning and according to Webster 's New World Dictionary, it means "coin, as distinguished from paper money".
The Law Dictionaries also give the same meaning.
Wharton 's Law Lexicon and Jowitt 's Dictionary of English Law state the meaning of "specie" as "metallic money" and in Black 's Law Dictionary, it is described as "coin of the precious metals, of a certain weight and fineness, and bearing the stamp of the Government, denoting its value as currency" while "Words and Phrases Permanent Edition Vol.
39A" also gives the same meaning.
Therefore, according to common parlance, the word "specie" means any metallic coin which is used as currency and if that be the true meaning, it is obvious that ornaments and other articles of gold cannot be described as "specie".
It would thus seem clear that the ornaments and other articles of gold purchased by the assessee do not fall within Entry 56 and they are, accordingly, liable to be taxed not at the lesser rate of 1 per cent applicable to "bullion and specie" but at the general rate of 3 per cent under section 5A read with Section 5(1) (ii) of the Act.
That takes us to the second question in regard to taxability of the turnover of sales of G.I. Pipes made by the assessee.
The Revenue 942 contended that G.I. Pipes fall within the description "water supply and sanitary fittings" in Entry 26A so as to be exigible to tax at the higher rate of 7 per cent while the assessee contended that they are not covered by this expression and are, therefore, taxable only at the lesser rate of 3% under sec.
5(1) (ii) of the Act.
The determination of this question turns on the true interpretation of the words "water supply and sanitary fittings".
So far as the expression "sanitary fittings" is concerned, it has received judicial interpretation by this Court in State of Uttar Pradesh vs Indian Hume Pipe Ltd. where it has been laid down that "sanitary fittings" according to the popular sense of the term mean such pipes or materials as are used in lavatories, urinals or bath rooms of private houses of public buildings.
The G.I. Pipes sold by the assessee would, therefore, fall within the description of "sanitary fittings" only if it can be shown and the burden of so doing would be on the Revenue, that they were meant for use in lavatories, urinals or bath rooms.
It does not appear that the attention of the assessee and the tax authorities was drawn to this aspect of the question and hence no material was brought on record which would throw light on the question as to what was the use for which the G.I. Pipes were meant.
If the G.I. Pipes were heavy and intended to be laid underground for carrying supply of water from one place to another, they would obviously not be "sanitary fittings".
This is, however, a question which has not been considered by the Revenue authorities and the case would, therefore, have to be remanded to the Appellate Assistant Commissioner for the purpose of determining whether having regard to the meaning which this Court has placed on the expression "sanitary fittings", the G.I. Pipes sold by the assessee fall within that description.
But the Revenue contended that even if the G.I. Pipes are not "sanitary fittings" within the meaning of that expression, they would still fall within the description "water supply. .fittings".
Now, it must be remembered that the category of goods in Entry 26A is not described as "water supply pipes" but as "water supply and sanitary fittings".
The use of the word "fittings" suggests that the expression is intended to refer to articles or things which are fitted or fixed to the floor or walls of a building and they may in a given case include even articles or materials fitted or fixed outside, provided they can be considered as attached or auxiliary to the building or part of it, such as, for example, a pipe carrying faecal matter from the commode to the sceptic tank, but they cannot include pipes laid underground 943 for carrying water supply.
Moreover, the words "water supply. . fittings" do not occur in isolation, but they are used in juxtaposition of the words "sanitary fittings".
The entire expression "water supply and sanitary fittings" is one single expression and the words "water supply. fittings" must receive colour from the immediately following words "sanitary fittings".
We are, therefore, of the view that the expression "water supply. fittings" in the context in which it occurs means such pipes or materials as are meant for use for supply of water to or in lavatories, urinals or bath rooms of private houses or public buildings and they do not include heavy pipes which are laid underground as mains for carrying water supply from one area or place to another.
Therefore, even for the purpose of determining whether G.I. Pipes sold by the assessee are "water supply. . fittings", it would have to be found as to what is the purpose for which they were meant to be used and since the question has not been approached from this point of view, we think it desirable that the case be sent back to the Appellate Assistant Commissioner for the purpose of determining whether, in the light of this meaning placed by us on the words "water supply. fittings", the G.I. Pipes sold by the assessee could be said to be "water suply. . . fittings.
" We, therefore, allow the appeal, set aside the orders made by the High Court, the Tribunal and the Appellate Assistant Commissioner and hold that so far as the ornaments and other articles of gold purchased by the assessee are concerned, they were liable to be taxed at the general rate of 3 per cent under section 5A read with section 5(1) (ii) of the Act and so far as G.I. Pipes sold by the assessee are concerned, we remand the case to the Appellate Assistant Commissioner for the purpose of deciding on the basis of the existing material as also such further material as may be adduced, whether G.I. Pipes sold by the assessee fell within the description "water supply and sanitary fittings" so as to be exigible to sales tax at the higher rate of 7 per cent under Entry 26A.
There will be no order as to costs of the appeal.
N.V.K. Appeal allowed.
| Dismissing the appeal by special leave, the Court ^ HELD: 1.
Having due regard to the age of the accused Munni Marandi and to the absence of any overt act, a sentence of two years R.I. would, in the circumstances of his case meet the ends of justice for the offence u/s 149 read with Section 326 I.P.C. [587 G H] 2.
Absence of legislation cannot be made up for by judicial legislation, Babua Marandi was aged 15 years at the time of the offence and there is no Children Act in Bihar.
Though the conviction or sentence cannot be interfered with, in the hapless circumstances of the case and in the helpless situation of legislative vacuum all that this Court can do is to direct that Babua Marandi be placed either in an open prison or in a model prison or any other prison available in the State where young offenders are kept apart from the adult offenders.
The special directions for doing so is that adolescents should be separated from adults in prison campuses for obvious reasons.
[588C E]
|
Civil Appeal Nos.
2330 2331 of 1969.
Appeals by Special Leave from the Judgment and order dated 17/ 18 1 69 of the Gujarat High Court in Second Appeal No. 187 and 857/61.
H. section Parihar and I. N. Shroff for the Appellant.
K. J. John for the Respondent.
The Judgment of the Court was delivered by KAILASAM, J.
These two Civil Appeals are by the Kathiawar Industries Ltd. by special leave against the judgment of the Gujarat High Court holding that the appellants are liable to pay octroi duty on uncrushed salt which is brought by the appellant to the factory situate within the octroi limits and crushed there.
The appellant is running a salt manufacturing works at Jaffrabad called "Nawabsidi Mohmad Khan Salt Works".
The company had constructed salt works, grinding mills, trolly tracks and a jetty at e port site.
The major portion of the salt works is situate out of the Municipal limits.
The salt is manufactured outside the municipal limits.
The grinding mills and the part of the trolly track leading to jetty come within the municipal limits of the respondent Jaffrabad Municipality.
The Municipality by a notice dated 3 1 1955 demanded from the appellant Rs. 7289 6 0 as arrears of octroi.
The appellant paid under protest and filed the suit out of which this appeal arises before the Civil Judge Gohilwad, District Bhavnagar, against the respondent for a declaration that the salt manufactured by the appellant at its salt works at Jaffrabad and exported uncrushed and/or crushed was not liable to octroi duty and that the goods passing through municipal limits from the salt works are not liable to octroi duty, and for an injunction restraining the respondent from recovering an amount of Rs. 7289 6 0 and for a further injunction restraining the Municipality from hindering or obstructing the free passage of salt and goods and for the refund of Rs. 250.
The appellant also filed another suit for the refund of Rs. 1271 14 O paid under protest.
These two suits were decreed, the court declaring that the salt manufactured by 246 the appellant company is not liable to octroi duty.
The court also granted an injunction as prayed for.
The Municipality preferred appeals.
The appellate court while dismissing the appeals and confirming the decree of the trial court observed that the perpetual injunction granted by the trial court would not apply to the salt entering the octroi limits for consumption or use for the factory situated within the octroi limits of the municipality.
The Municipality preferred two Second Appeals to the High Court of Gujarat at Ahmedabad.
A Bench of the High Court allowed the appeals except to the extent of confirming the declaration that uncrushed salt of the appellant company which is directly sent from the stacking ground to the jetty is not liable to octroi provided the plaintiff company followed the prescribed rules and formalities.
The other claims in the suits were dismissed.
Against the judgment of the High Court the plaintiff company has preferred these two appeals.
The only question that falls for consideration in these civil appeals is whether the salt manufactured by the appellant outside the octroi limits of the respondent and brought by the appellant within those limits for the purpose of being crushed into powder in the appellant 's factory situate within those limits and then exported is liable to octroi.
The facts as found by the High Court and which cannot be questioned are that the salt works consists of (i) salt pans; (ii) stacking ground for the salt collected from the pans; (iii) trolly track for carrying salt from stacking ground to the factory within the octroi limits of the Municipality and to the jetty which is outside the octroi limits; (iv) jetty; (v) Power house; (vi) store room; (vii) workshop and (viii) grinding mill which is referred to in the evidence as the crushing factory.
(f these, the crushing factory and part of the trolly track (about 1400 feet) are within the octroi Limits of the Municipality and the rest outside those limits.
Thus it is not in dispute that only the crushing factory and part of the trolly track are within the octroi limits.
salt is prepared is the salt pans outside the octroi limit and the salt which is to be crushed is taken to the crushing factory and the salt which is not to be crushed is taken in uncrushed form directly to the jetty over the trolly track part of which passes through the octroi limits of the Municipality.
The salt that is crushed in the crushing factory is also after crushing taken by the trolly to the Jetty.
From the jetty the salt whether crushed or uncrushed, as the case may be, is exported by steamers.
The High Court has found that the salt which is taken to the crushing factory within the octroi limits for the purpose of crushing and is crushed and later taken to the jetty is liable to octroi.
The question is whether this levy is sustainable in law.
247 In 1948, on the formation of Saurashtra State, Jaffrabad came with in the territorial limits of the Saurashtra State and the Bombay District Municipal Act, 1901, as adapted and applied to Saurashtra State became applicable to Jaffrabad.
The Jaffrabad Municipality, the predecessor of the respondent, was constituted under the Bombay District Municipal Act.
1901 .
The State of Saurashtra, within the territorial limits of which the said Municipality was situate, published an ordinance on 31 8 1949 being ordinance, No. 47 of 1949 called the Saurashtra Terminal Tax and octroi ordinance, 1949.
The ordinance extended to the whole of The State of Saurashtra and came into force from 31 8 1949.
Section 2 clause (2) of the ordinance defines 'octroi ' as including a terminal tax.
Section 3 empowers the Government to impose terminal tax and octroi duty.
It provided that octroi may be imposed on "animals or goods, or both, within the octroi limits brought for consumption or use therein".
Under section 4 Government is empowered to make rules.
In exercise of the powers under the ordinance the State Government n made rules relating to octroi known as the Saurashtra octroi and Terminal Tax Rules on 8th December, 1949 which was published in the Saurashtra Gazette on 15th December, 1949.
Rule 3 is the charging rule which provides that octroi is payable in respect of goods set out in the Schedule I attached to the Rules and prescribed that octroi shall be payable at the nakas at rates set out therein.
Item No. 23 is "Salt for Factory".
Schedule II which gives a list of items which are exempt from octroi duty contains in item No. 6, a sub item in Gujarat which means "Salt".
Thus under item 23 "Salt for Factory" is liable to octroi duty.
The octroi duty may be imposed under section 3 on "animals or goods, or both, within the octroi limits brought for consumption or use therein".
Oh the facts found, namely that uncrushed salt was brought into the factory situate within the octroi limits and crushed salt taken away for export from the octroi limits can it be said that the salt thus brought are goods for consumption or use therein.
It is the common case that the uncrushed salt as brought into the octroi limits is crushed and in the crushed form sent to the jetty for export.
The finding of the High Court is that the crushing of the uncrushed salt and sending the crushed salt to the jetty within the octroi limits will be used therein as required under section 3.
In this appeal it is necessary for us to consider the scope of the I words "consumption" and "use".
The precise meaning to be given to the words "consumption" and "use will depend upon the context in 17 475 SCI/79 248 which they are used.
These words are of wide import.
In the Constitution of India, Entry 52 in List II in Seventh Schedule a right to impose tax "on entry of goods into the local area for consumption, use or sale" is conferred.
In Burmah Shell oil Storage & Distributing Co. India Ltd. vs The Belgaum Borough Municipality this Court after tracing the history of octroi and terminal tax observed that while terminal tax is a kind or octroi which is concerned only with the entry of goods in a local area irrespective of whether they would be used there or not, octrois were taxes on goods brought into the area for consumption.
use or sale.
They were leviable in respect of the goods put to some use or the other in the area but only if they were meant for such user.
In considering the meaning of the words "consumption" and "use" this Court observed in Burmah Shell case (supra) that the word consumption; its primary sense means the act of consuming and in ordinary parlance means the use of an article in a way which destroys, wastes or uses up that article.
But in some legal contexts, the word "consumption '? has a wider meaning.
It is not necessary that by the act of consumption the commodity must be destroyed or used up.
n M/s.
Anwarkhat Mahboob Co. vs The State of Bombay (now Maharashtra) and others, the question that arose was whether conversion of one commodity into another commercially different article would amount to consumption.
The facts of the case were that tobacco was purchased and in the Bombay State the stem and dust from the tobacco was removed.
It was contended that removing the stem and dust from the tobacco did not amount to consumption of tobacco or had the effect of converting tobacco into an article commercially different.
The Court held that when the tobacco was delivered in the State of Bombay for the purchase of changing it into a commercially different article, viz., biddipatti the delivery was for the purpose of consumption.
This Court followed the decision in State of Travancore Cochin and ors.
v Sanmugha Vilas Cashew Nut Factory and Ors.
wherein it was held that the raw cashew nuts were put through a process and new articles of commerce, namely cashew nut oil and edible cashew nut kernels were obtained.
The Court expressed the view that the raw cashew nut is consumed in the process.
On the facts the High Court found alter referring to the different processes of baking or roasting.
Shelling pressing, pealing etc.
that although most of the process is done by hand, part of it is also done mechanically by drums.
Oil is extracted out of the outer shells as a result of roasting.
After roast 249 ing the outer shells are broken and the nuts are obtained.
The i J poison is eliminated by pealing oil the inner skin.
By this process of manufacture.
the respondents really consume the raw cashew and produce new commodities.
This Court accepted this finding and observed at p. 113 that the raw cashew nuts, after they reach the respondents, are put through a process and new articles of commerce, namely, cashew nut oil and edible cashew nut kernels, are obtained.
In Anwarkhan Mahboob Co. (supra) this Court gave the example of the process through which cotton is put through before ultimately the final product the wearing apparel is consumed by men, women and children.
The Court observed: "But before cotton has become a wearing apparel, it passes, through the hands of different producers, each of whom adds some utility to the commodity received by him.
There is first the act of ginning; ginned Cotton is spun into yarn by the spinner; the spun yarn is woven into cloth by the weaver; the woven cloth is made into wearing apparel by the tailor.
" At each of these stages distinct utilities are produced and what is produced is at the next stage consumed.
It is usual, and correct to speak of raw cotton being consumed in ginning.
Applying this test the conclusion is irresistible that when uncrushed salt is crushed in the factory it is commercially a different article and the uncrushed salt must be held to have been consumed.
The word "use" is of wider import than "consumption".
It cannot be denied that the uncrushed salt has been used and by the user a new product crushed salt has come into existence.
On a consideration of the facts and circumstances of the case we are satisfied that octroi is leviable on the uncrushed salt which is brought to the octroi area and crushed as the activity would amount to both consumption and use of the uncrushed salt.
In the result the appeals fail and are dismissed with costs.
N.V.K. Appeals dismissed.
| HELD: 1.
The Court had no power to supply the vacancy under section 8(1) (b) of the only if the arbitration agreement did show that the parties did not intend to supply the vacancy.
The words in section 8(1) (b) are these: "and arbitration agreement does not show that it was intended that the vacancy should not be supplied".
If no such intention could be culled out from the arbitration clause, the Court could supply the vacancy.
[129 D E].
M/s. Prabhat General Agencies etc.
vs Union of India and Anr.
,[1971] 2 S.C.R. 564; affirmed.
Badam Satyanarayanamurthi vs Badam Venkataramanamurthi, A.I.R. 1948 Madras 312; distinguished.
|
Civil Appeal No. 2406 of 1968.
From the Judgment and Order dated 13 2 1968 of the High Court of Mysore at Bangalore in R.S.A. No. 477 of 1962.
M. section K. Sastri and M. section Narasimhan for the Appellant.
B. D. Bal, R. B. Datar and Rajan Yashpal for the respondents 1, 5, 6,10, 11, 17, 19, 23, 25, 26, 27, 35, 36 and 50.
The Judgment of the Court was delivered by BHAGWATI, J.
This appeal by special leave raises two questions relating to the interpretation of certain provisions of the Bombay Municipal Boroughs Act, 1925.
The facts giving rise to the appeal are few and may be briefly stated as follows: The respondents are rate payers liable to pay property tax in respect of their lands and buildings situate within the limits of the erstwhile Municipal Borough of Dharwar now converted into the Hubli Dharwar Municipal Corporation.
The Municipal Borough of Dharwar (hereinafter referred to as the Municipal Borough) was at the material time governed by the provisions of the Bombay Municipal Boroughs Act, 1925 (hereinafter referred to as the Act).
The Chief Officer of the Municipal Borough prepared an assessment list for the official year 1951 52 containing revised valuation and assessment of the lands and buildings situated within the limits of the Municipal Borough and published it on 1st May, 1951 in accordance with the provisions of the Act.
The respondents and several other rate payers filed their objections against the valuation and assessment in the assessment list and consequent on the decisions on the objections, modifications were made in the assessment list and the assessment list so finalised was authenticated on 24th July, 1952.
Since the authentication of the assessment list was made after the expiry of the official year, the respondents and other rate payers took the view that the assessment list was void and inoperative and the Municipal Borough was not entitled to recover property tax at the revised rates which were higher than the rates charged in the previous official years.
It seems, however, that from a few persons, whose names do not appear in the record property tax in accordance with the revised rates was collected by the Municipal Borough.
There was consequently an agitation amongst the rate payers and a body called the Citizens Welfare Association championing the causes of the rate payers addressed a communication dated 30th November, 1952 to the Director of Local Authorities requesting him to direct the Municipal Borough to refund the excess amount of property tax collected from the rate payers, because according to them the levy and collection of property 886 tax at the revised rates was illegal in view of the fact that the assessment list was authenticated only on 24th July, 1952 beyond the expiration of the official year for which the property tax was sought to be levied.
The Director of Local Authorities by his reply dated 16th December, 1952 informed the Citizens Welfare Association that the levy of property tax under the authenticated assessment list was, according to him, perfectly valid.
The President of the Municipal Borough thereafter issued a public notice dated 10th November, 1954 calling upon the rate payers to "pay immediately all the tax still due from them and extend their full cooperation to the Municipal Borough".
Since the Municipal Borough was determined to recover the amount of property tax from the rate payers at the enhanced rates appearing in the assessment list, the respondents, acting for and on behalf of themselves and other rate payers, filed a suit against the Municipal Borough on 6th June, 1955.
after giving notice dated 1st April, 1955 on the hypothesis that such notice was required to be given under s 206A of the Act.
The main reliefs claimed in the suit were, firstly, a declaration that the Municipal Borough was not entitled to recover property tax from the rate payers at the revised rates since the assessment list was authenticated beyond the expiration of the official year and secondly, an order directing the Municipal Borough to refund the excess property tax recovered by it from the rate payers.
The Municipal Borough in its written statement raised a preliminary objection that the suit was barred by limitation since it was not filed within six months of the accrual of the cause of action as required by section 206A of the Act and it also disputed the claim of the rate payers on merits on the ground that there was nothing in the Act which required that the assessment list should be authenticated before the expiration of the official year and that even if the assessment list was authenticated beyond the expiration of the official year, it did not have the effect of invalidating the assessment list.
The Trial Court negatived the plea of limitation based on section 206A of the Act and so far as the merits were concerned, held that since the authentication of the assessment list was admittedly made beyond the expiry of the official year, the assessment list was void and inoperative and the Municipal Borough was not entitled to levy and collect property tax at the revised rates on the strength of such assessment list.
The Municipal Borough, being aggrieved by this decision, filed an appeal to the District Court, but the appeal was unsuccessful and a second appeal to the High Court also failed.
Hence the present appeal by the Municipal Borough with special leave obtained from this Court.
The principal contention that was urged before us on behalf of the Municipal Borough was that on a true construction of the relevant provisions of the Act, the authentication of the assessment list, in client to impose liability to tax for the official year even if it is made the official year to which the assessment list relates and it is sufficient to impose liability to tax for the official year even if it is made at any time after the expiry of the official year and, therefore, in the present case, though the authentication of the assessment list for the official year 1951 52 was made on 24th July, 1952 after the expiry of 887 the official year, it was valid and effective and operated to create liability on the tax payers for payment of tax at the revised rates.
In order to appreciate this contention it is necessary to examine briefly the scheme of the Act in regard to assessment and levy of property tax.
The tascicunus or section from 78 to 89 deals with assessment of and liability to rates of buildings and lands.
These sections set out the procedure which must be followed for levy of rates on buildings and lands.
Section 78, sub section
(1) requires the Chief Officer to cause an assessment list of all lands and buildings in the Municipal Borough to be prepared containing various particulars set out in the section.
When the preparation of the assessment list is completed, the Chief Officer is required under section 80 to give public notice of the list and of the place where the list or a copy thereof could be inspected.
Simultaneously the Chief Officer has also to give public notice under sub section (1) of section 81 of a date not less than one month after such publication before which objections to the valuation or assessment in such list shall be made.
Sub section
(2) provides for the mode in which the objections must be made and sub section
(3) provides for the hearing and disposal of the objections by the Standing Committee and the proviso to this sub section permits the powers and duties of the Standing Committee to be transferred to another committee or to any officer of the government.
This sub section provides that before the objections are investigated and disposed of, the objector shall be given an opportunity of being heard in person or by an agent and it is only after the hearing the objectors that the objections can be disposed of.
When the objections are thus considered and disposed of, the assessment list with the modifications which may have been made consequent upon the decisions on the objections has to be authenticated in the manner set out in sub section
Sub section (5) provides that the list so authenticated shall be deposited in the Municipal office and shall be open for inspection during office hours to all rate payers.
The completion of this procedure leads to certain important consequences and they are set out in sub section
(6) which reads as follows: "(6) Subject to such alterations as may be made therein under the provisions of section 82 and to the result of any appeal or revision made under sec.
110, the entries in the assessment list so authenticated and deposited and the entries, if any, inserted in the said list under the provisions of sec.
82 shall be accepted as conclusive evidence (1) .
(ii) for the purposes of the rate for which such assessment list has been prepared, of the amount of the rate liable on such buildings or lands or both buildings and land in any official year in which such list is in force.
" section 82 then provides for amendment of assessment list in certain cases.
This section is rather material and it may be reproduced in full: "82.
(1) The standing committee may at any time alter the assessment list by inserting or altering an entry in respect of any property, such entry having been omitted from or 888 erroneously made in the assessment list through fraud, accident or mistake or in respect of any building constructed altered, added to or reconstructed in whole or in part, where such construction, alteration, addition or reconstruction had been completed after the preparation of the assessment list, after giving notice to any person interested in the alteration of the list of a date, not less than one month from the date of service of such notice, before which any objection to the alteration should be made.
(2) An objection made by any person interested in any such alteration, before the time fixed in such notice, and in the manner provided by sub section (2) of section 81, shall be dealt with in all respects as if it were an application under the said section.
(3) An entry or alteration made under this section shall subject to the provisions of section 110, have the same effect as if it had been made in the case of a building constructed altered, added to or reconstructed on the day on which such construction, alteration, addition or reconstruction was completed or on the day on which the new construction, alteration, addition or reconstruction was first occupied, whichever first occurs, or in other cases, on the earliest day in the current official year on which the circumstances justifying the entry or alteration existed; and the tax or the enhanced tax as the case may be shall be levied in such year in the proportion which the remainder of the year after such day bears to the whole year.
" The next important section is section 84 which provides for the adoption of valuation and assessment contained in the assessment list of any particular year for the year immediately following.
That section is in the following terms: "84.
(1) It shall not be necessary to prepare a new assessment list every year.
Subject to the condition that every part of the assessment list shall be completely revised not less than once in every four years, the Chief Officer may adopt the valuation and assessment contained in the list for any year, with such alterations as may be deemed necessary, for the year immediately following.
(2) But the provisions of sections 80, 81 and 82 shall be applicable every year as if a new assessment list had been completed at the commencement of the official year.
" The other sections in this group are not material and it is not necessary to refer to them.
It is clear from the scheme of these provisions that the official year is the unit of time for the levy of the tax.
The provisional assessment list is prepared for the official year.
This may be done before the commencement of the official year or even thereafter in the course of the official year.
Then objections are invited and when made, they are disposed of and amendments consequential upon the 889 decisions on the objections are carried out in the assessment list.
The assessment list is then authenticated.
The process of assessment and levy of the tax which begins with the preparation of the provisional assessment list is thus completed when the assessment list is authenticated.
The assessment list, when authenticated, becomes effective from the first day of the official year and gives rise to the liability to pay tax.
It is on the authentication of the assessment list that the liability of the rate payers to pay tax arises and the tax is levied on the rate payers.
This position would seem to be clear as a matter of plain interpretation and in any event there is a long line of decisions of the Bombay High Court commencing from Sholapur Municipality vs Governor General(1) and ending has Sholapur Municipal Corporation vs Ramchandra(2) which has consistently accepted this position and the learned counsel appearing on behalf of the Municipal Borough did not dispute the correctness of these decisions.
The only contention raised by him was as to within what time the assessment list must be authenticated, if it is to be a valid and effective assessment list.
It is to this contention that we must now address ourselves.
Now, once we take the view that the process of levying the tax is complete only when the assessment list is authenticated and it is only then that the tax is levied on the rate payers, it is difficult to resist the conclusion that the authentication must be made within the official year.
The tax, being a tax for the official year, must obviously be levied during the official year and since the levy of the tax is complete only when the assessment list is authenticated, it must follow a fortiori that the authentication on the making of which alone the levy of the tax is effected, must take place in the official year.
Any other view would result in an anomalous and rather absurd situation, namely, that the tax for an official year would be leviable at any time, even years after the expiration of the official year.
That could not possibly have been intended by the legislature.
That would indeed be a strange consequence in case of a tax which is annual in its structure and organisation and which is intended to be levied for each official year.
But, apart from this consideration, there is inherent evidence in the sections themselves which shows that the authentication was intended by the legislature to be a step which must be taken before the close of the official year.
Section 84 provides that it shall not be necessary to prepare a new assessment list every year but, subject to the conditions that every part of the assessment list shall be completely revised not less than once in every four years, the Chief Officer may adopt the valuation and assessment contained in the list for any year, with such alterations as may be deemed necessary, for the year immediately following.
This provision postulates that there would be an assessment list for each official year at the close of that official year, so that the valuation and assessment contained in it can be adopted by the Chief Officer for the immediately following year.
Now clearly the assessment list which can be adopted for the immediately following year 890 is the authenticated assessment list and it would, therefore, seem that the legislative assumption underlying this provision is that in respect or each official year, there would be an authenticated assessment list before the close of that official year, so that the valuation and assessment contained in it can be adopted by the Chief Officer for the immediately following year.
Otherwise, it would not be possible for the Chief Officer to adopt the valuation and assessment of the preceding official year and he would have to prepare a new provisional assessment list every time when the assessment list for the preceding year is not finalised and authenticated and this might lead to the rather startling result of there being several provisional assessment lists for different official years in the process of finalisation at the same time.
We should be slow to accept an interpretation which might lead to such a strange consequence.
Then again considerable light on this question is thrown by the provision enacted in section 82.
It is a well settled rule of interpretation that the Court is "entitled and indeed bound, when construing the terms of any provision found in a statute, to consider any other parts of the Act which throw light on the intention of the legislature, and which may serve to show that the particular provision ought not to be construed as it would be alone and apart from the rest of the Act.
" The statute must be read as a whole and every provision in the statute must be construed with reference to the context and other clauses in the statute so as, as far as possible, to make a consistent enactment of the whole statute.
Obviously, therefore, section 78 to 81 must be so construed as to harmonise with section 82.
They must be read together so as to form part of a connected whole.
Section 82, sub section
(1) provides for making of an amendment in the assessment list by insertion or alteration of an entry in certain events after hearing objections which may be made by any person interested in opposing the amendment.
Sub section (3) of section 82 makes the amendment effective from "the earliest day in the current official year on which the circumstances justifying the entry or alteration existed.
" The expression 'current official year ' in the context in which it occurs in section 82, sub section
(3) clearly signifies the earliest day in the official year which is current when the amendment in the assessment list takes place and that expression refers only to the official year which is running at the time when the amendment is made by insertion or alteration of an entry under sub section
(1) of section 82.
It would, therefore, seem clear, on a combined reading of sub sections
(1) and (3) of section 82, that an amendment, in order to be effective in levying tax for an official year, must be made during the currency of the official year.
That is now well settled as a result of several decisions of the Bombay High Court culminating in the Full Bench decision in Sholapur Municipal Corporation vs Ramchandra (supra) and we do not see any reason to take a different view.
Now the scheme of sections 78 to 81 is identical with that of section 82 and in both cases what is contemplated first is a proposal to which objections are invited and after the objections are investigated and disposed of, the assessment list in the one case and the altered entry in the other are authenticated giving rise to liability in the rate payer.
It must follow a fortiori that if an alteration in the assessment list, in order 891 to fasten liability on the rate payer, is required to be made during the currency of the official year, equally, on a parity of reasoning, the assessment list, in order to give rise to liability in the rate payer, must also be authenticated before the expiry of the official year.
Moreover, it is difficult to behave that the legislature did not intend that there should be any time limit in regard to the levy of tax for an official year and that the tax should be legally leviable at any time after the close of the official year.
There is, in our opinion, sufficient indication in the various provisions of the Act to show that the authentication of the assessment list, in order to be valid and effective, must be made within the official year, though the tax so levied may be collected and recovered even after the expiry of the official year.
We may point out that the Karnataka High Court is not alone in taking this view the present case.
This view has been consistently taken by the Bombay High Court in a series of decisions over the years and it has also been followed by the Gujarat High Court.
When we find that three High Courts having jurisdiction over the territories in which the Act is in force have all taken this view over a course of years, we do not think we would be justified in departing from it, merely on the ground that a different view is possible.
This Court is ordinarily loathe to interfere with the interpretation of a State statute which has prevailed in the State for a long number of years and which the State Legislature has chosen not to disturb by legislative amendment.
As a matter of fact, we find that, in the present case, the Bombay Legislature accepted this interpretation of sections 78 to 81 and gave legislative recognition to it by introducing section 84A by Bombay Act 53 of 1954.
That section provides that where in any year a new assessment list is prepared, or a list is revised, or the valuation and assessment contained in the list for the year immediately preceding is adopted with or without alteration, such new, revised or adopted assessment list shall be authenticated in the manner provided by section 81 at any time not later than the thirty first day of July of the official year to which the list relates, and if it is not so authenticated, then the State Government shall appoint such person or persons as it thinks fit to prepare, revise or adopt and authenticate the assessment list, and thereupon such person or persons shall duly authenticate such list at any time before the last day of the official year to which such list relates, and sections 78 to 81 or section 84 shall, as far as may be, apply to the preparation, revision or adoption of the list, as the case may be, by the person or persons appointed by the State Government.
It is clear from this provision that the Legislature not only did not amend the Act for the purpose of removing the time limit of the official year or enlarging such time limit, but on the contrary, made the time limit more stringent by providing that the authentication shall be made by the Municipal Borough not later than 31st July of the official year and if the authentication is not made within that time, the State Government shall be entitled to appoint a person for the purpose of authenticating the assessment list and the authentication by such person shall not.
in any event, be later than the last day of the official year.
We are, therefore, of the view that the assessment list, in order to be effective in levying the tax, not be authenticated before the expiry of the official year and if it is not, the assessment list would be void and inoperative and not give rise to liability in the rate payers to pay tax.
892 That takes us to the second contention urged on behalf of the Municipal Borough based on section 206A. That section provides inter alia that no suit shall lie against a municipality or against any officer or servant of any municipality in respect of any act done in pursuance or execution or intended execution of the Act, or in respect of any alleged neglect or default in the execution of the Act, unless it is commenced within six months next after the accrual of the cause of action.
The argument of the Municipal Borough was that the cause of action for the suit arose in favour of the respondents and other rate payers on 24th July, 1952 when the assessment list was authenticated and since the suit was not filed within six months from that date, it was barred by limitation under s.206A. This argument is plainly unsustainable.
The assessment list being authenticated on 24th July, 1952, after the expiry of the official year 1951 52, was void and inoperative and the respondents and other rate payers were entitled to ignore it as a nullity.
It is only when the Municipal Borough sought to recover the amount of tax from them on the strength of the assessment list, that it became necessary for them to challenge the validity of the assessment list with a view to resisting the demand of the Municipal Borough.
Then and then only could a cause of action be said to have accrued to them which they were required to enforce within a period of six months.
Now, in the present case, there is no material to show as to when notices of demand requiring the respondents and other rate payers to pay the amount of tax were issued by the Municipal Borough or which rate payers paid the amount of tax and when.
It is not possible to say, in the absence of such material, as to when the cause of action for filing the suit arose to the respondents and other rate payers and whether it arose within six months before the filing of the suit or at a point of time earlier than that.
The Municipal Borough cannot, in the circumstances, be held to have established that the suit was not commenced by the respondents and other rate payers within six months after the accrual of the cause of action and the plea of limitation based on section 206A must fail.
We are, therefore, of the view that there is no substance in the appeal and it must be dismissed, but in the peculiar circumstances of the case, we make no order as to costs.
V.P.S. Appeal dismissed.
| The appellant in this appeal was convicted by the Presidency Magistrate, Bombay, of an offence under section 66(b) of the Bombay Prohibition Act (Act XXV of 1949) and sentenced to undergo imprisonment till the rising of the court and to pay a fine of Rs., 250 or in default to undergo rigorous imprisonment for one month.
He preferred an appeal to the High Court at Bombay, which was summarily dismissed.
After the dismissal of that appeal, the State of Bombay made a revision application to the High Court praying for enhancement of the sentence.
Notice was issued to the appellant under section 439(2) of the Code of Criminal Procedure to show cause against enhancement.
95 Held that the summary dismissal of the appeal preferred by the appellant did not preclude him from taking advantage of the provisions of section 439(6) of the Code of Criminal Procedure and showing cause against his conviction when he was subsequently called upon to show cause why the sentence imposed on him should not be enhanced.
Per DAS J. Sub section (6) of section 439 of the Code of Criminal Procedure confers a new and a valuable right on the accused.
The language used in sub section (6) does not, in terms, place any fetter on the right conferred by it on the accused.
This new right is not expressed to be conditioned or controlled by anything that may have happened prior to the revision application under sub section (1) for enhancement of sentence.
Therefore, whenever there is an application for enhancement of sentence, a notice must issue under sub section (2) to the accused person to show cause and whenever such notice is issued, the accused person must, under sub section (6), be given an opportunity, in showing cause against enhancement, also to show cause against his conviction.
It is not correct to say that sections 421, 435 & 439 of the Code give the court a discretion not to decide the appeal or revision brought before it.
The discretion conferred on the High Court does not authorise it to say that it will not look at the appeal or revision.
The Court 's bounden duty is to look into the appeal or revision and decide it, although in the process of arriving at its decision it has a very wide discretion.
There is no reason for holding that there is a merger or replacement of the Judgment of the trial Court into or by the Judgment of the High Court only when the appeal or revision is heard on notice to the respondent and either allowed wholly or partially or dismissed but not when it is heard without notice to the respondent and dismissed summarily; for this purpose it makes no difference whether the dismissal is summary or otherwise, and there is a judgment of the High Court in all the three cases.
The only difference in substance is that in the first two cases the judgment is final qua both parties while in the third case, i.e., when an appeal or revision by the accused is summarily dismissed without issuing notice to the State, the judgment is final only qua the accused who preferred the appeal or revision.
This is based not on any technical doctrine of res judicata, for there is none in criminal cases, but on the general principle of finality of judgment.
In the first two cases there can, after the judgment, be no further application by the State for enhancement of sentence and therefore no question of the application of section 439(6) can arise.
In the last case, i.e., in case of summary dismissal the Judgment not being final qua the State, the State may apply for enhancement of sentence and if it does the accused becomes entitled again to show cause against his conviction also by reason of the special provisions of section 439(6).
Per BHAGWATI and IMAM JJ.
A Judgment pronounced by the High Court in the exercise of its appellate or revisional 96 jurisdiction after issue of a notice and a full hearing in the presence of both the parties would certainly be arrived at after due consideration of the evidence and all arguments and would therefore be a final judgment and such judgment when pronounced would replace the judgment of the lower court, thus constituting the only final judgment to be executed in accordance with law by the court below.
When however a petition of appeal presented by a convicted person from jail is summarily dismissed under section 421 or a revision application made by him is dismissed summarily or in limine without hearing him or his pleader what the High Court does in such a case is to refuse to entertain the petition of appeal or the revision application and the order passed by the High Court dismissed or rejected" cannot be said to be an expression of the opinion of the court arrived at after due consideration of the evidence and all the arguments.
No notice for enhancement of sentence can be issued by the High Court when a judgment is pronounced by it after a full hearing in the presence of both the parties either in exercise of its appellate or its revisional jurisdiction.
Such notice for enhancement of sentence can be issued by it either suo motu or at the instance of an interested party when the judgment of the lower court subsists and is not replaced by its own judgment given in the exercise of its appellate or revisional jurisdiction.
When the Judgment of the lower court has been under its scrutiny on notice being issued to the opposite party and on a full hearing accorded to both the parties notice for enhancement of sentence can only be issued by it before it pronounces its judgment replacing that of the lower court.
When such hearing is in progress it is incumbent upon the High Court or the opposite party to make up its mind before the judgment is pronounced whether a notice for enhancement of sentence should issue to the accused.
Case law discussed.
|
tion (Civil) Nos.
5187 89 of 1985 etc.
(Under Article 32 of the Constitution of India) PG NO 592 P.S. Khera and Mrs. Sushrna Suri for the Petitioners.
Kuldip Singh, Additional Solicitor General; C.V.S. Rao, Ms. A. Subhashini, Girish Chandra and N.S.D. Behl for the Respondents.
The Judgment of the Court was delivered by VENKATARAMIAH, J.
The question involved in these petitions is whether the workmen who were working in canteens established under section 46 of the (hereinafter referred to as 'the Act ') in Ordnance Equipment Factory, Kanpur, Central Ordnance Depot, Kanpur and Air Force Station, Kanpur are entitled to claim the period of service in such canteens prior to 22.
10. 1980 as part of the qualifying service for claiming pension.
The three industrial establishments, referred to above, namely; Ordnance Equipment Factory, Central Ordnance Depot and Air Force Station, Kanpur are defence establishment forming part of the Defence Department of the Union of lndia.
By the Order No. 18(l)80/D(JCM) dated the 25th July, 1981 sanction was accorded by the President of India to treat all employees of canteens established in Defence Industrial Installations under section 46 of the Act as Government employees with immediate effect.
By an amendment, the said Government Order was given effect from 22.
10. 1980.
The Government Order further provided that it would be applicable to all employees of the statutory canteens irrespective of the type and management of the canteens and till the Government decided otherwise the employees of the said canteens would continue to be governed by the terms and conditions of service laid down in their appointment letters and contracts of employment already subsisting.
It was further stated that they would be continued to be paid such employments to which they were entitled then.
When some of the employees retired after 22.10.1980 they applied for payment of pension.
The Defence Department declined to treat the period of service rendered by them prior to 22.
10. 1980 in such canteens as part of qualifying ~service for purposes of pension on the ground that it was only with effect from 22.10.1980 from which date they had become Government employees their qualifying service could be counted.
Aggrieved by the rejection of the claim of the workers in those canteens, the petitioner s herein, have filed these petitions in this Court for declaration that th service rendered by the employees of such canteens prior to 22.10.1980 should be treated as qualifying service for purposes of pension.
On behalf of the Union of India counter affidavits were filed resisting the claim of the PG NO 593 petitioners.
As the information furnished in the counter affidavits was inadequate for purposes of disposing of the cases, the Court by its order dated 22.3.1988 directed the Union of India to file a fuller affidavit giving information about the following matters, namely; the authority which had the power to appoint workers in such canteens prior to 22.
1980, the authority which was paying salary to the workers in the said canteens prior to 22.
l9S0, the authority which~ was controlling such canteens prior to 22.
1980, the particulars of the persons who were consumers of the service rendered by the said canteens prior to 22.
10.1980 and other relevant matters in order tn decide the status of the workers in the said canteens prior to 22.10.1980.
Thereupon a further affidavit has been filed by Shri N. Sivasubramanian, Joint Secretary (Ordnance Factories) to the Government of India, Ministry of Defence, New Delhi.
In the said affidavit it is stated that (a) prior to being declared as Government servants w.e.f. 22. 10. 1980 the canteens workers in Ordnance Factories were under the canteen managing committees constituted as per provisions of section 46 of the Act, (b) the supervision and control of such canteens were exercised by the Canteen Managing Committee consisting equal number of elected representatives of the factory workers and nominees of the management and the Canteen Managing Committee was the appointing authority of the canteen workers; and (c) that the Canteen Managing Committee was paying the salary to the workers and also controlling the canteens.
It was further admitted that by the letter dated 24.5.
1965 of the Ministry of Defence it had been ordered thus: "The question of subsidising the canteens maintained in Defence Industrial Installations with reference to provisions of Section 46 of the has been under the consideration of Government for some time.
After a detailed examination of the matter it has been decided that in order to reduce the cost of meals and snacks served by the canteen to the personal of the Defence Industrial Installation registered as factories and subject to the conditions indicated in the succeeding paras, the cost of supervisory and clerical staff and cooks.
bearers.
helpers, vendors etc.
employed in these canteen should be reimbursed by the Govt.
to the Managing Committee of such canteens The Commandants of the installation will simultaneously ensure that the cost of the meals/snacks provided by these canteens is reduced proportionate to the subsidy received from Govt.
for the cost of the staff .
PG NO 594 In order to ensure that uniform standards for employment of staff and payment of salaries as far as possible and the subsidy paid by the Government is related to total number of personnel served by the canteens the number and grades of supervisory clerical and working staff and the scales of pay that should be allowed to them are given in Appendix `A ' to this office Memorandum for the guidance of the installation Commanders and the Managing Committee.
These scales of staff and salaries are the maximum outer limits within which the local Management may engage the staff and workers actually required.
Where staff can be engaged on more economical rates it may be employed on such rates.
The existing supervisory clerical and working personnel may be brought over to those pay scales to the extent necessary by taking into account their existing emoluments and thereafter annual increments may be allowed after one year from the date of switch over to these scales.
Other concessions or allowances of any kind should be allowed to the staff in addition to these consolidated pay scales.
Other terms and conditions of service may continue to be regulated by the Managing Committee as here to fore . .Reimbursement of the cost of staff will be limited to the scales indicated in the appendix . .
These orders are not applicable to the canteens which are at present run by contractors.
Such canteens can, how ever, be switched over to this scheme after the terms of the contract with the contractor have expired or by terminating the contract, in accordance with the existing clauses thereof if any.
This scheme will also be applicable to new canteens organised by cooperative societies of the staff of Managing Committee appointed under the guidance of the administration in pursuance of section 46 of the in other Defence Industrial Installations which are registered as ,factories,, and where canteens have not so far been opened".
It is seen from the above letter of the Ministry of Defence that prior to 24.5.1965 there were three kinds of canteens, namely; (i) canteens run by contractors (ii) canteens run by co operative societies of the staff, and (iii) canteens which had been established under section 46 PG NO 595 of the Act.
We are not concerned with the first two categories of the canteens but only with the last category of canteens in this case.
The above Ministry of Defence letter provides for subsidising the canteens maintained in Defence Industrial Installations under section 45 of the Act.
It also gives directions regarding pay scales, conditions of service etc.
The consumers of the services rendered by such canteens were the `factory employees for whose benefit they had been established.
It is also not disputed that the building or buildings in which such canteens had been established formed part of the industrial establishment concerned.
The Act is applicable both to the factories run by Government and the factories run by other private companies, organisations, persons etc.
It was enacted for the purpose of improving the conditions of the workers in the factories.
Section 46 of the Act reads thus: "46.
Canteens. (1) The State Government may make rules requiring that in any specified factory wherein more than two hundred and fifty workers are ordinarily employed, a canteen or canteens shall be provided and maintained by the occupier for the use of the workers.
(2) Without prejudice to the generality of the foregoing power, such rules may provide for (a) the date by which such canteen shall be provided ; (b) the standards in respect of construction, accommodation, furniture and other equipment of the canteen; (c) the foodstuffs to be served therein and the charges which may be made thereof; (d) the constitution of a managing committee for the canteen and representation of the workers in the management of the canteen ; (dd) the items of expenditure in the running of the canteen which are not to be taken into account in fixing the cost of foodstuff and which shall be borne by the employer; (e) the delegation to the Chief Inspector, subject to such conditions as may be prescribed, of the power to make rules under clause (c).
" PG NO 596 Rule 68 of the U.P. Factories Rules, 1950 (hereinafter referred to as `the Rules ') framed under sections 46 and 112 of the Act gives particulars regarding the type of building that should be made available for running a canteen and the manner in which accounts should be maintained in such canteens.
It further provides that a canteen managing committee should be established under clause (20) of rule 68 of the Rules.
The Managing Committee shall consist of an equal number of persons nominated by the occupier and elected by workers.
The number of elected workers shall be in the proportion of 1 for every 11000 workers employed in the factory, provided that in no case shall there be more than 5 or less than 2 workers on the Committee.
The object of providing for the establishment of Canteen Managing Committee is to see that the employees of the factories have some amount of say in the management of the affairs of the canteens but the obligation to establish a canteen under section 46 of the Act is imposed on the occupier.
The expression `occupier ' of a factory is defined in section 2(n) of the Act as the person who has ultimate control over the affairs of the factory, provided that (i) in the case of a firm or other association of individuals, any one of the individual partners or members thereof shall be deemed to be the occupier; (ii) in the case of a company, any one of the directors shall be deemed to be the occupier; and (iii) in the case of a factory owned or controlled by the Central Government or and State Government, or any local authority, the person or persons appointed to manage the affairs of the factory by the Central Government, the State Government or the local authority, as the case may be, shall be deemed to be the occupier.
Under clause (iii) of section 2(n) of the Act, in the case of a factory owned or controlled by the Central Government, the person or persons appointed to manage the affairs of the factory by the Central Government shall be deemed to be the occupier.
The person so appointed to manage the affairs of the factory of that Central Government is under an obligation to comply with section 36 of the Act by establishing a canteen for the benefit of workers.
the Canteen Managing Committee, as stated above, has to be established under rule 66 of the Rules to manage the affairs of the canteen.
The functions of the Canteen Management Committee are merely advisory.
It is appointed by the Manager appointed section 7 of the Act and the Manager is required to consult the Canteen Managing Committee from time to time as to the quality and quantity of foodstuff served in the canteen, that arrangement of the menus, times of meals in the canteen etc.
The food.
drink and other items served in the canteen are required to be sold on `no profit ' basis and the prices charged are subject to the approval of the Managing Committee.
The accounts pertaining to a canteen in a Government factory may be audited by its departmental Accounts Officers.
PG NO 597 The building for the canteen has to be provided by the occupier.
Under sub rule (13) of rule 68 of the rules there shall be provided and maintained sufficient utensils, crockery, cutlery, furniture and any other equipment necessary for the efficient running of the canteen.
Suitable clean clothes for the employees serving in the canteen shall also be provided and maintained.
Thus the basic requirements of the canteen, such as buildings, utensils, crockery, cultery, furniture etc. should be supplied by the occupier.
Under the Ministry of Defence letter dated 24.5.1965 the prices of food, drink and articles supplies for the canteens are to be subsidised.
A canteen is an integral part of the Defence establishment belonging to the Union of India.
There cannot be a canteen without sufficient number of workers working in the canteen.
The have to be appointed by the occupier.
Otherwise he would not be full complying with section 46 of the Act.
The Managing Committee cannot be the employer of those workmen in the true sense of the term.
The Managing Committee constituted under section 46 of the Act which is not an incorporated body and whose financial position is uncertain cannot be considered to be the employer who h as to bear the legal responsibilities under the several labour laws in face in India.
We may, however, add that in the case of a canteen run b a contractor or a co operative society or some other body the position may be different.
But even then there has to be a Managing Committee if such a canteen is treated as a canteen established for purposes of satisfying the requirements of section 46 of the Act.
Even in this case the contractor or the co operative society or some other body will be the employer but no the Managing Committee.
In this situation it is difficult to hold that the employees in canteens established under section 46 off the Act would not be employees of the occupier, even though for purposes of management a Canteen Managing Committee, whose functions are advisory as pointed out above, has to be constituted under the Rules.
It is also not shown that on the workers in the canteens becoming the Government employees on 22.10.
1980 they were paid by the previous management, named, the Canteen Managing Committees consituted under rule 68 of the Rules any compensation in lieu of the services rendered by them prior to 22.10.1980.
We find it, therefor, difficult to hold that the employees working in such canteens were not employees of the factories in which the canteen had been established.
If they are employees of the factories in which the canteen is established.
the service rendered by them in these factories should be counted as part of the qualifying service for pension.
Hence, the plea of the Union Government that the service rendered by the workers in canteens PG NO 598 established under section 46 of the Act on and after 22.10.1980 alone can be included in the qualifying service for pension cannot be accepted.
The period prior to 22.10.1980 also should be counted for purposes of pension.
We, therefore, direct the Union Government to treat the period during which the workers had served in the canteens established under section 46 of the Act in the Defence establishments at Kanpur with which we are concerned in these cases prior to 22.
10. 1980 also as part of the qualifying service for purposes of pension.
We further direct that the pension payable to those employees who have retired from service on or after 22.
1980 shall be recomputed by taking the period of service during which they had worked prior to 22.
1480 in such canteens into consideration.
Such computation shall be made within six months from today.
The arrears of pension payable to those who have retired from service shall be disbursed to them within three months after such computation.
The petitions are accordingly allowed.
No costs.
R.S.S. Petitions allowed.
| The President of India, by order dated July 25, 1981 accorded sanction to treat all employees of canteens established ia Defence Industrial Installations under section 46 of the , as Government employees.
The order was given effect from 22.12.1980.
The petitioners were working in the canteens of the three Defence establishments at Kanpur, forming part of the Defence Department of the Union of India.
On their retirement after 22.10.1980 the petitioners claimed that the period of service rendered by them prior to 22.10.1980 canteens be counted towards their qualifying service for the purposes of pension.
Their claim was not accepted.
The respondents ' contention was that prior to 22.10.1980 the canteens in Ordnance factories were supervised and controlled by the Canteen Managing Committee consisting of equal number of elected representatives of the factory workers and nominees of management, and these Committees were the appointing authority of the Canteen workers and paid their salaries.
Allowing the petitions, it was, HELD: (1) It was admitted by the respondents that by the letter dated 24.5.1965 of the Ministry of Defence, provision had been made for subsidising the canteens maintained in Defence Industrial Installations under section 4th of the Act.
The letter also contained directions regarding pay scales, conditions of service, etc.
of the employees.
The cost of supervisory and clerical staff and cooks etc.
was to be reimbursed by the Government and the canteen buildings formed part of the industrial establishment concerned.
[595A B] (2) The expression 'occupier ' of a factory is defined in section 2 (n) of the as the person who has ultimate control over the affairs of the factory.
Under PG NO 590 PG NO 591 cause (iii) of section 2(n), in the case of a factory owned or controlled by the Central Government, the person or persons appointed to manage the affairs of the factory by the Central Government shall be deemed to be the occupier.
[596C,F] (3) A canteen is an integral part of the Defence establishment belonging to the Union of India.
There cannot be a canteen without sufficient number of workers working in the canteen.
They have to be appointed by the occupier.
Otherwise he would not be fully complying with section 46 of the .
The Managing Committee cannot be the employer of those workmen in the true sense of the terms.
The Managing Committee constituted under section 46 of the Act which is not an incorporated body and whose financial position is un certain cannot be considered to be the employer who has to bear the legal responsibilities under the several labour laws in force in India.
[597C D] (4) The basic requirements of the canteen, such as Buildings, utensils, crockery, cutlery, furniture, etc.
are to be supplied by the occupier.
[597B C] (5) In this situation it is difficult to hold that the employees in canteens established under section 46 of the Act would not be employees of the occupier, even though for purposes of management a Canteen ,Managing Committee, whose functions are advisory, has to be constituted under the Rules.
l597F] (6) It is also not shown that the workers in the canteens becoming the Government employees on 22.10.1980.
They were paid by the previous management, namely, the Managing Committee constituted under rule 68 of the U.P. Factories Rules, 1950 any compensation in lieu of services rendered by them prior to 22.10.1980.
[597F G] (7) It is, therefore, difficult to hold that the employees working in such canteens were not employees of the factories in which the canteen had been established.
If they are employees of the factories in which the canteen is established, the service rendered by them in these factories should be counted as part of the qualifying service for pension.
[597G H]
|
minal Appeal No. 203 of 1966.
Appeal by special leave from the judgment and order dated April 5, 1966 of the Patna High Court in Criminal Appeal No. 602 of 1963.
D. P. Singh, for the appellant.
Nur ud din Ahmed and D. Goburdhun, for the respondents.
The Judgment of the Court was delivered by Bachawat, J.
The prosecution case was that Bhaiya Ramanuj Pratap Deo was the proprietor of village Phatpani and owned and possessed bakasht and gairmazura lands therein including plot No. 1311 and the mahua trees standing thereon.
On April 10, 1962 at 3 p.m. his employee PW 33 Bindeshwari Singh was in charge of collection of mahua fruits in plot No. 1311 and the victims Ram Swarup Singh and Ramdhari Singh were supervising the collection.
PW 1 Dhaneshwari, PW 2 Deokalia, PW 3 Dewal, PW 4 Rajmatia, PW 6 Udal Singh, PW 7 Border Singh, PW 8 Meghan Chamar, PW 9 Ram Dihal Kharwar, PW 10 Ram Torai Kharwar, PW 11 Manan Singh and PW 13 Jhagar Kharwar were collecting mahua fruits when suddenly accused Mathua Pandey, Kundal Pandey and Muneshwardhar Dubey armed with garassas, Chandradeo Pandey, Dayanand Pandey and Nasir Mian armed with bhalas and Bife Bhogta, Thegu Bhogta, Nageshwardhar Dubey and Uma Shankar Dubey armed with lathis surrounded Ramswarup and Ramdhari and assaulted them with their weapons.
Dewal also was assaulted by Bife and Thegu and suffered minor injuries.
Ramdhari died on the spot.
Ramswarup died while preparations were being made to carry him to the hospital.
Bindeshwari lodged the first information report at 8 p.m. on the same date.
On April 14, 1962 'accused Mathu gave a report 360 at Nagaruntari hospital.
He said that on April 10, 1962 at 3 p.m. while he was returning home, he was assaulted with lathis, garassas and bhalas by the employees of the Bhaiya Saheb.
The following injuries were found on the dead body of Ram swarup Singh : "(1) abrasion 1 1/2"x 1 1/4" with ecchymosis on anterior aspect of right knee joint,, (2) another abrasion 1/2" x 1/4 " with ecchymosis on anterior aspect of right leg, (3) a small abrasion with ecchymosis on anterior aspect of left knee joint, (4) an incised wound 4" x 1" x scalp on anterior aspect of the left side of the head, (5) a lacerated wound 31" X 1/3" X scalp with ecchymosis on right side of head and ' (6) a penetrating wound with clean cut margins 2 1/2" X 1" X abdominal cavity placed transversely on right hypochondrium just right to mid line with stomach and loop of large bowel bulging out of it.
" On opening the abdominal wall it was found that the peritoneum was con gested and the stomach was perforated on its anterior wall.
Injuries 1, 2, 3 and 5 were caused by hard and blunt substance such as lathi.
Injury No. 4 was caused by sharp cutting weapon such as garassa.
Injury No. 6 on the abdominal cavity was caused by some sharp pointed weapon with sharp cutting margin such as bhala.
The death was due to shock and internal haemorrhage caused by the abdominal wounds.
The following injuries were found on the dead body of Ramdhari Singh : "(1) the helix of left ear was cut; (2) a lacerated wound 1/2" x 1/10" x 1/10" with ecchymosis on the outer part of the left eye brow, (3) a punctured wound with clean cut margins 2 1/2"X I" X 1 1/2" on left thigh below its middle, (4) a punctured wound with clean cut margin 1" X 1/4" X 1" on posterior aspect of the left thigh in its middle, and (5) a penetrating wound with clean cut margins 2 1/4" x 3/4" x abdominal cavity on right side of the abdomen.
The loops of intestines were bulging out of this opening.
Injury No. 2 was caused by hard and blunt substance such as lathi.
The other injuries were caused by a sharp pointed weapon with sharp cutting edge such as bhala.
Death was due to shock and internal haemorrhage caused by injury No. 5 the abdominal wound.
The trial court convicted the accused respondents Mathu, Chandradeo, Kundal, Dayanand, Bife, Thegu, Nasir, Munesh wardhar, Nageshwardhar, Umashankardhar under section 302 read with section 149 of the Indian Penal Code for the murders of Ram dhari and Ramswarup and sentenced them to rigorous imprison ment for life each.
Bife, Thegu, Nageshwardhar and Umashan kardhar were convicted under section 147 of the Indian Penal Code and sentenced to rigorous imprisonment for six months each.
The remaining respondents were convicted under section 148 of the Indian Penal Code and sentenced to rigorous imprisonment for one year 361 each.
Bife and Thegu were convicted under section 323 of the Indian Penal Code for causing hurt to Dewal and sentenced to rigorous imprisonment for six months each.
The sentences of each respondent were to run concurrently.
The trial court held that (1) Bhaiya Saheb was in possession of plot No. 1311; (2) while Ramswarup and Ramdhari were collecting mahua on the plot, the respondents armed with bhalas, garassas and lathis inflicted fatal injuries on them with a view to forcibly prevent them from collecting the mahua, (3) Thegu and Bife assaulted Dewal with lathis, (4) the accused persons knew that there was likelihood of murders being committed in prosecution of the common object, and (5) the assailants inflicted the injuries on Ramswarup and Ramdhari with the intention of murdering them.
The respondents filed an appeal in the High Court of Patna.
The High Court allowed the appeal and set aside all the convictions and sentences.
The High Court, found that (1) respondent Chandradeo was the thikadar of plot No. 1311 and was in possession of the mahua trees standing thereon, (2) on the date of the occurrence,, the members of the prosecution party including Ramdhari and Ramswarup committed theft on the fruits of the mahua trees, and the respondents had the right of private defence of property against the theft; (3) Ramswarup carrying a tangi and Ramdhari carrying a danta caused severe injuries to respondent Mathu on his head, leg, and that while doing so they were not defending themselves; Mathu became unconscious.
He regained consciousness on April 14, 1962.
(4) the theft of mahua fruits was committed under such circumstances as might reasonably cause apprehension that death or grievous hurt would be the consequence if the right of private defence was not exercised.
Accordingly, the respondents ' right of private defence of property extended under section 103 of the Indian Penal Code to voluntarily causing death to Ramdhari and Ramswarup subject to the restrictions mentioned in section 99; (5) the person or persons who caused the two deaths exceeded the right of private defence as they inflicted more harm than was necessary for the purpose of defence.
These findings are based on adequate evidence and are not shown to be perverse.
In this appeal under article 136 of the Constitution from an order of acquittal passed by the High Court, we are not inclined to interfere with the above findings.
The question is whether in these circumstances the High Court rightly acquitted the appellants.
, The fatal wounds on the abdominal cavities of Ramdhari and Ramswarup were caused by bhalas.
The prosecution case was that Chandradeo, Dayanand and Nasir were armed with bhalas.
The High Court rightly held that the prosecution failed to established that Chandradeo was armed with a bhala.
The prosecution witnesses said generally that all the respondents surrounded Ram 362 dhari and Ramswarup and.
assaulted them.
The prosecution case has been found to be false in material respects.
It is not possible to record the finding that Chandradeo, Dayanand and Nasir were armed with bhalas.
Some of the respondents were armed with bhalas but it is not possible to say which of them were so armed and which of them inflicted the fatal wounds on Ramdhari and Ramswarup.
Accordingly we cannot convict any of the respondents under section 302.
The only question is whether they can be convicted under section 302 read with either section 149 or section 34.
In order to attract the provisions of section 149 the prosecution must establish that there was an unlawful assembly and that the crime was committed in prosecution of the common object of the assembly.
Under the fourth clause of section 141 an assembly of five or more persons is an unlawful assembly if the common object of its members is to enforce any right or supposed right by means of criminal force or show of criminal force to any Person.
Section 141 must be read with sections 96 to 106 dealing with the right of private defence.
Under section 96 nothing is an offence which is done in the exercise of the right of private defence.
The assertion of a right of private defence within the limits prescribed by law cannot fall within the expression "to enforce any right or supposed right" in the fourth clause of section 141.
In Kapildeo Singh vs The King(1) the High Court had affirmed the appellant 's conviction and sentence under section 147 and section 304 read with section 149, without considering the question as to who was actually in possession of the plot at the time of the occurrence.
The High Court observed that the question of possession was immaterial and that the appellants party were members of an unlawful assembly, "as both sides were determined to vindicate their rights by show of force or use of force.
" The Federal Court set aside the conviction and sentence.
It held that the High Court judge stated the law too loosely "if by the use of the word 'vindicate ' he meant to include even cases in which a party is forced to maintain or defend his rights".
The assembly could not be designated as an unlawful assembly if its object was to defend property by the use of force within the limits prescribed by law.
The charges against the respondents were that they "were members of an unlawful assembly in prosecution of the common object of which, viz., in forcibly preventing Ramdhari Singh and Ramswarup Singh from collecting mahua from Barmania field of village Phatnapi and if necessary in causing the murder of the said two persons, for the purpose, "that some of them caused the murders of Ramdhari and Ramswarup and that thereby all of them committed offences under section 302 read with section 149.
We have found that respondent Chandradeo was in possession of plot (1) 363 No. 1311 and the mahua trees standing thereon.
The object of the respondent 's party was to prevent the commission of theft of the mhua fruits in exercise of their right of private defence of property.
This object was not unlawful.
Nor is it possible to say that their common object was to kill Ramdhari and Ramswarup.
Those who killed them exceeded the right of private defence and may be individually held responsible for the murders.
But the murders were not committed in prosecution of the common object of the assembly or were such as the members of the assembly knew to be likely to be committed in prosecution of the common object.
The accused respondents cannot be made constructively responsible for the murders under section 302 read with section 149.
In Kishori Prasad & Ors.
vs State of Bihar(1) the High Court convicted the appellants under section 326/149 of the Indian Penal Code though the appellant Hirdaynarain was in lawful possession of the western portion of plot No. 67 and the attempt by the prorecution party to cultivate the same was high handed.
This Court set aside the conviction and sentence.
Ramaswami J. observed "In a case where the accused person could invoke the right of private defence it is manifest that no charge of rioting under section 147 or section 148, Indian Penal Code can be established for the common object to commit an offence attributed in the charge under section 147 or section 148, Indian Penal Code is not made out.
If any accused person had exceeded the right of private defence in causing the death of Chitanu Rai or in injuring Gorakh Prasad it is open to the prosecution to prove the individual assault and the particular accused person concerned may be convicted for the individual assault either under section 304, Indian Penal Code or of the lesser offence under section 326, Indian Penal Code.
The difficulty in the present case is that the High Court has not analysed the evidence given by the parties and given a finding whether any or which of the appellants are guilty of causing the death of Chitanu Rai or of assaulting Gorakh Prasad.
As we have already said, none of the appellants can be convicted of the charge of rioting under section 148 or of the constructive offence under section 326/149, Indian Penal Code.
" We accordingly hold that the respondents cannot be convicted under section 302 read with section 149, Indian Penal Code.
Nor is it possible to convict them under section 302 read with section 34.
The High 'Court rightly found that the respondents wanted to prevent the (1) Cr.
No. 191 of 1966 decd.
on 5 12 1968.
364 collection of mahua fruits and that a common intention of all of them to murder Ramdhri and Ramswarup was not established.
The case of Gurudittamal vs State of U.P.(1) is distinguish able.
In that case the Court found that (1) the accused persons who were in possession of a field had exceeded the right of private defence of property by murdering four persons who were peacefully harvesting the crops standing on the field and (2) each of the four appellants killed one member of the prosecution party and each of them individually committed an offence under section 302 (see paragraph 6 and end of paragraph 14).
In these circumstances, the Court upheld their conviction and sentence under section 302.
The Court also found that the appellants had the common intention to kill the victims and could be convicted under section 302 read with section 34 (see paragraph 12 and 9).
In the present case, none of the respondents can be convicted under section 302.
As a common intention to murder Ramdhari or Ramswarup is not established, they cannot be convicted under section 302 read with section 34.
In the result, the appeal is dismissed.
R.K.P.S. Appeal dismissed.
(1) A.I.R. 1965 S.C. 257.
| The State of Bihar filed a number of suits in this Court under article 131 of the Constitution in connection with the delayed delivery of iron and steel materials for its Gandak project.
In six of the suits the defendants were: The Union of India (Defendant No. 1 ) and Hindustan Steel Ltd. (Defendant No. 2).
In six other suits the defendants were: The Union of India (Defendant No. 1) and The Indian Iron & Steel Co. Ltd. (Defendant No. 2).
The prayers in all the suits were that decrees for specific sums of money be passed either against the Union of India or the second defendant.
Identical preliminary issues were set down for consideration in all the suits, namely: (1) whether the cause or causes of action in this suit are within the scope of article 131 of the Constitution? (2) Whether the suit is within the scope of article 131 of the Constitution in view of a non State viz. defendant No. 2, having been made a party to the suit ? (3) Whether the suit is barred by the provisions of section 80 C.P.C. for want of notice to defendant No. 1.
HELD: (i) The specification of the parties in article 131 is not of the inclusive kind.
The express words in cls.
(a), (b) and (c) of the Article exclude the idea of a private citizen, a firm or a corporation figuring as a disputant either alone or even along with a State or with the Government of India in the category of a party to the dispute.
The contents of the corresponding section, of the Government of India Act, 1935 namely section 204, and the legislative history culminating in the adoption of article 131 of the Constitution support the conclusion that so far as the parties to a dispute are concerned, the framers of the Constitution did intend that they could only be the constituent units of the Union of India and the Government of India itself arrayed on one side or the other either singly Or jointly with another unit or the Government of India.
For other types of controversies or disputes special provision has been made in the sonstitution e.g. in article 143 257, 262 and 290 A dispute in which a private party, is involved must be brought before a court other than this Court having jurisdiction over the matter.
[52.6 D F; 530 B; 531 C, F, H; 532 C] The United Provinces vs The Governor General in Council, and State of Seraikella and Others vs Union of India and another, [151] S.C.R. 474, referred to.
The enlarged definition of 'State ' given in Parts III and IV of the Constitution is not attracted to article 131 of the Constitution and a body like the Hindustan Steel Ltd. could not be considered to be "a State" for the purpose of article 131 of the Constitution.
[532 G] Rajasthan State Electricity Board vs Mohan Lal, ; , distinguished.
523 In view of the above finding on issue No. 2 the suits did not lie in this Court under article 131 of the Constitution and the plaints must be returned; it was accordingly unnecessary to decide issues Nos. 1 and 3.
[532 H] Article 131 does not prescribe that a suit must be filed in the Supreme Court for the complete adjudication of the dispute envisaged therein or the passing of a decree capable of execution in the ordinary way as decrees of other courts are.
Once this Court has given a declaration of its rights to the aggrieved party the function of the Court under article 131 is over.
[525 C F]
|
ivil Appeal No. 2841 of 1986.
From the Judgment and Order dated 9.4.
1986 of the Rajasthan High Court in S.B. Civil Revision No. 11 of 1981.
359 VM.
Tarkunde, section Atreya, Virendra Bandhu and Indra Makwana for the Appellants.
T.S. Krishnamurthy Iyer and S.K. Jain for the Respondents.
The Judgment of the Court was delivered by DUTT, J.
This appeal on a certificate granted under Article 134A of the Constitution of India is at the instance of the heirs and legal representatives of a deceased judg ment debtor and is directed against the judgment of a learned Single Judge of the Rajasthan High Court whereby the learned Judge upheld the order dated December 12, 1980 of the learned District Judge, Jaipur City, Jaipur, holding that in view of Article 136 of the the application of the decree holder auction purchaser for delivery of possession of the property auctioned purchased by him was maintainable and not barred by limitation.
The certificate on the basis of which the appeal is filed is not competent in view of clause (3) of Article 133 of the Con stitution, we have however treated the appeal as one under Article 136 of the Constitution.
The special leave to file the appeal is granted by us.
The mortgagee decree holder in execution of the final decree for mortgage himself purchase the disputed property in the auction sale held on July 14, 1978 at a sum of Rs.30,000.
On September 20, 1978, the judgment debtor Ganpat Singh, since deceased, the predecessorin interest of the appellants, filed an application under Order XXI Rule 90 of the Code of Civil Procedure for setting aside the sale.
Two other petitions of objections were filed by one Chiranji Lal and by another judgment debtor, Mst.
Abhey Kanwar.
All these objections including the application of Ganpat Singh under Order XXI Rule 90 of the Code of Civil Procedure, were dismissed for default and, consequently, the sale was con firmed by the learned district Judge, the executing court, on January 2, 1979.
On July 17, 1980, that is, more than one year after the sale was confirmed, the decree holder auction purchaser filed an application under Order XXI Rule 95 of the Code of Civil Procedure for delivery of possession of the property auctioned purchased by him.
The said application was opposed by the judgment debtor Ganpat Singh on the ground that as the application was filed more than one year after the confirmation of sale, it was barred by limitation under Article 134 of the . 360 It was held by the learned District Judge that in view of the provision of Explanation I1 of section 47 which was inserted in the Code by Section 20 of the Code of Civil Procedure (Amendment) Act, 1974, Article 136 prescribing a period of limitation of 12 years for the execution of the decree and not Article 134 of the would apply.
In that view of the matter, the learned District Judge held that the application was not barred by limitation as contended on behalf of the judgment debtor and directed issuance of the warrant of possession in respect of the disputed property.
Being aggrieved by the said order of the learned Dis trict Judge, the judgment debtor filed a revisional applica tion under section 115 of the Code of Civil Procedure before a learned Single Judge of the High Court.
The view expressed by the learned District Judge commended to the learned Judge of the High Court.
The learned Judge took a similar view that after the insertion of Explanation II to Section 47 of the Code of Civil Procedure, a purchaser of property at a sale in execution of a decree would be deemed to be a party to the suit in which the decree was passed and all questions relating to the delivery of possession of the property to such purchaser of immovable property would be questions relating to the execution of the decree and, as such, Arti cle 136 and not Article 134 of the would apply.
Further, the learned Judge held, inter alia, that after the amendment of the Code of Civil Procedure, Article 134 and Article 136 of the became so incon sistent that both could not exist and, relying upon the principle that in cases where two articles are equally applicable, the rule that the article which keeps alive the right of the party must be preferred, the learned Judge held that Article 134 stood impliedly repealed of section 47 of the Code of Civil Procedure read with Article 136 of the .
In that view of the matter, the learned Judge dismissed the revisional application of the judgment debtor under section 115 of the Code of Civil Procedure.
The learned Judge, however, granted a certificate to the appel lants for appeal to this Court under Article 134A of the Constitution of India.
Hence this appeal.
At this stage, it may be stated that the parties have settled their disputes after the hearing was concluded, the respondent decree holder having agreed to relinquish all his rights as the auction purchaser upon the appellants paying him a sum of Rs. 1,28,000.
The terms of such settlement will be stated hereafter.
In spite of such settlement, we think we should consider the view expressed by the learned dis trict Judge and the learned Single Judge of the High Court 361 that after the amendment of section 47 of the Code of Civil Procedure, an application under Order XXI Rule 95 of the Code will be governed by Article 136 of the and that, as held by the learned Judge of the High Court, Article 134 stands impliedly repealed by section 47 read with Article 136 of the .
Both the learned District Judge and the learned Judge of the High Court have been greatly influenced by the fact of the insertion of Explanation II under section 47 by the Code of Civil Procedure (Amendment) Act, 1976.
Explanation II provides as follows: "Explanation II.
(a) For the purposes of this section, a purchaser of property at a sale in execution of a decree shall be deemed to be a party to the suit in which the decree ' is passed; and (b) all questions relating to the delivery of possession of such property to such purchaser or his representative shall be deemed to be questions relating to the execu tion, discharge or satisfaction of the decree within the meaning of this section.
" Under clause (a) of Explanation II the auction purchaser shall be deemed to be a party to the suit in which the decree is passed.
Under clause (c), all questions relating to the delivery of possession shall be deemed to be ques tions relating to the execution, discharge or satisfaction of the decree within the meaning of section 47.
Section 47 bars determination of any question relating to the execu tion, discharge or satisfaction of the decree in a suit.
Such question shall be determined by the executing court.
As has been already noticed, in view of clause (a) of Explana tion II, the auction purchaser shall be deemed to be a party to the suit in which the decree is passed and under clause (b) of Explanation II all questions relating to delivery of possession shall be deemed to be questions relating to the execution, discharge or satisfaction of the decree.
Such questions, therefore, are to be determined by the court executing the decree and not by a separate suit.
Section 47 itself has nothing to do with the question of limitation.
Article 136 prescribes a period of limitation of 12 years for the execution of a decree from the date on which the decree or order becomes enforceable or where the decree or any subsequent order directs any payment of money or the delivery of any property to be made at a certain date or at recurring periods when default in making any 362 payment or delivery in respect of which execution is sought, takes place.
After a decree is out into execution within the period of limitation under Article 136, questions relating to execution, discharge or satisfaction of the decree may arise and such questions including the question as to the delivery of possession shall be determined by the executing court.
When a property is sold in execution of a decree, an application for setting aside the sale may be made under Rules 89, 90 or 91 of Order XXI of the Code of Civil Proce dure by the persons and on grounds as mentioned therein.
Such an application has also to be made within the pre scribed period of limitation of sixty days from the date of sale under Article 127 of the .
Article 134 prescribes a limitation of one year for an application for delivery of possession by a purchaser of immovable property at a sale in execution of a decree.
The limitation of one year will be computed from the date the sale becomes absolute.
Such an application for delivery of possession can be filed only after the decree is put into execution within the period of limitation as prescribed by Article 136 of the .
The periods of limitation prescribed by Articles 136 and 134 are for two different purposes, the former being for the execution of a decree for possession in respect of which decree is passed and the latter for an application for delivery of possession of immovable property which is purchased in the course of execution of a decree.
The two articles have nothing in common for their operation and it is not readily understandable how the two articles stand in conflict with each other.
An application for deliv ery of possession of immovable property purchased in execu tion cannot, by any stretch of imagination, be construed as an application for execution of a decree for possession of property so as to invoke the provision of Article 136 of the .
Merely because the auction purchaser will be deemed to be a party in the suit in which the decree has been passed, as provided in clause (a) of Explanation II to section 47 of the Code, and by virtue of clause (b) of Explanation II all questions relating to delivery of posses sion of the property shall be deemed to be questions relat ing to execution, discharge or satisfaction of the decree within the meaning of section 47, an application for deliv ery of possession under Order XXI Rule 95 of the Code of Civil Procedure cannot be equated with an application for the execution of a decree for possession so as to apply 12 years ' period of limitation as prescribed by Article 136 of the .
If it is held that Article 136 would apply to an appli cation for delivery of possession under Order XXI Rule 95 of the Code, it may lead to an absurdity.
Suppose a decree is put into execution on the last day of limitation of 12 years.
Obviously, the sale of any property in 363 execution of the decree will take place after the expiry of 12 years and, therefore, no application for delivery of possession of the property of the auction purchaser will be maintainable as 12 years have already passed from the date of the decree.
If Article 136 is held to apply to an appli cation for delivery of possession, then for the very same reason it will also apply to an application for setting aside sale.
In other words, an application for setting aside sale can also be made within a period of 12 years from the date of decree irrespective of the date of sale, which is absurd on the face of it.
It appears that the learned Judge of the High Court has misunderstood the scope of the provision of section 47 of the Code of Civil Procedure and that of the provisions of Articles 134 and 136 of the .
It may be that before the amendment of section 47 of the Code, an auction purchaser could file a suit for recovery of posses sion of the property within 12 years from the date of sale, but in view of the amendment of section 47 of the Code such a suit cannot be filed.
But that is no ground for holding that Article 136 of the would apply to an application for delivery of possession.
Under the old Limi tation Act of 1908, an application for delivery of posses sion could be made within three years from the date on which sale became absolute as prescribed by Article 180 of that Act, but under Article 134 of the Limitation Act, 1953 such an application can be made within one year from the date on which sale became absolute.
Thus the period of limitation for delivery of possession of property purchased at the court sale has been reduced to a considerable extent, but that also cannot be taken into consideration for the purpose of interpretation of the provisions of the Limitation Act.
It is for the Legislature to prescribe the period and the Court is only to see whether any particular application has been filed within that period.
In the instant case, as stated already, the scope of Articles 134 and 136 and their subject matters being completely different, the question of implied repeal of Article 134, as held by the learned Judge of the High Court, does not at all arise.
We would, accord ingly, hold that Article 134 will apply to an application under Order XXI Rule 95 of the Code of Civil Procedure by the auction purchaser for delivery of possession of the property sold in execution of a decree.
It may be mentioned here that Mr. Krishnamurthy Iyer, learned Counsel appearing on behalf of the decree holder respondent, has not made any attempt to support the judgment of the High Court on the ground of amendment of section 47 of the Code of Civil Procedure or on the ground of implied repeal of Article 134 of the Limitation Act by 364 the amended section 47 of the Code read with Article 136 of the Limitation Act.
On the contrary, it is contended by him that there can be no doubt that limitation under Article 134 commences from the date when the sale becomes absolute.
He has, however, sought to support the conclusion of the learned Judge of the High Court that the application for delivery of possession of the property is not barred by limitation on another groups which will be stated presently.
Under Order XXI Rule 92 where no application is made under Rule 89, Rule 90 or Rule 91 where such application is made and disallowed, the court shall make an order confirming the sale, and thereupon the sale shall become absolute.
It is submitted by the learned Counsel that it is not correct that the sale becomes absolute only under the circumstances as mentioned in Rule 92, and that apart from the provisions of Rules 89, 90 and 91 of Order XXI of the Code, an auction sale can be challenged on grounds other than those mentioned in the said Rules.
Counsel submits that if an application for setting aside sale is made and disposed of, the sale will become absolute after the disposal of such application, even though the application is not one as contemplated by Rules 89, 90 or 91 of Order XXI of the Code.
In this connection, the learned Counsel has drawn our attention to an application for setting aside the sale made by the 4th judgment debtor on January 27, 1979 on grounds other than those mentioned in Rules 89, 90, or 91.
But the said application was dismissed by the learned district Judge on July 21, 1979.
It is submitted by the learned Counsel that on the disposal of that application on July 21, 1979, the sale became absolute and the decree holder respondent having filed the application for delivery of possession on July 17, 1980, that is, within one year from July 21, 1979, it should be held that the application was quite within the period of limitation as prescribed by Article 134 of the Limitation Act.
In support of the contention, the learned Counsel has placed reliance upon a decision of the Privy Council in Chandra Mani Saha and others vs Anarjan Bibi and others, AIR 1984 PC 134.
In that case, in interpreting the words "when the sale becomes absolute" in Article 180 of the old Limitation Act, '1908, the Privy Council observed as follows: "Upon consideration of the sections and orders of the Code, their Lordships are of opinion that in construing the meaning of the words "when the sale becomes absolute" in article 180, Lim.
Act, regard must be had not only to the provisions of O. 21.
R. 92(1) of the schedule to the Civil Procedure Code, but also to the other material sections and 365 orders of the Code, including those which relate to appeals from orders made under O. 21, R. 92(1).
The result is that where there is an appeal from an order of the Subordinate Judge, disallowing the application to set aside the sale, the sale will not become absolute within the meaning of article 180, Lim.
Act, until the disposal of the appeal, even though the subordinate Judge may have con firmed the sale, as he was bound to do, when he decided to disallow the above mentioned application.
We may now consider the above contention of the learned Counsel for the respondent decree holder.
It has been al ready noticed that on January 2, 1979 while dismissing the application of the judgment debtor under Order XXI Rule 90 of the Code of Civil Procedure, the learned District Judge also confirmed the sale.
The said order of the learned District Judge confirming the sale is binding not only on the judgment debtor, who made the application under Order 21 Rule 90, but also on all other parties to the execution proceedings including the 4th judgment debtor.
Accordingly, there can be no doubt that the application filed by the 4th judgment debtor praying for the setting aside of the sale on grounds other than those mentioned in Rules 89, 90 and 91, was not maintainable after the confirmation of the sale.
Indeed, by the order dated July 21, 1979 the learned Dis trict Judge while dismissing the application of the 4th judgment debtor observed that after the confirmation of the sale, the court was not authorised to entertain the applica tion.
We do not think that the decision of the Privy Council in Chandra Mani 's case (supra) lends any support to the contention of the learned Counsel for the respondent decree holder that an auction sale can be set aside even on grounds other than those mentioned in Rules 89, 90 and 91.
All that has been ruled in that decision is that in constru ing the meaning of the words "when the sale becomes abso lute" in Article 180 of the old Limitation Act, regard must be had not only to the provision of Order XXI Rule 92(1) of the Code, but also to the other material sections and orders of the Code including those which relate to appeals from orders made under Order XXI Rule 92(1).
No provision of the Code has been pointed out to us under which a sale can be set aside apart from the provisions of Rules 89, 90 and 91 of order XXI of the Code.
There can be no doubt that when an application for setting aside the sale is made, the order passed by the executing court either allowing or dismissing the application will be final and effective subject to an appeal that may be made under the provisions of the Code.
It is inconceivable that even though no appeal has been filed against an order dismissing an applica 366 tion for setting aside the sale, another application for setting aside the sale can be made without first having the order set aside.
Such an application will be barred by the principle of res ludicata.
In the circumstances, there is no merit in the contention made on behalf of the respondent decree holder that the application for delivery of posses sion having been made within one year of the dismissal of the application of the 4th judgment debtor for setting aside the sale, it was within the period of limitation as pre scribed by Article 134 of the Limitation Act.
In Kamakshi Ammal and another vs Arukkani Ammal and another, AIR 1957 Mad. 440, which has been relied on by the learned Counsel for the decree holder respondent, there was an application under Order XX1 Rule 58 of the Code of Civil Procedure by one Nagammal who claimed under a possessory mortgage and that claim was allowed on June 14, 19 13.
The decree holder filed a suit to set aside this claim as she was entitled to do under the Code before it was amended in 1976.
The suit terminated in a compromise decree on August 15, 1944 and the application under Order XXI Rule 95 of the Code was made by the decree holder on August 14, 1947, that is, within three years from the date when the claim suit was disposed of.
It was held by the Madras High Court that the sale could not be said to have become absolute till the claim suit was finally disposed of on August 15, 1944.
In holding that, the Madras High Court has placed reliance upon the decision of the Privy Council in Chandra Mani 's case (supra) to the effect that though the third column of Arti cle 190 of the old Limitation Act refers to the date when the sale becomes absolute, that clause must be read not only with the provision of Order XXI Rule 92(1) of the Code, but also with the other material provisions and orders of the Code.
In our opinion the above decision of the Madras High Court in Kamakshi Ammal 's case does not support the conten tion of the respondent decree holder.
Order XXI Rule 58 of the Code is a material provision relating to any claim that may be preferred or any objection that may be made to the attachment of any property in execution of a decree.
Any sale that is held would, undoubtedly, be subject to the order that may be passed under Order XXI Rule 58 of the Code and, thereafter, as provided in the Code before its amend ment in 1976, the result of a suit that may be filed chal lenging such order passed by the executing court under Order XXI Rule 58.
But after a sale becomes absolute on the dis missal of the application of the judgment debtor 's claim for setting aside the sale, another application for setting 367 aside the sale by the judgment debtor is not maintainable and the period of limitation as prescribed by Article 134 of the Limitation Act cannot be computed from the date of the dismissal of the second application for setting aside the sale.
The decision of the Madras High Court in Dadrabahu Nainar vs Devendra Nainar, ILR , relied on by the respondent decree holder, does not appear to be of any assistance to him.
In that case, the Madras High Court has only followed the decision of the Privy Council in Chandra Mani 's case (supra).
In an earlier decision of the Full Bench of the Madras High Court in Muthu Korakkai Chetty vs Madar Ammal, ILR 43 Mad.
185 FD, also relied on by the respondent decree holder, what happened was that after an auction sale had been confirmed without opposition on April 26, 1918, an application was made on January 13, 19 18 to set it aside on the ground of fraud, and it was set aside on June 25, 19 18 in respect of a part of the properties sold.
The auction purchaser applied on February 17, 1917 for delivery of the remaining properties.
It was held by the Full bench that the application was not barred under Article 180 of the old Limitation Act as time should be computed from the date of the order disallowing the petition to set aside the sale on the ground of fraud and not from the date of the first confirmation.
This decision has been strongly relied upon by the learned Counsel for the respondent de cree holder and it is submitted that even though the appli cation for setting aside the sale on the ground of fraud was made after the sale was confirmed, the Full Bench took the view that the period of limitation under Article 180 of the old Limitation Act should be computed from the date of the order disallowing the application to set aside the sale on the ground of fraud and not from the date of the first confirmation.
On the basis of this decision, it is urged that in the instant case also the period of limitation under Article 134 should be computed from the date of dismissal of the second application for setting aside the sale.
We are enable to accept the contention.
In the Full Bench decision of the Madras High Court the application for setting aside the sale was made by the sons of a deceased judgment debtor and the remaining judgment debtors, and the application in so far as it was made by the sons of a de ceased judgment debtor was admitted out of due time on the ground of fraud.
In our opinion the High Court was justified in entertaining the application on the ground of fraud by the sons of a deceased judgment debtor who were not brought on the record as the legal representatives of their deceased father.
The application was, therefore, quite maintainable and, even though the sale was confirmed 368 and became absolute under Order XXI Rule 92, it was subject to the disposal of the application for setting aside the sale on the ground of fraud.
The facts of this decision are quite different from those of the instant case before us.
The application by the judgment debtor not being maintain able in law, the respondent decree holder was not entitled to compute the period of one year under Article 134 of the Limitation Act from the date of dismissal of the second application by the 4th judgment debtor.
The contention made on behalf of the respondent decree holder is without sub stance and is overruled.
In view of the discussion made above, we set aside the judgment of the learned Single Judge of the High Court and that of the learned District Judge.
As stated already, the parties have settled their dis putes, the respondent decree holder having decree to relin quish all this rights as the auction purchaser upon the appellants paying him a sum of Rs. 1,28,000.
We are told that said sum has been deposited in this Court in the above appeal and, as prayed for by the parties, we by our order dated May 5, 1987 set aside the execution sale and directed that the amount of Rs. 1,28,000 lying in this Court would be paid to the respondent decree holder or to his Counsel in full settlement of the mortgage decree.
By the said order we have also recorded full satisfaction of the mortgage decree passed in S.C. No. 10/73 on the file of the District Judge, Jaipur City, obtained by the respondent decree holder against the appellants and others.
It has also been recorded in the order that the decree holder auction purchaser has no sort of claim against the appellants under the mortgage deed in question or the decree passed thereon.
The two suits which have been filed by the decree holder auction purchaser against the Posts & Telegraph Department for recovery of arrears of rent in respect of the suit premises have, on the prayer made on behalf of the decree holder auction purchas er, been directed to be dismissed by the Trial Court without costs, since the money payable thereunder has been deposited in this Court by the Posts & Telegraph Department.
The Posts & Telegraph Department has been directed to pay the rent of the premises in suit in their occupation including arrears, if any, which may have accrued subsequent to the period for which rent has already been deposited in this Court, to the appellant treating them as landlords.
Even though the matter has been settled between the parties as above, we felt the necessity of laying down the correct legal position and, hence, this Judgment.
| The State Government issued a Notification on November 25, 1958 In exercise of power vested under Section 4 of the U.P. Sales Tax Act, 1948.
This Notification exempted 'cotton fabrics of all varieties ' from sales tax.
Under it, patta as an item of cotton fabric stood exempted from tax liability.
Subsequently, another Notification was issued on December 1, 1973 under Section 3 A of the Act.
This Notification pre scribed a rate of tax higher than that provided by Section 3 of the Act which contains the charging provision and pre scribes a uniform rate of tax on sales.
Section 3 A empowers the State Government to modify the rate of tax by Notifica tion.
This Notification of 1973 was issued without withdraw ing the earlier Notification of 1958.
The High Court, affirming the order of the Tribunal, held that in the absence of a Notification withdrawing the earlier Notification of 1958, sales tax would not be exigi ble in terms of the Notification of 1973.
Allowing the Appeal, HELD: (Per majority Pathak, CJI and Ranganath Misra, J., Ray, J. dissenting) 1.
The High Court was not justified in holding that in the absence of a notification withdrawing the earlier Noti fication of 1958, sales tax would not be exigible in terms of the Notification of 1973.
The order of the Tribunal, which has been affirmed by the High Court, is set aside and the assessment restored.
[96G] 2.
The Notification of 1958 issued under Section 4 of the Act exempted 'cotton fabrics of all varieties ' from sales tax.
The Notification of 1973 under Section 3 A of the Act prescribed sales tax of 7% on the sale of beltings of all kinds.
There is no dispute that patta is a kind of 94 belting material and, on being treated as cotton fabric, was exempted from sales tax.
[95FG] 3.
Section 3 is the charging provision; Section 3 A authorises variation of the rate of tax and Section 4 pro vides for exemption from the tax.
When after a Notification under Section 4 granting exemption from liability, a subse quent Notification under Section 3 A prescribes the rate of tax, the intention is to withdraw the exemption and make the sale liable to tax at the rate prescribed in the Notifica tion.
[96B D] 4.
As the power both for the grant of exemption and the variation of the rate of tax vests in the State Government and it is not the requirement of the Statute that a Notifi cation of recall of exemption is a condition precedent to imposing tax at any prescribed rate by a valid Notification under Section 3 A, the second Notification can easily be treated as a combined Notification both for withdrawal of exemption and also for providing higher tax.
[96D E] 5.
The exemption was in regard to a class of goods and while the exemption continues, a specific item has now been notified under Section 3 A of the Act.
[96F] (Per Ray, J. dissenting) 1.
Cotton beltings fail within 'beltings of all kinds ' as notified under Section 4 of the Act, being exempt from the imposition of sales tax.
As there is a general exemption granted by the Notifications issued in 1957 and 1958 exempt ing 'cotton fabrics of all kinds ', it is not possible to hold, in any view of the matter, that it will be excisable to sales tax on the basis of the Notification dated December 1, 1973 under Section 3 A of the said Act, by the Govern ment.
i98F; G H] 2.
So long as the general exemption granted under Sec tion 4 with regard to 'cotton fabrics of all kinds ' contin ues, no sales tax can be imposed on beltings of all kinds which fail within the 'cotton fabrics of all kinds ' and the general exemption under Section 4 will prevail over the Notification made under Section 3 A of the Sales Tax Act.
[99GH] 3.
It is not possible to subscribe to the view that since the Notification under Section 3 A has been made subsequent to the Notification issued under Section 4 of the Act, the subsequent Notification under Section 3 A will prevail over the general exemption granted under Section 4 of the Act.
[99H; 100A] 95 Porritts & Spencer Asia Ltd. vs State of Haryana, [1978] 42 S.T.C. 433 (SC); State of Tamil Nadu vs Navinchandra & Company, [1981] (48) S.T.C. 118 (Madras); Delhi Cloth and General Mills Co. Ltd. vs State of Rajasthan and Others, ; ; Commissioner of Sales Tax vs M/s Dayal Singh Kulfi Wala, Lucknow, [1980] U.P.T.C. 360 and Commis sioner of Sales Tax vs Rita Ice Cream Co., Gorakhpur, [1981] U.P.T.C. 1239, referred to.
|
Appeal No. 398 of 1956.
Appeal from the judgment and order dated March 19, 1956, of the Bombay High Court in Appeal No. 45 of 1955, arising out of the judgment and order dated March 23, 1956, of the said High Court in its Ordinary Original Civil.
Jurisdiction in Suit No. 468 of 1951.
M. C. Setalvad, Attorney General for India, N. P. Nathwani, J. B. Dadachanji, section N. Andley and Rameshwar Nath, for the appellants.
Purshottam Tricumdas, K. K. Desai and I. N. Shroff, for the respondents.
March 31.
The Judgment of the Court was delivered by 348 BHAGWATI J.
This appeal with a certificate of fitness is directed against the judgment and decree passed by the High Court,of Judicature at Bombay in appeal from its ordinary Original Civil Jurisdiction confirming, though on different grounds, the judgment and decree passed by a single Judge of that High Court in Suit No. 468 of 1951 instituted by the appellants (Original Plaintiffs) to recover from the respon dents (Original Defendants) a sum of Rs. 1,80,099 8 0 with interest and costs.
Since the year 1932 the first appellant has been a member of the East India Cotton Association Ltd., (hereinafter referred to as " the Association " ) as the sole 'proprietor of the firm of Messrs. Narrondass Manordass There in after referred to as "the member firm").
The first appellant along with other partners carried on business in partnership in Bombay inter alia as Cotton Merchants and Commission Agents in the name and style of Messrs. Narrondass Manordass, the 2nd appellant (hereinafter referred to as " the partnership firm ").
The respondents are a partnership firm and also a member of the Association.
Between September 23, 1947, and December 10, 1947, the member firm sold to the respondents 2,300 bales of Broach Vijay Fine 3/4" Navsari and/or Bardoli 7/8" Cotton for March/April 1948 Delivery.
Out of these 2,300 bales, 1,100 bales were disposed of by means of " Havalas " and in respect of the remaining 1,200 bales, there were cross contracts.
In the result when the time for " Delivery " arrived, sales in respect of 700 bales remained outstanding and the member firm was liable to give delivery of 700 bales to the respondents.
As however, the member firm failed to give delivery of the said 700 bales to the respondents, under the relevant by laws of the Association, the respondents " Invoiced Back " these 700 bales to the member firm on May 3, 1948, and as a result of this " Invoicing Back " a sum of Rs. 1,07,530 8 0 became due and payable by the member firm to the respondents and with regard to the transactions of all the 2,300 bales taken together an aggregate sum of Rs. 1,79,749 8 0 became due and payable by the 349 member firm to the respondents.
In respect of this sum of Rs. 1,79,749 8 0, the respondents sent to the member firm eight separate " Debit Notes " in respect of varying amounts and finally a consolidated debit note for Rs. 1,79,749 8 0.
It appears that the contract notes in respect of these transactions had been signed by one Ramanlal Nagindas who had been employed as a salesman in the Ready Cotton Department of the partnership firm.
The appellants contended that the said Ramanlal Nagindas had no authority to enter into the said transactions or to sign contract notes in respect thereof on behalf of the appellants and also that the said contracts were not in accordance with the by laws of the Association and they therefore denied their liability in respect of the said transactions.
The partnership firm, however, as the beneficiary under the said contracts decided to pay the amounts claimed by the respon dents without prejudice to the rights and contentions of both the parties.
On May 7, 1948, the said sum of Rs. 1,79,748 8 0 was paid by the partnership firm and was received by the respondents in terms of the letter addressed by the respondents on the said date: "The payment is made by you and accepted by us without prejudice to the rights and contentions of both the parties in respect thereof.
" A further sum of Rs. 350 being the amount of penalty for the alleged failure to tender the aforesaid 700 bales of the said contracts of Broach/Vijay March/April 1948 Delivery, was also paid by the partnership firm to the respondents on June 6, 1948, without prejudice to their aforesaid contentions.
The said Ramanlal Nagindas had entered into similar transactions with several other merchants and some of them claimed arbitration under by law 38 A of the Association.
Petitions were thereupon filed by the member firm in the High Court at Bombay being Petitions Nos.
A/51, A/52, A/55 and A/56 of 1949 under section 33 of the Indian Arbitration Act inter alia for a declaration that there existed no valid and enforceable arbitration agreement between the parties.
Mr. Justice Shah delivered judgment in the said petitions 350 on August 20, 1950, holding inter alia that the said contracts were void as being not in accordance with the by laws of the Association and allowed those petitions.
The respondents to the petitions thereupon filed petitions under article 136 of the Constitution for special leave to appeal to this Court against the said judgment of Mr. Justice Shah.
These petitions were, however, dismissed by this Court on or about April 6, 1951.
The appellants thereafter by their attorney 's letter dated May 2, 1951, called upon the respondents to return the said sum of I Is.
1,80,099 8 0 (being the aggregate of the said two sums of Rs. 1,79,749 8 0 and Rs. 350.) with interest thereon at the rate of 6 per cent.
per annum.
The respondents failed and neglected to pay to the appellants the said sum or any part thereof with the result that on May 7, 1951, the appellants filed the suit against the respondents for repayment to them of the said sum with interest and costs.
In the plaint as filed the appellants averred that the said contracts were void under the Bombay Cotton Contracts Act, 1932, as being not in accordance with the by laws of the Association inter alia in the following respects: (1) The contract notes produced by the respondents omitted to state the difference of Rs. . above or below the settlement rate of hedge contracts for the purpose of periodical settlements as required by by laws 139 and 141; and (2) no provision was made in any of the aforesaid contract notes with regard to the measurement of bales as required by the official form for delivery contracts prescribed in bylaw 80.
The respondents in their written statement contended that there was no by law which required any person to agree upon any difference above or below the settlement rate of hedge contracts for the purpose of periodical settlements and to state the same.
They further contended that the relative provisions contained in the official contract form had become obsolete as at all material times there were no hedge contracts bearing different numbers and in practice the said contracts were not put through periodical settlements.
351 They also contended that at all material times there was no by law which required any person to agree upon any specific measurements in respect of the bales agreed to be purchased inasmuch as the operation of by law 101 in regard thereto had been suspended by the Board since November 30, 1942.
After the suit reached hearing the appellants amended the plaint by averring that by reason of the said payments having been made by them and accepted by the respondents without prejudice to the rights and contentions of both the parties there was an implied agreement between them that in the event of the appellant 's establishing that they were not bound to pay the said sums to the respondents and that the respondents were not entitled to the payment thereof the respondents would repay or return the same to the appellants.
This plea was traversed by the respondents in the supplemental written statement which they filed.
The learned trial Judge followed the judgment of Mr. Justice Shah and held that the omission of the clause regarding measurement in the contract notes did not alter the character or legal effect of the contracts.
He similarly held that the omission of any reference in the contracts to the amount of difference above or below the settlement rate of hedge contracts in the last term of the contract notes rendered the contracts void.
He however was of the opinion that there was no implied agreement between the parties of the nature alleged by the appellants and that the payment made by appellants to the respondents was voluntary and therefore dismissed the appellants ' suit with costs.
The appellants preferred ail, appeal against this decision and the appellate Court dismissed the appeal and confirmed the decree passed by the learned trial Judge, though on different grounds.
The appellate Court agreed with the learned trial Judge that the omission of the term regarding measurement in the contract notes did not affect the character or legal affect of the contracts.
In regard to the omission to fill up the difference above or below the settlement rate 352 fixed for the hedge contracts in the last clause of the contract notes, however, the appellate Court was of the opinion that there was no obligation on the parties to agree to add or deduct the difference above or below the settlement rate as contended by the appellants.
If the parties did agree then the contract form provided that the agreement should be set out therein.
If, however, they did not agree then the first part of cl.
(2) of by law 141 would come into play and the settlement of the delivery contract would go through on the basis of the settlement rate of the hedge contract.
The omission to fill up the difference was thus of no consequence and did not invalidate the contracts.
The appellate Court also differed from the trial Judge on the question of the implied agreement and held that if the appellants succeeded in establishing that the respondents were not entitled to receive the payments the respondents were bound to repay the sums paid by the appellants to them.
In view, however, of the conclusion reached that the contracts were not void, the appellate Court dismissed the appeal.
The provisions of the Bombay Cotton Contracts Act, 1932 (Bom.
IV of 1932) and the by laws of the Association which fall to be considered by us may now be referred to: Section 8(1) (Bombay Cotton Contracts Act, 1932): " Save as hereinafter provided in this Act, any contract (whether either party thereto is a member of a recognized cotton association or not) which is entered into after the date on which this Act comes into operation and which is not in accordance with the by laws of any recognized cotton association shall be void.
" By law 80 of the Association: " Forward contracts between members how made: Delivery Contracts between members shall be made on the official form given in the Appendix.
Hedge contracts between members may be verbal or in writing and when in writing shall be in one or other of the forms given in the Appendix.
Whether verbal or written all contracts shall be subject to the by laws, 353 provided that in the case of Delivery Contracts By laws 149 to 163 inclusive shall not apply.
The specimen of the official contracts form in triplicate as used in 1947 48 (Vide Exhibit " D ") contained the following terms amongst others: No. Contract Note From Brokers To Messrs. . . . .
We have this day bought by your order and for your account subject to the By laws of the East India Cotton Association Ltd. From Messrs. (. ) bales of Cotton at Rs. per candy, delivered in Bombay in full pressed bales.
Measurement. tons/per 100 bales.
(For delivery contracts only).
for the purpose of periodical settlement of this contract we agree to a difference of Rs. above/below the settlement rate of hedge contract No. Remarks. Bombay. 194 No. Contract Note From Brokers To Messrs. . . . .
We have this day sold by your order and for your account subject to the By laws of the East India Cotton Association Ltd. To Messrs. (. ) bales of. Cotton. at Rs. per candy, delivered in Bombay in full pressed bales.
Measurement. tons/per 100 bales.
(For delivery contracts only).
For the purpose of periodical settlement of this contract we agree to a differ ence of Rs . above/below the settlement rate of hedge con tract No. Remarks . Bombay . 194 The contract notes which are rendered between the member firm and the respondents, however, contained no term as to measurement and so far as the last clause was concerned the blanks in regard to the difference of Rs. above or below the settlement rate of hedge contract No. were not filled in.
The relevant by laws in connection with these two terms contained in the official contract form were by law 101, and by laws 139 and 141: By law: 101.
Claims for excess measurement.
In respect of all Forward Contracts, measurement 45 354 shall approximate 13 1/2 tons per 50 bales provided that in respect of Forward Contracts, other than Hedge Contracts, the parties may agree upon any other measurement.
In all Forward Contracts, for any port the rate or rates of freight for any excess measurement over 13 1/2 tons per 50 bales shall be fixed by the Board from time to time and unless otherwise fixed the rate for such excess for all ports shall be Rs. 15 per ton in respect of each lot of 50 bales measuring more than 13 1/2 tons but not more than 14 1/2 tons and in respect of each lot of 50 bales measuring more than 14 1/2 tons Rs. 35 per ton for any excess over 13 1/2 tons.
No allowance for excess measurement shall be payable by the seller: (a) unless the buyer has given to the seller reasonable notice fixing an appointment for measurement, or (b) unless the buyer submits a claim to the seller within 6 weeks after the complete lot has been weighed over.
The Board shall have power from time to time and at any time to suspend the operation of this Bylaw as regards measurements.
By law: 139. "Settlement Days.
All Delivery Contracts other than those excepted under By laws 136 and Hedge Contracts shall be subject to periodical settlements through the Clearing House and in every case the parties to the contract must be members of the Association.
Settlements of differences due on open contracts and of other liabilities to be settled through the Clearing House shall be made once weekly on days which shall be fixed by the Board and notified in a calendar to be published annually.
The day on which Balance Sheets are required to be submitted to the Clearing House shall be known as Settlement Day.
" By law: 141.
Settlement rates. (1) For the purpose of these settlements, settlement prices for all positions of the Hedge Contract shall be fixed by the Board on or about the third working day immediately preceding Settlement 355 Day.
The prices so fixed shall be I P. M. prices on the day of fixation.
(2)In the case of Delivery Contracts, the settlement price of the Hedge Contract shall be the basis for the periodical settlement.
Such allowances as shall be agreed upon by the parties in their contract to cover any difference, between the cotton contracted for and the cotton which is the basis of the Hedge Contract shall be added to or deducted from the said settlement price.
In the case of contracts for descriptions which are not tenderable against the Hedge Contract the parties may either agree in their contract upon an allowance above or below the Hedge Contract for the purpose of their periodical settlement or may apply to the Board to fix settlement rates.
. . . . . . . . . . .
The only question for our determination in this appeal is whether the contracts between the parties were not in accordance with the by laws of the Association and therefore void.
There is no doubt that all the contracts were subject to the by laws of the Association.
The question still remains whether they were in accordance with the by laws because if they were not in accordance with those by laws they would be void.
The expression " not in accordance with " has been the subject of judicial interpretation in Radhakisson Gopikisson vs Balmukund Ramchandra (1).
Their Lordships of the Privy Council there held that the form prescribed was not a stereotyped one and that literal compliance with it was not essential.
The only thing required was that the contract notes must contain all the terms and conditions set out in the form in order to comply with it.
Their Lordships were of the opinion that substantial compliance with the form would be enough and if such sufficient compliance with the by laws was found in a particular case that would save the contracts from being declared void as not being in accordance with the by laws.
It was, however, urged on behalf of the appellants that by law 80 prescribes the form in which the contracts were to be entered into and all the terms and (1) (1932) L.R. 60 I.A. 63.
356 conditions incorporated in the official contract form had to be strictly complied with, that the omission of the term as to measurement as also the omission to fill in the blanks in regard to difference of Rs. above or below the settlement rate of hedge contract No. . . . were such departures from the form prescribed as would render the contracts void because it could not be then said that there was sufficient compliance with the statutory form.
Reliance was placed in support of this contention on Burchell vs Thompson (1), Ex parte Stanford, In re Barber (2), Thomas vs Kelly (3) and Parsons vs Brand & Cols vs Dickson (4).
The principle emerging from these decisions was enunciated to be that if the document executed by and between the parties departed from a characteristic part of the form prescribed or made a difference in the legal effect of the instrument, it would not be in accordance with the form and would therefore be void.
It would all depend upon the materiality of the particular term which is incorporated in the form.
If the non compliance with the requirements of the form were such as to make the document something else by reason of a characteristic part of the form not being followed or the document would lose some legal effect which it would have had if the proper words had been inserted therein, it cannot be said that there is sub stantial compliance with the statutory form.
Considering the term as to measurement in this light, it appears that the same had its basis in the requirements of the trade in regard to the pressing of the bales.
The bales which were the subject matter of these forward delivery contracts were either meant for transport within the country or export outside the country.
The bales were to be fully pressed so as to occupy the minimum space either in transport by rail or by steamer and initially they were bound with hoops.
The baling hoops were however difficult to obtain from Japan and therefore the bales came to be bound with ropes made of cotton, jute coir and hemp.
The bales thus bound otherwise than with hoops (1) (3) (4) , 357 occupied more space and difficulties were encountered by the merchants because of their being obliged to pay extra insurance and freight charges in respect of such bales.
Not only did the railways charge more for the transport of such bales, the shipping companies also did so and the insurance companies charged higher rates for insurance because the bales were not pressed in a manner which would minimise the risks of insurance.
All these factors brought about a situation creating difficulties between the purchasers and the sellers of cotton and these difficulties had to be resolved by the Association.
by law 101 had proceeded on the basis of cotton bales being bound with hoops, the approximate measurement in tons as agreed and understood in the trade being, 13 1/2 tons per 50 bales.
That was the standard measurement.
It was open however to the parties to agree upon any other measurement.
If any measurement other than the standard measurement was agreed to, an adjustment had to be made by reason of such difference in measurement and by law 101 provided that certain amount therein specified had got to be paid by the seller to the purchaser as and by way of allowance for such excess measurement.
Towards October, 1942, the situation in regard to the baling hoops deteriorated so much that it was thought desirable that bales bound with ropes should be permitted to be tendered under the by laws of the Association and that the operation of by law 101 as regards measurements should be suspended.
There were heavy fluctuations in the prices of the materials permitted to be used, and it was therefore thought advisable to fix certain allowances from time to time or before the beginning of the delivery periods taking into consideration the extra insurance and freight charges, if any, in respect of such bales.
A sub committee appointed by the Association made a report in this behalf on October 29, 1942, and on November 20 1942, the Board of Directors of the Association passed a resolution approving the recommendations of the subcommittee with this modification that the allowance to be prescribed in the price of bales bound with ropes 358 as against the price of bales bound with hoops as provided in by laws 96 and 119, be fixed before the commencement of the season and not be altered from time to time.
The Board of Directors issued a notice on November 30, 1942, suspending the operation of bylaw 101 as regards the measurement until further notice.
The position as it obtained at the time when the suit contracts were entered into was that by law 101 as regards measurement had been suspended and there was no necessity so far as the by laws went to make any mention in the contracts in regard to the same.
If the claim for excess measurement had not to be entertained, it was not at all necessary to mention the measurement in the contract forms and there would be substantial compliance with the contract form, even though no measurement was mentioned therein, the very basis for the mention of such measurement having disappeared.
It was, however, urged on behalf of the appellants that measurement was an essential part of the description of the goods sold and the suspension of by law 101 made it all the more necessary that the measurement should be specified in the contract form itself.
The standard measurement which had been mentioned in by law 101 had disappeared and it would therefore be necessary to mention in the contract form what was the measurement on the basis of which the price of the contract had been fixed by and between the parties.
If the bales actually tendered measured more in weight than what was actually agreed upon, the purchaser would be entitled to obtain from the seller an allowance for such excess measurement and that was the reason why it was necessary after the suspension of by law 101 to mention the agreed measurement between the parties.
This argument however ignores the fact that simultaneously with the suspension of the operation of the by law 101, by laws 96 and 119 which referred to forward and hedge contracts respectively were altered and provision was made therein to incorporate measures consequent upon the tender of bales bound with ropes 359 in place of bales bound with hoops.
The consequences of such tenders were worked out in the by laws as thus amended and allowances in the price of bales bound with ropes as against the price of bales bound with hoops were also provided for.
These allowances were in accordance with the resolution of the Board dated November 20, 1942, to be fixed before the commencement of the season and if such allowances were provided for there was nothing further to be done in regard to the difference in measurement, if any.
If the situation which obtained after November 20, 1942, provided for a tender of bales bound with ropes instead of bales bound with hoops in fulfilment of the contracts entered into between the parties, that was well known to all the members of the Association and it was open to them while fixing the prices themselves to take count of the extra charges for insurance and freight which would be payable by the purchaser in the event of bales bound with ropes being tendered instead of bales bound with hoops.
It, therefore, follows that the omission to mention the measurements in the contract notes did not render the contracts not in accordance with the by laws.
There was no such by law in operation at the time and even otherwise there was no need whatever to incorporate in the contract notes any term as to measurement.
It could not therefore be said that there was any departure from an essential or a characteristic part of the contract form or that the legal effect of the contracts was changed so as to invalidate the same.
When we come to the term in regard to the differences of Rs. . . above or below the settlement rate of hedge contract No. . . we find that that had reference to periodical settlements of contracts through the clearing house.
In accordance with bylaw 139 all delivery contracts other than those excepted under by law 136 and hedge contracts were subject to periodical settlements through the Clearing House which settlements had to be made once weekly on days fixed by the Board.
If the contracts had got to go through the clearing house in this manner it was necessary also that settlement rates should be fixed 360 and by law 141(1) provided that settlement prices for all positions of the hedge contract should be fixed by the Board.
The settlement prices thus fixed were to be taken as the basis for the periodical settlement of delivery contracts and it was further provided in bylaw 141(2) that such allowance as shall be agreed upon by the parties in their contracts to cover any difference between the cotton contracted for and the cotton which was the basis of the hedge contract shall be added to or deducted from the said settlement prices.
This was the basis of the provision contained in the relevant term of the contract form.
In the case of contracts for descriptions not renderable against the hedge contract it was open to the parties either to agree upon an allowance above or below the hedge contract or they would make an application to the Board to fix the settlement rates.
Whenever there was an agreement in this behalf the parties were to mention the difference thus agreed into the contract form and the periodical settlements of delivery contracts were to be effected on that basis.
The question arises as to whether the parties were bound to enter into any such agreement at the time they entered into the contracts.
It was contended on behalf of the appellants that such an agreement was necessary because it would otherwise involve the parties into payment of large sums of money on the settlement day next after the day of the contract.
The hedge contracts appertained to cotton of the lowest average and if the quality of cotton which was the subject matter of the contract between the parties was, as was usual, of a higher variety, it would involve the payment of large amounts by way of differences on the next settlement day, which certainly would not be within the contemplation of the contracting parties.
If that was so, the parties would agree to a difference between the rates of the cotton contracted for and the cotton which was the basis of the hedge contract and this difference above or below would serve to minimize the incidence of such payment on the next settlement day.
It was, therefore, submitted that it was incumbent on the parties when entering into a contract to 361 fill in this term as to differences.
If they agreed upon such differences the blank had to be filled in accordingly; but even though they did not agree upon any such differences, it was necessary for them to mention in the contract form that the difference above or below the rate of the hedge contract agreed upon by them was nil.
It was contended on the other hand on behalf of the respondent that there was no obligation on the parties entering into the contract to fill in that term.
If they agreed upon the difference all well and good but if they did not agree upon the difference, the first part of by law 141(2) stepped in and the consequences had to be worked out as if there was no agreement and the differences had to be paid on the settlement day next ensuing on the basis of the difference between the contract rates and rates of hedge contract, even though it may involve a payment of a substantial amount all at once.
According to this submission, in the case of contracts for descriptions tenderable againt the hedge contract two positions arose: viz., (1) parties to the contract may not agree to any difference in which case it would not be necessary to fill in that term in the contract note or (2) they may agree to the difference in which event the difference would be mentioned in the contract note.
In the case of contracts for descriptions which were not renderable against the hedge contract three positions would arise, viz., (1) the parties may not agree upon any difference in which event it would not be necessary to fill in the term as to difference in the contract notes; (2) the parties may agree upon such difference and that would have to be mentioned in the contract notes or (3) the parties could apply to the Board to fix the settlement rates.
It appears that the contention urged on behalf of the appellants would be more in consonance with business idea, , because no business man would think of immediately forking out a large sum of money on the next ensuing settlement day.
It would be tantamount to paying the price of the goods or a substantial part thereof long before the due date of delivery ever 46 362 arrived.
While recognizing the necessity of arriving at an agreement in this manner we are, however, not impressed with the argument that in the event of no such agreement as to the difference having been reached it would even so be necessary to mention in the contract note that the difference agreed upon was nil.
When the parties entered into the transactions all the terms and conditions of the contract would certainly be negotiated and agreed upon between them.
It would be open to them, in view of the by laws above referred to, to agree upon the difference above or below the settlement rate of hedge contracts for the purpose of facilitating the settlements through the clearing house.
But if no such difference above or below the settlement rate of hedge contracts were agreed upon between the parties, it would not necessarily follow that the word nil had got to be mentioned in the contract notes.
The very fact that no difference above or below the settlement rate of hedge contracts was agreed upon in the manner contemplated would be enough to spell out an agreement that no such difference was to be computed in arriving at the settlement rates in respect of these contracts.
If that was the true position it would be Superfluous to write the word " nil " as contended for by the appellants and the consequences, of such non mention would be the same as if the difference agreed upon was nil.
By law 141 (2) could then be worked out without any difficulty and the settlement rates in the case of delivery contracts would be fixed on the basis of the settlement price of the hedge contracts taking into account the facts that there was either no difference which was agreed upon or that the difference agreed upon was a specific one which was mentioned in the contract notes.
It was however pointed out on behalf of the respondents that the official contract form contained the expression " above/below the settlement rate of hedge contract No. .
Even though this may have been in consonance with the position as it obtained when the hedge contracts of five different varieties were in vogue, involving the specification of hedge contracts as Nos.
I to 5, that position substantially chanced 363 when hedge contracts of these 5 varieties were abolished and in their place and stead was substitute, a hedge contract called the 1.
The five varieties of hedge contracts were also for different deliveries which did not necessarily coincide one with the other and these contracts were not on the market all at one time, With the result that it would be necessary if the requirements of the contract form had to be complied with to fill in the blank not only by describing the hedge contract number, whether it was one or the other of the numbers I to 5 but also the particular hedge contract of a particular delivery.
Even if it may be assumed that the blank to be filled in in this behalf required a mention not only of the hedge contract No but also of a particular delivery thereof, all that went by the board when the I. C. C. was substituted in place of the hedge contract Nos.
I to 5.
The old contract form which had been prescribed by by law 80 was continued without any change being effected therein by virtue of such substitution and if at all the parties to a contract were to fulfill the requirements of the contract form, it would be necessary for them to strike out the words " hedge contract No and put in their place and stead the word " 1. C. C. " Even there the 1.
C. C. appertained to different deliveries which were not on the market all at one time.
The months of delivery were nowhere required to be filled in in the contract form, whether the contract form required the parties to have regard to the hedge contract No or the I. C. C., and to that extent, it can be said that the parties were expected to rely upon their commonsense and the practice of the trade as to what particular delivery was contemplated when the contracts were entered into between them.
All this goes to show that the parties to the contract were not tied down to a literal compliance with the terms contained in the official contract form but were required to act according to the position as it then obtained and if they substantially complied with the requirements of the contract form that was enough.
If the hedge contract No was not in vogue in the 364 market they need not conform to that provision in the official contract form but could make the necessary changes in accordance with the type of hedge contract which was then in vogue.
Similarly, they would have to record in the contract form the agreement reached between them in regard to the difference of Rs. above or below the settlement rate of the hedge contract No. if they came to a particular agreement in that behalf.
if, however, no such agreement was reached between the parties and here the effect of no agreement having been arrived at in regard to such difference would be the same as if the agreement between them was that the difference was to be nil no mention need be made of such difference in the contract form.
The result of either of the two latter positions would be that if the contracts were to pass through the Clearing House the settlement rates would be determined on the basis of the settlement price of the hedge contract fixed by the Board for those various settlements and the parties would have to pay to or receive from one another the differences calculated on the difference between the contract rates and those settlement rates.
The whole of this discussion, however, is academic by reason of the fact that in practice delivery contracts were not put through any periodical settlements and at all material times the operation of this term in the official contract form ' had become obsolete.
This position was not disputed on behalf of the appellants and their counsel stated before the Court that he did not wish to dispute the fact that delivery contracts were at no time submitted to periodical settle ments in the Association.
The effect of this procedure being adopted in the Association was tacitly to suspend the operation of these by laws as to periodical settlements in respect of delivery contracts and it would be superfluous, nay absurd, on the part of the business people entering into contracts subject to the by laws of the Association to incorporate in the contract form provisions which had become obsolete.
If the contracts were not to pass through the periodical settlements in the Clearing House no question would 365 ever arise of settlement rates requiring to be fixed, much less of the basis of such settlement rates being determined, or of the difference of Rs. above or below the settlement rate of hedge contracts being ever agreed upon between the parties.
If under those circumstances, the parties did not fill in those blanks which required to be filled in in the official contract form on the basis of by laws 139 and 141 being in operation, it could not be said that they had failed to substantially comply with the requirements of the official contract form.
The official contract form had to be filled in so far as it was practicable.
The operation of these by laws was in effect suspended and by the tacit understanding of the trade they were to be treated as if they did not exist.
It could not therefore be urged that the parties were put to the necessity of agreeing to such differences, if having regard to the circumstances that prevailed, it was impracticable to do so and if these blanks were not filled in as originally contemplated the contract notes could certainly not be impeached as being not in accordance with the by laws of the Association.
It was, however, urged on behalf of the appellants that if the parties to the contracts intended not to comply with the requirements of by laws 139 and 141 that would by itself vitiate the contracts because in that event the contracts would certainly be not in accordance with the by laws of the Association.
The parties in that event intended to perpetrate an illegality at the very inception of the contracts and the contracts were therefore void.
There is considerable force in this argument but we do not feel called upon to consider the same in view of the fact that that was not the ground on which the validity of the suit contract was challenged in the plaint.
We are therefore of the opinion that the omission to fill in those blanks in the contract notes did not spell any departure from an essential or a characteristic part of the contract form nor was the legal effect of the contracts in any manner changed thereby rendering the contracts void within the meaning of section 8 of the Bombay Cotton Contracts Act, 1932.
366 Both these grounds of attack against the validity of the contracts in question therefore fail and we are of the opinion that the contracts entered into between the appellant, , and the respondents were not void as alleged.
The appellants were therefore not entitled to recover from the respondents the said sum of Rs. 1,80,099 8 0 or any part thereof as alleged or at all and we are of the opinion that the appellate Court was right in rejecting the appellants ' claim.
We cannot part with this appeal without observing that the whole difficulty has been created by reason of the Association not having made the necessary alterations in the contract form in accordance, with the situation as it obtained.
from time to time.
When by law 101 was suspended in operation the Association ought to have deleted the term as to measurement from the contract form.
When the by laws 139 and 141 were virtually abrogated by reason of the delivery contracts not being subjected to periodical settlements in the Clearing House, the Association ought to have similarly deleted the last clause from the official contract form which required the difference of Rs above or below the settlement rates of hedge contract No to be filled in by the parties.
Equally untenable west he retention of the expression " Hedge Contract No when the five different varies of hedge contracts were abolished and one hedge contract named 1.
C. C. was substituted therefor.
We fully endorse the observations made by the appellate Court in the course of its judgment: " We have had occasion to point out in the past how badly the by laws of the East India Cotton Association are drafted and how clumsily the forms also settled, and the present form is an illustration of what we have had occasion to say in the past.
" The manner in which the official contract form which had been settled when the by laws of the Association came first to be promulgated has been retained in its pristine glory in spite of the various changes made in the operation of the by laws and the practice of the trade only enhances the difficulties of the parties and enables the parties who are so minded to raise all 367 sorts of disputes tenable or otherwise in order to avoid their liability in respect of the transactions effected by them in the Association.
It may be hoped that the Association will take effective steps to bring the official contract form in conformity with the bylaw,% in operation from time to time and the practice of the trade prevailing in the Association.
The result therefore is that this appeal fails and must stand dismissed with costs throughout.
Appeal dismissed.
| Customs Notification No. 200/79 dated 28.9.1979 exempts components required for the manufacture of heavy commercial motor vehicles or of tractors from customs duty in excess of 25 per cent ad valorem and whole of the additional duty leviable thereon.
Notification No. 179/ 80 dated 4.9.1980 exempts components required for the purpose of initial setting up or for the assembly or manufacture of tractors, an article falling under Heading No. 87.01(1) of the First Schedule of the Act from so much of the customs duty as is in excess of the rate applicable to the said article when imported complete.
The appellant company imported three consignments of components of agricultural tractors.
The Directorate General of Technical Development issued certificate in terms of notification No. 179/80 stating that the appellant company was holding a valid industrial licence for the manufacture of agricultural tractors and have an approved manufacturing programme.
The appellant cleared the goods availing itself of the said concession.
Having realised later that it was entitled to the larger concession available under Notifica tion No. 200 of 1979, it filed three applications in respect of the said consignments claiming refund to the extent of the difference between the entitlements to concession under the two notifications.
The DGTD issued certificates in terms of notification No. 200 of 1979 in its favour.
The Assistant Collector of Customs rejected assessee 's prayer on the ground that it had failed to produce end use certificate.
Its appeals before the Collector of Customs (Appeals) failed.
The Customs, Excise and Gold (Control) Appellate Tribunal dismissed the appeal on the ground that the appellant did not produce the approved manufacturing programme at the time of clearance of the goods as required under Notification No. 200 of 1979.
282 In these appeals it was contended for the respondents that since the amended certificates were not produced at the time of clearance but only much later the assessee was not entitled to the concession under Notification No. 200 of 1979.
Allowing the appeals, HELD: 1.
The assessee is entitled to the concession available under Notification No. 200 of 1979.
[287B C] 2.1 The grant of concession depends on production of evidence by the importer to the Assistant Collector of Customs at the time of clearance of the components or the goods that they have a programme duly approved by the Minis try of Industry and the Industrial Adviser or Additional Industrial Adviser of the Directorate General of Technical Development of the Ministry of Industry for the manufacture of such motor vehicles or of tractors and not on the refer ence in the certificates to the notifications that can be availed of by the assessee.
[286C D; 287B] 2.2 In the instant case, the assessee had produced unequivocal evidence in the form of original set of certifi cates from DGTD at the time of clearance of the goods of the fact that the appellant held a valid industrial licence for the manufacture of agricultural tractors and that it also had an approved manufacturing programme.
That was sufficient compliance with the terms of the notification in question.
The omission of the assessee to request the DGTD to refer to the assessee 's entitlement under the 1979 notification or the omission of the DGTD to refer to the assessee 's entitle ment under the 1979 notification cannot take away the asses see 's rights.
The order of the Tribunal is, therefore, set aside.
[286F H; 287A]
|
Civil Appeal No. 740 of 1978.
From the Judgment and Decree dated 18.3.1975 of the Andhra Pradesh High Court in C.C.C.A. No. 106 of 1969.
G.A. Shah, V.J. Francis and N.M. Popli for the Appellant.
S.B. Bhasme, P.K. Pillai and Dilip Pillai for the Respondents.
The Judgment of the Court was delivered by SAWANT, J.
Although the leave granted by this Court is limited to the question whether the plaintiff is entitled to an amount of Rs.75,000 which according to him he had actually advanced and the respondents had received for the purpose of prosecuting their litigation, and, therefore, the issue to be answered lies within a narrow 331 compass, it is necessary to state the relevant facts briefly to understand correctly the significance of the question to be answered.
Nawab Salar Jung III, a celebrity of the erstwhile State of Hyderabad expired on March 2, 1949 leaving behind him no issue but a vast estate.
As was expected, several persons came forward claiming to be his heirs, and among them were Sajjid Yar Jung and Turab Yar Jung who claimed to be his first cousins.
The Nizam by a notification of May 9, 1949, appointed a Committee to administer the estate of the late Nawab Salar Jung.
On the merger of the Hyderabad State, the Central Government by the , continued the Committee and also provided that no suit or other legal proceeding for the enforcement of any right or remedy in respect of any asset, shall be instituted in any court by any person other than the Committee except with the previous consent of the Central Government.
In the meanwhile, on May 31, 1949, the Nizam had already appointed a Commission to enquire into the question of succession to the estate, and one of the questions referred to the Commission was whether the Jagir of the late Nawab Salar Jung escheated to the Government and another was the ascertainment of his heirs.
The Commission was unable to proceed with the inquiry as some of the claimants filed a writ petition in the High Court of Andhra Pradesh challenging the jurisdiction of the Commission to enquire into the question of succession.
The High Court, by its decision of September 23, 1952 held that the Commission was not the proper forum for determining the question of succession and directed that the management of the estate should remain with the Committee until the question was settled by a Civil Court.
The question was ultimately settled by compromise between the various claimants including the Government.
The compromise was incorporated in a decree dated March 5, 1959 passed in a suit being Suit No. O.S. 13/58 which was filed by some of the claimants.
The present proceedings are an offshoot of the said suit.
Sajjid Yar Jung who claimed to be one of the first cousins of the late Nawab Salar Jung did not have the wherewithal to establish his claim to a share in the estate.
He approached the plaintiff who was a businessman of Bombay for financial help to enable him to establish his claim.
According to the plaintiff, he agreed to do so and Sajjid Yar Jung agreed to return all amounts to be advanced to him from time to time and also to give the plaintiff one anna share in the amount that 332 would be received by him from the estate.
The agreement was executed in writing on June 27, 1952 which is the subject matter of the present proceedings.
Pursuant to this agreement Sajjid Yar Jung and his agents drew large amounts from the plaintiff from time to time, totalling to about Rs.75,000.
Sajjid Yar Jung expired before the plaintiff received his share of the amount as per the agreement but after Sajjid Yar Jung successfully established his claim to the share in the estate.
According to the plaintiff, the amount due to Saijid Yar Jung from the estate was about Rs.60 lakhs and hence he claimed Rs.3 lakhs as his share (calculated at one anna in a rupee) in addition to the return of the sums advanced by him which as stated above was Rs.75,000.
The plaintiff, therefore, filed the present suit against the heirs of Sajjid Yar Jung for accounts and for administration of his estate and for distribution of the amount among the plaintiff and the defendants.
He also joined the receiver of the estate of Nawab Salar Jung Bahadur as one of the defendants to the suit.
The heirs of the late Nawab Sajjid Yar Jung (hereinafter referred to as "Nawab") contested the suit and denied that the plaintiff had advanced any amounts to the Nawab.
They also raised other contentions including the contentions that the suit was barred by limitation and that the agreement of June 27, 1952 was unenforceable in law as it was in the nature of a champerty deal which was opposed to public policy and forbidden by law.
The City Civil Court where the suit was filed found that the agreement was genuine, that it was admissible in evidence, that the amounts were advanced by the plaintiff to the Nawab and that the suit was not barred by limitation.
However, the Court found that the agreement was opposed to public policy as the object of the agreement was that the plaintiff should wield his influence with Central and State Ministers to have the Nawab recognised as the heir to the estate in return for his being given one anna share in the amount to be received by the Nawab.
The Court, therefore, held that the agreement in question was not enforceable.
The Court also held that even the amounts actually advanced by the plaintiff and received by the Nawab could not be recovered by the plaintiff.
Accordingly, the Court dismissed the suit with costs.
The plaintiff preferred an appeal to the High Court.
The Division Bench of the High Court held that the appeal had abated against all the respondents on account of the failure of the plaintiff appellant to bring on record the heirs of one of the respondents, viz., Askar Nawab Jung who had died pending the appeal.
On 333 merits, the Bench also held that the agreement was against the public policy.
The Court further held that the agreement was one whole agreement and hence the plaintiff was not entitled to recover even the amount of Rs.75,000 which was actually advanced by him to the Nawab for prosecuting the litigation.
It is this decision which is challenged before us.
As stated earlier, leave has been granted only in respect of the said amount of Rs.75,000 and, therefore, we are concerned in the present appeal only with the question as to whether the conclusion arrived at by the High Court, i.e., that the agreement is opposed to public policy and the actual advance of Rs.75,000 was a part of the whole agreement and was, therefore, also tainted by the vice of being contrary to public policy is correct.
That the amount of Rs.75,000 was advanced by the plaintiff to the Nawab for prosecuting his claim as a sharer in the estate, is not disputed.
In fact, the Nawab had to approach the plaintiff and had to enter into the agreement in question for the express purpose of successfully prosecuting his claim.
The plaintiff cannot also contend that he had agreed to and did advance the said amount of Rs.75,000 only because he wanted and expected the Nawab to be successful in the prosecution of his claim.
The advance was not a friendly loan or without consideration.
The agreement itself stipulated that on the successful establishment of the claim, the Nawab would not only return the said advance but would also pay to the plaintiff consideration for the said advance.
That consideration was agreed to be at the rate of one anna in a rupee.
It is, therefore, apparent on the face of the record that the advance and the share in the estate, were a part of the same contract one as a consideration for the other.
The two stand together and none can stand without the other.
Hence, I am not impressed by the contention advanced by Shri Shah for the appellant that the amount of Rs.75,000 which was advanced by the appellant can be separated from the other agreement or could be treated differently.
I am in agreement with the High Court that the agreement has to be treated as a whole and the two parts, viz., the advance and the consideration for the same cannot be separated from each other.
The next question is whether the advance in question was opposed to public policy.
On this question, Shri Shah took us through the law on the subject, and contended that both the City Civil Court as well as the High Court have created a new head of public policy to declare the agreement as void, although according to the relevant 334 statutory Provisions as well as the decisions of the Court, the agreement is not void.
In the first instance, he referred us to the provisions of Sections 23, 65, 69, 70 and Part (ii) of Section 73 of the Indian Contract Act.
Section 23 states that the consideration or object of an agreement is lawful, unless it is forbidden by law; or is of such a nature that, if permitted, would defeat the provisions of any law, or is fraudulent; or involves or implies injury to the person or property of another; or the Court regards it as immoral, or opposed to public policy.
In each of these cases the consideration or object of an agreement is said to be unlawful.
Every agreement of which the object or consideration is unlawful is void.
He then pointed out to us that the specific rule of English law against maintenance and champerty have not been adopted in India and a champertous agreement is not per se void in this country.
He contended that before a champertous agreement is held to be void, it must be shown that it is against public policy or against justice, equity and good conscience.
He contended in this connection that the Nawab admittedly did not have sufficient finance to prosecute his claim though, he had a valid claim as shown by the result of the litigation in that behalf.
The plaintiff, therefore, did not do anything wrong in advancing the amount in question to him to enable him to establish his claim successfully since the Nawab could not have repaid the amount unless he got a share in the estate.
It was a legitimate exercise to reduce the agreement to writing and to stipulate therein that the amount should be repaid along with a share in the estate when the Nawab 's claim was established.
The share in the estate being only one anna in a rupee could not also be said to be on the high side and conscionable.
The High Court has given a finding in that behalf in favour of the appellant.
The High Court has, however, held against the appellant only on the ground that the agreement was against public policy.
He strenuously urged that if the champertous nature of the agreement is ignored which it is legitimate to do so in this country, there is no other ground of public policy on which the agreement can be struck down.
In this connection, he referred us to the decision of this Court in the matter of Mr. 'G ', a Senior Advocate of the Supreme Court, where it is reiterated that a champertous contract would be legally unobjectionable if no lawyer was involved and that the rigid English rules of Champerty and Maintenance do not apply in India.
In that case, he pointed out to us that the agreement was held unenforceable because it was agreement between a lawyer and his client and it amounted to professional misconduct.
However, this Court has also observed there that if such an agreement had been 335 between a third party "it would have been legally enforceable and good.
It may even be that it is good in law and enforceable as it stands though we do not so decide because the question does not arise; but that was argued and for the sake of argument even that can be conceded.
It follows that there is nothing morally wrong, nothing to shock the conscience, nothing against public policy and public morals in such a transaction per se, that is to say, when a legal practitioner is not concerned.
But that is not the question we have to consider.
However much these agreements may be open to other men what we have to decide is whether they are permissible under the rigid rules of conduct enjoyed by the members of a very close professional preserve so that their integrity, dignity and honour may be placed above the breath of scandal".
His second leg of the argument rested on the other provisions of the Indian Contract Act to which I have made reference above.
He contended that even assuming that it was an agreement to receive consideration a share in the claim that was to be established by the Nawab, it was not against public policy.
He contended that the amount in question was admittedly advanced and an advantage of it was taken by the Nawab to establish his claim.
He had, therefore, to return the same to the appellant.
In this connection, he referred to us to the other provisions of the Indian Contract Act to which I have made a reference earlier.
Section 65 states that when an agreement is discovered to be void or 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.
Section 69 states that a person who is interested in the payment of moneys which another is bound by law to pay, and who therefore pays it, is entitled to be reimbursed by the other.
Section 70 declares that where a person lawfully does anything for another person, or delivers anything to him, not intending to do so gratuitously, and such other person enjoys the benefit therefore, the latter is bound to make compensation to the former in respect of, or to restore, the thing so done or delivered.
Part (ii) of Section 73 states that when an obligation resembling those created by contract has been incurred and has not been discharged, any person injured by the failure to discharge it, is entitled to receive the same compensation from the party in default as if such person had contracted to discharge it and had broken his contract.
Shri Shah also referred us to the provisions of Section 84 of the which reads as follows: 336 "84.
Where the owner of property transfers it to another for an illegal purpose and such purpose is not carried into execution, or the transferor is not as guilty as the transferee, or the effect of permitting the transferee to retain the property might be to defeat the provisions of any law, the transferee must hold the property for the benefit of the transferor.
Relying on these statutory provisions as well as the judicial decisions, he contended firstly that assuming that the agreement was a champertous one, it was neither immoral nor against public policy, and secondly even de hors the agreement, the appellant is entitled to the said advance of Rs.75,000 under Section 70 of the Indian Contract Act.
The High Court referred to the evidence on record in appeal which had an intimate bearing on the nature and the purpose of the agreement in question and came to the following conclusions.
The Court held that the plaintiff appellant was approached by the Nawab because being a businessman of eminence, he was highly influencial.
He had an access to the ministers and other worthies in the Government.
He was in a position to secure to the Nawab his claim by wielding his influence.
The Nawab knew about it and the plaintiff was also confident about it.
It 'was immaterial that those whom he had approached were men of high repute and great integrity of character.
The fact that because of his accessibility he could get things done through them or could make use of his other standing with them to deliver goods to the Nawab, was enough to taint the entire agreement with the vice of introducing corruption in public life.
The High Court also found that the advance which was made was in the nature of an investment to share the booty.
There was no reason for the plaintiff who was a total stranger to the Nawab to undertake the financing in question which was in those days on a considerably high scale.
No person who was not confident of delivering the goods would have embarked on financing on such a liberal scale.
The plaintiff admittedly was a businessman who knew the value of each pie he was spending.
He was doing it as a fruitful investment with sure returns.
That is evident from the terms of the contract themselves since both the advance and the consideration for which the advances were made form part of one integral contract.
On these facts which are on record, the High Court came to the conclusion that the parties had entered into the agreement in question with the avowed purpose that the plaintiff would use his then prevailing influence with the worthies in the 337 Government to secure the gains for the Nawab.
The Court On this evidence came to the conclusion that the agreement was nothing but one obviously made to lend services as a "go between" or a "carrier" for commission.
This being so, it was against public interest and detrimental to the health of body politic.
The High Court further repelled the contention that either the City Civil Court or it was evolving a new head of public policy by referring to a decision of this Court in Ghurelal Parakh vs Mahadeodas Maiya & Ors., AIR 1959 SC 781=(1959) Suppl.
2 SCR 406 and the decisions of the English Court and to opinions of the jurists/experts in treatises and essays on the subject of public policy.
The Court also pointed out that this was by no means a new head of public policy and it can come under the head "agreements tending to injure the public" as mentioned at page 325 of Anson 's Law of Contract (23rd ed).
I am in respectful agreement with the conclusion arrived at by the High Court.
It cannot be disputed that a contract which has a tendency to injure public interests or public welfare is one against public policy.
What constitutes an injury to public interests or welfare would depend upon the times and climes.
The social milieu in which the contract is sought to be enforced would decide the factum, the nature and the degree of the injury.
It is contrary to the concept of public policy to contend that it is immatable, since it must vary with the varying needs of the society.
What those needs are would depend upon the consensus value judgments of the enlightened section of the society.
These values may sometimes get incorporated in the legislation, but sometimes they may not.
The legislature often fails to keep pace with the changing needs and values nor is it realistic to expect that it will have provided for all contingencies and eventualities.
It is, therefore, not only necessary but obligatory on the courts to step in to fill the lacuna.
When courts perform this function undoubtedly they legislate judicially.
But that is a kind of legislation which stands implicitly delegated to them to further the object of the legislation and to promote the goals of the society.
Or to put it negatively, to prevent the frustration of the legislation or perversion of the goals and values of the society.
So long as the courts keep themselves tethered to the ethos of the society and do not travel off its course, so long as they attempt to furnish the felt necessities of the time and do not refurbish them, their role in this respect has to be welcomed.
It is true that as observed by Burrough, J. in Richardson vs Mellish, [ ; at 252 public policy is "an unruly horse and 338 dangerous to ride" and as observed by Cave, J. in re Mirams, [189] 1 QB 594 at 595 it is "a branch of the law, however, which certainly should not be extended, as judges are more to be trusted as interpreters of the law than as expounders of what is called public policy".
But as observed by Prof. Winfield in his article 'Public Policy in the English Common Law ' [1928]42 Harv.
L. Rev. 76, 91]: "Some judges appear to have thought it [the unruly horse of public policy] more like a tiger, and refused to mount it at all perhaps because they feared the fate of the young lady of Riga.
Others have regarded it like Balaam 's ass which would carry its rider nowhere.
But none, at any rate at the present day, has looked upon it as a Pegasus that might soar beyond the momentary needs of the community.
" All courts are at one time or the other felt the need to bridge the gap between what is and what is intended to be.
The courts cannot in such circumstances shirk from their duty and refuse to fill the gap.
In performing this duty they do not foist upon the society their value judgments.
They respect and accept the prevailing values, and do what is expected of them.
The courts will, on the other hand, fail in their duty if they do not rise to the occasion but approve helplessly of an interpretation of a statute or a document or of an action of an individual which is certain to subvert the societal goals and endanger the public good.
The contract such as the present one which is found by the City Civil Court as well as the High Court to have been entered into with the obvious purpose of influencing the authorities to procure a verdict in favour of the late Nawab was obviously a "carrier" contract.
To enforce such a contract although its tendencies to injure public weal is manifest is not only to abdicate one 's public duty but to assist in the promotion of a pernicious practice of procuring decisions by influencing authorities when they should abide by the law.
To strike down such contracts is not to invent a new head of public policy but to give effect to its true implications.
A democratic society is founded on the rule of law and any practice which seeks to subvert or circumvent the law strikes at its very root.
When the Court discountenances such practice, it only safeguards the foundation of the society.
Even assuming, therefore, that the Court finds a new head of public policy to strike down such practice, its activism is not only warranted but desired.
339 The appeal is, therefore, dismissed.
In the circumstances of the case, there will be no order as to costs.
FATHIMA BEEVI, J. I have had the advantage of perusing the judgment prepared by my teamed brother, Sawant, J.
I agree with him that the appeal must fail.
I wish to say a few words.
The only point that arises for decision in the appeal is whether an amount of Rs.75,000 which the plaintiff claims to have advanced, is recoverable from the respondents.
The relevant facts have been stated by my learned brother and it is not necessary to repeat the same.
The City Civil Court found that the agreement on the basis of which the plaintiff claimed relief was opposed to public policy.
The object of the agreement according to the trial court was that the plaintiff should wield his influence with Central and State Ministers to have Sajjid Yar Jung recognised as the heir of late Nawab Salar Jung in return for his being given one anna share in the assets to be received by Sajjid Yar Jung from the estate of late Nawab Salar Jung.
The High Court has confirmed that under the agreement the plaintiff was to promote the cause of Sajjid Yar Jung in his being recognised as heir of the Nawab Salar Jung and for the help thus rendered to receive a share of one anna in a rupee out of the assets obtained.
The plaintiff appears to have advanced an amount of Rs.75,000 in promoting the cause of Sajjid Yar Jung as agreed upon.
The help in promoting the cause was much more than mere financing.
On the evidence the High Court found that the help Sajjid Yar Jung wanted from the plaintiff was to bring to bear his influence with the Central and State Ministers and the request for financial help was secondary to the request to represent the cause with the use of influence.
The High Court affirmed that the object of agreement was to influence the Central and State Ministers and to advance and expand all amounts necessary in that connection.
In the face of the concurrent findings with which we agree, I have no doubt in our mind that the contract relating to the payment of the amount is not severable from the agreement to promote the cause of Sajjid Yar Jung by wielding the influence the plaintiff had.
Every agreement of which the object or consideration is unlawful is void.
The consideration or object of an agreement is unlawful when the court regards it as opposed to public policy.
If anything is done against the public law or public policy that would be illegal in as much as the interest of the public would suffer in case a contract against public policy is permitted to stand.
Public policy is a principle of judicial 340 interpretation founded on the current needs of the community.
The law relating to public policy cannot remain immutable.
It must change with passage of time.
A bargain whereby one party is to assist another in recovering property and is to share in the proceeds of the action and such assistance is by using the influence with the administration, irrespective of the fact that the persons intended to be influenced are not amenable to such influence is against protection and promotion of public welfare.
It is opposed to public policy.
In this view, we would hold that the plaintiff cannot enforce the agreement to recover the amount from the respondents.
ORDER The appeal is, therefore, dismissed with no order as to costs.
R. section section Appeal dismissed.
| Appellant 's land was acquired by the Agra Town improvement Trust under the provisions of the U.P. Town Improvement Act, 1919.
For the land acquired, the appellant was paid a paltry sum.
No solatium was awarded as none was awardable under the Act.
[391B].
The appellant sought a reference before the Nagar Mahapalika Tribunal.
The Tribunal raised the compensation to Rs.1,45,839 and also awarded interest at the rate of 4 1/2 percent.
Still dissatisfied, the appellant moved the High Court in appeal.
The Nagarpalika also filed a cross appeal against enhancement.
The High Court allowed the appeal of the appellant and further enhanced the compensation by Rs.48,613 and the rate of interest to 6 percent.
On the amount of Rs.48,613 solatium at the rate of 15% was awarded by the High Court.
No solatium was however awarded on the slim Of Rs. 1,45,839 awarded by the Tribunal, on the ground that the appellant had not made a grouse or laid any claim to it in his grounds of appeal.
The High Court negatived the contention of the appellant that his claim to solatium was not based on any demand at his instance but it was rather a statutory duty of the Court to grant it.
Allowing the appeal, this Court, HELD: (1) Solatium, as the word goes, is "money comfort" quantified by the statute, and given as a conciliatory measure for the Compulsory acquisition of the land of the citizen, by a welfare state such as ours.
[392D E] 390 (2) The importance of the award of solatium cannot be undermined by any procedural brocades.
It follows automatically the market value of the land acquired, as a shadow would to a man.
It springs up spontaneously as a part of the statutory growth on the determination and emergence of market value of the land acquired.
That it falls to be awarded by the Court "in every case" leaves no discretion with the court in not awarding it in some cases and awarding in others.
[393A B] Om Prakash vs State of Uttar Pradesh, [19741 2 S.C.C. 731, referred to.
(3) Solatium in the scheme of section 23(2) of the Land Acquisition Act is part of the compensation and sections 28 and 34 of the said Act Provide for payment of interest on the amount of compensation.
[394H 395A] Periyar & Pareekanni Rubbers Ltd. vs State of Kerala, ; , referred to.
(4) Solatium being part of compensation must fetch statutory interest from the date of dispossession of the land owner tin date of payment.
[395D] Dr. Shamlal Narula V. Commissioner of Income Tax Punjab, ; , referred to.
|
Appeals Nos. 722 and 723 of 1993.
From the Judgment and Order dated 13.11.92 of the Allahabad High Court in W.P. Nos.
688 & 1246 of 1992.
WITH CIVIL APPEALS NOS.
386 and 387 of 1993 From the Judgment and Order dated 13.11.92 of the Allahabad High Court in W. P. Nos. 8 19 and 888 of 1992.
Rajiv Dhawan, P.K. Dey and Rakesh Gosian, Ms. Rani Jethmalani, (N.P.) for the Appellants in C.A. Nos.
722 23/93.
R.P. Saxena for the Appellants in C.A. Nos. 386 87/93.
Yogeshwar Prasad and Ms. Rachna Gupta for the Respondent.
J The appellants in Civil Appeals Nos.
722 & 723 of 1993 had been appointed as Assistant District Government Counsel (Criminal) to appear in different criminal cases, on behalf of the State, in different Courts in the District of Moradabad.
They filed the connected Writ Applications before the High Court against the decision of the State Government, refusing to extend their term for a farther period of three years, which were dismissed by the High Court.
It appears that the appellants.
except appellant No. 3, Gopal Sharma. had been appointed by Government Order dated 25.2.91.
as Assistant District Government Counsel (Criminal) in the District of Moradabad, in accordance with the provisions of Section 24 of the Criminal Procedure Code (hereinafter referred to as "the Code") and the Legal Remembrancer Manual (hereinafter referred to as "the Manual") against the substantive vacancies.
Appellant No. 3, however, had been appointed on 13.12.1990.
The last date of the tenure of the appellants, other than appellant No. 3, as mentioned in the aforesaid Government Order dated 25.
2.1991 was 31.12.199 1.
The tenure of appellant No. 3 was up to 13.12.199 1.
It is not in dispute that before the expiry of the term aforesaid, the District Judge, Moradabad, by his letter dated 27.12.1991 recommended the names of appellants for extension of their terms.
The District Judge prepared two lists i.e. 'A ' and 'B '.
List 'A ' contained the name of those lawyers "whose work and conduct has been approved for their extension as Government Counsel", whereas List `B ' contained the names of the remaining Government Counsel, who in the opinion of the District Judge were "average lawyers".
The names of the appellants are in List 'A ' The District Judge requested the District Magistrate.
Moradabad.
to send his recommendation to the State Government for extension of the term of tile Government Counsel, mentioned in List 'A '.
The District Magistrate.
after receipt of the recommendation of the District Judge aforesaid, by a communication dated 2.1.92, did not recommended the names of the appellants, for extension of their terms, saying that on the inquiry at his level, "reputation, professional work, behaviour and conduct of the above mentioned Government Counsel was not found in accordance with public interest".
It may be mentioned that on 28.12.9 1. tile State Government had extended the terms of the appellants till further orders.
Ultimately, without assigning any reason, the extension recommended by the District Judge was rejected by the State Government, which decision is the subject matter of the controversy in the present appeals.
In the State of U.P., the Manual is an authoritative compilation of the government orders and instructions for the conduct of legal affairs of the State Government.
Para 1.00 of Chapter VII gives the details of the Law Officers of the Government which includes the Government Counsel (Civil, Revenue, Criminal) 975 along with many others like Judicial Secretary and Legislative Secretary.
The Chapter VII of the contains the procedure in respect of appointment and conditions of engagements of District Government Counsel.
The District Officer is required it) consider all the applications received.
in consultation with the District Judge and to submit in order of preference the names of ' the legal practitioners, along with the opinion of the District Judge on tile suitability and merit of each candidate to the State Government giving due wightage to the claim of the existing incumbents, if any.
After the receipt of such recommendations, the Legal Remembrancer is required is required to submit the said recommendations with his own opinion for the orders of the State Government.
In Para 7.06 of the Manual, the procedure regarding the appointment and renewal has been prescribed "7.06.
Appointment and renewal (1) The legal practitioner finally selected by the Government may be appointed District Government Counsel for one year from the date of his taking over charge.
(2)At the end of the aforesaid periodic the District Officer after consulting the District Judge shall submit a report on his work and conduct to the legal Rememberancer together with the statement of work done in Form No. 9.
Should his work or conduct be found to he unsatisfactory the matter shall be reported to the Government for orders.
If the report in respect of his work and conduct is satisfac tory, he may be furnished with a deed of engagement in Form No. 1 for a term not exceeding three years.
On his first engagement a copy of Form No.2 shall he supplied to him and lie shall complete and return it to the legal Remembrancer for record.
(3)The appointment of any legal practitioner as a District Government Counsel is only professional engagement terminable at will on either side and is not appointment to a post under the government.
Accordingly the government reserves the power to terminate the appointment of any District Government Counsel at any time without assigning any cause.
" Para 7.08 contains the procedure for renewal after expiry of the original term: "7.08.
Renewal of term (1) At least three months before the expiry 976 of the term of a District Government Counsel, the District Officer shall after consulting tile District Judge and considering, his past record of work, conduct and age, report to the Legal Remembrancer together with the statement of work done by him in Form No.9 whether in his opinion the term of appointment of such counsel should be renewed or not.
A copy of the opinion of the District Judge should also he sent along with the recommendations of the District Officer.
(2)Where recommendation for the extension of the term of a District Government Counsel is made for a specified period only the reasons therefore shall also he stated by the District Officer.
(3) While forwarding, his recommendation for renewal of the term District Government Counsel (i) the District Judge shall give an estimate of the quality of the Counsel 's work from the judicial standpoint, keeping, in view the different aspects of a lawyers capacity as.
it is manifested before him in conducting, State cases, and specially his professional conduct.
(ii) the District Officer shall give his report about the suitability of the District Government Counsel from the administrative point of view, his public reputation in general his character.
integrity and professional conduct.
(4) If the Government agrees with the recommendations of the District Officer for the renewal of the term of the Government Counsel, it may pass orders for re appointing him for a period not exceeding three years.
(5) If the government decides not to re appoint a Government Counsel, the Legal Remembrancer may call upon the District Office r to forward fresh recommendations in the manner laid down in para 7.03.
(6) The procedure prescribed in this para shall be followed on the expiry of every successive period of renewed appointment of a 977 Dist Government Counsel.
Note : The renewal beyond 60 years of age shall depend upon continuous good work, sound integarity and physical fitness of the Counsel.
It was pointed out on behalf of the appellants, that any legal practitioner finally selected by the Government may be appointed as District Government Counsel for one year from the date of his taking over charge, but in view of Para 7.06 of the Manual at the end of the aforesaid period the District Magistrate after consulting the District Judge has to submit a report on his work and conduct to the Legal Remembrancer in the form prescribed.
If the report in respect of his workand conduct is satisfactory, then such Counsel shall be furnished with a deed of engagement in form No. 1 for a term not exceeding three years.
Para 7.08 of the Manual contains the procedure for renewal of the term of the District Government Counsel after the expiry of original term.
It requires the District Officer at least three months before the expity of the term of a District Government Counsel to report to the Legal Rmembrancer after consulting the District Judge and considering the past record of work conduct and age of such District Government Counsel.
If the Government agrees with the recommendation it may pass an Order re appointing him for a period not exceeding three years.
The stand of the appellants is that in view of Para 7.06(2), the appointment of any legal practitioner as a District Governemnt Counsel, does not automatically come to an end rather it indicates and element of continuity and that is why Para 7.06(2) requires the District Officer at the end of period of one year to submit a report after consulting the District Judge concerned in respect of the work and conduct of such District Government Counsel to the Legal Remembrancer in a form prescribed.
If the report in respect of work and conduct is satisfactory then such District Government Counsel shall be furnished with a deed of engagement in a form prescribed for a term not exceeding three years.
As such after the period of one year if the engagement for a further period upto three years is not given, it amounts to a stigma.
On behalf of the appellants attention of this Court was drawn to a letter addressed to the District Magistrate by Dr. Nepal Singh, M. L.C., the District President of the party then in power recommending the names of other Government Counsel for renewal/extension of their term.
It was pointed out that in respect of all those persons.
The District Magistrate has recommended for extension.
There is however, no material before us to show that the District 978 Magistrate was influenced by the said letter in any manner.
A part form that the persons so resommended by the District Magistrate were not impleded as respondents to the Writ applications.
As such we are not inclined to go into this aspect.
The different paragraphs of the Manual aforesaid were examined in detail in the case of Kumari Shrilekha Vidyarthi vs State of U. P. , in connection with an order dated February 6, 1990 issued by the State of U. P. terminating the appointments of all Government Counlsel ( Civil Criminal and Revenue) in all the districts of the State of U.P. with effect from February 28, 1990 and directing the preparation of fresh panels for making appointments in places of the existing incumbents.
while quashing such general order it was said: Viewed in any manner the impugned circular dated February 6, 1990 is arbitrary.
It terminates all the appointments of Government Counsel in the districts of the State of Uttar Pradesh by an omnibus order even though these appointments were all individual.
No common reason applicable to all of them justifying their termination in one stroke on a reasonable ground has been shown.
The submission on behalf of the State of UttarPradesh at the hearing that many of them were likely to be re appointed is by itself ample proof of the fact that there was total non application of mind to the individual cases before issuing the general order terminating all the appointments.
This was done in spite of the clear provisions in the L. R. manual lying down detailed procedure for appointment, termination and renewal of tenure and the requirement to first consider the existiong incumbent for renewal of his tenure and to take steps for a fresh appointment in his place only if the existing incumbent is notfound suitable in comparison to more suitable persons available for appointment at the time of renewal.
In the case of existing appointees a decision has to be first reached about their non suitability for renewal before deciding to take steps for making fresh appointments to replace them.
None of these steps were taken and no materialhas been produced to show that any existing incumbent was found unsuitable for the office on objective assessment before the decision to replace all by fresh appointees was taken.
The prescribed procedure laid down in the L.R. Manual which has to regulate exercise of this power was tatally igonered.
In the present case it appears to be an admitted position that appointments of the appellants as assistant District Government Counsel (Criminal) is governed 978 979 .LM0 by Section 24 of the Code, as well different paragraphs of Chapter VII of the Manual.
It was not disputed on behalf of the State, that appellants shall be deemed to be Additional Public Prosecutors within the meaning of Section 24 of the Code, although in the order of appointment they have been designated as Assistant District Government Counsel (Criminal).
The procedure prescribed in the Manual can be observed and followed as supplemental to the provisions of Section 24 of the Code.
Needless to say that, if there is any conflict, then Section 24 of the Code being statutory in nature will override the procedure prescribed in the Manual.
The relevant part of Section 24 is as such "24.
Public Prosecutors (1) For every High Court, the Central Government of the State shall, after consultation with the High Court, appoint a Public Prosecutor and may also appoint one or more Additional Public Prosecutors, for conducting in such Court, any prosecution,appeal or other proceedings on behalf of the Central Government or State Government, as the case may be.
(2). . . . (3) For every district, the State Government shall appoint a Public Prosecutor and may also appoint one or more Additional Public Prosecutors for the district: Provided that the Public Prosecutor or Additional Public Prosecutor appointed for one district may he appointed also to be a Public Prosecutor as the case may be for another district.
(4)The District Magistrate shall, in consultation with the Sessions Judge, prepare a panel of names of persons, who are.
in his opinion, fit to he appointed as Public Prosecutors or Additional Public Prosecutors for the district.
(5) No Person shall be appointed by the State Government as the Public Prosecutor or Additional Public Prosecutor for the district unless his name appears in the panel of names prepared by the District Magistrate under sub section (4).
" The Code prescribes the procedure for appointment of Public Prosecutor and Additional Public Prosecutor, for the High Court and the District Courts by the State Government.
The framers of the Code, were conscious of the fact, that the Public Prosecutor and the Additional Public Prosecutor have an important role, 980 while prosecuting on behalf of the State, accused persons, who are alleged to have committed one or the other offence.
Because of that, provisions have been made for their selection in the Code.
It is for the Sessions Judge to assessee the merit and professional conduct of the persons recommended for such appointments and the District Magistrate to express his opinion on the suitability of persons so recommended, from the administrative point of view.
Sub section (5) of Section 24 provides that no person shall be appointed by the State Government as the Public prosecutor or as an Additional Public Prosecutor "unless his name appears in the panel of names prepared by the District Magistrate under sub section (4)".
The aforesaid section requires an effective and real consultation between the Sessions Judge and the District Magistrate, about the merit and suitability of person it) he appointed as Public Prosecutor or as an Additional Public Prosecutor.
That is why it requires, a panel of names of persons, to be prepared by the District Magistrate in consultation with the Sessions Judge.
The same is the position so far the Manual is concerned.
It enumerates in detail, how for purpose of initial appointment extension or renewal, the District Judge who is also the Session Judge, is to give his estimate of the quality of the work of the Counsel from the judicial Standpoint and the District Officer i.e. the District Magistrate is to report about the suitability, of such person, from administrative point of view.
On behalf of the State, our attention was drawn to the expression "in his opinion" occurring in sub section (4) of Section 24 of the Code.
It was urged that as the Code vests power in the District Magistrate to consider the suitability of the person concerned, for appointment, according, to his opinion, there is not much scope of judicial review by Courts, unless a clear case of malice on the part of the District Magistrate is made out.
In view of the series of judgments of this Court in Barium Chemicals Ltd vs Company Law Board, ; ; State of Assam Bhatrai Kala Bhandar Ltd.
AIR , Rohtas Industries Ltd. vs S.D. Agarwal; , , The Purtapur Company Ltd. vs Cane Commissioner of Bihar AIR 1970 SC 1896 and M.A. Rasheed vs The State of Kerala; , , it is almost settled that, although power has been vested in a particular authority, in subjective term:, still judicial review is permissible.
In the present case the District & Session Judge strongly recommended extension for the appellants, saying that so far their work and conduct were concerned, the same had been approved.
But the District Magistrate, simply said that on the inquiry at his level "reputation, professional work, behaviour and conductor the appellants as government counsel was not found in accordance with the public interest".
The quality of the Counsel ' work has to be judged and assessed 981 by the District & Sessions Judge.
The District Magistrate is required to consider the suitability of such person, from the administrative point of view.
According to us, in view of the strong recommendation about the quality of the appellants ' professional work, the District Magistrate should have applied his mind in consultation with the Sessions Judge.
in respect of each individual case.
instead of making a general and identical comment against all the appellants.
Apart from that the mandate of sub section (4) of Section 24 is that "the District Magistrate shall, in constitution with the Session Judge, prepare a panel of names of persons".
Sub section (5) of Section 24 prescribes a statutory bar that no person shall be appointed by the State Government as the Public Prosecutor or Additional Public Prosecutor for the district "unless his name appears in the panel of names prepared by the District Magistrate under sub section (4)".
When sub section (4) and sub section (5) of Section 24 of the Code, speak about preparation of a panel, out of which appointments against the posts of Prosecutor or Additional Public Prosecutor have to he made.
then the Sessions Judge and the District Magistrate are required to consult and discuss the names of the persons fit to be included in the panel and to include such names in the panel.
The expressions "panel of names of persons", do not mean that some names are to be suggested by the Sessions Judge and some comments are to be made, in respect of those names by the District Magistrate, without proper consultation and discussion over such names.
The statutory mandate ought to have been complied with by the District Magistrate and the Sessions Judge in its true spirit.
In the facts of the present case, no such panel appears to have been prepared by the District Magistrate in terms of sub section (4) of Section 24.
As Section 24 of the Code does not speak about extension or renewal of the term of the person so appointed, the same procedure, as provided under sub section (4) of Section 24 of the Code, has to be followed.
In the present case the District Magistrate instead of having an effective and real consultation with the District & Sessions Judge simply made some vague and general comments against the appellants, which cannot be held to he the compliance of the requirement of subsection (4) of Section 24.
In the case of Kumari Shrilankha Vidyarthi (supra), this Court was not concerned with the question regarding the extension/renewal of the terms of the Government Counsel.
The primary question which was examined by this Court in that case, was as to whether it was open to the State Government by the impugned circular dated February 6, 1990.
to terminate appointments of all the Government Counsel in the different districts of the State, by an omnibus order, even though those appointments were all individual.
It was held that any such exercise of power by the State Government cannot satisfy the test of Article 14 of the Constitution 982 and as such was unreasonable and arbitrary.
In that connection reference was made to the Manual aforesaid and it was pointed out that the said Manual has laid down detailed procedure for appointment, termination and renewal of the tenure of the District Government Counsel.
It was pointed out, that different paragraphs of the Manual require, first to consider the existing incumbents for extension and renewal of their tenure and to take steps for fresh appointment in their place, if the existing incumbents were not found suitable in comparison to more suitable persons available for appointment at the time of the renewal.
As already mentioned above.
Section 24 of the Code does not speak about the extension or renewal of the term (if the Public Prosecutor or Additional Public Prosecutor.
But after the expiry of the term of the appointment of persons concerned.
it requires the same statutory exercise, in which either new persons are appointed or those who have been working as Public Prosecutor or Additional Public Prosecutor.
are again appointed by the State Government, for a fresh term.
The procedure prescribed in the Manual to the extant it is not in conflict with the provisions of Section 24.
shall he deemed to be supplementing the statutory provisions.
But merely because there is a provision for extension or renewal of the term, the same cannot he claimed as a matter of right.
It is true that none of the appellants can claim, as a matter of right, that their terms should have been extended or that they should be appointed against the existing vacancies but certainly they can make a grievance that either they have not received the Pair treatment by the appointing authority or that the procedure prescribed in the Code and in the Manual aforesaid.
have not been followed.
While exercising the power of judicial review even in respect of appointment of members of the legal profession as District Government Counsel the Court can examine whether there was any infirmity in the "decision making process.
" Of course, while doing so the Court cannot substitute its own judgment over the final decision taken in respect of selection of persons for those posts.
It was said in the case of Chief Constable of the North Wales Plice vs Evans.(1982) ; "The purpose of judicial review is to ensure that the individual receives fair treatment, and not to ensure that the authority, after according Pair treatment.
reaches on a matter which it is authorised or enjoined by law to decide for itself a conclusion which is correct in the eyes of the court.
" In the facts of the present case, the procedure prescribed by Section 24 of the Code have not been followed by the District Magistrate.
There is nothing on the 983 records of the case to show that any panel as required by sub section (4) of Section 24 was prepared by the District Magistrate in consultation with the District & Sessions Judge.
The District Magistrate simply made some general comment in respect of the appellants.
When the District & Sessions Judge had put them in List 'A ' of his recommendation.
According, to us, this shall not amount to either the compliance of 'sub section (4) of Section 24 of the Code or Para 7.06(2) of the Manual.
It appears there has been no effective or real consultation between the Sessions Judge and the District Magistrate for preparation of the panel, as contemplated.
by sub section (4) of Section 24 of the Code.
The members of the legal profession are required to maintain high standard of legal ethics and dignity of profession.
They are not supposed to solicit work or seek mandamus from courts in matters of professional engagements.
We have been persuaded to interfere in these matters to a limited extent, as we are satisfied that there is patent infraction of the statutory provisions of the Code.
As we are of the view that the District Magistrate has not performed his statutory duty as enjoined by law, the appeals of the appellants have to be allowed.
In the result, the appeals are allowed.
We direct the District Magistrate, Moradabad, to perform his statutory duty afresh.
in accordance with the requirement of Section 24 of the Code read with the relevant paragraphs of Chapter VII of the Manual, which are not inconsistent with Section 24 of the Code.
so far the appellants are concerned, if the vacancies are still there.
The necessary steps shall be taken preferably within four months from the date of this judgment.
the State Government shall thereafter perform its part in accordance with Section 24 and different paragraphs of the Manual which are applicable in the facts and circum stances of the case.
We make it clear that we are not expressing any opinion on the merit of the claim of the appellants to get extension or appointment against the posts of Assistant District Government Counsel (Criminal).
There will he no order as to costs.
CIVIL APPEALS NOS.
386 & 387 OF 1993 So far the appellants of these appeals are concerned, their names were put under List 'B ' by the District & Sessions Judge in his recommendation saying that they were "average lawyers".
Their case stands on a different footing.
The District & Sessions Judge.
who is required to express his opinion on the merit and the conduct of the persons recommended for appointment or extension of the period 984 as District Government Counsel, has expressed the opinion that appellants are "average lawyers" and has put them in List B.
In other words, neither the District & Sessions Judge has recommended the case of the appellants of these appeals for extension nor the District Magistrate.
Their case cannot be treated at par with the appellants of the other appeals.
In such as situation, no useful purpose will be served by directing the District Magistrate to perform his statutory duty as required by sub section (4)of Section 24 of the Code again, even the respect of these appellants.
Accordingly, these appeals are dismissed.
there will be no orders as to costs.
V.P.R, C.A. Nos. 722 and 723/93 allowed.
C.A. Nos. 386 and 387/93 dismissed.
| Sub sec.
(3) of section 2 of the Contempt of Courts Act, 1926, excludes the jurisdiction of the High Court to take cognisance of a contempt alleged to have been committed in respect of a Court subordinate to it only in cases where the acts alleged to constitute contempt are punishable as con tempt under specific provisions of the Indian Penal Code, but not where these acts merely amount to offences of other description for which punishment has been provided for in the Indian Penal Code.
The fact that defamation of a judge of a subordinate Court constitutes an offence under sec.
499 of the Indian Penal Code does not, therefore, oust the jurisdiction of the High Court to take cognisance of the act as a contempt of court.
Defamatory statements about the conduct of a judge even in respect of his judicial duties do not necessarily consti tute contempt of Court.
It is only when the defamation is calculated to obstruct or interfere with the due course of justice or proper administration of justice that it amounts to contempt.
Kisan Krishna Ji vs Nagpur Conference of Society of St. Vincent de Paul (A.I.R. 1943 Nag.
334) disapproved.
V.M. Bason vs A.H. Skone ([.L.R. explained.
Subordi nate Judge.
First Class Hoshangabad vs Jawaharlal (A.I.R. , Narayan Chandra vs Panchu Pramanick (A. L R. , Naresh Kumar vs Umaromal (A.I.R. 1951 Cal. 489), Kaulashia vs Emperor (I.L.R. 12 Pat. 1), State vs Brahma Prakash (A.I.R. 1950 All. 556), Emperor vs Jagannath (A.I.R. 1938 All.
358), Bennet Colman vs C.S. Monga (I.L.R. approved.
|
Petition (Civil) Nos.
7900 02 of 1982.
WITH Writ Petition Nos. 837 & 853 of 1982.
(Under Article 32 of the Constitution of India) WITH Civil Appeals Nos.
3137 38 of 1993.
1021 From the Judgment and Order dated 26.7.84 & 27.7.84 of the Rajasthan High Court in D.B.
Civil Special Appeal Nos. 182 & 184 of 1984.
WITH C.M.P. Nos.
19643 45 of 1988 & C.M.P. No.
8272 of 1986.
R.K. Garg, Aruneshwar Gupta, R.K. Kamal and S.K. Gupta for the Petitioners in W.P. Nos. 7900, 7902/82, SLPS.
12682/84,830/85.
and for the Respondent No. 4 in CA.No.
1649/78.
T. Sridharan for the Petitioner in WPs.
Nos. 837 & 853 of 1982.
M.K. Ramamurthi, and Parijat Sinha for the Appellants in CA.
No. 1649/78 and for the Respondent No, 4 in WPs.
7900 82/82.
R. F. Nariman and P.H. Parekh for the intervenor in WPs.
Nos. 7900 02/82.
V.R. Reddy, Additional Solicitor General, V.C. Mahajan, Ms.
B. Sunita Rao, V.K. Verma and Ms. A. Subhashini for the Respondent in U.O.I. C.V.S. Rao, (NP) for the Respondent in SLP Nos.
12682/84,830/85.
C.V. Rappai for the Respondent No. 14 in WP.
7900 02/82.
The Judgment of the Court was delivered by PUNCHHI, J.
These are a handful of writ petitions and special leave petitions which, on grant of leave hereby, and having become appeals, can conveniently be disposed of by a common judgment.
The fulcrum of the controversy herein, and the shadow in which it works is a three judge Bench decision of this Court in Katyani Dayal & Ors.
vs Union of India & Ors.
; decided on March 26, 1980.
Before adverting to the facts and circumstances in which this cause has been presented to this Court it would be fruitful to give a broad outline of Katyani Dayal 's case, in the immediately succeeding, paragraphs.
Connected with Katyani Dayal 's case were writ petitions filed in a represen 1022 tative capacity, purporting to represent all temporary Assistant Engineers (on a later point of time known as temporary Assistant Officers) appointed by the Railway Board, pursuant to the authority given by the President of India, on the recommendations of the Union Public Service Commission; selection based on interview alone.
There was a separate classification of such temporary Assistant.
Officers when compared with India Railway Service Engineers (Class 1).
Direct recruits to the Indian Railway Service of Engineers (Class 1) were subjected to competitive written and personality tests and in the nature of things only the very best could emerge out successfully.
On the other hand temporary Assistant Officers, (hereafter referred as 'Officers ' at places) were neither subjected to written nor to a personality test but, as said before, were selected on the basis of interview.
Besides the minimum educational qualification, which was the same for both the services three years experience as a Civil Engineer was.
additionally required for the aspirants to the Indian Railway Service of Engineers (Class 1) (hereafter referred to as the 'Engineers ' at places).
While the President was the appointing authority of the Engineers, the Railway Board was the appointing authority of the Officers.
Both the members of these services on selection were due for different courses of training earmarked separately.
There were a host of other factors which distinguished the quality and character of the personnel of the two parallel services as elaborately detailed in Katyani Dayal 's case (supra).
Between the years 1955 and 1964, as many as 553 officers (temporary Assistant Engineers) were appointed by the Railway Board through the Union Public Service Commission.
Though in the letters of appointment the officers (temporary Assistant Engineers) and others concerned were told that six of them, would be absorbed into the Indian Railway Service of Engineers (Class 1) every year, this figure in the subsequent years was increased from time to time when in 1975, the figure as increased stood at 25 per year.
The net result was that after absorption, 107 Officers were residually left unabsorbed in the year 1976 by the time of the filing of the connected writ petitions in Katyani Dayal 's case and they too were finally absorbed in 1979 by What was described as a "blanket order".
Before hand on September 17, 1965, the Railway Board had taken a decision to the effect that the Officers so absorbed into the Indian Service of Engineers would be given weightage in seniority "on the basis of half the total years of continuous service in working posts in Railways prior to their permanent absorption into Class. 1, subject to a maximum weightage of five years".
The then writ petitioners, describing themselves as members of the Federation of Temporary Officers Association, Indian Railways joining with them, their President, Vice President and Secretary of the aforesaid Federation as writ petitioners approached this Court 1023 in a representative capacity to seek relief in their seniority status.
The principal claim of the writ petitioners was that Officers were appointed to temporary posts on the cadre of Engineers and that their seniority had to be reckoned on the basis of their length of continuous service, though they conceded that in any given year, the candidates appointed as Engineers on the basis of the results of the competitive examinations were placed above those appointed on the basis of selection by the Union Public Service Commission.
The challenge was to the authority of the Railway Board to create such an unclassified parallel service, something outside the preview of the Indian Railway Establishment Board.
Notwithstanding the procedure of selection so adopted the writ petitioners contended that they were recruited in Class I service and supported their claim on diverse grounds so as to obtain the result that all Assistant Engineers formed one class under the Indian Railway Establishment Board.
Challenge was made to the classification of personnel into those that were recruited on the basis of the competitive examinations and those that were recruited by selection, but both by Union Public Service Commission, terming it as arbitrary and not permissible under the equality clause in the Constitution.
Grievance was voiced that the right of absorption of a handful of temporary Engineers (Officers) every year into the Service of Engineers was arbitrary and inequituous resulting in grave injustice rendering decades of service of the Officers to a mere waste.
Unfortunately the then writ petitioners did not sue the respondents across in a representative capacity.
In the fitness of things it would have been appropriate for the then writ petitioners to either involve all parties who could possibly have an interest or a likely affectation in the litigation, or to sue them in a representative capacity if not individually.
However some people did get impleaded as parties in that case to project their.
point of view and due to the nature of dispute those predominantly were members of the Indian Railways Service of Engineers Class 1.
This Court while dismissing the writ petitions held that the classification of temporary Assistant Officers separately from the Indian Railway Service Engineers of Class I was neither discriminatory nor violative of Articles 14 and 16 of the Constitution, for the reason that it had nexus to the object sought to be achieved, which mainly was efficiency of service, and that both the services had started separately and never became one.
This Court further viewed that the object of recruitment being different, the methods of recruitment dissimilar, the appointing authority being not the same, the training imparted to the two unlike, the tenure of temporary Assistant Officers being precarious, and their maximum aspiration being only to be absorbed into the Indian Railway Service of Engineers Class 1024 were distinctive features and, therefore, no question of their entitlement to equal rights arose until and unless the temporary Assistant Officers got absorbed into the Indian Railway Service of Engineers Class 1.
This court also ruled that the.
seniority of the.absorbed temporary Assistant Officers would ordinarily reckon from the date of their absorption into the Indian Railway Service of Engineers Class I as stipulated in their letters of appointments With regard to the time factor, this Court also took into account the long wait involved in the process but all the same approved of the measures of the Railway Board in lessening the Iona wait by giving them weightage of half of the length of service as temporary Assistant Officers subject to the maximum of five years.
And lastly this court rejected the claim of the temporary Assistant Officers asking for "equal status for equal pay and equal work" leaving a ray of hope that such goal might be achieved in the not too distant future.
The instant batch of matters is virtually on the same lines as of Katyani Dayal 's case claiming the same relief and this time by the Temporary Assistant Officers through a body styled as the Federation of Directly Appointed Officers (Suppressed) of Indian Railways and a few others, in a representative capacity across which stand arrayed the Union of India and the Railway Board as respondents.
When this matter came up for hearing on 15 March, 1990 before a three judge Bench in which one of us (Punchhi, J.) was a member, it was It that the affected parties should be impleaded in their representative capacity so as to make the decision of this Court binding on every member of both the classes of employees.
The requisite direction was thus made and carried out.
Pursuant thereto some private respondents on record represent the entire body of similarly placed Engineers, Thus both sides have sued and are being sued in their representative capacity.
Mr. R.K. Garg, learned counsel for the petitioners has spear headed the claim of the temporary Assistant Officers on the basis of the so called developing concept of Article 14 in the years gone by, especially in the field of the right to equality in matters relating to employment on appointment in service.
He asserts that the development of law has gone a long way so as to shed the views expressed in Katyani Dayal 's case justifying demolition of the demarcation between the two services made as it was in Katyani Dayal 's case examining the question afresh in the light of Raghunandan Prasad Singh vs Secretary, Home (Police) Department, Government of Bihar & Ors [1988] Supp.
SCC 519, Dr. O.Z Hussain vs Union of India [1990] Supp.
SCC 688 at 691, & Direct Recruit Class II Engineering of officers Association vs State of Maharashtra & Others ; and 1025 other cases.
It was contended that Katyani Dayal 's case upholding the creation of temporary posts outside the service was on the basis which has since been eroded and "equal pay for equal work" with equality in all other conditions of service including avenues of confirmation, absorption, promotion, pension and security have become inflexible postulates of service jurisprudence.
On the other hand, learned counsel for the respondents has opposed such method contending that what is being asked is a virtual review of Katyani Dayal 's case which is not permissible by means of successive writ petitions.
Addedly it is urged that principles of constructive res judicata would bar the re agitation of the issues decided in Katyani Dayal 's case, if not the strict principles of res judicata.
Lastly it was urged that when the matter has been settled in this particular service, its unsettling by means of a petition under Article 32 of the Constitution is impermissible.
We were taken through Katyani Dayal 's case extensively.
What we find is that the distinction and the classification of the temporary Assistant Officers and members of the Indian Railway Service of Engineers Class I fell clearly to be identified and marked.
The only method of fusion was by means of a phased absorption as noticed in paragraph 9 of the Report detailed above.
The scheme having met with approval of this Court cannot by mere passage of time be taken to have become vulnerable by subsequent exponence and dimension of Article 14 of the Constitution.
This Court in Katyani Dayal 's case specifically said that relief of equality was being denied to the then petitioners because of the history, origin, and structure of the Services.
No opinion was expressed however as to the validity of the given weightage of half the length of service to Temporary Assistant Officers.
subject to a maximum of five years, because of its being questioned elsewhere.
We are unable to make any headway or act in judicial indiscipline towards widening the scope of these matters in the face of the Constitution Bench decision of Direct Recruit 's case (supra).
Amongst the conclusions summed up by the Constitution Bench conclusion (J) and (K) seal the fate of these matters.
These are: "(J) The decision dealing with important questions concerning a particular service given after careful consideration should be respected rather than scrutinised for finding out any possible error.
It is not in the interest of service to unsettle a settled position.
(K)That a dispute raised by an application under Article 32 of the 1026 Constitution must be held to be barred by principles of res judicata including the rule of constructive res judicata if the same has been earlier decided by a competent court by a judgment which became final.
" The distinction between, the two services was well marked in Katyani Dayal 's case (supra) and the important question of equality was once for all settled.
To find fault with it, at this juncture again on the touch stone of equality dimension would be to unsettle a settled position.
That venture is neither in the interest of justice nor in the interest of service.
When there has been complete absorption of the personnel of one service into the other, and the seniority of the absorbers is to be reckoned from their date of absorption as stipulated in their appointment matters and as held by this Court with weightage of half the length of service subject to a maximum of five years, it would otherwise be imprudent now, at this point of time to dig up old issues.
The rule of weightage also appears to us to be reasonable and this is a pattern which has been noticed and approved in many a Service.
Similarly when the dispute raised between the Officers in a representative capacity and Engineers not so represented, in Katyani Dayal 's case (supra), still it was a dispute raised before this Court which has been decided finally.
A dispute now sought to be raised under Article 32 of the Constitution between the Officers in a representative capacity and Engineers across also in a representative capacity must be held to be barred by principles of res judicata as also in the rule of constructive res judicata.
The cases aforementioned relied upon by learned counsel for the petitioners/appellants do not remove this hurdle, however, broadly may Article 14 and 16 be viewed and expanded.
It is thus unnecessary to elaborate those cases and discover their ratio.
The are argument of learned counsel for the appellant that the State is prohibited to create separate channels of service and create discrimination by making one as an isolated one, and not providing for promotional avenues reasonably, falls to the ground in view of the bar of re agitation erected by Direct Recruit 's case (supra).
Equally when absorption had been made possible and its pace quickened with weightage, it is difficult to find fault with the scheme at this point of time to look for a substitution at our end, as that would unsettle a settled position, established more than a decade ago.
We also do not see any compelling reasons to deviate from the principles enunciated in the judgment.
At this point of time the bars erected by Direct Recruit 's case (supra) appear to us to have further thickened goading us to refrain from the exercise of any undoing.
We thus leave the matter as it is.
It needs mentioning that the appeals being decided instantly are against the judgments and orders of the High Court rejecting writ petitions of the petitioners 1027 before it on the basis of Katyani Dayal 's case (supra).
No details of these cases are necessary to dispose of these appeals for the reasons stated above.
As a result these petitions and appeals tail, but without any order as to costs.
In view of the dismissal of the main matters, no orders are necessary on all the C.M.Ps.
G.N. Matters dismissed.
| Basappa Bheemappa K,as the Watandar of the disputed agricultural lands admeasuring 4 acres, and 6 acres 26 guntts, in Kubihal Village in Kundgol Taluk of Dhwarwad District which became a part of Karnataka State in 1956.
In 1950, he leased the disputed lands to appellant 1 and the father of appellant 2 for their personal cultivation.
With the coming into force of the Bombay paragana and Kulkarni Watans(Abolition) Act 1950 the lands were resumed by the State of Bombay, Bheemappa applied under this Act for regrant of the wattan land, and the Dy.
Commissioner of Dhawad District made the regrant in his favour on 30.11.1968.
On 31.3.1969, he sold the land to appellant No. 1 and the father of appellant No. 2 under a registered sale deed.
The land tribunal under the Karnataka land Reforms Act 1961 found it unnecessary to register the occupancy rights (of the appellants in view of the sale.
In 1976, respondent field a suit against Bheemappa and 2 other brothers for partition to the disputed property and separate possession.
He impleadcd appellants 1 and 2 as defendant,; in the suit since they were in possession of the disputed lands.
He contended that Bheemappa had sold the lands without the prior consent of his brothers, and for nor legal necessity.
of the family, and the sale was void ab initio.
780 The Munsiff Court granted a decree in favour of the respondent on its finding that the disputed funds were Hindu joint family properties, that the sale *%,as void ab initio for tile reasons stated . and that the plea (if the defendants appellants that if the sale was void the tenancy revived. ",as unacceptable.
The Munsiff Court, and in appeal, the Civil Judge concurrently held that the sale was void since sale (it ' fragments was prohibited under the Karnataka prevention of Fragmentation Act 1966.
A regular second appeal before the High Court was dismissed in limine.
The appellants contended before this Court that if the sale was ab initio void, the agricultural tenancy (of the appellant%; revived.
For the respondents it was submitted that the tenancy on lease hold rights in the disputed lands held by the appellant got merged in tile sale effected in their favour.
When that sale was found to be void it did not have the effect (if reviving the merged tenancy of the appellants,as would restore their tenancy right,; in the disputed lands.
Allowing the appeal, this Court, HELD: (1) Tile tenants being the persons deemed to be in possession of the disputed lands and entitled to continue in possession thereof a partition decree could have been granted, in respect of such tenanted lands only if permissible by law.
(784 H) (2) The courts below having found that the sale deed was void because Bheemappa could not having sold the undivided interest of his brother, only his 1/4 undivided interest, in the disputed lands had to be regarded as having been sold by him.
(784 H) The lessors ' entire interest (or entire reversion in the disputed lands cannot therefore be regarded us having been sold under the sale deed of 31 st March, 1969.
From this, it follows that the lease hold interests of the leases and the lessors entire reversion could not have merged in one and the same person, so as to constitute merger envisaged under section 111(d) of the Transfer of Property.
Act, 1982.
For constituting merger under that procession, the interests of the lessee and the interests of the lessor in the whole of the 781 property had to vest at the same time in one person in the same right.
(785 BC) The tenancy rights of the appellants in the disputed lands was not affected or disturbed by the sale deed of 31st March, 1969, and it is unnecessary to consider the question of revival of the right of tenancy of the appellants in the disputed lands.
(785 D) 3.
Case remitted to the Court of Munsiff at Kundgol Dharwad District to decide the claim for partition if the disputed lands had continued as tenanted lands, as found by this Court.
(785 E)
|
vil Appeal No. 2347 of 1966.
Appeal from the judgment and decree, dated June 3, 1966 of the Calcutta High Court in Appeal No. 251 of 1965.
M.C. Chagla and S.N. Mukherjee, for the appellant.
section V. Gupte, M.G. Poddar and D.N. Mukherjee, for the respondent.
Clause 3(c) of the deed provided for a renewal of the lease and was in the following terms : "3 (c).
The lessor will on the written request of the lessees made two calendar months before the expiry of the term hereby created and if there shall not at the time of such request be any existing breach or non observance of any of the covenants on the part of the lessees hereinabove contained grant to it one renewal of 10 years from the expiry of the said term at the same rent and containing the like convenants and provisos as are herein contained except that as regards the clause for renewal for further period the rent shall be as may be agreed between the lessor and the lessees.
" On December 1, 1963, the time fixed for applying for the renewal of the lease expired.
On December 13, the appellant made a written request for the renewal.
On December 23, 1963 the respondent 's solicitors replied stating that the request being out of time was ineffective and asking the appellant to, vacate the land on the expiry of the lease.
The appellant had erected structures on the land for the purpose of running a petrol delivery station and was a Thika tenant within the meaning of the Calcutta Thika Tenancy Act, 1949.
In February 1964 the respondent filed an application before the Controller asking for eviction of 240 the appellant under sections 3(vi) and 5 of the Calcutta Thika ,,Tenancy Act.
The Controller allowed the application.
An appeal from this order was dismissed by the appellate Authority.
A revision petition against the order was dismissed by the High Court.
While dismissing the revision petition, the High Court stayed the execution of the order of eviction for a month and observed that the authorities under the Calcutta Thika Tenancy Act had no power to decide whether the appellant was entitled to a renewal of the lease.
Thereafter the appellant filed the present suit on the Original Side of the Calcutta High Court asking for a declaration that it was entitled to a renewal of the lease, specific performance of the covenant for renewal, an injunction restraining execution of the order of eviction passed by the Controller and for other reliefs.
In paragraphs 13 and 14 of the plaint the appellant alleged that the delay in giving notice of renewal should be excused in view of the following special circumstances: (a) the delay was due to oversight; (b) the respondent had not altered her position for the worse or to her detriment within the space of 12 days; (c) neither party had treated the matter of time as being as the essence of the transaction; (d) the appellant had constructed a service station for petroleum products of immense utility to the public of the locality; (e) the appellant was in possession of the land.
The respondent contended that the application for renewal being made out of time was ineffective and that there was no ground for excusing the delay.
S.P. Mitra, J. accepted the respondent 's contention and dismissed the suit.
An appeal under clause 15 of the Letters Patent was dismissed by a Divisional Bench of the High Court.
Both the courts concurrently held that the letter, dated December 13, 1963 was not a proper exercise of the option by the ,appellant under the lease, dated February 17, 1954 and that there were no special circumstances for excusing the delay in ,giving the notice.
The appellant has filed the present appeal after obtaining a certificate from the High Court under article 133 ( 1 ) (a) and (b) of the Constitution.
The appellant neglected to make the application for renewal of the lease within the stipulated time.
Mr. Chagla has submitted that the time is not of the essence of the contract having regard to sec.
55 of the Indian Contract Act, 1877 as interpreted in the case of Jamshed Khodaram Irani vs Durjorji Dhunjibhai(1).
Section 55 of the Indian Contract Act provides that "when a party to a contract promises to do a certain thing at or before a specified time, or certain things at or before specified time, and fails to do any such thing at or before the specified time, the contract, or so much of it as has not been performed, becomes voidable at the option of the promisee, if the intention of the (1) L.R. 43 I.A. 26.
241 parties was that time should be of the essence of the contract.
" In Jemshed 's case(1) Viscount Haldane observed that the section did not lay down any principle as regards contracts to sell land in India different from those which obtained under the law of England.
It is well known that in the exercise of its jurisdiction to decree specific performance of contracts the Court of Chancery adopted the rule, especially in the case of contracts for the sale of land, that stipulations .as to time were not to be regarded as of the essence of the contract unless they were made so by express terms or unless a clear indication of a contrary intention appeared from the nature of the contract or the surrounding circumstances.
In his well considered judgment Viscount Haldane carefully refrained from saying that time was not to be regarded as of the essence in all contracts relating to land.
At common law stipulations as to time in a contract giving an option for renewal of a lease of land were considered to be of the essence of the contract even if they were not expressed to be so and were construed as conditions precedent.
Equity followed the common law rule in respect of such contracts and did not regard the stipulation as to time as not of the essence of the bargain.
As stated in Halsbury 's Laws of England, 3rd ed., vol. 3, article 281, p. 165 "An option for the renewal of a lease, or for the purchase or re purchase of property, must in all cases be exercised strictly within the time limited for the purpose, otherwise it will lapse.
" This passage was quoted with approval by Danckwerts L.J. in Hare vs Nicoll(2).
A similar statement of law is to be found in Foa 's General Law of Landlord and Tenant, 8th article 453, p. 310, and in Hill and Redman 's Law of Landlord and Tenant, 14th ed., p. 54.
The reason is that a renewal of a lease is a privilege and if the tenant wishes to claim the privilege he must do so strictly within the time limited for the purpose.
With regard to equitable relief against the failure of the tenant to give notice of renewal within the stipulated time.
the law is accurately stated in Halsbury 's Laws of England, 3rd ed.
,vol. 23, p. 626, article 1329, footnote (u) thus : "Relief will not be given in equity against failure to give notice in time, save under special circumstances.
The decided cases show that in such cases relief is not given in equity save upon the ground of unavoidable accident, fraud, surprise, ignorance not wilful or inequitable conduct on the part of the lessor precluding him from refusing to give the renewal.
The limits of the equitable interference in such cases were clearly stated by the Master of the Rolls (Sir R.P.Arden) in Eaton vs Lyon.(3) He observed : "At law a covenant must be strictly and literally performed; in equity it must be really and substantially (1) L.R.43 I.A.26 (2) 145.
(3) ; , 692 3=695 6 30 E.R. 1223, 1224,1225 6. 242 performed according to the true intent and meaning of the parties so far as circumstances will admit; but if unavoidable accident, if by fraud, by surprise or ignorance not wilful, parties may have been prevented from executing it literally, a Court of Equity, will interfere; and upon compensation bei ng made, the party having done everything in his power, and being prevented by means, I have alluded to, will give relief .
I decide this case upon the principles on which, Lord Thurlow decided (Bayley vs The Corporation of Leominster , and I hope now, it will be known, that it is expected, these covenants shall be literally performed where it can be done; and that Equity will interpose, and go beyond the stipulations of the covenant at law, only where a literal performance has been prevented by the means, I have mentioned, and no injury is done to the lessor? ' We are of the opinion that the stipulation as to time in clause 3 (c) of .the indenture of lease dated February 17, 1954 should be regarded as of the essence of the contract.
" The appellant not 'having exercised the option of renewal within the time limited by the 'clause is not entitled to a renewal.
The appellant claims relief against the consequences of its default on the grounds enumerated in paragraphs 13 and 14 of the plaint.
Grounds (b) and (e) cannot be regarded as special circumstances.
to ground (d), it is.
not shown that the service station is of immense public utility.
The fact that the appellant constructed a service station is an irrelevant consideration.
Ground (c) is not established and it is not 'shown that the time is not of the essence of the bargain.
As to ground (a) there is some evidence to show that the delay in giving the notice of renewal was due to oversight.
But it is not shown that the delay was due to any unavoidable accident, excusable ignorance, fraud or surprise.
The delay arose from mere neglect on the part of the appellant and could have been avoided by reasonable diligence.
As observed 'by the Master of the Rolls in Reid & Anr.
vs Grave & Others(1): "The rule is now well established, that no accident will entitle a party to renew unless it be unavoidable.
I am of opinion, that nothing but accident, which, could not have been avoided by reasonable diligence, will entitle the plaintiff to a renewal in this Court.
" We may add that where no time is fixed for the purpose, an application for renewal for the lease may be made within a reasonable time before the expiry of the term (see Foa 's General Law of Landlord & Tenant, 8th ed., article 455, pp.
311 12, Ram Lal (1) , 248.
243 Dubey vs Secretary of State for India (1), Maharani Hemanta Kumari Devi vs Safatulla Biswas & Ors.(2).
In the present case, the lease fixes a time within which the application for renewal is to be made.
The time so fixed is of the essence of the bargain.
The tenant loses his right unless he makes the application within the stipulated time.
Equity will not relieve the tenant from the consequences of his own neglect which could well be avoided with reasonable diligence.
The appeal is dismissed with costs.
Y.P Appeal dismissed.
| For the assessment years 1940 41 to 1943 44 the assessee company claimed to be an investor in shares and properties and not a dealer.
The contention was rejected by the Income tax Officer, the Appellate Assistant Commissioner and the Tribunal.
The company then applied to the Tribunal under section 66(1) of the Income tax Act, 1922 for a reference of the following questions of law for the opinion of the High Court: (i) whether on the facts and in the circumstances of the case the assessee company can rightly be treated as a dealer in investments and properties ? (ii) whether the profits and losses arising from the sale of shares, securities and immovable properties of the assessee company can be taxed as business profits.
The Tribunal refused to make the reference and the High Court dismissed the application under section 66(2).
On appeal by special leave this Court held that the question as to what were the characteristics of the business of dealing in shares or that of an investor was a mixed question of law and fact.
It remanded the case to the High Court for directing the Tribunal to state a case under section 66(2) on the following questions: (i) whether there are any materials on the record to support the finding of the Income tax Officer that the assessee company was a dealer in shares.
, securities and immovable property during the assessment year in question (ii) whether the profits and losses arising from the sale of shares, securities and immovable properties of the assessee company can be treated as business property ? On these questions being referred to the High Court by the Tribunal, the High Court decided them against the assessee company.
The company again appealed to this Court.
It was contended on behalf of the appellant that the questions as framed by this.
Court did not reflect the real controversy 'and therefore the questions as originally framed in the company 's application under section 66(1) should be referred to the High Court in a fresh statement of case to be made by the Tribunal.
HELD: (i) The questions framed by this Court and the form in which they were framed seemed to assume that the questions involved were questions of fact for it is only in regard to a question of fact that the question can properly be framed "as to whether there was material to support the said finding".
This Court had itself held that the questions involved in the present case were mixed questions of law and fact.
Therefore the questions framed by this Court were not appropriate and did not reflect the real controversy between the parties.
It was therefore appropriate that the questions should be modified as suggested by the appellant in its petition under section 66(1) to the High Court.
[53 G 54 B] (ii) The proper construction of statutory language is always a matter of law and therefore the claim of the assessee that the profits and losses arising from the sale of shares securities etc.
cannot be treated as profits 47 of a business involves the application of law to the facts found in the setting of the particular case.
In dealing with findings on such questions of law and fact the High Court must No. doubt accept the findings of the.
Tribunal on the primary questions of fact; but it is open to the High Court to examine whether the Tribunal had 'applied the relevant legal principles correctly or not in reaching its final conclusion; and in that sense, the scope of enquiry and the extent of the jurisdiction of the High Court in dealing with such points is the same as in dealing with pure questions of law.
[53 B D] G. Venkataswami Naidu & Co. vs
C.I.T., , relied on.
|
Appeal No. 78 of 1962.
Appeal from the judgment and order dated April 13,1960, of the Bombay High Court in Income tax Reference No 40 of 1959.
R.J. Kolah, J.B. Dadachanji, O.C. Mathur and Ravinder Narain, for the appellants.
N.D. Karkhanis and R.N. Sachthey, for the respondent.
November 25, 1963.
The Judgment of the Court was delivered by SARKAR J.
This is an appeal against a judgment of the High Court at Bombay given on a case stated to it under the Income tax Act and answering in the affirmative the following question: "Whether the levy of Rs. 68,501/ as penalty for concealment in the original return for the assessment year 1951 52 is legal?" The question arose, in the assessment of the appellant, a firm, for the year 1951 52 in respect of which the accounting year was the calendar year 1950.
The assessee carried on business at Surat it had a branch at Bangkok to which it exported cloth from India.
The branch also made purchases locally and sold them.
During the last world war the business at Bangkok had been in abeyance but it was re started after the termination of the hostilities.
In its return for the assessment year 1949 50 the assessee did not include any profit of the Bangkok branch but stated that the books of account of the Bangkok branch were not available and that therefore its profit might now be assessed on an estimate basis subject to action under section 34 or 35 on production of statement of account.
: The assessment was there 563 upon made on the basis of profit at 5 % on the export to Bangkok branch appearing in the Surat books.
For the year 1950 51 again there was no reference to the Bangkok branch in the return and a similar estimate was made for this year also.
For the year, 1951 52 also the Bangkok business profits were not shown but on January 11, 1952, the Income tax Officer issued a notice to the assessee under section 22(4) of the Act to produce the profits and loss account and balance sheet with the relevant books.
The assessee excused itself by alleging on January 29, 1952 that the books were at Bangkok and the profit and loss account and the balance sheet could not be drawn up unless its partner, Hatimbhai A. Malbary, went there personally and there was no certainty as to when he would go there and promising that in the following year these accounts for the calendar year 1950 would be produced.
Thereupon the Income tax Officer made an estimate of the sales of the Bangkok branch at Rs. 7,50,000 and of the net profits at 5% thereon, amounting to Rs. 37, 5001 .
This assessment was made on January 31, 1952.
On the same day he issued a notice under section 28(3) of the Act requiring the assessee to show cause why a penalty under s.28(1)(c) for concealment of the particulars of the income of 1950 should not be levied.
The assessee was heard on this notice and on January 22, 1954, the Income tax Officer imposed a penalty of Rs.20,000 on it as its explanation was not acceptable.
In the meantime assessment proceedings for the year 1952 53 had commenced and this year also the assessee adopted a similar attitude as in the previous years.
The Income tax Officer was however insistent and, therefore, after various adjournments, the assessee had on August 17, 1953 to produce the accounts and books of the Bangkok branch.
It appeared from these books that in the calendar year 1950 the assessee had made a profit of Rs. 1,25,520/ .
The Income tax Officer thereupon commenced proceedings under section 34 of the Act against the assessee in respect of the assessment year 1951 52 and gave 564 notice to the assessee to submit a return.
The assessee then submitted a return stating therein correctly the profits for the calendar year 1950.
The Income tax Officer completed that assessment after directing the .issue of a further notice under section 28(3) on April 8, 1954 requiring the assessee to show cause why penalty should not be levied for deliberately concealing the particulars of his income of 1950.
Pursuant to this notice the Income tax Officer passed another order on February 28, 1957 imposing a penalty of Rs. 68,501.
So there were two orders of penalty.
The assessee appealed to the Appellate Assistant Commissioner against both the aforesaid orders of penalty but the appeals were rejected.
There is no dispute as to the assessment of the income.
The assessee then appealed to the Income tax Appellate Tribunal.
The Tribunal observed, "It is indeed difficult to understand the action ' of the Department in splitting up one offence into two proceedings.
So far as the levy on the basis of the 23(3) assessment is concerned, it appears to have no basis as till that stage the Department had not succeeded in establishing and bringing home any guilt.
It was still in the region of estimate. .
The levy of Rs. 20,000 has to be remitted in full.
The levy of Rs. 68,501 is entirely different.
With the definite knowledge that the Income tax Officer had obtained that the profit for the year was Rs. 1,25,520 he has clearly proved the guilt of concealment against the assessee. .
The penalty is not at all excessive and accordingly confirmed.
" The revenue authorities never questioned the cancellation of the first order of penalty.
Thereafter the asseseee obtained a reference to the High Court of the question which we have set out at the beginning of this judgement.
That question, it will be noticed, referred only to the penalty of Rs. 68,501 / imposed pursuant to the second notice under section 28(3) for concealing the particulars of the income of 1950.
It has to be observed that in the return that was filed in the proceedings started under 565 section 34, the assessee furnished correct particulars and it also produced the books.
So it had not committed any default in connection therewith.
The notice must therefore be taken to have been in respect of the original concealment of the income.
The assessee knew and this is what was found by the Tribunal% and that is a finding of fact which is binding on a Court in a reference that its profits were Rs. 1,25,520/and it had not disclosed that profit originally nor produced the relevant books but permitted the Incometax Officer to proceed on an estimate of that profit at Rs. 37,500/ .
It was contended in the High Court that in respect of the same concealment there were thus two penalties involved, namely, one of Rs. 20,000 and the other of Rs. 68,501/ .
The High Court agreed with the contention of the assessee that two penalties could not be levied in respect of identical facts but it held that the penalties in this case had not been levied on the same facts.
It observed that the original assessment was solely on the basis of an estimate and the second assessment was after knowledge of the full facts of the concealed income.
In this Court Mr. Kolah has urged that the second order for penalty was illegal because there was one concealment and in respect of that an order for penalty of Rs. 20,000/ had earlier been made.
He contended that there was no jurisdiction to make the second order of penalty while the first order stood and for that reason the second order must be treated as a nullity.
He further stated that the fact that the first order was subsequently cancelled by the Tribunal would not set the second order on its feet for it was from the beginning a nullity as having been made when the first order stood.
We are unable to accept this argument.
It may be that in respect of the same concealment two orders of penalty would not stand but it is not a question of jurisdiction.
The penalty under the section has to be correlated to the amount of the tax which would have been evaded if the assessee had got away with the concealment.
In this case having assessed 566 the income by an estimate, the Income tax Officer levied a penalty on the basis of that estimate.
Later when he ascertained the true facts and realised that a much higher penalty could have been imposed, he was entitled to recall the earlier order and pass another order imposing the higher penalty.
If he had omitted to recall the earlier order that would not make the second order invalid.
He had full jurisdiction to make the second order and he would not lose that jurisdiction because he had omitted to recall the earlier order, though it may be that the two orders could not be enforced simultaneously or stand together.
However, in the present case the earlier order having been cancelled and no objection to the cancellation having been taken, we have only one order and that for the reasons earlier stated is, in our view, a legal order.
It was also said that when the first order of penalty was passed the Income tax Officer was in possession of the full facts which would have justified the imposition of the higher penalty.
It was pointed out that the first order of penalty was passed on January 22 1954 while the books disclosing the real state of affairs had been produced before the Income tax Officer on August 17, 1963.
It was contended that in inspite of this he passed the order imposing a lower penalty, he had no right later to change that order In support of this contention reference was made to C. V. Govinderajulu Iyer vs Commissioner of Income tax, Madras" '.
There it was argued that the original proceeding under section 23(3) and a proceeding under section 34 in respect of the same period were different and in the latter proceeding a penalty could not be imposed for a concealment in respect of the original proceeding.
Rajamannar C.J. rejected this contention and held, "that so long as the proceedings under Section 34 relate to the assessment for the same period as the original assessment, the Income tax Officer will be competent to levy a penalty on any ground open to him under Section 28(1), even though it relates (1) [16] I.T.R. 391 567 to the prior proceeding".
He however proceeded to observe, "There may be one possible qualification of his power, and that is when the default or the act which is the basis of the imposition of the penalty was within the knowledge of the officer who passed the final order in the prior proceeding and if that, officer had failed to exercise his power under Section 28 during the course of the proceeding before him.
Possibly in that case he would have no power.
" Learned counsel for the appellant relied on this latter ob servation in support of his contention.
We do not think that Rajamannar C.J. wished to state this qualification on the power of the Income tax Officer as a proposition of law.
It was not certainly necessary for the purposes of the case before him.
We do not wish to be understood as subscribing to it as at present advised.
But assume that this statement of the law is correct.
It has no application to the present case.
What is said is that if the default which entails the penalty was within the knowledge of the authority when it passed the final order in the prior proceeding no penalty could be later imposed.
Now Rajamannar C.J. was not dealing with a case in which two penalties had been imposed.
The case before him was one in which no return had been filed pursuant to a general notice but subsequently section 34 proceedings had been stated and resulted in an assessment and an order imposing a penalty was thereupon passed.
The final order in the prior proceedings referred to by the learned Chief Justice must, therefore, be final assessment order in the prior proceedings.
Now in the present case the final order in the prior assessment proceedings was made on January 31, 1952 and on that date the Income tax Officer had no knowledge of the concealment of income of Rs. 1,25,520.
Therefore it seems to us that the observation of Rajamannar C.J. does not assist Mr. Kolah.
We may also observe that the first order of penalty passed on January 22, 1954, was pursuant to a notice issued on January 31, 1952 in respect of which the assessee had offered 568 his explanation on March 11, 1952.
That notice 'was not concerned with any concealment that came to light from the production of the books on August 17, 1953 and, therefore, on this concealment the assessee had never been heard.
In assessing a penalty If on this notice subsequently acquired knowledge would be irrelevant.
The result is that the appeal fails and it is dismissed with costs.
Appeal dismissed.
| The appellant, a firm of Surat, had a branch at Bangkok, to which it exported cloth, and the branch also made purchases locally and sold them.
During the war the business of the branch had been in abeyance, but was re started after the termination of the hostilities.
in its return for the assessment year 1949 50 the appellant did not include any profit of the branch, but stated that the books of account of branch were not available, and therefore its profits might now be assessed on an estimate basis subject to 561 action under s.34 or 35.The assessment was made on the basis of profit at 5 % on the export to the branch appearing in the Surat books.
A similar estimate was made for year 1950 51.
For the year 1951 52 also the business profits of the branch were not shown but the Income tax officerissued a notice to the assessee to produce the relevant accountsand books.
The appellant excused itself by promising that in thefollowing year these accounts for the year 1950 would be produced.
Thereupon the Income tax Officer made an estimate of the sales of the branch and of the net profits at 5 % thereon, amounting to Rs. 37,500/ , and the same day he issued a notice to show cause why a penalty for concealment of the particulars of the income of 1951 52 should not be levied.
Subsequently, the Income tax Officer imposed a penalty of Rs. 20,000/ on it as its explanation was not acceptable.
In the meantime assessment proceedings for the year 1952 53 had commenced and the appellant adopted a similar attitude.
The Income tax Officer was insistent and, therefore, appellants had to produce the accounts and books of the branch, from which it appeared that for the year 1951 52 the appellant had made a profit of Rs. 1,25,520/ .
The Income tax Officer issued a further notice to the appellant to show cause why penalty should not be levied for deliberately concealing income for the year 1951 52.
Pursuant to this notice the Income tax Officer passed another order imposing a penalty of Rs. 68,501/ .
The appellant 's appeal to the Appellate Assistant Commissioner against both the orders of penalty was rejected.
On appeal, the Tribunal cancelled the first order of penalty but confirmed the second one.
This hereafter, the appellant obtained a reference to the High Court on the question: "Whether the levy of Rs. 68,501/ as penalty for concealment in the original return for the assessment year 1951 52 is legal?" The High Court answered the question in the affirmative.
On the appeal by special leave it was urged that the second order for penalty was illegal because there was one concealment and in respect of that a penalty of Rs. 20,000/ had earlier been imposed, that there was no jurisdiction to make the second order of penalty while the first order stood and for that reason the second order must be treated as a nullity; and that the fact that the first order was subsequently cancelled by the Tribunal would not set the second order on its feet for it was from the beginning a nullity as having been made when the first order stood.
Held: (i) The contentions must be rejected.
The Income tax Officer had full jurisdiction to make the second order and he would not lose that jurisdiction because he had omitted to recall the earlier order, though it may be that the two orders in respect of the same concealment could not be enforced simultaneously or stand together.
When the Income tax Officer ascertained the true facts and realised that a much higher penalty could have been imposed, he was entitled to recall the earlier order and pass another order imposing the higher penalty.
If he had omitted to recall the earlier order that would not make the second order invalid, 1 SCI/64 36 562 (ii)In the present case the earlier order having been cancelled and no objection to the cancellation having been taken, there is only one order, which is a legal order.
C.V. Govindarajulu Iyer vs Commissioner of Income tax, Madras, , distinguished.
|
Civil Appeal No. 2754 of 1981.
Appeal by special leave from the judgment and order dated the 6th August, 1979 of the Allahabad High Court in Civil Revision No. 1904 of 1978.
M. K Garg for the Appellant.
K K Mahrotra for the Respondent.
The Judgment of the Court was delivered by SEN, J.
The short point involved in this appeal by special leave from a judgment of the Allahabad High Court, is whether the Court of the District Judge, Almora had jurisdiction to entertain the petition for nullity of marriage filed by the respondent under section 12 of the (hereinafter referred to as 'the Act ').
To bring out the point, it is necessary to state a few facts.
It appears that the parties originally belonged to village Bagyan, 1005 District Pithoragarh, in the State of Uttar Pradesh.
The appellant 's A case is that they fell in love and she became enceinte, as the respondent had access to her during the period of courtship.
Her case is that she wanted to marry the respondent, but her father was opposed to the alliance as her elder brother and sister were unmarried.
She was therefore brought in an advanced stage of pregnancy to Delhi and through the intervention of her uncle Basant Kumar, the marriage was solemnised on January 24, 1976 according to Arya Samaj rites at the Arya Samaj Mandir, Hanuman Road, New Delhi.
Three days after the marriage, i.e. On January 27, 1976, the respondent left the residence of Basant Kumar on the pretext that he had to fetch his belongings from the residence of his uncle Dharm Nand Pant who also lives at Delhi, and never returned.
On February 6, 1976, he served a notice on the appellant alleging that the marriage was a nullity as she got pregnant through someone else, that fraud was practised on him by her uncle Basant Kumar and that he had been coerced to marry her against his will.
On February 17, 1976 she sent a reply denying the allegations made therein.
On March 2, 1976 she filed a petition for restitution of conjugal rights under section 9 of the Act in the Court of Subordinate Judge, Class I, Delhi.
It may here be stated that although the appellant is a resident of Delhi as she lives with her uncle Basant Kumar at Lajwanti Garden, and the respondent was also a resident of Delhi being employed, at all material times, as Radio Technician in the Ministry of Home Affairs, Rail Bhavan, New Delhi, he started the present proceedings not at Delhi but at Almora.
On March 18, 1976 the respondent filed a petition for nullity of marriage under section 12 of the Act in the Court of the District Judge, Almora alleging that the parties were residents of village Bagyan, District Pithoragarh, i.e. within the territorial jurisdiction of the Court of District Judge, Almora.
On March 23, 1976 i.e. just after five days of the filing of the petition under section 12 of the Act the appellant delivered a dead child at Delhi.
On February 25, 1977 the Subordinate Judge, Class 1, Delhi decreed the appellant 's suit for restitution of conjugal rights under s 9 of the Act.
In decreeing her claim for restitution of conjugal rights, the learned Subordinate Judge observed: "That to sum up, the evidence adduced by petitioner proves that the petitioner and respondent were known to 1006 each other and had developed sexual intimacy.
It is further proved that the respondent married the petitioner at Delhi on 24.1.1976 of his own sweet free will according to Hindu rites.
The petitioner delivered a dead child on 23.3.1976 would show that on the date of marriage, the petitioner was running in 7th month of pregnancy.
Such advanced stage of pregnancy could not be hidden from the vision of any person.
The plea of respondent that he did not know on 24.1.1976 that the petitioner was pregnant cannot be believed.
The respondent thus knew at the time of marriage that the petitioner was pregnant.
The very fact that he married her of his own free will would justify the conclusion corroborated by other evidence and circumstances discussed above that the petitioner had conceived from the respondent and the respondent thus married her of his own free will.
" The judgment of the learned Subordinate Judge decreeing the appellant 's claim for restitution of conjugal rights under section 9 of the Act was not appealed from and has, therefore, become final.
Upon these facts, it is quite evident that the Court of the District Judge, Almora had no jurisdiction to try the petition for the nullity of marriage filed by the respondent under section 12 of the Act.
The appellant by her written statement filed on August 23, 1976 challenged the jurisdiction of the District Judge, Almora to try the suit.
The learned District Judge, accordingly framed a preliminary issue as to jurisdiction.
By his order dated April 8, 1978 he negatived the objection raised by the appellant holding that since the parties were originally resident of village Bagyan, District Pithoragarh, that is, a place within the territorial jurisdiction of the Court of the District Judge, Almora, he I was competent to entertain and try the suit.
The appellant being aggrieved by the order of the learned District Judge preferred an appeal before the High Court.
The High Court by its judgment dated August 6, 1979 upheld the finding of the learned District Judge observing: "The allegations made in the written statement do unmistakably show that the respondent was ordinarily residing at village Bagyan which was within the limits of the terri 1007 torial jurisdiction of the Court or District Judge, Almora.
A Even if she happened to be in Delhi on the date when the petition was presented, she must have gone to Delhi only on a temporary visit as she had no place of residence at Delhi and the respondent could not be said to have been residing at Delhi when the petition was presented in the District Court.
" In arriving at that conclusion, the High Court was obviously influenced by the fact that the parties never had any permanent residence.
While it is true that mere casual or temporary visits do not constitute 'residence ' within the meaning of cl.
(ii) of section 19 of the Act, it cannot be said that the parties came to Delhi on a temporary sojourn for a day or two.
The appellant 's case is that she had left her parental home at village Bagyan as her father did not consent to the marriage.
If that be so, the irresistible conclusion is that she came to reside with the respondent at Delhi.
It was frankly conceded before us that the finding of the High Court that she should be so regarded as having her residence at village Bagyan in 1) the District of Pithoragarh is based on no evidence.
It is agreed on all hands that ever since the marriage, the appellant has been residing with her uncle Basant Kumar at Lajwanti Garden.
New Delhi.
Section 19 of the Act, insofar as material, reads as follows: "19.
Every petition under this Act shall be presented to the District Court within the local limits of whose ordinary original civil jurisdiction (i) the marriage was solemnised, or (ii) the respondent, at the time of the presentation of the petition, resides, or (iii) the parties to the marriage last resided together. " It is common ground that the marriage was solemnised on January 26, 1976 at New Delhi.
The fact that the parties last resided together at the residence of the appellant 's uncle Basant kumar at Lajwanti Garden, New Delhi is not in dispute.
It is, therefore, clear that the conditions laid down in cls.
(i) and (iii) of section 19 of the Act are not present to invest the Court of the District Judge, Almora to entertain the petition for annulment of marriage filed by the respondent under s, 12 of Act, 1008 The question that arises is whether the learned District Judge was invested with jurisdiction by reason of cl.
(ii) of section 19 of the Act, i.e. whether, at the time of presentation of the petition, the appellant was a resident of village Bagyan within the territorial jurisdiction of the Court of District Judge.
In order to give jurisdiction on the ground of 'residence ', something more than a temporary stay is required.
It must be more or less of a permanent character, and of such a nature that the court in which the respondent is sued, is his natural forum.
The word 'reside ' is by no means free from all ambiguity and is capable of a variety of meanings according to the circumstances to which it is made applicable and the context in which it is found.
It is capable of being understood in its ordinary sense of having one 's own dwelling permanently, as well as in its extended sense.
In its ordinary sense 'residence ' is more or less of a permanent character.
The expression 'resides ' means to make an abode for a considerable time; to dwell permanently or for a length of time; to have a settled abode for a time.
It is the place where a person has a fixed home or abode.
In Webster 's Dictionary, 'to reside ' has been defined as meaning 'to dwell permanently or for any length at time ', and words like 'dwelling place ' or 'abode ' are held to be synonymous.
Where there is such fixed home or such abode at one place the person cannot be said to reside at any other place where he had gone on a casual or temporary visit, e.g. for health or business or for a change.
If a person lives with his life and children, in an established home, his legal and actual place of residence is the same.
If a person has no established home and is compelled to live in hotels, boarding houses or houses or others, his actual and physical habitation is the place where he actually or personally resides.
It is plain in the context of cl.
(ii) of section 19 of the Act, that the word 'resides ' must mean the actual place of residence and not a legal or constructive residence; it certainly does not connote the place of origin.
The word 'resides ' is a flexible one and has many shades of meaning, but it must take its colour and content from the context in which it appears and cannot be read in isolation.
It follows that it was the actual residence of the appellant, at the commencement of the proceedings, that had to be considered for determining whether the District Judge, Almora, had jurisdiction or not.
That being so, the High Court was clearly in error in uphold in the finding of the learned District Judge that he had jurisdiction 1009 to entertain and try the petition for annulment of marriage filed by the respondent under section 12 of the Act.
In the result, the judgment of the High Court is set aside and the District Judge, Almora, is directed to return to the respondent the petition filed by him for nullity of marriage under section 12 of the for presentation to the proper court, i.e. the Court of the District Judge, Delhi.
There shall be Do order as to costs.
S.R. Appeal allowed.
| Uttar Pradesh Muslim Wakf Act, 1960 (Act XVI of 1960) repealing Uttar Pradesh Muslim Wakf Act, 1936 (Act XIII of 1936 Legal position as to the finality of Survey Reports and effect of registration of Wakfs already made under the earlier Act long before it was repealed Words and phrases "Every other Wakf " in section 29 of the 1960 Act, meaning of.
Criminal Procedure Code, 1973, section 144 Whether an order made under section 144 Criminal Procedure Code is judicial or quasi judicial order or whether it is passed in exercise of an executive power in performance of executive function amenable to writ jurisdiction under Article 32 of the Constitution Nature and power under the section and what it authorises the executive magistracy to do and in what circumstances, explained.
In Mohalla Doshipura of Varanasi city, there are two sects of Mohamedans the Shias and the Sunnis.
Both the sects revere the martyrdom of Hazrat Imam Hasan and Hazrat Imam Hussain, grand sons of Prophet Mohammed, during the Moharram but in a different manner.
Nine plots bearing Nos. 245, 246, 247, 248/23/72, 602, 603, 602/1133, 246/1134 and 247/1130 in the said Mohalla and buildings and structures thereon belong to the Shia Waqf of Mohalla Doshipura.
Shias of that Mohalla numbering about 4000 constitute a religious denomination having a common faith and they observe Moharram for two months and eight days in a year in memory of Hazrat Imam Hussain who along with his 72 followers attained martyrdom at Karbala in Iraq.
The said religious belief is practised by the men folk and the women folk of the Shia community by holding Majlises (religious discourses), Recitations, Nowhas, Marsia, doing 1078 Matam (wailing) and taking out processions with Tabut Tazia, Alams, Zukinha, etc.
For performing these religious rites, practices and observances the Shia community has been customarily using from time immemorial the nine plots in Mohalla Doshipura and the structures thereon.
The entire period of Moharram is a period of mourning for the Shias whose staunch belief is that the whole purpose of their life is to carry out these religious practices and functions during the Moharram and that in case they do not perform all these rites, practices, observances and functions, including those relating to the Tazia, they will never be delivered and till these are performed the whole community will be in mourning and in none of their families any marriage or other happy function can take place.
The petitioners, in the writ petition, and through them the Shia community, contended as follows: (i) that their customary rights to perform several religious rites, practices, observances and functions on the said nine plots and the structures thereon having been already determined in their favour by decisions of competent civil courts ending with the Review Petition 36177 in Civil Appeal 941176 in the Supreme Court, the respondents must be commanded by a mandamus not to prohibit or restrain the Shias from performing their religious rites etc.
On the said plots; (ii) that the registration of Shia Waqfs concerning the plots and structures for performance of these practices and functions under sections 5 and 38 of the Uttar Pradesh Muslim Wakfs Act, 1936, which had become final as no suit challenging the Commissioner 's report and registration was filed within two years by any member of Sunni Community or the Sunni Central Wakf Board, also concluded the said rights in their favour; and (iii) that the power under section 144 Criminal Procedure Code is being invariably exercised perversely and in utter disregard of the lawful exercise of Shias ' legal rights to perform their religious ceremonies and functions and instead of being exercised in aid of such lawful exercise it is exercised in favour of those who unlawfully and illegally interfere with such lawful exercise under the facile ground of apprehension of imminent danger to peace and tranquility of the locality.
The respondents contested and contended as follows: (i) that a Writ Petition under Article 32 for such a relief of declaration is not maintainable in as much as the basic purpose of a petition under Article 32 is to enforce existing or established fundamental rights and not to adjudicate and seek a declaration of such rights or entitlement thereto; (ii) that no mandamus under Article 32 is competent inasmuch as orders under section 144 Cr.
P.C. these are judicial or quasijudicial; alternatively even if it were assumed that these orders are administrative or executive orders passed by the Executive Magistrates, they cannot be challenged unless the Magistrate has exceeded his powers or acted in disregard to the provisions of the law or perversely; and (iii) that the writ petition was barred by res judicata or principles analogous to res judicata by reason of the Supreme Court 's decisions in (a) Civil Appeal 941/1976.
(b) Review Petition 36 of 1977 and (c) order permitting withdrawal of S.L.P. 6226 of 1978 on 4 12 1978.
Allowing the petition, the Court ^ HELD: 1: 1.
The petitioners and through them the Shia community of Mohalla Doshipura, Varanasi, have established their customary rights to perform 1079 their religious rites, practices, observances, ceremonies and functions minus the A recitation and utterance of Tabura over the plots in question.
[1136 B C] 1: 2.
The litigation arising out of Suit No. 849 of 1878 (Sheik Sahib and ors.
vs Rahtnatu and ors.) declared the mosque in plot No. 246 to be a public mosque at which every mohammedan became entitled to worship and further declared the Shias ' right to keep their Tazia in the apartment attached to the mosque and repair it in the verandah thereof and to hold their majlises on 9th and 12th of Moharram on or near the platform on the surrounding ground of the mosque as early as on 29th March, 1879.
[1098 B, G H] The alleged customary rights of Sunnis in the matter of burial of their dead on the plot No. 60211133 was decided against them, in the Suit No. 42411931 filed by the then Maharaja of Banaras in the Court of Addl.
Munsiff, Banaras.
[1099 A B, G] The third and most important Suit No. 232/1934 filed in the court of City Munsiff, Banaras (Fathey Ullah and Ors.
(Sunnis) vs Nazir Hussain and Ors.
(Shias) in respect of all the plots in Khasra Nos 245, 246, 247, 248/23/72, 602, 603, 602/1133, 246/1134 and 247/1130 which were claimed to be Sunni Wakfs by long user, also went against the Sunnis and in favour of the Shias, clearly establishing the title or ownership of Shias over at least two main structures Zanana Imambara on plot No. 245 and Baradari on plot No. 247/1130 and to the land below the structures and what is more substantially the customary rights claimed by the Shia Muslims over the plots and structures were upheld.
[1100 H, 1101 A B, 1102 F G] The said suit 232/34 had been filed in the representative capacity both as regards the Sunni plaintiffs and Shia defeadants and all the formalities under order I rule 8 of the Civil Procedure Code had been complied with and as such he final decision in that litigation is binding on both the communities.
[1104 B C, G H] 2 :1.
Ordinarily adjudication of questions of title or rights and granting declaratory relief consequent upon such adjudication are not undertaken in a Writ Petition under Article 32 of the Constitution and such a petition is usually entertained by the Supreme Court for enforcement of existing or established title or lights for preventing infringement or encroachment thereof by granting appropriate reliefs in that behalf.
Here, what Shia community is seeking by the Writ Petition is enforcement of their customary rights to perform their religious rites, practices, observances and functions on the concerned nine plots and structures thereon which have already been adjudicated, determined and declared in their favour by decisions of competent Civil Courts in the earlier litigations and that the declaration sought in the prayer clause is really incidental.
[1097 A C] 2: 2.
It is true that title and ownership of the plots of land in question is distinct from title and ownership of structures standing thereon and both these are again distinct from the customary rights claimed by the members of the Shia community to perform their religious ceremonies and functions on the plots and the structures thereon.
However, even if the petitioners and through them the Shia community are unable to prove their existing or established title either to the concerned plots or to the structures standing thereon but they are able to 1080 prove that they have existing or established customary rights to perform their religious ceremonies and functions on the plots and the structures thereon simultaneously complaining of illegal deprivation or encroachment by executive officers at the behest of the respondents or the Sunni community the reliefs sought by them by way of enforcement of such customary rights will have to be entertained and considered on merits and whatever relief they may be found legally and properly entitled to may have to be granted to them.
[1097 C F] 3: 1.
It is well settled that section 11 of the Civil Procedure Code is not exhaustive of the general doctrine of res judicata and though the rule of res judicata as enacted in section 11 has some technical aspects the general doctrine is founded on considerations of high public policy to achieve two objectives, namely, that there must be a finality to litigation and that individuals should not be harassed twice over with the same kind of litigation.
The technical aspects of section 11 of Civil Procedure Code, as for instance, pecuniary or subject wise competence of the earlier forum to adjudicate the subject matter or grant reliefs sought in the subsequent litigation would be immaterial when the general doctrine of res judicata is to be invoked.
Even under section 11 of the Civil Procedure Code the position has been clarified by inserting a new Explanation VIII in 1976 [1105 C D, 1107 A B] 3: 2.
In the instant case; (a) it was not disputed that the Munsif 's Court at Banaras was competent to decide the issues that arose for determination before it in earlier litigation and, therefore, the decision of such competent court on the concerned issues must operate as a bar to any subsequent agitation of the same issues between the same parties on general principles of res judicata; (b) not only were the Sunnis ' customary rights over the plots and structures in question put in issue during the trial but the customary rights to perform their religious ceremonies and functions on the plots and structures thereon claimed by the Shias were also directly and substantially put in issue inasmuch as the plaintiffs (Sunni Muslims) has sought an injunction restraining the Shias from exercising their customary rights.
Therefore, the decision in this litigation which bore a representative character not merely negatived the Sunnis ' customary rights claimed by them over the plots and structures but adjudicated, determined and declared the Shias ' entitlement to their customary rights to perform their religious ceremonies and functions on the plots and structures thereon in question and this decision is binding on both the communities of Mohalla Doshipura; (c) there is no question of there being any gap or inadequacy of the material on record in the matter of proof of Shias ' entitlement to customary rights over the plots and structures in question, whatever be the position as regards their title to the plots or structures; and (d) a clear case has been made out of an existing or established entitlement to the customary rights in favour of the Shias ' community to perform their religious ceremonies and functions over the plots and structures in question under the decrees of competent Civil Court for the enforcement of which the instant Writ Petition has been filed.
[1107 B H, 1108 A] Rajah Run Bahadoor Singh vs Musumut Lachoo Koer, XII I. A. 23: Mst.
Gulab Bai vs Manphool Bai, ; ; Daryao and others vs State of U.P. ; ; Gulabchand Chhotalal parikh vs State of Bombay (now 1081 Gujarat); , and Union of India vs Nanak Singh, ; , referred to.
Broadly speaking, while repealing the 1936 Act, the 1960 Act maintains and preserves the finality and conclusiveness accorded to the Survey Reports completed and submitted by the Wakfs Commissioners under the former Act and the registration of Wakfs under the 1936 Act has been kept alive and effective as if such registration has taken place under the latter Act and registration of Wakfs under the latter Act has been permitted only in respect of Wakfs other then those which have already been registered under the former Act.
A perusal of sections 6, 9, 28 and 29 of the 1960 Act and sections 4(3), 4(5), 5(1), (2), (3) and 39 of the 1936 Act clearly show that the finality and conclusiveness accorded to the Commissioner 's report under section 5(3) of the 1936 Act has been preserved and the registration of Wakfs under the 1936 Act has been maintained under the 1960 Act notwithstanding the repeal of the former Act by the latter.
In other words any Survey Report submitted under the 1960 Act and any registration made under the 1960 Act will be futile and of no avail in regard to Wakf properties respecting which the Commissioner 's Report under the 1936 Act has become final and registration has been effected under the 1936 Act.[1108H, 1109A, 1110 F G] 4:2.
In the instant case; (a) having regard to the six properties being specifically asked to be entered in the list of Shia waqfs by Imam Ali Mahto in his application and the order made thereon, all the properties mentioned in the application must be regarded as having been entered in the list of Shia wakfs by the Chief or Provincial Commissioner for Wakfs and the Notification under section 5(1) related to all those properties as having been notified to be Shia Wakfs particulars whereof were stated to be available in the Board 's office.
The Nota Bena at the foot of the Notification amounted to sufficient particularisation of the properties notified as Shia Wakfs.
Non mentioning of those properties as Sunni Wakfs in Appendices VIII and IX sent to the Sunni Central Wakfs Board must amount to a notice to the Sunni Board and the Sunni Muslims that these had been enlisted as Shia Wakfs.
Admittedly, no suit was filed either by the Sunni Central Board or any other person interested in those Wakfs challenging the decision recorded in his Report by the Chief or Provincial Commissioner for Wakfs within the time prescribed under section 5(2) of the Act and, therefore, the Chief Commissioner 's Report together with the appendices X and XI thereto dated 28th/31st October, 1938, on the basis of which the Notification dated 15th January, 1954 was issued and published in Official Gazette on 23rd January, 1954, must be held to have become final and conclusive as between the members of the two communities; (b) the Notification dated 26 2 1944 issued by the Sunni Wakf Board on the basis of material which did not form part of the Chief Commissioner 's Report would be in violation of section 5(1) of the 1936 Act; (c) Notice issued by the Shia Board under section 53 of the 1936 Act complaining about the entry at Serial No. 224 must be regarded as having been issued ex majori cautela; and (d) even if it were assumed for the purposes of argument that entry at Serial 224 in the Notification dated 26th February, 1944 refers to the mosque in question it cannot affect the customary rights of the petitioners and through them the Shia community to perform their religious ceremonies and functions over the other 8 plots and structures thereon which had been listed as Shia Wakfs under the Notification dated 15th January, 1954, especially when it is now common ground 1082 that the mosque on Plot No. 246 is a public mosque constructed by general subscriptions and is accessible to members of both the sects for offering prayers and doing worship therein; (e) the registration under section 38 of the 1936 Act would be available to the petitioners and must prevail over the subsequent registration, if any, obtained by the Sunnis in respect of some of the properties under the 1960 Act; really speaking such latter registration would be non est in the eye of law.
Even on the second foundational basis the Shias have proved their existing or established entitlement to their customary rights to perform their religious ceremonies and functions on the concerned plots and structures thereon.[1113 B G, 1115 A B, 1116 E A, 1117 A B] 4:3.
Shias are claiming the right to perform their religious ceremonies and functions on the plots and structures in question not so much on the basis of any title or ownership thereof but on the basis of customary exercise since time immemorial and they have been claiming such customary rights by prescription over the plots belonging to the Maharaja of Banaras as Zamindar and superior title holder and the prescriptive rights have enured for the benefit of all the Shias notwithstanding such superior title in the Maharaja and if that be so they will also enure for their benefit as against any derivative title claimed by anyone under the Maharaja.
Moreover when these plots and structures, particularly these three plots were being registered as Shia Wakfs under the U.P. Wakfs under the U.P. Muslims Wakfs Act 1936 by the Shia Board and Sanads or Certificates of Registration in respect thereof were being issued in December 1952, the two Sunni Lessees who are said to have obtained a lease on 20.4.1952 did not raise any objection to such registration.
The Shias ' customary rights acquired by prescription over these plots cannot thus be defeated by such derivative title.
[1119 C G] 5:1.
Having regard to such implementation of the concept of separation of judicial functions from executive or administrative functions and allocation of the former to the Judicial Magistrate and the later to the Executive Magistrates under the Code of 1973, the order passed by a District Magistrate, Sub Divisional Magistrate or any other Executive Magistrate under the present section 144 is not a judicial order or quasi judicial order, the function thereunder being essentially an executive (police) function.
[1125 E G] 5:2.
It is true that before passing the order the District Magistrate, Sub Divisional Magistrate or the Executive Magistrate gives a hearing to parties except in cases of emergency when exparte order can be made under section 144(2) by him without notice to the person or persons against whom it is directed, but in which cases on an application made by any aggrieved person he has to give hearing to such person under section 144(5) and thereupon he may rescind or alter his earlier order.
It is also true that such an order made by the Executive Magistrate is revisable under section 397 of the Code because under the Explanation to that section all Magistrates, whether executive or judicial or whether exercising appellate or original jurisdiction, are deemed to be inferior Courts for purposes of the revisional power of the High Court or Court of Sessions.
But the fact that the parties and particularly the aggrieved party are heard before such an order is made merely ensures fair play and observance of audi alterem partem rule which are regarded as essential in the performance of any executive or administrative function and the further fact that a revision lies against the order of the executive magistrate either to the Sessions Court or to the High Court 1083 removes the vice of arbitrariness, if any, pertaining to the section.
In fact, in the three decisions of the Supreme Court which were relied upon by counsel for respondents 5 and 6, namely, Babu Parate 's case, K.K. Mishra 's case and Madhu Limaye 's case where the constitutionality of section 144 of the old Code was challenged on the ground that it amounted to unreasonable restriction on the fundamental right of a citizen under Article 19(1) of the Constitution, the challenge was repelled by relying upon these aspects to be found in the provision.
However, these aspects cannot make the order a judicial or quasi judicial order and such an order issued under section 144 of the present code will have to be regarded as an executive order passed in performance of an executive function where no lis as to any rights between rival parties is adjudicated but merely an order for preserving public peace is made and as such it will be amenable to writ jurisdiction under Article 32 of the Constitution.[1125H, 1126 F] 5:3.
The power conferred under section 144 Criminal Procedure Code 1973 is comparable to the power conferred on the Bombay Police under section 37 of the Bombay Police Act, 1951 both the provisions having been put on the statute book to achieve the objective of preservation of public peace and tranquility and prevention of disorder and it has never been disputed that any order passed under section 37 of the Bombay Police Act is subject to writ jurisdiction of the High Court under Article 226 of the Constitution on the ground that it has the effect of violating or infringing a fundamental right of a citizen.
The nature of the power under both the provisions and the nature of function performed under both being the same by parity of reasoning an order made under section 144 Criminal Procedure Code, 1973 is amenable to writ jurisdiction either under Article 32 or under 226 of the Constitution if it violates or infringes any fundamental right.
[1126 F H, 1127 A B] 5:4.
In urgent cases of nuisance or apprehended danger, where immediate prevention or speedy remedy is desirable, a District Magistrate, a Sub Divisional Magistrate or any other Executive Magistrate specially empowered by the State Government in this behalf may, by a written order stating the material facts of the case, direct a particular individual, or persons residing in a particular place or area, or the public generally when frequenting or visiting a particular place or area, (i) to abstain from a certain act or (ii) to take certain order with respect to certain property in his possession or under his management, if he considers that such direction is likely to prevent or tends to prevent obstruction, annoyance or injury to any other person lawfully employed, or danger to human life, health or safety, or a disturbance of public tranquility, or a riot or an affray.
Sub section (2) authorises the issuance of such an order ex parte in cases of emergency or in cases where circumstances do not admit of the serving in due time of a notice upon the person or persons against whom the order is directed but in such cases under subsection (5) the executive magistrate, either on his own motion or on the application of the person aggrieved after giving him a hearing, may rescind or alter his original order.
Under Sub section (4) no order under this section shall remain in force for more than two months from the making thereof unless under the proviso thereto the State Government by Notification directs that such order shall remain in force for a further period not exceeding six months.[1127 H, 1128 A E] 1184 The entire basis of action under section 144 is provided by the urgency of the situation and the power thereunder is intended to be availed of for preventing disorders, obstructions and annoyances with a view to secure the public weal by maintaining public peace and tranquility.
Preservation of the public peace and tranquility is the primary function of the Government and the aforesaid power is conferred on the executive magistracy enabling it to perform that function effectively during emergent situations and as such it may become necessary for the Executive Magistrate to over ride temporarily private rights and in a given situation the power must extend to restraining individuals from doing acts perfectly lawful in themselves, for, it is obvious that when there is a conflict between the public interest and private rights the former must prevail.
The section does not confer any power on the Executive Magistrate to adjudicate or decide disputes of Civil nature or questions of title to properties or entitlements to rights but at the same time in cases where such disputes or titles or entitlement to rights have already been adjudicated and have become the subject matter of judicial pronouncements and decrees of Civil Courts of competent jurisdiction then in the exercise of his power under section 144 he must have due regard to such established rights and subject of course to the paramount consideration of maintenance of public peace and tranquility the exercise of power must be in aid of those rights and against those who interfere with the lawful exercise thereof and even in cases where there are no declared or established rights the power should not be exercised in a manner that would give material advantage to one party to the dispute over the other but in a fair manner ordinarily in defence of legal rights, if there be such and the lawful exercise thereof rather than in suppressing them.
In other words, the Magistrate 's action should be directed against the wrong doer rather than the wronged.
Furthermore, it would not be a proper exercise of discretion on the part of the Executive Magistrate to interfere with the lawful exercise of the right by a party on a consideration that those who threaten to interfere constitute a large majority and it would be more convenient for the administration to impose restrictions which would effect only a minor section of the community rather than prevent a larger section more vociferous and militant.
Legal rights should be regulated and not prohibited all together for avoiding breach of peace or disturbance or public tranquility.
The key note of the power in section 144 is to free the society from menace of serious disturbances of a grave character and the section is directed against those who attempt to prevent the exercise of legal rights or others or imperil the public safety and health.[1128 E H, 1129 A D, 1138B] Muthialu Chetti vs Bapun Sahib, ILR ; Parthasaradi Ayyangar vs Chinna Krishna Ayyangar, ILR 5 Mad.
304 and Sundram Chetti and Ors.
vs The Queen, ILR 6 Mad. 203, approved.
Hasan and Ors.
vs Muhammad Zaman and Ors.
52 I.A. 61 and Haji Mohammad Ismail vs Munshi Barkat Ali and Ors., , applied.
Madhu Limaye 's case; , , followed.
D.V. Belvi vs Emperor, AIR 1931 Bom.
325; Queen Empress vs Tirunarasimha Chari, I.L.R. ; Muthuswami Servaigram and Anr.
vs Thangammal Ayiyar, AIR 30 Mad. 242; Bondalpati Thatayya vs Gollapuri Basavayya and Ors., AIR 1953 Mad. 956; Babulal Parate 's case ; K.K. Misra 's case.
1085 ; ; Sahibzada Saiyed Muhammed Amirabbas Abbasi and Ors.
vs The State of Madhya Bharat and Ors., , The Parbhani Transport Co operative Society Ltd. vs The Regional Transport Authority; , , Smt.
Ujjam Bai 's case, [1963] 1 SCR 778, N. section Mirajkar 's case; , , explained and distinguished.
After all the customary rights claimed by the petitioners partake of the character of the fundamental rights guaranteed under Articles 25 and 26 of the Constitution to the religious denomination of Shia Muslims of Varanasi, a religious minority, who are desirous of freely practising, their religious faith and perform their rites, practices, observances and functions without let or hindrance by members belonging to the majority sect of the community, namely, Sunni Muslims and as such a positive approach is called for on the part of the local authorities.
It is only in an extremely extraordinary situation, when other measures are bound to fail, that a total prohibition or suspension of their rights may be resorted to as a last measure.[1133F H.1134A] 6:2.
In the instant case, the earlier litigations which was fought right up to the Supreme Court cannot be regarded as between the same parties, in as much as the same was not fought in representative character while the present writ petition is litigated between the petitioners and the respondents representing their respective sects; further, it was felt by the Supreme Court that proper adjudication would not be possible without impleading the two Boards (Shia Central Wakf Board and Sunni Central Wakf Board) notices were issued to them and they were also impleaded as parties to the petition who have filed their respective affidavits in the matter and have been heard through respective counsel.
Moreover the earlier decision of the Supreme Court in Civil Appeal No. 941 of 1976 did not record any decision on the rights of the parties on merits but the Court took the view that the parties should be relegated to a civil suit on the assumption that the petitioners before the Allahabad High Court (i.e. W.P. No.2397 of 1978) had raised disputed questions of title and the Allahabad High Court had decided them for the first time in the writ petition; irrespective of whether the assumption made by the Supreme Court was right or wrong; the fact remains that there was no adjudication or decision on the petitioners ' right on merits as a result of the final order passed by the Supreme Court in the appeal, which was confirmed in the Review Petition; all that could be said to have been decided by the Supreme Court in Civil Appeal No. 941 of 1976 and Review Petition No. 36 of 1977 was that parties should get their rights adjudicated in Civil Suit.
For these reasons it is obvious that neither res judicata nor principle analogous to res judicata would bar the present writ petition.
[1134 G H, 1135 A D]
|
eal No. XXXIV of 1950.
Appeal by special leave from an Award of the All India Industrial Tribunal (Bank Disputes) Bombay, dated 1st Janu ary, 1950.
The facts of the case are set out in the judg ment.
Dr. Bakshi Tek Chand (Veda Vyas and S.K. Kapur, with him) for the appellant.
B. Sen for the respondents.
Alladi Krishnaswami Aiyar (Jindra Lal, with him) for the Union of India. 1950.
May 26.
The Court delivered judgment as follows : KANIA C.J I have read the judgments prepared by Messrs. Fazl Ali, Mahajan and Mukherjea JJ.
461 in this case.
As the views in those judgments in respect of the nature of the duties and functions of the Industrial Tribunal do not show agreement I consider it necessary to add a few words of my own.
In my opinion, the functions and duties of the Indus trial Tribunal are very much like those of a body discharg ing judicial functions, although it is not a Court.
The rules framed by the Tribunal require evidence to be taken and witnesses to be examined, cross examined and re exam ined.
The Act constituting the Tribunal imposes penalties for incorrect statements made before the Tribunal.
While the powers of the Industrial Tribunal in some respects are different from those of an ordinary civil Court and it has jurisdiction and powers to give reliefs which a civil Court administering the law of the land (for instance, 'ordering the reinstatement of a workman) does not possess in the discharge of its duties it is essentially working as a judicial body.
The fact that its determination has to be followed by an order of the Government which makes the award binding, or that in cases where Government is a party the legislature is permitted to revise the decision, or that the Government is empowered to fix the period.
of the opera tion of the award do not, to my mind, alter the nature and character of the functions of the Tribunal.
Having consid ered all the provisions of the Act it seems to me clear that the Tribunal is discharging functions very near those of a Court, although it is not a Court in the technical sense of the word.
The next question is whether under article 136 the Court has jurisdiction to entertain an application for leave to appeal against the decision of such a body.
It is not dis puted that the Court has power to issue writs of certiorari and prohibition in respect of the work of the Tribunal.
The only question is whether there is a right of appeal also.
In my opinion the wording of article 136 is wide enough to give jurisdiction to the Court to entertain an application for leave to appeal, although it is obvious that having regard to the nature of the functions of the Tribu nal, this Court will be very reluctant to entertain such an application.
462 As regards the merits, I do not think this is a case in which I would admit the appeal.
The aggrieved parties may apply for redress by adopting other appropriate proceedings.
The appeal therefore should be dismissed with costs.
FAZL ALl J.
The important question to be decided in this case is whether the present appeal lies at all to this Court.
The question is not free from difficulty, but on the whole I am inclined to think that 'the appeal does lie.
It is fully recognized that the scope article 136 of the Constitution is very wide, but the significance of the language used in the section can be appreciated only by comparing it with the articles which precede it.
Article 132 deals with the appellate jurisdiction of the Supreme Court in cases involving a substantial question of law as to the interpretation of the Constitution, and the words used in that article are: "appeal. from any judgment, decree or finalorder." Article 133 deals with appeals in civil matters and the same words are used here also.
Arti cle 134 deals with appeals in criminal matters, and the words used in it are: "appeal. from any judgment, final order or sentence." In article 136, the words "judg ment" and "decree," which are used in articles 132 and 133 are retained.
Similarly, the words "judgment" and "sen tence" occurring in article 134 are also retained.
But the expression "final order" becomes "order," and, instead of the High Court, reference is made to "any court.
" Cer tain other words are also used in the article which seem to me to have a special significance, these being "determina tion," "cause or matter" and "tribunal.
" It is obvious that these words greatly widen the scope of article 136.
They show that an appeal will lie also from a determination or order of "any tribunal" in any cause or matter.
Can we then say that an Industrial Tribunal does not fall within the scope of article 136 ? If we go by a mere label, the answer must be in the affirmative.
But we have to look further and see what are the main functions of the Tribunal and how it proceeds to discharge those functions.
This is necessary because 463 I take it to be implied that before an appeal can.
lie to this Court from a tribunal it must perform some kind of judicial function and partake to some extent of the charac ter of a Court.
Now there can be no doubt that the Industrial Tribunal has, to use a well known expression, "all the trappings of a Court" and performs functions which cannot but be regarded as judicial.
This is evident from the rules by which the proceedings before the Tribunal are regulated.
It appears that the proceeding before it commences on an application which in many respects is in the nature of a plaint.
It has the same powers as are vested in a civil Court under the Code of Civil Procedure when trying a suit, in respect of discovery, inspection, granting adjournment, reception of evidence taken on affidavit, enforcing the attendance witnesses, compelling the production of documents, issuing commissions, etc.
It is to be deemed to be a civil Court within the meaning of sections 480 and 482 of the Criminal Procedure Code, 1898.
It may admit and call for evidence at any stage of the proceeding and has the power to administer oaths.
The parties appearing before it have the right of examination, cross examination and re examination and of addressing it after all evidence has been called.
A party may also be represented by a. legal practitioner with its permission.
The matter does not rest there.
The main function of this Tribunal is to adjudicate on industrial disputes which implies that there must be two or more parties before it with conflicting cases, and that it has also to arrive at a conclusion as to how the dispute is to be ended.
Prima facie, therefore, a Tribunal like this cannot be excluded from the scope of article 136, but before any final conclu sion can be expressed on the subject certain contentions which have been put forward on behalf of the respondents have to be disposed of.
The first contention is that the Industrial Tribunal cannot be said to perform a judicial or quasi judicial function.
since it is not required to be guided by any recognized substantive law in deciding disputes 464 which come before it.
On the other hand, in deciding industrial disputes, it has to override contracts and create rights which are opposed to contractual rights.
In these circumstances, it is said that the very questions which arose before the Privy Council in Moses vs
Parker Ex parte Mose (1) arise in this case, these questions being : (1) How can the propriety of the Tribunal 's decision be tested on appeal, and (2) What are the canons by which the appellate Court is to be guided in deciding the appeal ? Their Lordships of the Privy Council undoubtedly felt that these were serious questions, but they had no hesitation in saying that "if it were clear that appeals ought to be allowed.
such difficulties would doubtless be met somehow.
" This, in my opinion, is a sufficient answer to the difficul ty raised.
The Tribunal has to adjudicate in accordance with the provisions of the .
It may sometimes override contracts, but so can a Court which has to administer law according to the Bengal or Bihar Money lenders Act, Encumbered Estates Act and other similar Acts.
The Tribunal has to observe the provisions of the special law which it has to administer though that law may be dif ferent from the law which an ordinary Court of justice administers.
The appellate Court, therefore, can at least see that the rules according to which it has to act and the provisions which are binding upon it are observed, and its powers are not.exercised in an arbitrary or capricious manner.
The second contention, which is a more serious one, is that the adjudication of the Tribunal has not all the at tributes of a judicial decision, because the adjudication cannot bind the parties until it is declared to be binding by the Government under section 15 of the Industrial Dis putes Act.
It is said that the adjudication is really in the nature of an advice or report which is not effective until made so by the Government.
It appears that a similar objection was raised in Rex vs Electricity Commissioner 's, London Electricily ' (1) Joint Committee Co. (1920) Ex Parte (1) for the purpose of deciding whether a writ of certiorari should be Issued in the circumstances of the case but was dis.
posed of in these words : "It is necessary, however, to deal with what i think was the main objection of the Attorney General.
In this case he said the Commissioners come to no decision at all.
They act merely as advisers.
They recommend an order embodying a scheme to the Minister of Transport, who may confirm it with or without nodifications.
Similarly the Minister of Trans port comes to no decision.
He submits the order to the Houses of Parliament, who may approve it with or without modifications.
The Houses of Parliament may put anything into the order they please, whether consistent with the Act of 1919, or not.
Until they have approved, nothing is decided, and in truth the whole procedure, draft scheme, inquiry, order, confirmation, approval, is only part of a process by which Parliament is expressing its will, and at no stage is subject to any control by the Courts.
It is unnecessary to emphasize the constitutional importance of this contention. .
In the provision that the final decision of the Commissioners is not to be operative until it has been approved by the two Houses of Parliament I find nothing inconsistent with the view that in arriving at that decision the Commissioners themselves are to act judicially and within the limits prescribed by Act of Parliament, and that the Courts have power to keep them within those limits.
It is to be noted that it is the order of the Commissioners that eventually takes effect; neither the Minister of Trans port who confirms, nor the Houses of Parliament who approve, can under the statute make an order which in respect.
of the matters in question has any operation.
I know of no author ity which compels me to hold that a proceeding cannot be a judicial proceeding subject to prohibition or certiorari because it is subject to confirmation or approval, even where the approval has to be that of the Houses of Parlia ment.
The authorities are to the contrary. ' ' (1) 466 It is well known that a writ of certiorari can issue only against an order of a judicial or quasi judicial tribu nal and if it is permissible for the High Court to.
issue a writ of certiorari against an Industrial Tribunal, which fact was not seriously disputed before us, I find it diffi cult to hold that the tribunal does not come with in the purview of article 136.
If a subordinate Court acts in excess of its jurisdiction or assumes a jurisdiction which it does not possess, the appellate Court can always interfere and do what is contemplated to be done by a writ of certiorari.
It is to be noted that under section 15 of the , in cases where the appropriate Govern ment is not a party to the dispute, all that the Government has to do on receiving the award of the Tribunal is to declare it to be binding and to state from what date and for what period it will be binding.
Section 15.(2) is mandatory and it provides: "On receipt of such award, the appropriate Government shall by order in writing declare the award to be binding. . " Thus the Government cannot alter, or cancel, or add to the award, but the award must be declared to be binding as it is.
In substance, therefore, the adjudication of the Tribunal amounts to a final determination of the dispute which binds the parties as well as the Government.
Our attention was however drawn to the proviso to section 15 (2), which runs as follows: "Provided that where the appropriate Government is a. party to the dispute and in its opinion it would be inexpe dient on public grounds to give effect to the whole or any part of the award, it shall on the first available opportu nity lay the award together with the statement of its rea sons for not making a declaration as aforesaid before the Legislative Assembly of the Province, or where the appropri ate Government is the Central Government, before the Central Legislative Assembly, and shall, as soon as may be, cause to be moved therein a resolution for the consideration of the 467 award, and the Legislative Assembly may, by its resolution, confirm, modify, or reject the award.
" This proviso was relied upon by the respondents to show that the right to appeal from the award could not have been contemplated in any case.
But the Act itself makes a dis tinction between cases in which the Government is a party and those in which the Government is not a party.
The proviso relates to a very special type of case and as at present advised I do not wish to express any opinion as to whether an appeal lies to this Court or not in such a case, but, in my judgment, where the Government has only to de clare the award to be binding, an appeal shall lie.
It is necessary here to say a few words as to the scope of the appeal.
As was pointed out by this Court in Pritam Singh vs The State(1), the power under article 136 of the Constitution being a special power is to be exercised only in special cases.
The rule so laid down is bound to re strict the scope of the appeal in practice in almost all the cases which fall under article 136.
But in some cases a limitation will be imposed on the scope of the appeal by the very nature of the case and of the tribunal from which an appeal is sought to be brought, and a case under the Indus trial Disputes Act seems to be an example of such a case.
Dealing now with the merits of the appeal, I am not prepared to hold that this is a proper case for interference with the adjudication of the Tribunal.
The power of this Court was invoked by the appellants on four grounds.
These grounds have been elaborately examined by Mahajan J. and two of them have been pronounced to be wholly inadequate for justifying our interference.
My view with regard to these two grounds is identical with that of Mahajan J. and I do not wish to add to what he has already said on the subject.
The remaining two grounds also are, in my opinion, wholly insufficient to justify the exercise of our special power under article 136.
One of these grounds is that the award of the Tribunal is based on no evidence whatsoever.
I do not, however, find that this ground (1) ; 60 468 was urged in this form in the application for special leave to appeal to this Court.
All that was intended to be urged was that the appellants wanted to adduce evidence but were not allowed to do so.
From the decision of the Tribunal however, it appears that the evidence that was shut out related to one isolated point only and the Tribunal might well have been justified in not allowing evidence to be admitted on a point which in its opinion had no direct bearing on the issue before them.
After hearing the re spondents on this particular point, I am not disposed to hold that the Tribunal has committed such an error as would justify the interference of this Court.
The last ground urged is that the award has been signed by only two members of the Tribunal though it originally consisted of three persons and though the entire hearing of the dispute had taken place before all the three persons.
This objection does not appear to me to be fatal to the jurisdiction of the Tribunal, because under section 8 of the Act it is not obligatory on the Government to appoint a new member to fill a vacancy if one of the members ceases to be available at any time during the proceedings.
Under that section, if the Chairman ceases to be available, the Govern ment must appoint his successor, whereas if a member ceases to be available the Government may or may not appoint any one to fill his place.
In the present case, our attention was drawn to some correspondence which shows that one of the members was called upon to act as a member of another Tribu nal and the award in question was pronounced after informing the Government of the procedure which the Chairman and the remaining members intended to adopt.
In the view I have taken, this appeal must fail, and I would accordingly dismiss it with costs.
MAHAJAN J. This is an appeal by special leave from the determination of an industrial dispute by the Industrial Tribunal appointed under Ordinance VI of 1949.
Bharat Bank Limited, Delhi, the appellant, is a company registered under the Indian Companies Act.
469 Its employees made certain demands and as a result of an unfavourable response from the bank it appears that they struck work on the 9th March, 1949.
The bank in its turn served notices on them to resume work and proceeded to discharge a number of them between the 19th March and 24th March as they failed to do so.
The Central Government constitued a Tribunal consisting of three persons for the adjudication of industrial disputes in banking companies under section 7 of the (XIV of 1947), The disputes mentioned in schedule II of the notifi cation were referred under section 10 of the Act to this Tribunal.
Item 18 of this schedule reads as follows : "Retrenchment and victimization (Specific cases to be cited by employees).
" The dispute under this item between the Bharat Bank and its employees was heard by the Tribunal at Delhi and its award was made on the 19th January, 1950.
It was published in the Government of India Gazette dated 4th February, 1950, and was declared to be binding for a period of one year.
The award of the Tribunal was signed by two out of its three members.
A preliminary objection was raised on behalf of the Central Government as well as on behalf of the respondents that this Court had no jurisdiction to grant special leave to appeal against the determination of an Industrial Tribu nal inasmuch as it did not exercise the judicial powers of the State and that its determination was not in the nature of a judgment, decree or order of a Court so as to be ap pealable.
This being the first case in which special leave was granted from the determination of an Industrial Tribu nal, it is necessary to examine the provisions of the Con stitution dealing with this matter and if possible, to define the limits of the jurisdiction of this Court under article 136.
This article is in these terms : "(1) Notwithstanding anything in this Chapter, the Supreme Court may, in its discretion, grant special leave to appeal from any judgment, decree, determination, sentence or order m any cause or matter passed 470 or made by any court or tribunal in the territory of India.
(2) Nothing in clause (1) shall apply to any judgment, determination, sentence or order passed or made by any court or tribunal constituted by or under any law relating to the Armed Forces.
" The article occurs in Chapter IV of Part V of the Consti tution: "The Union Judiciary.
" Article deals with the establishment and constitution of the Supreme Court.
Article 131 confers original jurisdiction on this Court in certain disputes arising between the Government of India and the States etc.
Articles and 133 deal with the appellate juris diction of the Court in appeals from High Courts within the territory of India in civil matters.
By article 134 limited right of appeal in criminal cases has been allowed.
The Judicial Committee of the Privy Council which was the high est Court of appeal for India prior to 10th October, 1949, was not a Court of criminal appeal in the sense in which this Court has been made a Court of criminal appeal under article 134.
It could only entertain appeals on the crimi nal side in exercise of the prerogative of the King.
Article 135 empowers this Court to hear all appeals which under existing laws could be heard by the Federal Court of India.
By the Abolition of Privy Council Jurisdiction Act, 1949,which came into force on the 10th October, 1949, all the powers that were possessed by the Judicial Committee of the Privy Council in regard to cases or matters arising in India became exercisable by the Federal Court of India whether those powers were exercisable by reason of statutory authority or under the prerogative of the King.
The powers of the Judicial Committee were conferred upon it by the Judicial Committee Act, 1844 (7 & 8 Vict., C. 69).
Appeals lay to His Majesty in Council from judgments, sentences, decreesor orders of any Court of justice within any British colony or possession abroad.
Closely following article 135 which confers all the powers of the Judicial Committee on the Supreme Court comes article 136.
The language employed in this article is very wide and is of a comprehensive character.
Powers given 471 are of an overriding nature.
The article commences with the words "Notwithstanding anything in this Chapter.
" These words indicate that the intention of the Constitution was to disregard in extraordinary cases the limitations contained in the previous articles on this Court 's power to entertain appeals.
These articles dealt with the right of appeal against final decisions of High Courts within the territory of India.
Article 136, however, overrides that qualification and empowers this Court to grant special leave even in cases where the judgment has not been given by a High Court but has been given by any Court in the territory of India; in other words, it contemplates grant of special leave in cases where a Court subordinate to a High Court has passed or made any order and the situation demands that the order should be quashed or reversed even without having recourse to the usual procedure provided by law in the nature of an appeal, etc.
The word "order" in article 136 has not been qualified by the word "final.
" It is clear, therefore, that the power to grant special leave under this article against an order of a Court could be exercised with respect to interlocutory orders also.
Another new feature introduced in article 136 is the power given to grant special leave against orders, and determinations etc.
of any tribunal in the territory of India.
This word did not find place in the Judicial Committee Act, where the phrase used was "a Court of jus tice.
" It is the introduction of this new expression in article 136 that has led to considerable argument as to its scope.
Another expression that did not find place in the Judicial Committee Act but has been introduced in article 136 is the word "determination." A question has been raised as to the meaning to be given to these words in the article.
On the one hand, it was contended that the words "determina tion" and "tribunal" were introduced in the article in order to bring within the scope of the applellate jurisdiction of this Court all orders of tribunals of different varieties and descriptions.
On the other hand, it was said that the words "determination" and "tribunal" were added in the article by way of abundant caution and 472 the intention was that if a tribunal exercised the judicial powers of the State and the decision was passed in the exercise of that power, this Court as the highest judicial Court in the Republic would have power, if it considered, necessary in the ends of justice, to grant special leave.
Clause (2) of article 136 excludes the jurisdiction of this Court in respect of military Courts.
or Tribunal.
It is interesting to observe that in articles 138, 139 and 140 the Constitution has conferred powers on Parliament for further enlargement of the powers of this Court.
Two points arise for determination in this case: (1) whether the word "tribunal" in this article has been used in the same sense as "Court," or whether it has been used in a wider sense, and (2) whether the word "determination" in the article includes within its scope the determinations made by Industrial Tribunals or other similarly constituted bodies or whether it has reference only to determinations of a Court or a tribunal of a purely judicial character.
It was conceded by the learned counsel appearing for the Cen tral Government, Mr. Alladi Krishnaswami Aiyar, that if any tribunal, whether administrative, domestic or quasi judi cial, acts in excess of its jurisdiction, then it can be controlled by the High Courts under the powers conferred on them by article 226 by the issue of a writ of certiorari.
It was said that if the Industrial Tribunal in this case could be proved to have trespassed beyond the limits 0 its statutory jurisdiction, then the remedy lies elsewhere and not by a petition of special leave under article 136.
Mr. Alladi 's contentions may be briefly summarized as follows: (1) The expression "tribunal " means seat of a judge, or a court of justice.
Its necessary attribute is that it can give a final judgment between two parties which carries legal sanction by its own force.
That the word "tribunal" in juxtaposition to the word "court" could only mean a tribunal 'which exercised judicial functions of the State and did not include within its ambit a tribunal which had quasi judicial or administrative powers.
(2) The kinds of orders against which special leave to appeal could be given under article 136 473 have to be of the same nature as passed by a Court , ' in other words, it was said that unless there was a judicial determination of a controversy between two parties, the order would not be appealable.
That in the case of an Industrial Tribunal what gives binding force to the award is the declaration of the government, that the spark of life to it is given by that declaration and without that, the award of the Tribunal is lifeless and has no enforceability and hence cannot be held to be of an appealable nature.
It was further said that in cases between the Government and its employees, by the procedure prescribed in the Act the award could also be rejected, and that being so, by its own deter mination a tribunal could not impose a liability or affect rights.
Dr. Bakshi Tek Chand, appearing for the bank, on the other hand argued that whenever a tribunal, whether exercis ing judicial or quasi judicial functions, determined a matter in a judicial manner, then such a determination is within article 136.
It was said that an Industrial Tribunal has no administrative or executive functions, that its duty is to adjudicate on an industrial dispute, i.e., to act as a Judge, on certain kinds of disputes between employers and employees and that its functions are of a judicial nature, though the ambit of the powers conferred is larger than that of an ordinary Court of law inasmuch as it can grant reliefs which no Court of law could give, but that is because of the powers conferred on it by law.
It was argued that the plain words of the article should not be given a narrow meaning when the intention of the Constitution was to confer the widest power on this Court.
It was further contended that as between private employers and employees and even in certain cases between Government and its employees the decision of the Tribunal was binding on the Government and Government had no power either to affirm, modify or reject it.
All that it was authorised to do was to announce it and by its declaration give it enforceability; that fact, howev er, could not affect the question of appealability of the determination under article 136.
It was finally argued that powers should be exercised by this Court wherever there is a miscarriage 474 of justice by a determination of any tribunal and that if the intention of the Constitution by use of the word "tribunal"was in the same sense as "court," then it was not necessary to import it in article 136, because all tribunals that exercise judicial functions fall within the definition of the word "court" though they may not have been so de scribed.
After considerable thought I have reached the conclusion that the preliminary objection should be overruled.
I see no cogent reasons to limit the plain words of the statute and to place a narrow interpretation on words of widest ampli tude used therein.
In construing the articles of the Con stitution it has always to be remembered that India has been constituted into a sovereign democratic republic in order to ensure justice to all its citizens.
In other words, the foundations of this republic have been laid on the bedrock of justice.
To safeguard these foundations so that they may not be undermined by injustice occurring anywhere this Court has been constituted.
By article S2 of the Constitu tion the Court is empowered to see that the fundamental rights conferred on the citizens by the Constitution are not in any way affected.
By article 136 it has been given overriding power to grant special leave to appeal against orders of courts and tribunals which go against the princi ple of natural justice and lead to grave miscarriage of justice.
The exercise of these, powers could only have been contemplated in cases which affect the rights of people living within the territory of India in respect of their person, property or status.
The question, therefore, for consideration is whether the jurisdiction conferred by use of unambiguous phraseology and by words which have a plain grammatical meaning and are of the widest amplitudeshould be limited and restricted on considerations suggested by Mr. Alladi.
The construction suggested by the learned counsel, if accepted, would in the first instance make the use of certain words in the article unnecessary and redundant and would run counter to the spirit of the Constitution.
It must be presumed that the draftsmen of the Constitution knew well the fact that there were a number of tribunals consti tuted in this country 475 previous to the coming into force of the Constitution which were performing certain administrative, quasi judicial or domestic functions, that some of them had even the trap pings of a Court but in spite of those trappings could not be given that description.
It must also be presumed that the Constitution makers were aware of the fact that the highest Courts in this country had held that all tribunals that discharged judicial functions fell within the definition of the expression "Court.
" If by the use of the word "tribu nal" in article 136 the intention was to give it the same meaning as "Court," then it was redundant and unnecessary to import it in the article because, by whatever name de scribed, such a tribunal would fall within the definition of the word "Court.
" The word "Court" has a well known meaning in legislative history and practice.
As pointed out in Halsbury 's Laws of England, the word "Court" originally meant the King 's Palace but subsequently acquired the meaning of (1) a place where justice was admin istered, and (2) the person or persons who administer it.
In the Indian Evidence Act it is defined as including all judges and magistrates and all persons except arbitrators legally authorized to take evidence.
This definition is by no means exhaustive and has been framed only for the pur poses of the Act.
There can be no doubt that to be a Court, the person or persons who constitute it must be entrusted with judicial functions, that is, of deciding litigated questions according to law.
However, by agreement between parties arbitrators may be called upon to exercise judicial powers and to decide a dispute according to law but that would not make the arbitrators a Court.
It appears to me that before a person or persons can be said to constitute a Court it must be held that they derive their powers from the State and are exercising the judicial powers of the State.
In R.v.
London County Council (1), Saville L.J. gave the following meaning to the word "Court" or "judicial authori ty" : (1) [1931]2K.B. 215.
61 476 "It is not necessary that it should be a Court in the sense that this Court is a Court, it is enough if it is exercising, after hearing evidence, judicial functions in the sense that it has to decide on evidence between a proposal and an opposition; and it is not necessary to be strictly a Court if it is a tribuna which has to decide rightly after hearing evidence and opposition.
" As pointed out in picturesque language by Lord Sankey L.C. in Shell Co. of Australia vs Federal Commissioner of Taxation(1), there are tribunals with many of the trappings of a Court which, nevertheless, are not Courts in the strict sense of exercising judicial power.
It seems to me that such tribunals though they are not full fledged Courts, yet exercise quasi judicial functions and are within the ambit of the word "tribunal" in article 136 of the Constitution.
It was pointed out in the above case that a tribunal is not necessarily a Court in this strict sense because it gives a final decision, nor because it hears witnesses oath nor because two or more contending parties appear before it between whom it has to decide, nor because it gives deci sions 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.
The intention of the Constitution by use of the word "tribunal" in the article seems to have been to include within the scope of article 136 tribunals adorned with similar trappings as Court but strictly not coming within that definition.
Various defi nitions of the phrase "judicial power" have been given from time to time.
The best definition of it on high authority is the one given by Griffith C.J. in Huddart, Parker & Co. vs Moorehead(2), wherein it is defined as follows : "The words 'judicial power ' as used in section 71 the Constitution mean the power which every sovereign author ity must of necessity have to decide controversies between its subjects, or between itself and its subjects, whether the rights relate to life, liberty or property.
The exer cise of this power does not begin [19311 A. C. 275.
(2) ; , 357. 477 until some tribunal which has power to give a binding and authoritative decision (whether subject to appeal or not) is called upon to take action.
" It was conceded that a tribunal constituted under the , exercises quasi judicial powers.
That phrase implies that a certain content of the judicial power of the State is vestedit and it is called upon to exercise it.
An attempt was made to define the words "judicial" and "quasi judicial" in the case of Cooper vs Wilson (1).
The relevant quotation reads thus : "A true judicial decision presupposes an existing dis pute between two or more parties, and then involves four requisites : (1) The presentation necessarily orally) of their case by the parties to the dispute; (2) if the dispute between them is a question of fact, the ascertainment of the fact by means of evidence adduced by the parties to the dispute and often with the assistance of argument by or on behalf of the parties on the evidence; (3) if the dispute between them is a question of law, the submission of legal argument by the parties, and (4) a decision which disposes of the whole matter by a finding upon the facts in dispute and application of the law of the land to the facts so found, including where required a ruling upon any disputed question of law.
A quasi judicial decision equally presup poses an existing ' dispute between two or more parties and involves (1) and (2), but does not necessarily involve (3) and never involves (4).
The place of (4)is in fact taken by administrative action, the character of which is determined by the Minister 's free choice.
" The extent of judicial power exercised by an ]industrial Tribunal will be considered hereinafter in the light of the observations cited above.
Reference was made to certain passages from Professor Allen 's book on Law and Order, Chapter IV, page 69, where mention is made of the kinds of administrative tribunals functioning in various countries today.
Porter on Adminis trative Law, 1929 Edn., (1) , at p. 340.
478 page 194, was also relied upon.
There can be no doubt that varieties of administrative tribunals and domestic tribunals are known to exist in this country as well as in other countries of the world but the real question to decide in each case is as to the extent of judicial power of the State exercised by them.
Tribunals which do not derive authority from the sovereign power cannot fall within the ambit of article 136.
The condition precedent for bringing a tribu nal within the ambit of article 136 is that it should be constituted by the State.
Again a tribunal would be outside the ambit of article 136 if it is not invested with any part of the judicial functions of the State but discharges purely administrative or executive duties.
Tribunals, however, which are found invested with certain functions of a Court of justice and have some of its trappings also would fall within the ambit of article 136 and would be subject to the appellate control of this Court whenever it is found neces sary to exercise that control in the interests of justice.
It is now convenient to consider whether a tribunal constituted under the , exer cises all or any one of the functions of a Court of justice and whether it discharges them according to law or whether it can act as it likes in its deliberations and is guided by its own notions of right and wrong.
The phrase "industrial dispute" has been defined in section 2 clause (k) of the Act as follows : "any dispute or difference between employers and em ployees, or between employers and workmen, or between work men and workmen, which is connected with the employment or non employment or the terms of employment or with the condi tions of labour, of any person.
" Such a dispute concerns the rights of employers and employees.
Its decision affects the terms of a contract of service or the conditions of employment.
Not only may the pecuniary liability of an employer be considerably affect ed by the adjudication of such dispute but it may even result in the imposition of punishments on him.
It may adversely 479 affect the employees as well.
Adjudication of such a dis pute affects valuable rights.
The dispute and its result can always be translated in terms of money.
The point for decision in the dispute usually is how much money has to pass out of the pocket of the employer to the pocket of the employee in one form or another and to what extent the right of freedom of contract stands modified to bring about indus trial peace.
Power to adjudicate on such a dispute is given by section 7 of the statute to an Industrial Tribunal and a duty is cast on it to adjudicate it in accordance with the provisions o Act.
The words underlined clearly imply that the dispute has to be adjudicated according to law and not in any other manner.
When the dispute has to be adjudicated in accordance with the provisions of the Act, it follows that the tribunal has to adhere to law, though that law may be different from the law that an ordinary Court of justice administers.
It is noteworthy that the tribunal is to consist of experienced judicial officers and its award is defined as a determination of the dispute.
The expression "adjudication" implies that the tribunal is to act as a judge of the dispute; in other words, it sits as a Court of justice and does not occupy the chair of an administrator.
It is pertinent to point out that the tribunal is not given any executive or administrative powers.
In section 38 of the Act power is given to make rules for the purpose of giving effect to the provisions of the Act.
Such rules can provide in respect of matters which concern the powers and procedure of tribunals including rules as to the summoning of witness es, the production of documents relevant to the subject matter and as to appearance of legal practitioners in pro ceedings under this Act.
Rule 3 of these rules provides that any application for the reference of an industrial dispute to a tribunal shall be made in form (A) and shall be accompanied by a statement setting forth, inter alia, the names of the parties to the dispute and the specific matters of dispute.
It is in a sense in the nature of a plaint in a suit.
In rule 13 power is given to administer oaths.
Rule 14 provides as follows : "A tribunal may accept, admit or call for 480 evidence at any stage of the proceedings before it and in such manner as it may think fit.
" Rule 17 provides that at its first sitting the tribunal is.
to call upon the parties to state their case.
In rule 19 provision has been made for proceedings ex parte.
Rule 21 provides that in addition to the powers conferred by sub section (3) of section 11 of the Act, a tribunal shall have the same powers as are vested in a civil Court under the Code of Civil Procedure when trying a suit, in respect of the following matters, namely, (a) discovery and inspection; (b) granting of adjournment; (c) reception of evidence taken on affidavit; and that the tribunal may summon and examine suo motu any person whose evidence appears to it to be material.
It further says that the tribunal shall be deemed to be a civil Court within the meaning of sections 480 and 482 of the Code of Criminal Procedure, 189S. Rule 21 says that the representatives of the parties, appearing before a tribunal, shall have the right of examination, cross exami nation and re examination and.
of addressing the Court or Tribunal when all evidence has been called.
In rule 30 it is provided that a, party to a reference may be represented by a legal practitioner with the permission of the tribunal and subject to such conditions as the tribunal may impose.
In section 11 (3) it is laid down that a tribunal shall have the same powers as are vested in a civil Court under the Code of Civil Procedure when trying a suit, in respect of the following matters, namely, (a) enforcing the attendance of any person and examining him on oath; (b) compelling the production of documents and material objects; (c) issuing commissions for the examination of witnesses; (d) in respect of such other matters as may be prescribed; and every in quiry or investigation by a tribunal shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228 of the Indian Penal Code.
It is difficult to conceive in view of these provisions that the Industrial Tribunal per forms any funCtions other than that of a judicial nature.
The tribunal has certainly the first three requisites and characteristics of a Court as defined above.
It has cer tainly a considerable element of the fourth also inasmuch as. 481 the tribunal cannot take any administrative action, the character of which is determined by its own choice.
It has to make the adjudication in accordance with the provisions of the Act as laid down in section 7.
It consists of persons who are qualified to be or have been judges.
It is its duty to adjudicate on a serious dispute between employers and employees as affecting their right of freedom of contract and it can impose liabilities of a pecuniary nature and disobedience of its award is made punishable.
The powers exercisable by a tribunal of this nature were considered in a judgment ' of the Federal Court of India in Western India Automobile Association vs Industrial Tribunal, Bombay (x), and it was observed that such a tribunal can do what no Court can, namely, add to or alter the terms or condi tions of the contract of service.
The tribunal having been entrusted with the duty of adjudicating a dispute of a peculiar character, it is for this reason that it is armed with extraordinary powers.
These powers, however, are derived from the statute.
These are the rules of the game and it has to decide according to these rules.
The powers conferred have the sanction of law behind it and are not exercisable by reason of any discretion vested in the members of the tribunal.
The adjudication of the dispute has to be in accordance with evidence legally adduced and the parties have a right to be heard and being represented by a legal practitioner.
Right to examine and cross examine witnesses has been given to the parties and finally they can address the tribunal when evidence is closed.
The whole procedure adopted by the Act and the rules is modelled on the Code of Civil Procedure.
In my opinion, therefore, the Industrial Tribunal has all the necessary attributes of a Court of justice.
It has no other function except that of adjudicating on a dispute.
It is no doubt true that by reason of the nature of the dispute that they have to adju dicate the law gives them wider powers than are possessed by ordinary Courts of law, but powers of such a nature do not affect (1) [1949]] F.C.R. 321.
482 the question that they are exercising judicial power.
Stat utes like the Relief of Indebtedness Act, or the Encumbered Estates Act have conferred powers on Courts which are not ordinarily known to law and which affect contractual rights.
That circumstance does not make them anything else but tribunals exercising judicial power of the State, though in a degree.
different from the ordinary Courts and.
to an extent which is also different from that enjoyed by an ordinary Court of law.
They may rightly be described as quasi judicial bodies because they are out of the hierarchy of the ordinary judicial system but that circumstance cannot affect the question of their being within the ambit of article 136.
It may also be observed that the tribunal is deemed to be a civil Court for certain purposes as laid down in rule 21 of the rules above cited and in section 11(3) of the Act.
As a civil Court if it exercises any of the powers contem plated by this section its decisions would become subject to appeal to a District Judge and a fortiori this Court 's power under article 136.
would at once be attracted in any case in respect of these matters.
Again, in Chapter VI of the Act breach of the terms of an award has been made punishable by section 29 of the Act.
The result therefore, is that disobedience of the terms of an award is punishable under the Act.
That being so, a determination of the tribu nal not only affects the freedom of contract and imposes pecuniary liability on the employer or confers pecuniary benefits on the employees, but it also involves serious consequences as failure to observe those terms makes a person liable to the penalties laid down in Chapter VI.
An award which has these serious consequences can hardly be said to have been given by a tribunal which does not exer cise some of the most important judicial functions of the State.
Considerable stress was laid by Mr. Alladi on the provi sions of sections 15 and 19 of the Act.
Section 15 enacts as follows : "(1) Where an industrial dispute has been referred to a Tribunal for adjudication, it shall hold its 483 proceedings expeditiously and shall, as soon as practicable on the conclusion thereof, submit its award to the appropri ate Government.
(2) On receipt of such award, the appropriate Govern ment shall by order in writing declare the award to be binding.
Provided that where the appropriate Government is a party to the dispute and in its opinion it would be inexpe dient on public grounds to give effect to the whole or any part of the award, it shall on the first available opportu nity lay the award together with the statement of its rea sons for not making a declaration as aforesaid before the Legislative Assembly of the province, or where the appropri ate Government, is the Central Government, before the Cen tral Legislature, an d shall, as soon as may be, cause to be moved therein a resolution for the consideration of the award; and the Legislative Assembly or as the case may be, the Central Legislature, may by its resolution confirm, modify or reject the award.
(3) On the passing of a resolution under the proviso to sub section (2), unless the award is rejected thereby, the appropriate Government shall11 by order in writing declare the award as confirmed or modified by the resolution, as the case may be, to be binding.
(4) Save as provided in the proviso to subsection (3) of section 19, an award declared to be binding under this section shall not be called in question in any manner.
" As regards clause (4), it was conceded rightly that a law dealing with industrial disputes and enacted in the year 1947 could not in any way,affect the provisions of the Constitution laid down in article 136.
It was however, strenuously urged that the award of the tribunal had no binding force by itself and unless the appropriate Govern ment made a declaration in writing under clause (2) of section 15, this award was a lifeless document and had no sanction behind it and therefore it could not have been contemplated that if would be appealable even by special leave.
In my opinion, this contention is unsound.
The provisions of clause (2) of 484 section 15 leave no discretion in the Government either to affirm, modify or reject the award.
It is bound to declare it binding.
It has no option in the matter.
In such a situation it is the determination by the tribunal that matters.
Without that determination Government cannot function.
It does not possess the power either to adjudi cate the dispute or to alter it in any manner whatsoever.
That power vests in the tribunal alone.
The rights of the parties are really affected by the adjudication contained in the award, not by the Government 's declaration which is automatic.
It is no doubt true that announcement of the award by the Government gives it binding force but that does not affect the question of the appealability of the determination under article 136 of the Constitution.
The apposite answer to this contention may be given in the language of the decision in Rex vs Electricity Commissioners (1).
The relevant passage runs thus : "It is necessary, however, to deal with what I think was the main objection of the Attorney General.
In this case he said the Commissioners come to no decision at all.
They act merely as advisers.
They recommend an order embodying a scheme to the Minister of Transport, who may confirm it with or without modifications.
Similarly the Minister of Trans port comes to no decision.
He submits the order to the Houses of parliament, who may approve it with or without modifications.
The Houses of Parliament may put anything into the order they please, whether consistent with the Act of 1919, or not.
Until they have approved, nothing is decided, and in truth the whole procedure, draft scheme, inquiry, order, confirmation, approval, is only part of a process by which Parliament is expressing its will, and at no stage is subject to, any control by the Courts.
It is unnecessary to emphasize the constitutional importance of this contention.
Given its full effect, it means that the checks and safeguards which have been imposed by Act of Parliament, including the freedom from compulsory taking, can be removed, and new and onerous and (1) , at 207.
485 inconsistent obligations imposed without an Act of Parlia ment, and by simple resolution of both Houses of Parliament.
I do not find it necessary to determine whether, on the proper construction of the statute, resolutions of the two Houses of Parliament could have the effect claimed.
In the provision that the final decision of the Commissioners is not to be operative until it has been approved by the two Houses of Parliament I find nothing inconsistent with the view that they act judicially and within the limits pre scribed by Act of Parliament, and that the Courts have power to keep them within those limits.
It is to be noted that it is the order of the Commissioners that eventually takes effect, neither the Minister of Transport who confirms, nor the Houses of Parliament who approve.
can under the statute make an order which in respect of the matters in question has any operation.
I know of no authority which compels me to hold that a proceeding cannot be a judicial proceeding subject to confirmation or approval, even where the approval has to be that of the Houses of Parliament.
The authorities are to the contrary The observations, though they relate to a case which concerns the issue of a writ of prohibition and certiorari, have application to the present case.
Here no discretion whatsoever has been left in the Government in ordinary cases to either modify or t0 reject the determination of the tribunal.
The fact that the Government has to make a decla ration after the final decision of the tribunal is not in any way inconsistent with the view that the tribunal acts judicially.
It may also be pointed out that within the statute itself a clue has been provided which shows that the circumstance that the award has to be declared by an order of Government to be binding does not affect the question of its appealability.
In article 136 clause (2) express provi sion has been made for excepting from the ambit of article 136 the decisions of military courts and tribunals.
It follows that but for the exception it was considered that these would be within article 136 clause (1).
It is quite clear from the various provisions of the Army Act that the decisions of military tribunals or courts are subject to confirmation either by 486 the Commander in Chief or various other military authori ties.
It is only after such confirmation that 'that can operate.
It has never been considered that fact in any way affects the question of their appealability.
Rex vs Minister of Health (1) also supports this view.
There by the Housing Act, 1925, by section 40, a local authority which had prepared an improvement scheme was required to present a petition to the Minister praying that an order should be made confirming such scheme.
Sub section (3) provided that the Minister after considering the peti tion may cause a local inquiry to be made and may by order confirm the scheme with or without conditions or modifica tions.
In sub section (5) it was stated that the order of the Minister when made shall have effect as if enacted in this Act.
It was held be the Court of Appeal that as the order made by the Minister was made without the statutory conditions having been complied with it was ultra vires and therefore a writ of certiorari should issue for the purpose of quashing it.
Reliance was placed by Scrutton L.J. on Rex vs Electricity Commissioners (2).
The same.view was ex pressed in Minister of Health vs The King (3).
It was observed that judicial review by prohibition or a writ of certiorari was permissible if the Minister of Health in confirming the order exceeded his statutory powers.
It is clear therefore that simply because an order has to be confirmed by a Minister or by the Government it in any way affects the power of judicial review.
Reference may also be made to the observations in Smith vs The Queen (4).
At page 623 it was observed that it is a common principle in every case which has in itself the character of a judicial pro ceeding that the party against whom a judgment is to operate shall have an opportunity of being heard.
In this sense it can hardly be disputed that the proceeding before an indus trial Tribunal is a judicial proceeding.
In my judgment, therefore, the contention raised by Mr. Alladi that this (1) (3) [1931] A.C. 494; (2) (4) 3 A.C. 245.
487 Court cannot exercise its powers under article because the decision of the tribunal has no force till a declaration is made by the Government cannot be sustained.
As regards section 19, it was contended that an award declared by the appropriate Government under section 15 to be binding can only come into operation on such date as may be specified by the appropriate Government and can only remain in operation for such period not exceeding one year, as may be fixed by that Government and it was said that herein the Government had the power to state the period from which the award was to commence and the time for which it was to remain in force.
This section does not, in my opin ion, affect the question of the appealability of the deter mination of the tribunal.
Government has certain functions to perform in its own sphere after the award is made.
In certain cases it is bound to declare that award binding.
In other cases, when it is itself a party to the dispute, it has certain overriding powers and these overriding powers are that if it considers that the award is not in public interests it may refer it to the legislature.
The legisla ture, however, has the power to modify, accept or reject the award.
These overriding powers presuppose the existence of a valid determination by a tribunal.
If that determina tion is in excess of jurisdiction or otherwise proceeds in a manner that offends against the rules of natural justice and is set aside by exercise of power under article 136, then no occasion arises for exercise of governmental power under the Act.
Given a valid award, it could not be denied that the Government could exercise its powers in any manner it con sidered best and the exercise of that power is outside the constitution of this Court.
In this connection reference was made to Moses vs Parker (1).
The passage on which emphasis was laid reads as follows : "The Court has been substituted for the commissioners to report to the governor.
The difference is that their report is to be binding on him.
Probably it was (1) [1896] A.C. 488 thought that the status and training of the judges made them the most proper depositaries of that power.
But that does not make their action a judicial action in the sense that it can be tested and altered by appeal.
It is no more judicial than was the action of the commissioners and the governor.
The Court is to be guided by equity and good conscience and the best evidence.
So were the commissioners.
So every public officer ought to be.
But they are expressly exoner ated from all rules of law and equity, and all legal forms.
How then can the propriety of their decision be tested on appeal ? What are the canons by 'which this Board is to be guided in advising Her Majesty whether the Supreme Court is right or wrong ? It seems almost impossible that decisions can be varied except by reference to some rule, whereas the Court making them is free from rules.
If appeals were allowed, the certain result would be to establish some system of rules, and that is the very thing from which the Tasmanian Legislature has desired to leave the Supreme Court free and unfettered in each case.
If it were clear that appeals ought to be allowed such difficulties would doubt less be met somehow.
But there are strong arguments to show that the matter is not of an appreciable nature.
" One would have expected that after this opinion the decision would have been that the Judicial Committee had no jurisdiction to entertain the appeal but their Lordships proceeded to base their decision not on this ground but on the ground that this was not a fit case for the exercise of the prerogative of the King.
In my opinion, the observations made in that case have no apposite application to the provi sions of the statute with which we are concerned.
I do not see any difficulty in this case in testing the propriety of the determination of the tribunal.
This Court is not to substitute its decision for the determination of the tribu nal when granting relief under article 136.
When it chooses to interfere in the exercise of these extraordinary powers, it does so because the tribunal has either exceeded its jurisdiction or has approached the questions referred to it in a manner which is likely to 489 result in injustice or has adopted a procedure which runs counter to the well established rules of natural justice.
In other words, if it ,has denied a hearing to a party or has refused to record his evidence or has acted in any other manner, in an arbitrary or despotic fashion.
In such cir cumstances no question arises of this Court constituting itself into a tribunal and assuming powers of settling a dispute.
All that the Court when it entertains an appeal would do is to quash the award and direct the tribunal to proceed within the powers conferred on it and approach the adjudication of the dispute according to principles of natural justice.
This Court under article 136 would not constitute itself into a mere court of error.
Extraordinary powers have to be exercised in rare and exceptional cases and on well known principles.
Considered in the light of these principles, there is no insuperable difficulty in the present case of the nature pointed out in the passage cited above.
It was conceded that the High Court could exercise powers under section 226 and could quash an award but it was said that under article 136 this power should not be exer cised in an appeal.
I do not see why ? Particularly when after the High Court has passed any decision on an applica tion made to it in exercise of the powers under section 226, that decision could be brought to this Court in appeal.
In the matter of an industrial dispute where expedition is the crux of the matter, it is essential that any abuse of powers by such tribunals is corrected as soon as possible and with expedition.
It may be mentioned that it is no novel practice for a court empowered to grant special leave to exercise its powers even though there may be intermediate rights of appeal or other remedies available, if it is considered essential to do so in extraordinary situations.
Vide Bent wick 's Privy Council Practice, 3rd Edn., page 125.
Therein it is stated as follows : "In several cases from Jamaica, the Privy Council grant ed leave to appeal to the Queen in Council directly from the Supreme Court, without an intermediate appeal (which would have been attended with much 490 expense and delay) to the Court of Error in the island, there being in each of those cases manifestly some point of law raised which deserved discussion.
" The cases were In Re Barnett(1), Harrison vs Scott (2), and Attorney General of Jamacia vs Manderson (s).
The phraseology employed in article 136 itself justifies this course.
The article empowers this Court to grant special leave against sentences or orders made by any court.
In all other articles of the Constitution right of appeal is con ferred against final decisions of the highest court of appeal in the country but under this article power is given to this Court to circumvent that procedure if it is considered necessary to do so.
I am, therefore, of the opinion that the mere circumstance that a remedy in the nature of a writ of certiorari is open to the petitioners does not necessarily lead to the conclusion that the power of this Court under article 136 is circumscribed by that circumstance.
Whenever judicial review is permissible in one form or another, this Court as the highest Court in the land can exercise its special powers and circumvent ordinary procedure by granting special leave.
What it has to ulti mately decide it can decide earlier.
I now proceed to examine some of the cases to which reference was made by Mr. Alladi.
Three Australian cases were cited which concern the construction of sections 51, 71 and 72 of the Australian Constitution (63 and 64 Vict., c. 12).
Section 72 requires that every Justice of the High Court and every Justice of any other Court created by the Parliament of the Common wealth shall subject to the power of removal contained in the section be appointed for life.
Section 71 confers the whole judicial power of the Commonwealth upon the Courts therein mentioned and no other tribunal or body can exercise that power.
Every Court referred to in section 71 has to be constituted in the manner provided by section 72.
The ques tion in these cases was as to the meaning of the phrase "judicial power of the Commonwealth.
" Similar (1) 4 Moo. 453. (2) 5 Moo. 357. (3) 6 Moo. 239. 491 phraseology has not been used in any part of the Constitu tion of India and in these circumstances it is difficult to derive any assistance from these decisions in solving the problem before us.
The Constitution of India is not mo delled on the Constitution of Australia and that being so, any observations made in decisions given under that Consti tution cannot be held to be a safe guide in the interpreta tion of language employed in a Constitution differently drafted.
The first of these cases is Waterside Workers ' Federa tion of Australia vs
J.W. Alexander Ltd. (1).
Therein it was held that the power conferred by the Commonwealth Concilia tion and Arbitration Act 1904 1915 upon the Commonwealth Court of Conciliation and Arbitration to enforce awards made by it is part of "the judicial power of the Commonwealth "within the meaning of section 71 of the Constitution, and can only be vested in the courts mentioned in that section.
Mr. Alladi placed reliance on a passage at page 467 in the judgment of Isaacs and Rich JJ., which reads as follows : "The arbitral part of the Act, therefore, is quite within the power of pl. xxxv, and is not intended by the Act to be exercised by an ordinary Court of Justice, which, it is suggested, Parliament by some strange perversity proceed ed to destroy at birth.
It is true that enforcement provi sions are found. .
But all this was in imitation of the State Acts of Arbitration, and not in reliance on the Judi cature Chapter of the Federal Constitution.
The arbitral portion of the Act is, in our opinion, perfectly good, subject to its severability from any other portion which may be bad.
" It was argued that the Industrial Tribunal here was an arbitration tribunal of the same kind as in Australia and exercises similar functions.
It is however pertinent to observe that the phraseology employed in section 15 of the Indian Act is different from that used in the Australian statute.
The Indian statute has constituted different bodies for different purposes.
An Industrial Tribunal has been constituted (1) 25 C.L.R. 63 492 only to discharge one function of adjudication.
It is not described as an arbitral tribunal.
The Act has avoided the use of the word "arbitration" either in preamble or in any of its relevant provisions though the determination has been named as an award.
In these circumstances it is unsafe to seek any guidance from observations made in this case.
The next case to which reference was made is Rola Co. (Australia) Proprietary Ltd. vs The Commonwealth (1).
The question here was whether the Women 's Employment Board constituted under the Women 's Employment Act, 1942, did not exercise the judicial power of the Commonwealth.
It was held that the Board exercised functions which were arbitral in character.
Emphasis was laid on a passage occurring in page 198 of the report which reads as follows : "An industrial award lays down rules of conduct for the future.
It does not purport to ascertain and enforce exist ing rights; it is directed to the creation of new rights.
It is urged on behalf of the plaintiff that a determination of the Committee does not create a rule of conduct binding the parties for the future, but that it authoritatively deter mines a possibly controverted question of fact and that the making of such an authoritative determination is necessarily an exercise of judicial power.
Reference is made to the frequently quoted statement of Griffith C.J. in Huddart Parker & Co. Pty. Ltd. vs Moorehead (2), approved by the Privy Council in Shell Co. of Australia Ltd. vs Federal Commissioner of Taxation (8):__ "I am of opinion that the words 'judicial power ' as used in section 71 of the Constitution mean the power which every sovereign authority must of necessity have to decide controverises between its subjects or between itself and its subjects, whether the rights relate to life, liberty or property.
The exercise of this power does not begin until some tribunal which has power to give a binding and authori tative decision (whether subject to appeal or not) is called upon to take action." (1) ; (2) a C.L.R. 330 at 357.
(3) 493 Reg.
5C gives Committees power.
to decide controversies between subjects relating to their rights and the regulation purports to make those decisions binding and authoritative.
I am not satisfied that the words of Griffith C.J. are properly interpreted when it is said that they mean that a power to make binding and authoritative decisions as to facts is necessarily judicial power.
I direct attention to the concluding words " is called upon to take action.
" In my opinion these words are directed to action to be taken by a tribunal which has power to give a binding and authorita tive decision.
The mere giving of the decision is not the action to which the learned Chief Justice referred.
If a body which has power to give a binding and authoritative decision is able to take action so as to enforce that deci sion, then, but only then, according to the definition quoted, all the attributes of judicial power are plainly present.
I refer to what I say more in detail hereafter, that the Privy Council, in the Shell case (1), in which approval was given to the definition quoted, expressly held that a tribunal was not necessarily a Court because it gave decisions (even final decisions) between contending parties which affected their rights.
In Huddart Parker 's case (2), Isaacs 1. referred to the statement of Palles C.B. in R.v.
Local Government Board for Ireland (3) "to erect a tribunal into a 'Court ' or 'juris diction ', so as to make its determinations judicial, the essential element is that it should have power, by its determination within jurisdiction, to impose liability or affect rights." "By this," said the learned Chief Baron, "I mean that the liability is imposed, or the right affected by the determination only, and not by the fact determined, and so that the liability will exist, or the right will be affected, although the determination be wrong in law or in fact.
It is otherwise of a ministerial power.
If the existence of such a power depends upon a contingency, al though it may be necessary for the officer to determine whether (1) (2) ; at 383.
(3) at p. 373.
494 the contingency has happened, in order to know whether he shall exercise the power, his determination does not bind.
The happening of the contingency may be questioned in an action brought to try the the act done under the alleged exercise of the power.
But where the determination binds, although it is based on an erroneous view of facts or law, then the power authorizing it is judicial.
There we get a modern use of the term 'judicial power '.
" This state ment of the characteristics of judicial power looks to what, in Waterside Workers ' Federation of Australia vs Gilchrist, Watt & Sanderson Ltd.(1), Isaacs and Rich JJ.
referred to as the creation of instant liability in specified persons as distinct from laying down a rule or standard of conduct for the future.
The decision of an ordinary Court that B is bound to pay money to A applies a pre existing standard of rights and duties not created by the Court itself, with the result that there is an immediately enforceable liability of B to pay to A the sum of money in question.
The decision of the Wom en 's Employment Board does not create any such liability, nor does the determination of a Committee of Reference create any such liability.
In order to impose an immediale ly enforceable liability upon any employer, for example, to pay wages to a particular female, it would be necessary for the female or some person on her behalf (see reg.
9A) to sue in a court of competent jurisdiction.
If such a proceeding succeeded there would then be a liability created by the determination of the court.
such a proceeding the determina tion of the Committee of Reference would be evidence of the facts to which it related, but that determination would not in itself create "liability.
" The concluding words of the passage quoted above at once distinguish the present case from the Australian case.
The award given by an Industrial Tribunal in respect either of bonus or higher wages, etc.
is enforceable by its own force and by the coercive machienary of the Act and it is not merely a declaration of a character that furnishes a cause of action to the employee to bring a suit on its foot to recover the C.L.R. 482, 512.
495 wages.
An arbitral tribunal 's decision cannot be enforced unless it has the sanction of a Court of justice behind it but the award of the Tribunal is enforceable under the Act itself by the coercive machinery provided therein.
It is the terms of the award that are enforceable and not the terms of the order made by the Government.
It is the breach of the terms of the award that is punishable and not any breach of Government 's order.
The Government itself is bound to declare the award binding and it has no option whatsoever in the matter.
It is no doubt true that the tribunal has not only to decide the existing rights and liabilities of the parties and it can lay down rules of conduct for the future but it does so because by law it is authorised to do so.
Its decision carries the sanction with it.
The Government is bound to give effect to it and the statute enforces it by coercive machinery.
In my view, therefore, this decision again has no relevancy to the present case.
The third case to which reference was made is Shell Co. of Australia vs Federal Commissioner of Taxation (1).
That was an income tax matter and the decision has been consid ered in an earlier part of this judgment.
Reference was also made to Mohammad Ahmad vs Governor General in Council ("), in which it was held that an improvement trust was not a civil Court subordinate to the High Court under section 115 of the Code of Civil Procedure.
That has no bearing to the matter in issue here.
Similar point was discussed in Hari vs Secretary of State for India (3).
Labour Relations Board vs John East Iron Works Ltd. (4) is a Canadian case and the decision proceeded on the same lines as in the Australian cases.
Mr. Sen appearing for the respondents placed reliance on O 'Connor vs Waldron (5).
The relevant passage occurs at page 81 which runs thus : The law as to judicial privilege has in process of time developed.
Originally it was intended for the protection of judges sitting in recognised Courts of (1) (3) I.L.R. (2) I.L.R. (4) A.I.R. 1949 P.C. 129.
(5) , 496 Justice established as such.
The object no doubt was that judges might exercise their functions free from any danger that they might be called to account for any words spoken as judges.
The doctrine has been extended to tribunals exer cising functions equivalent to those of an established Court of Justice.
In their Lordships ' opinion the law on the subject was accurately stated by Lord Esher in Royal Aquari um etc.
Ltd. vs Parkinson (1), where he says that the privi lege applies wherever there is an authorized inquiry which, though not before a Court of Justice, is before a tribunal which has similar attributes.
This doctrine has never been extended further than to Courts of Justice and tribunals acting in a manner similar to that in which such Courts act '" The learned counsel contended that the. word "tribunal" in article 136 could only have reference to those tribunals which exercise functions equivalent to that of a Court of Justice.
I have no hesitation in holding that the Industrial Tribunal has similar attributes as that of a Court of Jus tice in view of the various provisions to which I have made reference.
Reference was also made to certain passages occuring in pages 422 and 428 of Toronto Corporation vs York Corporation (2).
That was a case of the Municipal Board of Ontario.
It was held there that the Board was merely an administrative tribunal.
Next reliance was placed on R.v.
National Arbitration Tribunal, Ex parte Horatio Crowther & Co. Ltd.(3).
That dealt with the powers of tile National Arbitration Tribunal.
In my opinion this citation also is not of much assistance.
It was again urged by Mr. Alladi that the word "tribu nal" was introduced in the article to provide for cases of tribunals like the Board of Revenue.
The suggestion does not appear to be sound, because a Revenue Board has all the attributes of a Court of justice and falls within the defi nition of the word "Court" in matters where it adjudicates on rights of parties.
(6) (7) [1938] A.C. &15.
(8) 497 The word "tribunal" has been used in previous legisla tion in a number of statutes and it is difficult to think that the Constitution when it introduced this word in arti cle 136 intended to limit its meaning to only those tribu nals which though not described as Courts strictly speaking, were discharging the same or analogous functions as were being discharged by Courts.
For the reasons given above I am of the opinion that the word "tribunal" in article 136 has to be construed liberally and not in any narrow sense and an Industrial Tribunal inasmuch as it discharges functions of a judicial nature in accordance with law comes within the ambit of the article and from its determination an application for spe cial leave is competent.
The question now to determine is whether the exercise of overriding powers of this Court can be justified on any ground whatsoever in the present case.
As I have already said, exceptional and extraordinary powers of this character can only be justifiably used where there has been a grave miscarriage of justice or where the procedure adopted by the Tribunal is such that it offends against all notions of legal procedure.
Dr. Bakshi Tek Chand for the petitioner bank urged four grounds justifying exercise of the special jurisdiction of this Court.
Firstly, he contended that the word "victimiza tion" used in clause 18 of the reference had been interpret ed in such a manner by the Tribunal that it had usurped jurisdiction to decide disputes which were never referred to it.
In my view this is not a matter which can justify the exercise of the powers under article 136.
This Court is not a mere Court of error.
The word "victimization" has not been defined in the statute and is not in any sense a term of law or a term of article It is an ordinary English word which means that a certain person has become a victim, in other words, that he has been unjustly dealt with.
It was argued that the word has acquired a special meaning in regard to industrial disputes and connotes a person who becomes a victim of the employer 's wrath by reason of his trade union activities and that the word cannot relate to a person who has been merely unjustly dismissed.
Be that as it may.
498 The determination of the Tribunal has not been materially affected by this interpretation of the word to any large extent and that being so, it does not call for the exercise of the special power.
The second ground urged was that the Tribunal has erred in ordering reinstatement of persons who were guilty of an illegal strike.
It was contended that section 23 (b) of the Act has been wrongly construed by it and as a result of this misconstruction persons who were guilty of a wrong and who could not have been reinstated have been reinstated.
In brief, the argument was that under section 23(b) when a matter has been referred to a tribunal in respect of an earlier strike, any strike during the pendency of that dispute is an illegal strike and that was the situation here.
The employees of the bank had struck work in December, 1948.
That dispute had been referred to an Industrial Tribunal.
It was during the pendency of that dispute that another strike took place which led to the dismissal of the employees who have now been reinstated by the present award.
The Calcutta High Court has held that a strike during the pendency of the period of truce and during the pendency of an earlier dispute before a tribunal is illegal even if it is brought about as a result of fresh and new demands which are not covered by the earlier dispute.
One of the members of the Tribunal thought that the decision laid down the law correctly on the point, but the other member thought that the decision was erroneous.
Both of them, however, agreed that whether the strike was legal or illegal that point did not in any way affect the question that they had to decide under issue 18.
The consequences of an illegal strike are laid down in the Act and certain penalties are provided therein.
The Act nowhere states that persons guilty of illegal strike cannot be reinstated.
Be that as it may.
The reference to the Tribunal was made by the Government in respect of an illegal.
strike and the Tribunal was bound to give its decision on the reference.
Item 18 of schedule II clearly empowers the tribunal to deal with cases of victimi zation as a result of the third strike which the petitioner described as illegal.
The Tribunal may be 499 wrong in the view they have taken but it seems to me this is again not a question of that vital character which would justify the grant of special leave under article 136.
The next question raised by the learned counsel that the award of the Tribunal is based on no evidence whatsoever.
This contention requires serious consideration.
I have examined the proceedings of the Tribunal and it appears that all ' it did was that as required by rule 17 at the first sitting it called upon the parties to state their cases.
Mr. Parwana on behalf of the employees stated their respec tive cases and Mr. Ved Vyas who represented the bank stated the bank 's case and after the cases had been stated the proceedings terminated and both parties addressed arguments and the Tribunal proceeded to give its award.
Whether the charge of victimization in individual cases was proved or not depended on proof of certain facts which had to be established by evidence.
The onus of proving victimization clearly rested on the employees.
No evidence whatsoever was led on their behalf.
The statement of the case by Mr. Parwana was not on oath.
There was no examination or cross examination of Mr. Parwana.
No affidavit supporting the facts stated by Mr. Parwana was filed by him or by any employee.
Mr. Parwana produced an abstract of the corre spondence but the original correspondence was not produced.
The bank disputed the facts stated by Mr. Parwana by means of a lengthy affidavit.
It seems no reference was made even to this affidavit by the Tribunal.
No counter affidavit was filed in reply to the facts stated in this 'affidavit.
The bank wanted to call some evidence.
Particular reference was made in respect of a scurrilous letter issued by one Bhatta charya on behalf of the employees and distributed by them, which it is alleged considerably shook the credit of the bank.
This opportunity was denied to it.
It was contended before us that the bank wanted to lead evidence on certain matters and that the opportunity to lead it was denied.
There is nothing on the record to support this contention.
The result therefore is that the facts on the basis of which allegations of victimization have been 64 500 made are neither supported by an affidavit nor by any evi dence and the award is based on no evidence whatsoever.
The Act as well as the rules framed under it contemplate a proper hearing, discovery and inspection of documents and production of evidence, etc.
None of this procedure was followed by the Tribunal.
It is difficult to see on what material the Tribunal has given its award as there is none existing on the present record and the respondents ' counsel could not point out to any such material.
At one time during the argument I was inclined to think that possibly both parties by agreement consented to treat the statement of case as evidence in the case and did not wish to produce any other evidence, but the affidavit filed on behalf of the bank disputes all the facts stated by Mr. Parwana.
The only evidence on the record is the bank 's affidavit and if the facts contained in the affidavit are accepted, then the determination made by the Tribunal cannot stand.
It seems to me therefore that the procedure adopted by the Tribunal was against all principles of natural justice and the award is thereby vitiated and should be set aside.
It happens that when the safeguard of an appeal is not provided by law the tendency sometimes is to act in an arbitrary manner like a benevolent despot.
Benevolent despotism, however, is foreign to a democratic Constitution.
The members of the Tribunal seem to have thought that having heard the state ment of the cases of the parties they could proceed to a judgment on their own view of its right or wrong unaided by any material.
That kind of procedure to my mind is unwar ranted by the statute and is foreign to a democratic Consti tution.
In these circumstances it is the compelling duty of this Court to exercise its extraordinary powers and to quash such an award.
The last contention raised by Bakshi Tek Chand was that though a Tribunal consisting of three persons was appointed to adjudicate on the dispute, the award has only been signed by two of them.
Reference in this connection was made to section 16 of the Act which says that the award of a Tribu nal shall be in writing and shall be signed by all the members of the 501 Tribunal and that nothing in the section shall be deemed to prevent any member of the Tribunal from recording a minute of dissent.
The provisions of the section are mandatory and have not been complied with.
It is common ground that the case was stated by the parties at a sitting when all the members of the Tribunal were present and the arguments were heard by all of them.
No sitting took place subsequent to this which would have necessitated the carrying on of pro ceedings by two members of the Tribunal by a quorum.
When the matter has been heard by all the three members, the award should have been given by all of them.
Therefore the award given by two of them is not the award of the Tribunal constituted by the Government.
It is therefore vitiated and has to be quashed.
Reference in this connection was made to section 8 of the Act which reads as follows : "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.
" The Tribunal was never reconstituted by the Government by any notification.
Under section 7 a Tribunal has to be constituted in accordance with the provisions of the Act by the Government.
The Government having constituted a Tribunal of three persons it had power under section 8 to reconsti tute it but did not exercise that power.
The result there fore is that the Tribunal as originally constituted was not the Tribunal which gave the award in this reference.
Only two members have given the award.
It was said that one of the members ceased to be available and the Government was not bound to fill up that vacancy.
There is no material on the record to prove whether any member became unavailable and if so, when.
But even if a member becomes unavailable and the Government does not choose to fill up the vacancy, still the Government has to reconstitute the Tribunal by saying that 502 two members will now constitute the Tribunal.
An affidavit with two telegrams annexed was filed before "us on behalf of the respondents which disclosed that Mr. Chandrasekhara Aiyar who was one of the members of the Tribunal, in Novem ber, 1949, was appointed a member of the Boundary Commission in Bengal and that the other two members sent a telegram to the Labour Ministry asking it to fill up the vacancy or to reconstitute the Tribunal.
The advice given by the Ministry was that they could proceed as they were and that the Gov ernment would later on, if necessary, fill up the vacancy.
We are not concerned whether the advice given was right or wrong.
But the fact remains that the Tribunal was never reconstituted and it was not denied that Mr. Chandrasekhara Aiyar is now sitting in the same Tribunal without being again nominated to it and the Tribunal is hearing the same reference under the other issues referred to it.
Moreover, I do not see why after having heard the reference he could not give the award even if he was in Calcutta or sign the award given by the other two members.
The idea of three persons hearing a case and two of them deciding it is repug nant to all notions of fairness.
It may well have been that the opinion of the third may have influenced the other two or the decision arrived at may have been quite different.
It so happened in this case that two members of the Tribunal differed on an important question of law but somehow adjust ed their differences and gave a unanimous award.
The presence of the third in such a situation may have very vitally affected the result.
After a good deal of thought I feel that it would be most dangerous for this Court to condone proceedings of this character.
If exceptional powers are not exercised even when a body legally constitut ed under the statute does not function according to the statute, then they defeat the very purpose of the Constitu tion.
Reference in this connection may be made to the deci sion of their Lordships of the Privy Council in Fakira vs King Emperor (1).
In that case section 377 (1) A.I.R. 1937 P.O. 119.
503 of the Code of Criminal Procedure as modified and as ap plicable to Hyderabad stood as follows : "In every case so submitted, the confirmation of the sentence or order passed by the Court of the Resident at Hyderabad shall, when such Court consists of two or more Judges, be made, passed and signed by at least two of them." In Fakira 's case the order of confirmation was only made, passed and signed by one of them, though the Court of the Resident consisted of two Judges.
Their Lordships held that the peremptory provisions of section 377 had not been complied with and that the sentence passed had not been validly confirmed.
The appeal was allowed and the case was remitted to the Court of the Resident.
The provisions of section 18 of the are also of a peremptory nature.
Reference may also be made to a case arising under the Bar Councils Act reported in In re An Advocate, Madras(1), where one member of the tribunal under that Act had died and had not signed the report.
It was held that the tribunal ceased to be properly constituted and that the report could not be considered.
For the reasons given above I would quash this award and direct that the Tribunal which is still functioning should readjudge item 18 of the reference and then submit its award on this point to Government.
The employees cannot be held responsible for the method of procedure adopted by two members of the Tribunal.
Each party will have to bear their own costs in this Court.
The appeal is allowed to the extent indicated above.
MUKHERJEA J.
This appeal, which has come up before us on special leave, is directed against an award made by the All India Industrial Tribunal, dated the 19th of January, 1950.
The Tribunal was constituted by the Central Govern ment under section 7 of the and a large number of disputes (1) A.I.R. 1942 Mad.
504 between several Banking companies and their emiployees were referred to it for adjudication.
Amongst these Banking companies were the Bharat Bank Limited, the appellants before us, and the disputes between them and their employ ees, who are respondents in this appeal, related inter alia to a number of cases of retrenchment and victimization which the latter alleged against the former.
The Tribunal held its enquiry in Delhi in respect to the cases which were connected with the Delhi Branch of the appellants and as a result of the same, made their award on 19th January, 1950, holding that 26 persons, who were employees under the appel lants, were improperly dismissed by the latter and should be reinstated.
Further directions were given in the award regarding the salaries and allowances that were to be paid to the dismissed employees.
This award was declared to be binding in terms of the provisions of sections 15 and 19 of the by the Central Government on 30th of January, 1950, and it was directed to remain in operation for a period of one year.
It is against this award that the present appeal has been preferred.
On behalf of the Indian Union which appeared as an intervener in this appeal, as also on behalf of the respond ents, a preliminary objection was taken challenging the competency of the appeal.
The contention put forward by Sir Alladi Krishnaswami Aiyar, who appeared for the inter vener, in substance, is that article 136 of the Indian Constitution, under which special leave was prayed for and obtained by the appellants in this case, does not contem plate or include within its scope an appeal against an award of an Industrial Tribunal which is not vested with, and cannot exercise, judicial powers, and the decision of which cannot, therefore, rank as a judicial determination.
The Industrial Tribunal, it is said, is an administrative body exercising quasi judicial functions and this Court cannot be called upon to exercise the powers of an appellate Court in respect to the decision of a tribunal which is really a part of the administrative machinery of the Govern ment.
505 In reply to this objection, it has been urged by Sir Tek Chand that the Tribunal constitutedunder the is really and in substance, a Court or judicial tribunal which is invested with the power and authority to exercise judicial functions; and in any event, the language of article 136 of the Constitution is wide enough to include an appeal from the award or determination of any tribunal, be it judicial or not.
There are two questions which require consideration on this preliminary point.
The first is, whether the award or decision of an Industrial Tribunal constituted under the is a judicial decision in the proper sense of the expression or is it the pronouncement of an administrative or quasi judicial body which may exercise some of the functions of a Court of law but is really not so ? The other question turns upon the construction to be put upon article 136 of the Constitution particularly on the meaning to be given to the words 'tribunal ' and 'determina tion ' occurring therein; and the question is whether the language is wide enough to include an adjudication or award of an Industrial Tribunal.
As regards the first question, it is to be noticed that owing to the intricate and complex system of Government that exists in a modern State and the vast expansion of social legislation of all sorts that have taken place in England and in other countries including our own, within the last few decades, the so called administrative and quasi judicial tribunals have come to be a permanent feature of our social and political system.
They function as adjudicating bodies in disputes concerning a large number of economic and.
social affairs.
In a sense they are governmental bodies appertaining to the executive and not to the judicial branch of the State, though in various matters they are armed with judicial powers analogous to those normally carried out by Courts of law.
The question is, what are the tests or distinguishing features, if any, which distinguish an admin istrative tribunal from a Court of law.
Once we are able to formulate these tests, we would be 506 in a position to determine whether a Tribunal functioning under the is or is not a judicial tribunal properly so called.
Whether a particular function or activity is judicial or not is often a difficult question to decide.
The point was elaborately dealt with by Lord Sankey who delivered the judgment of the Privy Council in Shell Co. of Australia vs Federal Commissioner of Taxation (1).
The question raised in that case was whether the Board of Review, which was set up in 1925 under the Commonwealth Income Tax legislation, was a Court exercising judicial powers of the Commonwealth ? The High Court of Australia decided by a majority that it was an administrative and not a judicial tribunal and this majority judgment was affirmed in appeal by the Privy Council.
Lord Sankey remarked in course of his judgment that "the decided cases show that there are Tribunals which possess many of the trappings of a Court but which, nevertheless, are not Courts in the strict sense of exercising judicial power.
Mere externals do not make a direction by an ad hoc tribunal to an administrative officer, an exercise by a Court of judicial power.
" The actual decision in the case rested on the ground that the Board of Review could not be a judicial tribunal, as its orders were not conclusive for any purpose whatsoev er.
The decision, it seems, has only a negative value.
The Lord Chancellor enumerated a series of negative propositions which stated inter alia that a tribunal is not necessarily a Court because two or more contending parties appear before it, nor because it hears witnesses, or gives a final deci sion which affects the right of the parties.
What the real or positive test is, the Privy Council did not care to formulate, though the judgment quoted, with approval, cer tain observations of Griffith C.J. given in another Austra lian case, namely, Huddart Parker & Co. vs Moorehead(" '), which to some extent neutralised the effect of the negative tests enumerated in the judgment.
The observations of Grif fith C.J. are as follows : (1) (2) ; , at p. 357.
507 "I am of opinion that the words 'judicial power '. mean the power which every sovereign authority must have of necessity to decide controversies between its subjects, or between itself and its subjcets, whether the rights relate to life, liberty or property.
The exercise of this power does not begin until some tribunal which has power to give a binding and authoritative decision (whether subject to appeal or not) is called upon to take action.
" It may be stated that the authority to hear and decide on evidence between a proposal and an opposition though it is one of the most essential of judicial powers, may be present is an administrative tribunal also.
In the majority of cases, administrative bodies are also armed with the powers of a Court of Justice in summoning witnesses, admin istering oaths and punishing disobedience to its order made for the purpose of effecting its enquiries (1).
As a matter of fact, it is usual to find that those features which were at one time attached exclusively to activities carried on in a Court of law are being extended to committees, commissions or boards conducting enquiries under directions or supervi sion of the Government.
The presence or absence of these features, therefore, does not furnish any conclusive test to determine whether a particular body is a judicial body or not.
In the observations of Griffith C.J. quoted above, the learned Chief Justice laid stress on the power to make a binding and authoritative decision as the essential element in the exercise of judicial power.
The exact meaning and implication of these expressions were the subject matter of discussion in later Australian cases and it was held by the majority of the Judges in Rola Co. (Australia) Pty.
Limited vs The Commonwealth (2), that t. hey do not simply mean that if an authority is given power to decide controverted ques tions of fact and its determination is made binding on the parties to the controversy, it would be sufficient to show that judicial power was entrusted to such authority.
A determination, it was pointed out, may be binding on the parties (1) Vide W F. O 'Connor vs Waldron at p, 82. ; 508 in the same sense as a contract is binding on them.
What is necessary is that the determination by its own force and without the aid or instrumentality of any other authority or power must affect the rights and obligations of the parties; or in other words, the decision itself irrespective of the facts decided, must create rights and impose obligations; and it should be enforceable as such under the ordinary law of the land.
This undoubtedly is one of the fundamental tests which distinguishes a judicial body from one which exercises administrative or quasi judicial functions.
Some times the decision or report of the administrative tribunal becomes operative after it is accepted by the head of the department under which the tribunal conducted its enquiries and it is then enforced by some sort of administrative process; or it might create rights between the parties which have to be sued upon in the ordinary way in a Court of law and it is only on the basis of a judgment or decree that is obtained in such action that relief could be had by the party.
The essence of judicial determination is that nothing further remains to be done except the enforcement of the judgment, a step which is compelled automatically by the law of the land.
The other fundamental test which distinguishes a judicial from a quasi judicial or administrative body is that the former decides controversies according to law, while the latter is not bound strictly to follow the law for its decision.
The investigation of facts on evidence adduced by the parties may be a common feature in both judicial and quasi judicial tribunals, but the difference between the two lies in the fact that in a judicial proceeding the Judge has got to apply to the facts found, the law of the land which is fixed and uniform.
The quasi judicial tribunal on the other hand gives its decision on the differences between the parties not in accordance with fixed rules of law but on principles of administrative policy or convenience or what appears to be just and proper in the circumstances of a particular case.
In other words, the process employed by an administrative tribunal in coming to its decision is not what is known as 'judicial 509 process ' (x).
Sir Maurice Gwyer in his deposition before the Committee on Minister 's Powers appointed by the English Parliament in 1929 stated that "a clear distinction is to be drawn between judicial and quasijudicial powers.
" The 'judicial power ' was defined by the witness as a power to decide a question of legal right in a dispute between par ties involving either a finding of fact or the application of a fixed rule or principle of law or involving both.
"The quasi judicial power," he defined as meaning "the power of giving decisions on questions of differences of an adminis trative and not justiciable character which cannot be deter mined by reference to any fixed law or principle of law but are matters of administrative discretion and judgment "(2).
In Cooper vs Wilson (3), Scott L.J. quoted with approval and adopted as the basis of his judgment the following passage from the report of the above committee: "A true judicial decision presupposes an existing dis pute between two or more parties, and then involves four requisites : (1) The presentation (not necessarily orally) of their case by the parties to the dispute; (2) if the dispute between them is a question of fact, the ascertain ment of the fact by means of evidence adduced by the parties to the dispute and often with the assistance of argument by or on behalf of the parties on the evidence; (3) if the dispute between them is a question of law, the submission of legal argument by the parties; and (4) a decision which disposes of the whole matter by a finding upon the facts in dispute and an application of the law of the land to the facts so found, including where required a ruling upon any disputed question of law.
A quasi judicial decision equally presupposes an existing dispute between two or more parties and involves (1) and (2) but does not necessarily involve (3) and never involves (4).
The place of (4) is in fact taken by administrative action, the character of which is determined by the Minister 's free choice.
" (1) See Robson 's Justice and Administrative Law, p. 74.
(2) Vide Committee of Minister 's Powers, Minutes of Evd., Vol.
II, pages 15 16 and also Robson 's Justice and Adminis trative Law, p. 319.
(3) 510 In our opinion these statements correctly bring out the distinction between a judicial tribunal and an administra tive body which exercises quasi judicial functions.
These being the essential features which distinguish the two classes of tribunals, we would have to ascertain with refer ence to the provisions of the , which class or category of tribunals an Industrial Tribunal comes under.
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.
" The word "settlement" suggests the idea of establishing compromise between the interests of disputing parties.
There are three classes 'of authorities provided for by the Act who are entrusted with the powers and duties of investigation and settlement of industrial disputes.
First of all, there are conciliation officers or Boards of Concil iation, whose duties mainly are to induce parties to come to a fair and amicable settlement amongst themselves.
Second ly, there are Courts of Enquiry and though they are ' de scribed as Courts, their duties end with investigation into the matters referred to them and submitting reports there upon to the appropriate Government.
Lastly, there are Industrial Tribunals composed of independent persons who either are or had been Judges of a High Court or District Judges or are qualified for appointment as High Court Judges.
It will be seen from the descriptions given above that the Board of Conciliation or Court of Enquiry constituted under the could, on no account, be regarded as judicial tribunals.
To enable them to investi gate facts they are however armed with certain powers of compelling attendance of witnesses and production of docu ments etc.
These provisions are to be found in section 11 of the Act.
The significant thing to note is, that there is no distinction made in this respect between Conciliation Boards and Courts of Enquiry on the One hand and Industrial Tribunals on the other.
The same powers are conferred 511 the three classes of authorities without any distinction whatsoever and sub section (3) of section 11 further lays down that any enquiry or investigation by a Board, Court of Enquiry or Tribunal shall be deemed to be a judicial pro ceeding within the meaning of sections 193 and 228 of the Indian Penal Code.
This means that proceedings before an Industrial Tribunal or for the matter of that before the other two bodies also could be deemed to 'be judicial pro ceedings only for certain specified purposes.
The express provision making the proceedings judicial proceedings for those purposes only emphasises that they are not judicial proceedings otherwise.
Under section 15 (1), the Industrial Tribunal has got to submit its award to the appropriate Government and sub section (2) lays down that on receipt of such an award, the appropriate Government shall by order in writing declare the award to be binding.
A different provision has been made in regard to cases where the Government itself figures as a party to the dispute.
In such cases, if the Government considers it inexpedient on public grounds to give effect to the award either in whole or in part, it may, at the earli est opportunity, lay the award for consideration before the Provincial or Central Legislative Assembly as the case may be and the Legislative Assembly may.
by its resolution confirm, modify or reject the award.
After the resolution is passed, the Government is to declare the award so con firmed or modified to be binding [see sub section (3)].
Sub section (4) of section 15 expressly lays down that an award declared to be binding under any two of the previous sub sections shall not be called into question in any manner whatsoever.
The Government is not merely to declare the award binding but under section 19 (3), it has got to speci fy the date when the award would come into force and also to fix the period during which it would remain binding, and this period shall not exceed one year.
It will be seen, therefore, that there is nothing in the from which it could be inferred that the Industrial Tribunal really functions as a Court exercis ing judicial functions.
Regarding 512 the trappings or the external indicia of a Court, its i position is almost the same as that of the Board of Con ciliation or Court of Enquiry and Bakshi Sir Tek Chand concedes that the latter are not judicial tribunals at all.
The powers of an Industrial Tribunal are certainly wider than those of the other bodies, but it has no power to make a final pronouncement which would proprio vigore be binding on, and create rights and obligations between the parties.
It is for the appropriate Government to declare the award to be binding and the part which the Government plays in such matters is not a mechanical part merely, for the award can really become operative only when the date of its commence ment and the period of its duration are fixed, and it is for the Government and Government alone to.
fix the same.
With regard to the other class of cases, where the Government itself is one of the parties to the dispute, the position is still worse.
An award in such cases is always subject to the contingency of being rejected or modified by the legis lature before whom it could be placed for consideration at the option of the Government.
Where a contingency like this is attached to an award, it can never be regarded as a final or binding decision which is of the essence of a judicial proceeding.
The fact that in cases of disputes between private employers and their workmen, the Government has to accept the award as it is, makes no difference in principle.
Possibly, this rule was made in consideration of the status and training of the people who constitute the Tribunal, but nevertheless the determination cannot acquire any authority or force, so long as the appropriate Government does not make the declaration and fix the time of its operation as mentioned above.
In regard to the other class of awards, where the Government is one of the disput ing parties, the award on the face of it is neither the final nor the authoritative pronouncement on the matter in dispute, and it is always in the powers.
of one of the disputing parties to subject it to further scrutiny at the hands of the legislature who can reject the whole award or effect such changes in it as it considers proper.
This shows the real nature of the Tribunal and it is not and 513 could not be suggested that the Industrial Tribunal is a Tribunal which exercises judicial functions when the dispute is only between private employers and their workmen, and it ceases to be such when the employer is the Government it self.
We would now examine the process by which an Industrial Tribunal comes to its decisions and I have no hesitation in holding that the process employed is not judicial process at all.
In settling the disputes between the employers and the workmen, the function of the Tribunal is not confined to administration of justice in accordance with law.
It can confer rights and privileges on either party which it con siders reasonable and proper, though they may not be within the terms of any existing agreement.
It has not merely to interpret or give effect to the contractual rights and obligations of the parties.
It can create new rights and obligations between them which it considers essential for keeping industrial peace.
An industrial dispate as has been said on many occasions is nothing but a trial of strength between the employers on the one hand and the workmen 's organization on the other and the Industrial Tribunal has got to arrive at some equitable arrangement for averting strikes and lock outs which impede production of goods and the industrial development of the country.
The Tribunal is not bound by the rigid rules of law.
The process it employs is rather an extended form of the process of collective bargaining and is more akin to administrative than to judi cial function.
In describing the true position of an Industrial Tribu nal in dealing with labour disputes, this Court in Western India Automobile Association vs Industrial Tribunal, Bom bay, and others(1) quoted with approval a passage from Ludwig Teller 's well known work on the subject, where the learned author observes that "industrial arbitration may involve the extension of ,existing agreement or the making of a new one or in general the creation of new obligations or modification of old ones, while commercial arbitration generally (1) at p. 345.
514 concerns itself with interpretation of existing obligations and disputes relating to existing agreements.
" The views expressed in these observations were adopted in its entire ty by this Court.
Our conclusion, therefore, is that an Industrial Tribunal formed under the is not a judicial tribunal and its determination is not a judicial determination in the proper sense of these expres sions.
We now come to the other question as to whether an appeal could be taken to this Court against an award of an Industrial Tribunal by special leave under article 136 of the Constitution.
Article 136 is a part of Chapter IV of the Constitution which deals with the Union Judiciary.
The different jurisdictions of the Supreme Court have been prescribed in a series of articles commencing from article 131.
Article 131 defines the original jurisdiction of the Supreme Court.
Article 132 deals with its appellate powers in cases where substantial questions of law as to the inter pretation of the Constitution are involved.
Article 133 contains the provision relating to appeals in civil cases from judgments, decrees and orders of the High Courts;and article 134 makes provisions relating to criminal appeals.
Article 135 lays down that the Supreme Court shall have jurisdiction and powers with respect to any matter not covered by articles 133 and 134, if such jurisdiction and power could have been exercised by the Federal Court prior to the coming into force of the present Constitution.
Then comes article 136 which runs as follows: "(1) Notwithstanding anything in this Chapter, the Supreme Court may, in its discretion, grant special leave to appeal from any judgment, decree, determination, sentence or order in any cause or matter passed or made by any court or tribunal in the territory of India.
" The article is worded in the widest terms possible.
It vests in the Supreme Court a plenary jurisdiction in the matter of entertaining and hearing appeals by granting of special leave against any kind of judgment, decree or order made by any Court or tribunal in any 515 cause or matter and the powers could be exercised in spite of and overriding the specific provisions for appeal con tained in the previous articles.
The controversy so far as the present case is concerned mainly centers round the interpretation to be put upon two words, namely, "determi nation" and "tribunal" used in the article.
Does the word "tribunal" mean a judicial tribunal only and is the expres sion "determination" restricted to what is known as "judi cial determination"? Sir Alladi 's contention is that in interpreting these words we should follow the principle of ejusdent generis.
"Determination," he says, must be taken to be judicial determination which is of the same nature as decree, judg ment, order or sentence; and "tribunal" associated with the word" Court" could not but mean "judicial tribunal.
" Bakshi Sir Tek Chand on the other hand lays stress on the fact that the word "determination" was not in the origi nal draft Constitution, and it was subsequently added, presumably with a view to widen the scope of article 136 and include within it, the decisions of administrative and quasi judicial tribunals also.
He points out that according to the definition given in section 2 (b) of the , "award" means a determination either interim or final of an industrial dispute by an Industrial Tribunal.
There is undoubtedly something to be said in favour of both these views.
The difficulty, in our opinion, arises from the fact that neither of these terms "determination" or "tribunal" has a fixed or definite connotation in ordinary language.
The word "determination" means and signifies the ending of a controversy or litigation by the decision of a Judge or Arbitrator.
It cannot be said that it is restrict ed exclusively to proceedings in court.
Likewise, the dictionary meaning of the word "tribunal" is 'court of justice ' or 'seat of a Judge. ' By 'Judge ' we mean some authority by which contested matters are decided between rival parties.
Here again, it is not possible to say that the expression is applicable only to a 66 516 regular court of law.
If the tribunal is a full fledged judicial tribunal, it is not disputed that its decisions would be proper subject matter of appeal under article ,136 of the Constitution.
The question is whether this article includes within its scope the determinations of quasi judicial tribunals as well.
Our view is that ordinarily we should not put any re stricted interpretation upon the plain words of an article in the Constitution and thereby limit our powers of granting special leave for appeals, which the Constitution for best of reasons did not choose to fetter or circumscribe in any way.
At the same time, we must admit that some sort of restricted interpretation may be unavoidable in view of the context in which particular words appear; and certain re strictions may be implicit in the very purpose for which article 136 has been framed.
Article 136 empowers us in our discretion to hear appeals from pronouncements of all infe rior courts and tribunals.
With regard to law courts, no difficulty arises.
As regards tribunals which are not courts in the proper sense of the expression, it may not be proper, in our opinion, to lay down a hard and fast rule that no appeals could, on any account, be allowed against determina tions of such tribunals.
There are numerous varieties of these adjudicating bodies, whose structures vary greatly in character and composition and so do the powers and functions which they exercise.
The best thing to do would be to examine each type of cases as it arises and if we find that with regard to determinations emanating from certain tribu nals it is not possible for us to exercise fully and effec tively the powers of an appellate Court, such determinations must be held to lie outside the purview of article 136 of the Constitution.
This disability in the matter of exercising our powers as an appellate Court might arise from the fact that the rules and principles by which we ordinarily judge the sound ness or otherwise of judicial decisions are not capable of being applied to the determinations of certain administra tive tribunals.
It might also arise from the fact that the law under which the 517 tribunal functions prevents us from making any effective order which would be binding and operative of its own force without the intervention of some other power or authority; or there may be some kind of contingency attached to it.
In our opinion, these difficulties do confront us in the entertaining or hearing of an appeal against the decision of an Industrial Tribunal.
In the first place, as we have said above, the determination of an Industrial Tribunal does not become complete and binding unless and until it is declared to be so by the appropriate Government.
Till the Government makes such declaration, neither of the parties to the dis pute can have any real reason for filing an appeal.
An appeal, if it lies, could be filed after the determination has been declared binding.
But in such cases, is it the determination of the Tribunal merely which is challenged by way of appeal or is it ' the determination by the Tribunal to which has been super added a declaration by the Government ? The decision in the appeal would undoubtedly affect not merely the decision of the Tribunal but that of the Govern ment as well which is certainly not a tribunal within the meaning of article 136.
Assuming again that the award is set aside and we substitute our own determination in place of the award given by the Tribunal, will our award be enforce able by itself or will it require a declaration by the Government to make it binding ? If Government is itself a party to the dispute, will it be open to Government to place our decision for consideration by the Legislative Assembly? And will the Legislative Assembly be competent to reject or modify our award ? These problems arise because under sec tion 15 the award under the Act becomes binding only when the Government declares it to be so and if our judgment takes the place of the award of the Tribunal, all the in firmities that attach to the award must necessarily attach to our judgment also.
The other difficulty is no less formidable.
As said above, the Tribunal is not bound to decide the disputes by application of the ordinary law of the land.
A good deal depends upon questions of policy 518 and public convenience.
It is not possible for us to.judge the propriety of the decision by a reference to some stand ard or fixed rules and we think that the very policy of the law prevents us from interfering with the discretion exer cised by the Tribunal.
Where the direction is committed to any body or a tribunal exercising quasi judicial functions which are not lettered by ordinary rules of law, the tribunal should in the absense of any provision to the contrary be deemed to have the final authority in the exercise of that discretion.
We cannot sit in appeal over their decision and substitute our own discre tion for theirs.
,Questions, however, may and do arise where such quasi judicial body attempts to usurp jurisdiction which it does not possess.
It may assume jurisdiction under a mistaken view of law or refuse to exercise jurisdiction properly by adoption of extraneous or irrelevant considera tions;or there may be cases where in its proceedings the tribunal violates the principles of natural justice.
In all such cases the most proper and adequate remedy would be by writs of certiorari or prohibition and the Court having authority may direct that the decision of the body or tribu nal might be brought up to be quashed for lack of jurisdic tion or for mistake apparent on the face of it; and if the proceedings had not terminated at that time, a writ of prohibition may also be issued for preventing the tribunal from exceeding its jurisdiction.
The issuing of such writs would not be an exercise of appellate powers which means the rehearing of the case and passing of such judgment which in the opinion of the appellate Court the original tribunal should have made.
The object of these writs is simply to keep the exercise of powers by these quasi judicial tribu nals within the limits of jurisdiction assigned to them by law and torestrain them from acting in excess of their authority.
These principles are well settled and require no elucidation(1).
Our conclusion, therefore, is that article 136 of the Constitution does not contemplate a determination given by the Industrial Tribunal.
(1) Rex vs Electricity Commissioners ; Board of Education vs Rice 519 Even assuming for argument 's sake that we have got jurisdiction under article 136, the exercise of which would depend upon the circumstances of each case, in view of the reasons which we have set out above, this is not an appeal which, in our opinion, should be admitted even if we have the power to do so.
The result is that the preliminary objection succeeds and the appeal fails and is dismissed with costs.
PATANJALI SASTRI ' J.
I entirely agree with the judgment just now delivered by Mukherjea J. and I have nothing to add.
Appeal dismissed.
Agent for the Union of India: P.A. Mehta.
| The respondents are registered dealers carrying on the business of tanning hides and skins and selling the tanned skins.
The authorities under the Hyderabad General Sales Tax Act, 1950 assessed the respondent for the total turnover which included the price paid by the respondent for purchasing tanning bark used in the tanning process.
The respondent contended that the price paid for the purchase of tanning bark should be excluded from the taxable turnover because the tanning bark was bought by the respondent for consumption and not for sale and hence the respondent was not "dealer" qua the tanning bark.
His contention was not accepted by the Tax authorities.
In a petition to the High Court under section 22(1) of, the Hyderabad General Sales Tax Act the contention of the respondent was accepted and the assessment was modified.
In appeal filed with special leave, Held: The High Court was in error in holding that a purchaser is liable to pay tax under r. 5(2) of the Sales Tax Rules only when he is carrying on a business of buying and selling a commodity specified in sub r.
(2) and not when he buys it for consumption in a process for manufacturing a commodity to be sold by him.
(ii) To regard an activity as a business there must be a course of dealing either actually continued or contemplated.
to be continued with a profit motive and not for sport or pleasure.
But to be a dealer a person need not follow the activity of buying, selling and supplying the same commodity.
The Act requires merely that buying of the commodity mentioned in r. 5(2) must be in the course of business; that is it must be for sale or use with a view to take profit out of the integrated, activity of buying and disposal.
The commodity may itself be converted into another saleable commodity or it may be used as an ingredient or in aid of a manufacturing process leading to the production of such saleable commodity.
(iii) In the present case the tanning bark was not bought by the respondent for any purpose unconnected with the business.
Consumption of the tanning bark in the manufacturing process did not therefore exclude the respondents from the definition of dealer qua the tanning bark.
Sadak Thamby and Company vs State of Madras, 14 S.T.C. 753, approved.
|
iminal Appeals Nos. 75, 100 and 101 of 1963.
Appeals from the judgment and order dated February 27, 28, 1963 of the Bombay High Court in Criminal Appeal No. 1077 of 1962.
section G. Patuwardhan and A. G. Ratnaparkhi for the appellant(in Cr.
A. No. 75 of 1963).
B. B. Tawakley, Harbans Singh and A. G. Ratnaparkhi, for the appellants (in Cr. A. Nos. 100 and 101 of 1963).
D. R. Prem, K. L. Hathi and B. R. G. K. Achar, for R. H. Dhebar, for the respondents.
August 27, 1963.
The Judgment of the Court was delivered by DAS GUPTA J.
On June 11, 1961 at 5 p.m. the road in front of the Temple of Shri Maruti in the village of Chinchpur of Taluk Sholapur was the scene of a terrible tragedy.
Three persons Revansidappa, and his two maternal uncles, Yellappa and Maruti were done to death there in a most gruesome manner.
Revansidappa 's neck was severed from the body, except for a piece of skin and one of his legs was chopped off.
The spinal cord and vertebra of Yellappa were cut off.
The jaw, vertebra, tongue and a major part of the neck of Maruti were cut off.
The first information that reached the police station of this tragedy was by a letter of the village police patel written on the same day and addressed to the Police Sub Inspector of Mandrup.
It merely stated that three murders had taken place in course of riot and maramari at 5 p.m. in the evening and mentioning the names of the men who had been murdered.
This letter reached the police sta 591 tion at 2.30 a.m. Head Constable Bansode who was in charge of the police station then left for the place of occurrence after having sent a report to the Police Sub Inspector who was camping at Bhandrkavathe village.
The Sub Inspector reached Chinchpur at about 11 a.m. on the 12th.
Some constables had already reached the village.
Vishwanath, Head Constable of Mandrup with two other constables who had been on duty on the bridge over the Bhima river which runs west of the village Chinchpur learnt of these terrible murders at 7 p.m. on the very date of the murders and left for the place, arriving at the village at 9.30 p.m.
They found the three dead bodies lying there and the Police Patel and some other persons present.
Head Constable Ram Chandra Bansode reached the place at 6.30 a.m. on the 12th and after making enquiries had three persons, Gurpadappa, Parasappa and Daulappa brought to the place.
They were arrested by the Sub Inspector when he arrived.
The only witness the Sub Inspector could examine on that date was Parwati, the step mother of the deceased Revansidappa.
He found that all the men had left the village and only women were present.
After completing the investigation the Sub Inspector sent up cliarge sheet against 13 persons.
All the thirteen were tried by the Sessions Judge on a charge under section 148 of the Indian Penal Code, on three charges under section 302/34 of the Indian Penal Code, with three alternative charges under section 302/149 of Indian Penal Code and a further charge under section 342 of the Indian Penal Code.
Three out of the 13, viz., Gurpadappa, Parasappa and Annarava Shivabala were convicted by the learned Sessions Judge under section 302/34 of the Indian Penal Code on each of the three counts and sentenced to imprisonment for life.
All the three were also convicted under section 342 of the Indian Penal Code and sentenced to six months ' rigorous imprisonment.
Gurpadappa and Annaraya were also convicted under section 147 of the Indian Penal Code and sentenced to rigorous imprisonment for two years.
Parasappa was convicted under section 148 of the Indian Penal Code and sentenced to rigorous imprisonment for three years.
The sentences were directed to run concurrently.
The other 10 accused persons were acquitted by the learned Judge.
592 Gurpadappa, Parasappa and Annaraya Shivabala appealed to the High Court of judicature at Bombay against their conviction and sentence.
Their appeal was dismissed and the conviction and sentence of Gurpadappa and Annarava were affirmed.
Parasappa 's conviction was also affirmed but after notice on him as to why the sentence should not be enhanced, the sentence of life imprisonment was enhanced to one of death.
The State appealed against the order of acquittal of all other accused except that of Sangappa.
The High Court allowed the State 's appeal in respect of three of these, viz., Shranappa, Ganpati and Tipanna and convicted them of the offence with which they were charged.
The High Court sentenced Shranappa to death and Ganpati and Tipanna to imprisonment for life.
The State 's appeal in respect of the other six were dismissed.
Sliranappa had filed the present appeal under article 134(1)(a) of the Constitution.
The other five, viz., Gurpadappa, Parasappa, Annaraya, Ganpati and Tipanna were granted special leave to appeal by this.
Court and on the basis of that they have filed the appeals against the orders of conviction and sentence passed against them.
The prosecution case is that there had for sometime been trouble between Gurpadappa and his brother Dhannappa on the one side and Parwati and the deceased Revansidappa on the other over the possession of a plot of land in Chinchpur.
According to Parwati and Revansidappa this land had merely been mortgaged to Gurpadappa by Revansidappa 's father and the debt had been paid out and they were entitled to get back possession.
To this Gurpadappa did not agree.
He, however, agreed to Parwati 's request that the dispute may be settied by a Panchayat.
But without calling a Panchayat Gurpadappa and his brother started cultivating the land on June 10.
When Parwati saw this, she protested ; but to no purpose.
The two brothers said that there would be no Panchayat.
On the next day i.e., June 11, Revansidappa who used to live with his maternal uncles at the neighbouring village, Chanegaon, came to Parwati 's house at Chinchpur with his two uncles, Maruti and Yellappa.
Shortly after this all the thirteen accused persons came in front of 593 the house and demanded that Revansidappa, Yellappa and Maruti should come out of the house.
When they did not, some of the accused went on the roof of the house and began to remove it by means of spades.
Some iron sheets were actually removed.
Ultimately, at the instance of two neighbours Gourava and Panchppa the three unfortunate young men came out of the house.
They were led to the school which stands some way north of Parwati 's house.
From there one by one they were taken near the Maruti Temple outside the Ves, the village wall and done to death.
It is said that Yellappa was struck by Parasappa and Shranappa with axes while the other accused beat him with sticks.
He died instantaneously.
Next was the turn of Revansidappa.
He was also struck with axes by Shranappa and Parasappa and all others with sticks.
Revansidappa died immediately.
Maruti was brought there last of all; Parasappa and sangappa struck him with axes and the other accused with sticks.
He also died on the spot.
All the accused then left the place.
Three of them, Gurpadappa, Parasappa and Daulappa were taken into custody on the very next day.
Annaraya Shivabala was arrested on June 13 and Sliranappa and Ganpati Shamraya on the following day.
Three more accused, Dhanappa, jakanna and Ganpati Gurling were arrested three days later.
On August 6, 1961 were arrested Tipanna and Dhondappa.
The remaining accused Sangappa surrendered in Court on October 16, 1961.
All the accused pleaded not guilty.
Their case was that they had been falsely implicated Gurpadappa and his brother Dhanappa because they were in possession of the land purchased by them, which Revansidappa and his step mother, Parwati, had been claiming and the other accused either on suspicion or because they had supported Gurpadappa and his brother over the land dispute.
Shranappa 's appeal is one of right under article 134(1) (a) of the Constitution.
To decide his appeal it is therefore necessary for us to examine the evidence adduced in the case for ourselves and to see whether the assessment of the evidence on which the High Court convicted him is proper and justified.
That evidence consists in this case of the testimony of a single witness Par 594 wati, given by her in the Court of the Committing Ma gistrate.
This is undoubtedly substantive evidence, which if believed, would be sufficient in law to support the order of conviction.
For, it was brought on the record of the Sessions Court under the provisions of section 288 of the Code of Criminal Procedure ; when in, the Sessions Court Parwati resiled from her previous statement before the Committing Magistrate and made a definite statement that she had not seen the occurrence the question has.
naturally been raised whether this evidence of Parwati which is substantive evidence at the Trial under the provisions of section 288 of the Code of Criminal Procedure required corroboration before the Court should act on it.
The question how far evidence in the Committing, Court given by a witness who refiles from it at the Trial in Sessions and which is brought in as evidence at the Trial under section 288 of the Code of Criminal Procedure requires corroboration or not, has engaged the attention of most of the High Courts in India in numerous cases.
Many such judgments have been cited before us and extensive passages have been read out from some of them.
While the dust of controversy sometimes obscured the simplicity of the true position, most of the learned Judges have, if we may say so, with respect, appreciated the situation correctly.
That is this.
On the one hand, it is true that corroboration of such evidence is not required in law ; but it is equally true that in order to decide which of the two versions, the one given in the Committing Court and the one in the Sessions Court, both of which are substantive evidence, should be accepted, the judge of facts would almost always feel inclined to look for something else beyond this evidence itself to help his conclusion.
We cannot do better in this connection than to quote from the observations on this question by their Lordships of the Privy Council in Bhuboni Sahu vs The King(1).
In that case the evidence of an approver in the Committing Court had been brought on the record under section 288 of the Code of Criminal Procedure.
Dealing with the question as to the value that can be attached to such evidence their Lordships observed thus (1)A.I.R. 1949 (P.C.) 257.
595 "Apart from the suspicion which always attaches to the evidence of an accomplice it would plainly be unsafe, as the judges of the High Court recognized, to rely implicitly on the evidence of a man who had deposed on oath to two different stories.
" This, if we may say so, with respect, is the crux of the question.
Where a person has made two contradictory statements on oath it is plainly unsafe to rely implicitly on his evidence.
In other words, before one decides to accept the evidence brought in under section 288 of the Code of Criminal Procedure as true and reliable one has to be sa tisfied that this is really so.
How can that satisfaction be reached? In most cases this satisfaction can come only if there is such support in extrinsic evidence as to give a reasonable indication that not only what is said about the occurrence in general but also what is said against the particular accused sought to be implicated in the crime is true.
If there be a case and there is such infinite variety in facts and circumstances of the cases coming before the courts that it cannot be dogmatically said that there can never be such a case where even without such extrinsic support the Judge of facts, after bearing in mind the intrinsic weakness of the evidence, in that two different statements on oath have been made, is satisfied that the evidence is true and can be safely relied upon, the judge will be failing in his duty not to do so.
The present is not one such case.
It is true that Parwati has in this deposition in the Committing Court given a detailed account of not only the incidents at the house and the three young men, Rvansidappa, Maruti and Yellappa being taken out of her house to the accused persons but also as regards how they were led to the village school, how one after the other the three were taken near the Maruti Temple, how her entreaties to spare them were in vain and the manner of attack on each of the victims.
The learned judges of the High Court appear to have been impressed by the very vividness of this description and persuaded themselves apparently from this alone that she was speaking the truth.
Unfortunately the important fact that the witness had made a totally different statement on oath in another Court and denied to have seen the occurrence did not receive from the lear 596 ned judges the attention it deserved.
Again, the ability to describe vividly should not be mistaken for anxiety to speak truly.
For, one often exists without the other.
Closer scrutiny of Parwati 's statement in the Committing Court discloses some features, at least, for which no explanation is available.
According to her account Yellappa was first taken from the school to the temple and that all the thirteen took part in the attack.
If that be true, there were none of the accused party to guard Revansidappa and Maruti, who were in the school during this time.
Who however was left to guard them? To this we find no answer from Parwati 's deposition.
There is the same mystery as to who was left to guard Maruti when Revansidappa was next taken and killed all the thirteen taking part in the attack according to her.
It is also to be noticed that she does not clearly state in this deposition where exactly she was standing or sitting during the occurrence.
The place where the bodies were discovered and where undoubtedly these three young men were killed is outside the village wall.
This wall would have a door through which, if the prosecution story is true, the victims were taken out.
Was Parwati also allowed to go out? If she was riot, could she have seen the actual attack on these three persons from her place on the village side of the Ves.
We look in vain in Parawiti 's deposition for any answer to these questions.
Again, according to her story, three axes were used in the attack.
Only one axe was however discovered at the place of occurrence.
How is it that while two axes were taken away the third was left behind? There may be a good answer to this question.
But none is furnished by the evidence on the record.
This being the nature of Parwati 's evidence it is, in our opinion, clearly unsafe to accept her testimony against any of the accused persons unless corroborated by other evidence.
In respect of Shranappa, whose appeal we are now considering, there is admittedly no such corroboration.
It is not possible therefore to accept what Parwati had said against this appellant as true.
The High Court has, in our opinion, fallen into error in acting on her testi 597 mony even in the absence of corroboration.
We hold that the prosecution has failed to prove its case against him and he must be acquitted of the charges against him.
The appeals by the other five, is by special leave of this Court, but what we have stated above as regards the need of corroboration of Parwati 's testimony in the Cornmiting Court applies equally in respect of each of them also.
There is no such corroboration whatsoever in respect of Parwati 's story of participation in the occurrence of Gurpadappa, Ganpati Shamraya and Tipanna.
As regards the other two appellants, Parasappa and Annaraya Shivabala, some slight corroboration has been offered by the prosecution.
That is in the presence of stains of human blood on the soles of the Chappals seized from them at the time of their arrest.
The value of this corroboration is considerably reduced however by the fact that before these chappals were seized from Parasappa on Julie 12 and from Annaraya Shivabala on June 13, these accused persons had been brought up to the place of occurrence.
There is scope therefore for thinking that the soles of the chappals became stained with blood when they walked over the blood stained ground.
It will not be reasonable thereforeto treat the presence of these blood stains on the soles of their chappals as sufficient corroboration of Parwati 's evidence against them.
The conviction of these five appellants also cannot therefore stand.
Accordingly, we allow the appeals, set aside the order of conviction and sentence passed against them and order that they be acquitted.
Appeals allowed.
| The respondent Venkatiah went on leave for six days and did not join duty on the expiry of the leave period but remained absent without sending to the appellant any communication for extending his leave.
Later, he sent 2 letter to the appellant accompanied by a medical certificate issued by a Civil Assistant Surgeon in respect of his illness for a period of nearly two months.
The Medical Officer of the appellant was unable to confirm that he was ailing for a period of two months.
Finding the explanation for his absence unsatisfactory the appellant refused to take him back in its employment.
Meanwhile he had applied to the Regional Director of the Employees ' State Insurance Corporation and obtained cash sickness benefit for the period covered by the Medical Certificate issued by the Civil Assistant Surgeon.
On the appellant 's refusal to take him back in its employment, the respondent union, referred his case for adjudication 18 2 section C. India/64 266 to the Labour Court and the management of the appellant was directed to reinstate him.
The appellant then moved a writ petition in the High Court and it was allowed by the learned single Judge.
The respondent then preferred a Letters Patent Appeal before a Division Bench of the High ' Court.
The appeal was allowed by the Division Bench and the award passed by the Labour Court was restored.
In his appeal against the said decision the appellant 's main contention in this Court was that the case of Venkatiah fell squarely within the provisions of Standing Order 8(ii) and the High Court was wrong in holding that the decision of the appellant in refusing to condone the absence of Venkatiah was either unfair or improper, or that it contravened the provisions of section 73 of the .
The respondent mainly contended that in the present case the employee received sickness benefit, and so, for the said sickness, no penalty could be imposed on him.
Held : (i) Standing Order 8(ii) was applicable to the present case and the fact that the same conduct was dealt with in two different standing orders, could not affect the applicability of Standing Order 8(ii) to the present case.
(ii) Whether or not the appellant should have accepted the certificate of the Civil Assistant Surgeon was primarily for the appellant to consider; as there was no allegation about mala fides in this case, it was not open to the High Court, in exercise of its writ jurisdiction, to consider the propriety of the conclusion reached by the Labour Court on this point.
(iii) On a proper construction of section 73(1) read with sub section
(2), it was impossible to invoke section 73 against the appellant, because the termination of Venkatiah 's services had not taken place during the period of his illness for which he received sickness benefit; the High Court was not justified in taking the view that the termination of Venkatiah 's services under S.O. 8(ii) contravened the pro visions of section 73(1).
(iv) The view taken by the Regional Director about the effect of the Civil Assistant Surgeon 's certificate under the proviso to regulation 53 could not be said to be binding on the appellant and in view of the construction put on section 73(1), there was no inconsistency between the said section and Standing Order 8(ii).
|
Appeals Nos. 71 to 76 of 1953.
Appeals under article 132(1) of the Constitution of India from the Judgment and Order dated 30th January, 1953, of the Orissa High Court in Original Jurisdiction Cases Nos. 13, 14, 15, 16, 25 and 26 of 1952.
The facts of the case appear in the judgment.
B. Somayya (K. B. Krishnamurthi, with him) for the appellant in Civil Appeal No. 71 of 1953.
B. Somayya (D. Narasaraju and N. Y. Ramdas, with him) for the appellant in Civil Appeal No. 72 of 1953.
D. Narasaraju and A. Krishnaswami (N. V. Ramdas, with them) for the appellant in Civil Appeal No. 73 of 1953.
D. Narasaraju (N. V. Ramdas, wit him) :for the appellant in Civil Appeal No. 76 of 1953.
D. V. Narasinga Rao for the appellant in Civil Appeal No. 75 of 1953.
R. Patnaik for the appellant in Civil Appeal No. 74 of 1953.
M. C. Setalvad, Attorney General for India, and Pitambar Misra, Advocate General of Orissa (P. A. Mehta, with them) for the respondent.
May 29.
The Judgment of the Court was delivered by MUKHERJEA J.
4 MUKHERJEA J.
These six appeals arise out of as many applications, presented to the High Court of Orissa, under article 226 of the Constitution, by the proprietors of certain permanently settled estates within the State of Orissa, challenging the constitutional validity of the legislation known as the Orissa Estates Abolition Act of 1952 (hereinafter called "the Act") and praying for mandatory writs against the State Government restraining them from enforcing the provisions of the Act so far as the estates owned by the petitioners are concerned.
The impugned Act was introduced in the Orissa State Legislature on the 17th of January, 1950, and was passed by it on the 28th September, 1951.
It was reserved by the State Governor for consideration of the President and the President gave his assent on 23rd January, 1952.
The Act thus receives the protection of articles 31(4) and 31A of the Constitution though it was not and could not be included in the list of statutes enumerated in the ninth schedule to the Constitution, as referred to in article 31B.
The Act, so far as its main features are concerned, follows the pattern of similar statutes passed by the Bihar, Uttar Pradesh and Madhya Pradesh Legislative Assemblies.
The primary purpose of the Act is to abolish all zemindary and other proprietary estates and interests in the State of Orissa and after eliminating all the intermediaries, to bring the ryots or the actual occupants of the lands in direct contact with the State Government.
It may be convenient here to refer briefly to some of the provisions of the Act which are material for our present purpose.
The object of the legislation is fully set out in the preamble to the Act which discloses the public purpose underlying it.
Section 2(g) defines an "estate" as meaning any land held by an intermediary and included under one entry in any of the general registers of revenue paying lands and revenue free lands prepared and maintained under the law for the time being in force by the Collector of a district.
The expression "intermediary" with reference to any estate is then defined and it 5 means a proprietor, sub proprietor, landlord, landholder . thikadar, tenure holder, under tenure holder and includes the holder of inam estate, jagir and maufi tenures and all other interests of similar nature between the ryot and the State.
Section 3 of the Act empowers the State Government to declare, by notification, that the estate described in the notification has vested in the State free from all encumbrances.
Under section 4 it is open to the State Government, at any time before issuing such notification, to invite proposals from "intermediaries" for surrender of their estates and if such proposals are accepted, the surrendered estate shall vest in the Government as soon as the agreement embodying the terms of surrender is executed.
The consequences of vesting either by issue of notification or as a result of surrender are described in detail in section 5 of the Act .
It would be sufficient for our present purpose to state that the primary consequence is that all lands comprised in the estate including communal lands, non ryoti lands, waste lands, trees, orchards, pasture lands, forests, mines and minerals, quarries, rivers and streams, tanks, water channels, fisheries, ferries, hats and bazars, and buildings or structures together with the land on which they stand shall, subject to the other provisions of the Act, vest absolutely in the State Government free from all encumbrances and the intermediary shall cease to have any interest in them.
Under section 6, the intermediary is allowed to keep for himself his homestead and buildings and structures used for residential or trading purposes such as golas, factories, mills, etc., but buildings used for office or estate purposes would vest in the Government.
Section 7 provides that an intermediary will be entitled to retain all lands used for agricultural or horticultural purposes which are in his kha 's possession at the date of vesting.
Private lands of the intermediary, which were held by temporary tenants under him, would however vest in the Government and the temporary tenants would be deemed to be tenants under the Government, except where the intermediary himself holds less than 33 acres of land in any capacity.
As 6 regards the compensation to be paid for the compulsory acquisition of the estates, the principle adopted is that the amount of compensation would be calculated at a certain number of years ' purchase of the net annual income of the estate during the previous agricultural year, that is to say, the year immediately preceding that in which the date of vesting falls.
First of all, the gross asset is to be ascertained and by gross asset is meant the aggregate of the rents including all cesses payable in respect of the estate.
From the gross asset certain deductions are made in order to arrive at the net income.
These deductions include land revenue or rent including cesses payable to the State Government, the agricultural 'income tax payable in the previous year, any sum payable as chowkidary or municipal tax in respect of the buildings taken over as office or estate buildings and also costs of management fixed in accordance with a sliding percentage scale with reference to the gross income.
Any other sum payable as income tax in respect of any other kind of income derived from the estate would also be included in the deductions.
The amount of compensation thus determined is payable in 30 annual equated instalments commencing from the date of vesting and an option is given to the State Government to make full payment at any time.
These in brief are the main features of the Act.
There was a fairly large number of grounds put forward on behalf of the appellants before the High Court in assailing the validity of the Act.
It is to be remembered that the question of the constitutional validity of three other similar legislative measures passed, respectively, by the Bihar, Uttar Pradesh and Madhya Pradesh Legislative Assemblies had already come for consideration before this court and this court had pronounced all of them to be valid with the exception of two very minor provisions in the Bihar Act.
In spite of all the previous pronouncements there appears to have been no lack of legal ingenuity to support the present attack upon the Orissa legislation, and as a matter of fact, much of the arguments put forward on behalf of the appellants purported to have been based 7 on the majority judgment of this court in the Bihar appeals, where two small provisions of the Bihar Act were held to be unconstitutional.
The arguments advanced on behalf of the appellants before the High Court have been classified by the learned Chief Justice in his judgment under three separate heads.
In the first place, there were contentions raised, attacking the validity of the Act as a whole.
In the second place, the validity of the Act was challenged as far as it related to certain specified items of property included in an estate, e.g., private lands, buildings, waste lands, etc.
Thirdly, the challenge was as to the validity of certain provisions in the Act relating to determination of compensation payable to the intermediary, with reference either to the calculation of the gross assets or the deductions to be made therefrom for the purpose of arriving at the net income.
The learned Chief Justice in a most elaborate judgment discussed all the points raised by the appellants and negatived them all except that the objections with regard to some of the matters were kept open.
Mr. Justice Narasimham, the other learned Judge in the Bench, while agreeing with the Chief Justice as to other points, expressed,, in a separate judgment of his own, his suspicion about the bona fides of the Orissa Agricultural Income tax (Second Amendment) Act, 1950, and he was inclined to hold that though ostensibly it was a taxation measure, it was in substance nothing else but a colorable device to cut down drastically the income of the intermediaries so as to facilitate further reduction of their net income as provided in clause (b) of section 27(1) of the Act.
He, however, did not dissent from the final decision arrived at by the Chief Justice, the ground assigned being that whenever there is any doubt regarding the constitutionality of an enactment, the doubt should always go in favour of the legislature.
The result was that with the exception of the few matters that were kept open, all the petitions were dismissed.
The proprietors have now come before us on appeal on the strength of certificates granted by the High Court under articles 132 and 133 8 of the Constitution as well as under section 110 of the Code of Civil Procedure.
No contention has been pressed before us on behalf of the appellants attacking the constitutional validity of the Act as a whole.
The arguments that have been advanced by the learned counsel for the appellants can be conveniently divided under three heads: In the first place, there has been an attack on the validity of the provisions of two other statutes, namely, the Orissa Agricultural Income tax (Amendment) Act, 1950, and the Madras Estates Land (Amendment) Act, 1947, in so far as they affect the calculation of the net income of an estate for the purpose of determining the compensation payable under the Act.
In the second place, the provisions of the Act have been challenged as unconstitutional to the extent that they are applicable to private lands and buildings of the proprietors, both of which vest as parts of the estate, under section 5 of the Act.
Lastly, the manner of payment of compensation money, as laid down in section 37 of the Act, has been challenged as invalid and unconstitutional.
Under the first head the appellants ' main contention relates to the validity of the Orissa Agricultural Income tax (Amendment) Act of 1950.
This Act, it is said, is not a bona fide taxation statute at all, but is a colorable piece of legislation, the real object of which is to reduce, by artificial means, the net income of the intermediaries, so that the compensation payable to them under the Act might be kept down to as low a figure as possible.
To appreciate this contention of the appellants, it would be necessary to narrate a few relevant facts.
Under section 27 (1)(b) of the Act, any sum payable in respect of an estate as agricultural income tax, for the previous agricultural year, constitutes an item of deduction which has to be deducted from the gross asset of an estate for the purpose of arriving at its net income, on the basis of which the amount of compensation is to be determined.
The Estates Abolition Bill was published in the local gazette on 3rd January 1950, As has been said 9 already, it was introduced in the Orissa Legislative Assembly on the 17th of January following and it was passed on the 28th September, 1951.
There was an Agricultural Income tax Act in force in the State of Orissa from the year 1947 which provided a progressive scale of taxation on agricultural income, the highest rate of tax being 3 annas in the rupee on a slab of over Rs. 30,000 received as agricultural income.
On 8th January, 1950, that is to say, five days after the publication of the Abolition Bill, an amended agricultural income tax bill was published in the official gazette.
At that time Mr. H. K. Mahtab was the Chief Minister of Orissa and this bill was sponsored by him.
The changes proposed by this Amendment Act were not very material.
The highest rate was enhanced from 3 annas to 4 annas in the rupee and the highest slab was reduced from Rs. 30,000 to Rs. 20,000.
For some reason or other, however, this bill was dropped and a revised bill was_ published in the local gazette on 22nd July, 1950, and it passed into law on 10th of August following.
This new Act admittedly made changes of a very drastic character regarding agricultural income tax.
The rate of taxation was greatly enhanced for slabs of agricultural income above Rs. 15,000 and for the highest slab the rate prescribed was as much as 12 annas 6 pies in the rupee.
It was stated in the statement of objects and reasons that the enhanced agricultural income was necessary for financing various development schemes in the State.
This, it is said, was wholly untrue for it could not be disputed that almost all the persons who came within the higher income group and were primarily affected by the enhanced rates were intermediaries under the Estates Abolition Bill which was at that time before the Select Committee and was expected to become law very soon, and as the legislature had already definitely decided to extinguish this class of intermediaries, it was absurd to say that an increased taxation upon them was necessary for the development schemes.
The object of this amended legislation, according to the appellants, was totally different from what it ostensibly purported 2 10 to be and the object was nothing else but to use it as a means of effecting a drastic reduction in the income of the intermediaries, so that the compensation payable to them may be reduced almost to nothing.
This change in the provisions of the Agricultural Income tax Bill, it is further pointed out, synchronized with a change in the Ministry of the Orissa State.
The original amended bill was introduced by the then Chief Minister, Mr. H. K. Mahtab, who was in favour of allowing suitable compensation to expropriated zemin. dars; but his successor, who introduced the revised bill, was said to be a champion of the abolition of zemindary rights with little or no compensation to the proprietors.
In these circumstances, the argument of the learned counsel is that the agricultural income tax legislation being really not a taxation statute but a mere device for serving another collateral purpose constitutes a fraud on the Constitution and as such is invalid, either in its entirety, or at any rate to the extent that it affects the estate abolition scheme.
We have been referred to a number of decisions on this point where the doctrine of colourable legislation came up for discussion before courts of law; and stress is laid primarily upon the pronouncement of the majority of this court in the case of The State of Bihar vs Maharaja Kameshwar Singh and Others (1) which held two provisions of the Bihar Land Reforms Act, namely, sections 4(b) and 23 (f) to be unconstitutional on the ground, among others, that these provisions constituted a fraud on the Constitution.
The fact that the provisions in the amended Agricultural Income tax Act were embodied in a separate statute and not expressly made a part of the Abolition Act itself should not, it is argued, make any difference in principle.
As the question is of some importance and is likely to be debated in similar cases in future, it would be necessary to examine the precise scope and meaning of what is known ordinarily as the doctrine of "colourable legislation".
It may be made clear at the outset that the doctrine of colourable legislation does not involve any question (1) of bona fides or mala fides on the part of the legislature.
The whole doctrine resolves itself into the, question of competency of a particular legislature to enact a particular law.
If the legislature is competent to pass a particular law, the motives which impelled it to act are really irrelevant.
On the other hand, if the legislature lacks competency, the question of motive does not arise at all.
Whether a statute is constitutional or not is thus always a question of power( ' (1).
A distinction, however, exists between a legislature which is legally omnipotent like the British Parliament and the laws promulgated by which could not be challenged on the ground of incompetency, and a legislature which enjoys only a limited or a qualified jurisdiction.
If the Constitution of a State distributes the legislative powers amongst different bodies, which have to act within their respective spheres marked out by specific legislative entries, or if there are limitations on the legislative authority in the shape of fundamental rights, questions do arise as to whether the legislature in a particular case has or has not, in respect to the subject matter of the statute or in the method of enacting it, transgressed the limits of its constitutional powers.
Such transgression may be patent, manifest or direct, but it may also be disguised, covert and indirect and it is to this latter class of cases that the expression "colorable legislation" has been applied in certain Judicial pronouncements.
The idea conveyed by the expression is that although apparently a legislature in passing a statute purported to act within the limits of its powers, yet in substance and in reality it transgressed these powers, the transgression being veiled by what appears, on proper examination, to be a mere presence or disguise.
As was said by Duff J. in Attorney General for Ontario vs Reciprocal Insurers and Others(2), "Where the law making authority is of a limited or qualified character it may be necessary to examine with some strictness the substance of the legislation (1) Vide Cooley 's Constitutional Limitations Vol.
I. p. 379.
(2) at 337.
12 for the purpose of determining what is that the legislature is really doing.
" In other words, it is the substance of the Act that is material and not merely the form or outward appearance, and if the subject matter in substance is something which is beyond the powers of that legislature to legislate upon, the form in which the law is clothed would not save it from condemnation.
The legislature cannot violate the constitutional prohibitions by employing an indirect method.
In cases like these, the enquiry must always be as to the true nature and character of the challenged legislation and it is the result of such investigation and not the form alone that will determine as to whether or not it relates to a subject which is within the power of the legislative authority(1).
For the purpose of this investigation the court could certainly examine the effect of the legislation and take into consideration its object, purpose or design(1).
But these are only relevant for the purpose of ascertaining the true character and substance of the enactment and the class of subjects of legislation to which it really belongs and not for finding out the motives which induced the legislature to exercise its powers.
It is said by Lefroy in his well known work on Canadian Constitution that even if the legislature avow on the face of an Act that it intends thereby to legislate in reference to a subject over which it has no jurisdiction, yet if the enacting clauses of the Act bring the legislation within its powers, the Act cannot be considered ultra vires(3).
In support of his contention that the Orissa Agricultural Income tax (Amendment) Act of 1950 is a colorable piece of legislation and hence ultra vires the Constitution, the learned counsel for the appellants, as said above, placed considerable reliance upon the majority decision of this court in the case of The State of Bihar vs Sir Kameshwar Singh(4), where two clauses (1) Vide Attorney General for Ontario vs Reciprocal Insurers and Others, at 337.
(2) Vide Attorney General for Alberta vs Attorney General for Canada, [19391 A.C. I 17 at 130.
(3) See Lefroy on Canadian Constitution, page 75.
(4) 13 of the Bihar Land Reform Act were held to be un constitutional as being colourable exercise of legislative power under entry 42 of List III of Schedule VII of the Constitution.
The learned counsel has also referred us, in this connection, to a number of cases, mostly of the Judicial Committee of the Privy Council, where the doctrine of colourable legislation came up for consideration in relation to certain enactments of the Canadian and Australian legislatures.
The principles laid down in these decisions do appear to us to be fairly well settled, but we do not think that the appellants in these appeals could derive much assistance from them.
In the cases from Canada, the question invariably has been whether the Dominion Parliament has, under colour of general legislation, attempted to deal with what are merely provincial matters, or conversely whether the Provincial legislatures under the pretence of legislating on any of the matters enumerated in section 92 of the British North America Act really legislated on a matter assigned to the Dominion Parliament.
In the case of Union Colliery Company of British, Columbia Ltd. vs Bryden( ), the question raised was whether section 4 of the British Columbian Coal Mines Regulation Act, 1890, which prohibited China men of full age from employment in under ground coal working, was, in that respect, ultra vires of the Provincial legislature.
The question was answered in the affirmative.
It was held that if it was regarded merely as a coal working regulation, it could certainly come within section 92, sub section (10) or (13), of the British North America Act; but its exclusive application to Chinamen, who were aliens or naturalised subjects, would be a statutory prohibition which was within the exclusive authority of the Dominion Parliament, con ferred by section 91, sub section (25), of the Act.
As the Judicial Committee themselves explained in a later case(2), the regulations in the British Columbian Act "were not really aimed at the regulation of coal mines at all, but were in truth a device to deprive the Chinese, (1) (2) Vide Cunningham vs Tomeyhomma at 157.
14 naturalised or not, of the ordinary rights of the inhabit ants of British Columbia and in effect to prohibit their continued residence in that province since it prohibited their earning their living in that province.
" On the other hand, in ReInsurance Act of Canada(1), the Privy Council had to deal with the constitutionality of sections 11 and 12 of the Insurance Act of Canada passed by the Dominion Parliament under which it was declared to be unlawful for any Canadian company or an alien, whether a natural person or a foreign company, to carry on insurance business except under a licence from the Minister, granted pursuant to the provisions of the Act.
The question was whether a foreign or British insurer licensed under the Quebec Insurance Act was entitled to carry on business within that Province without taking out a licence under the Dominion Act? It was held that sections 1 1 and 12 of the Canadian Insurance Act, which required the foreign insurers to be licensed, were ultra vires, since in the guise of legislation as to aliens and immigration matters admittedly within the Dominion authority the Dominion legislature was seeking to intermeddle with the conduct of insurance business which was a subject exclusively within the provincial authority.
The whole law on this point was thus summed up by Lord Maugham in Attorney General for Alberta vs Attorney General for Canada(2): "It is not competent either for the Dominion or a Province under the guise, or the pretence, or in the form of an exercise of its own powers to carry out an object which is beyond its powers and a trespass on the exclusive power of the other." The same principle has been applied where the question was not of one legislature encroaching upon the exclusive field of another but of itself violating any constitutional guarantee or prohibition.
As an illustration of this type of cases we may refer to the Australian case of Moran vs The Deputy Commissioner of Taxation for New South Wales(3).
What happened (1)[1932] A.C. 41.
(3) [1940]A.C.838.
(2)[1939] A.C. 117 at 130.
15 in that case was that in pursuance of a joint Commonwealth and States scheme to ensure to wheat growers in all the Australian States "a payable price for their produce " a number of Acts were passed by the Commonwealth Parliament imposing taxes on flour sold in Australia for home consumption, so as to provide a fund available for payment of moneys to wheat growers.
Besides a number of taxing statutes, which imposed tax on flour, the Wheat Industry Assistance Act No. 53 of 1938 provided for a fund into which the taxes were to be paid and of which certain payments were to be made to the wheat growers in accordance with State legislation.
In the case of Tasmania where the quantity of wheat grown was relatively small but the taxes were imposed as in the other States, it was agreed as a part of the scheme and was provided by section 14 of the Wheat Industry Assistance Act that a special grant should be made to Tasmania, not subject to any federal statutory conditions but intended to be applied by the Government of Tasmania, in paying back to Tasmanian millers, nearly the whole of the flour tax paid by them and provision to give effect to that purpose was made by the Flour Tax Relief Act No. 40 of 1938 of the State of Tasmania.
The contention raised was that these Acts were a part of a scheme of taxation operating and intended to operate by way of discriminating between States or parts of States and as such were contrary to the provisions of section 51(ii) of the Commonwealth Australian Constitution Act.
The matter came up for consideration before a full court of the High Court of Australia and the majority of the Judges came to the conclusion that such legislation was protected by Section 96 of the Constitution, which empowered the Parliament of the Commonwealth to grant financial assistance to any State on such terms and conditions as the Parliament thought fit.
Evatt J. in a separate judgment dissented from the view and held that under the guise of executing the powers under section 96 of the Constitution, the legislature had really violated the constitutional prohibition laid down in section 51(ii) of the Constitution.
There was an appeal taken to the Privy Council.
The Privy Council 16 affirmed the judgment of the majority but pointed out that " cases may be imagined in which a purported exercise of the power to grant financial assistance under section 96 would be merely colourable.
Under the guise and pretence of assisting a State with money, the real substance and purpose of the Act might simply be to effect discrimination in regard to taxation.
Such an Act might well be ultra vires the Commonwealth Parliament.
" We will now come to the decision of the majority of this court regarding two clauses in the Bihar Land Reforms Act which seems to be the sheet anchor of the appellants ' case(1).
In that case the provisions of sections 23(f) and 4(b) of the Bihar Land Reforms Act were held to be invalid by the majority of this court not on the ground that, in legislating on these topics, the State legislature had encroached upon the exclusive field of the Central legislature, but that the subjectmatter of legislation did not at all come within the ambit of item No. 42 of List III, Schedule VII of the Constitution under which it purported to have been enacted.
As these sections did not come within entry 42, the consequence was that half of the arrears of rent as well as 12 '% of the gross assets of an estate were taken away, otherwise than by authority of law and therefore there was a violation of fundamental rights guaranteed by article 31 (1) of the Constitution.
This was a form of colourable legislation which made these provisions ultra vires the Constitution.
It may be stated here that section 23 of the Bihar Land Reforms Act lays down the method of computing the net income of an estate or a tenure which is the subject matter of acquisition under the Act.
In arriving at the net income certain deductions are to be made from the gross asset and the deductions include, among others, revenue, cess and agricultural income tax payable in respect of the properties and also the costs of management.
Section 23 (f) provided another item of deduction under which a sum representing 4 to 121 % of the gross asset of an estate was to be (1) Vide The State of Bihar vs Sir Kameshwar Singh, 17 deducted as "costs of works for benefit to the raiyat".
The other provision contained in section 4 (b) provides that all arrears of rent which had already accrued due to the landlord prior to the date of vesting shall vest in the State and the latter would pay only 50% of these arrears to the landlord.
Both these provisions purported to have been enacted under entry 42 of List III Schedule VII of the Constitution and that entry speaks of" principles on which compensation for property acquired is to be determined and the form and manner in which that compensation is to be given.
" It was held in the Bihar case(1) by the majority of this court that the item of deduction provided for in section 23(f) was a fictitious item wholly unrelated to facts.
There was no definable pre existing liability on the part of the landlord to execute works of any kind for the benefit of the raiyat.
What was attempted to be done, therefore, was to bring within.
the scope of the legislation something which not being existent at all could not have conceivable relation to any principle of compensation.
This was, therefore, held to be a colourable piece of legislation which though purporting to have been made under entry 42 could not factually come within its scope.
The same principle was held applicable in regard to acquisition of arrears of rent which had become due to the landlord prior to the date of vesting.
The net result of this provision was that the State Government was given the power to appropriate to itself half of the arrears of rent due to the landlord without giving him any compensation whatsoever.
Taking the whole and returning the half meant nothing more or less than taking the half without any return and this, it was held, could not be regarded as a principle of compensation in any sense of the word.
It was held definitely by one of the learned Judges, who constituted the majority, that item 42 of List III was nothing but the description of a legislative head and in deciding the com petency of the legislation under this entry, the court is not concerned with the justice or propriety of the (1) 3 18 principles upon which the assessment of compensation is directed to be made; but it must be a principle of compensation, no matter whether it was just or unjust and there could be no principle of compensation based upon something which was unrelated to facts.
It may be mentioned here that two of the three learned Judges who formed the majority did base their decision regarding the invalidity of the provision, relating to arrears of rent, mainly on the ground that there was no public purpose behind such acquisition.
It was held by these Judges that the scope of article 31(4) is limited to the express provisions of article 31(2) and although the court could not examine the adequacy of the provision for compensation contained in any law which came within the purview of article 31(4), yet that clause did not in any way debar the court from considering whether the acquisition was for any public purpose.
This view was not taken by the majority of the court and Mr. Narasaraju, who argued the appeals before us, did not very properly pursue that line of reasoning.
This being the position, the question now arises whether the majority decision of this court with regard to the two provisions of the Bihar Act is really of any assistance to the appellants in the cases before us.
In our opinion, the question has, got to be answered in the negative.
In the first place, the line of reasoning underlying the majority decision in the Bihar case(1) cannot possibly have any application to the facts of the present case.
The Orissa Agricultural Income tax (Amendment) Act of 1950 is certainly a legislation on " taxing of agricultural income " as described in entry 46 of List II of the Seventh Schedule.
The State legislature had undoubted competency to legislate on agricultural income tax and the substance of the amended legislation of 1950 is that it purports to increase the existing rates of agricultural income tax, the highest rate being fixed at 12 annas 6 pies in the rupee.
This may be unjust or inequitable, but that does not affect the competency of the legislature.
It cannot be said, as was said in the Bihar case(1), that the legislation purported to be based (1) 19 on something which was unrelated to facts and did not exist at all.
Both in form and in substance the Act was an agricultural income tax legislation and agricultural income tax is certainly a relevant item of deduction in the computation of the net income of an estate and is not unrelated to it as item No. 23(f) of the Bihar Act was held to be.
If under the existing law the agricultural income tax was payable at a certain rate and without any amendment or change in the law, it was provided in the Estates Abolition Act that agricultural income tax should be deducted from the gross asset at a higher rate than what was payable under law, it might have been possible to argue that there being no pre existing liability of this character it was really a non existing thing and could not be an ingredient in the assessment of compensation.
But here the Agricultural Income tax (Amendment) Act was passed in August, 1950.
It came into force immediately thereafter and agricultural income tax was realised on the basis of the amended Act in the following year.
It was, therefore, an existing liability in 1952, when the Estates Abolition Act came into force.
It may be that many of the people belonging to the higher income group did disappear as a result of the Estates Abolition Act, but even then there were people still existing upon whom the Act could operate.
The contention of Mr. Narasaraju really is that though apparently it purported to be a taxation statute coming under entry 46 of List II, really and in substance it was not so.
It was introduced under the guise of a taxation statute with a view to accomplish an ulterior purpose, namely, to inflate the deductions for the purpose of valuing an estate so that the compensation payable in respect of it might be as small as possible.
Assuming that it is so. still it cannot be regarded as a colourable legislation in accordance with the principles indicated above, unless the ulterior purpose which it is intended to serve is something which lies beyond the powers of the legislature to legislate upon.
The whole doctrine of colourable legislation is based upon the maxim that you cannot do indirectly what you cannot do 20 directly.
If a legislature is competent to do a thing directly, then the mere fact that it attempted to do it in an indirect or disguised manner, cannot make the Act invalid.
Under entry 42 of List III which is a mere head of legislative power the legislature can adopt any principle of compensation in respect to properties compulsorily acquired.
Whether the deductions are large or small, inflated or deflated they do not affect the constitutionality of a legislation under this entry ' The only restrictions on this power, as has been explained by this court in the earlier cases, are those mentioned in article 31(2) of the Constitution and if in the circumstances of a particular case the provision of article 31(4) is attracted to a legislation, no objection as to the amount or adequacy of the compensation can at all be raised.
The fact that the deductions are unjust, exorbitant or improper does not make the legislation invalid, unless it is shown to be based on something which is unrelated to facts.
As we have already stated, the question of motive does not really arise in such cases and one of the learned Judges of the High Court in our opinion pursued a wrong line of enquiry in trying to find out what actually the motives were which impelled the legislature to act in this manner.
It may appear on scrutiny that the real purpose of a legislation is different from what appears on the face of it, but it would be a colourable legislation only if it is shown that the real object is not attainable to it by reason of any constitutional limitation or that it lies within the exclusive field of another legislature.
The result is that in our opinion the Orissa Agricultural Income tax (Amendment) Act of 1950 could not be held to be a piece of colourable legislation, and as such invalid.
The first point raised on behalf of the appellants must therefore fail.
The other point raised by the learned counsel for the appellants under the first head of his arguments relates to the validity of certain provisions of the Madras Estates Land (Orissa Amendment) Act of 1947.
This argument is applicable only to those estates which are 21 situated in what is known as ex Madras area, that is to say, which formerly belonged to the State of Madras but became a part of Orissa from 1st April, 1936.
The law regulating the relation of landlord and tenant in these areas is contained in the Madras Estates Land Act of 1908 and this Act was amended with reference to the areas situated in the State of Orissa by the amending Act XIX of 1947.
The provisions in the amended Act, to which objections have been taken by the learned counsel for the appellants, relate to settlement and reduction of rents payable by raiyats.
Under section 168 of the Madras Estates Land Act, settlement of rents in any village or area for which a record of rights has been published can be made either on the application of the landholder or the raivats.
On such application being made, the Provincial Government may at any time direct the Collector to settle fair and equitable rents in respect of the lands situated therein.
Sub section (2) of section 168 expressly provides that in settling rents under this section, the Collector shall presume, until the contrary is proved, that the existing rate of rent is fair and equitable, and he would further have regard to the provisions of this Act for determining the rates of rent payable by raiyats.
Section 177 provides that when any rent is settled under this chapter, it can neither be enhanced nor reduced for a period of 20 years, except on grounds specified in sections 30 and 38 of the Act respectively.
The amending Act of 1947 introduced certain changes in this law.
A new section, namely, section 168 A was.
introduced and a further provision was added to section 177 as sub section (2) of that section, the original section being renumbered as sub section (1).
Section 168 A of the amended Act runs as follows: (1) Notwithstanding anything contained in this Act the Provincial Government may, on being satisfied that the exercise of the powers hereinafter mentioned is necessary in the interests of public order or of the local welfare or that the rates of rent payable in money or in kind whether commuted, settled or 22 otherwise fixed are unfair or inequitable invest the Collector with the following powers: (a) Power to settle fair and equitable rents in cash; (b) Power, when settling rents to reduce rents if in the opinion of the Collector the continuance of the existing rents would on any ground, whether specified in this Act or not, be unfair and inequitable.
(2) The power given under this section may be made exercisable within specified areas either generally or with reference to specified cases or class of cases.
" Sub section (2) which has been added to section 177 stands thus: " 2(a) Notwithstanding anything in sub section (1) where rent is settled under the provisions of section 168 A, the Provincial Government may either retrospectively or prospectively prescribe the date on which such settlement shall take effect.
In giving retrospective effect the Provincial Government may, at their discretion, direct that the rent so settled shall take effect from a date prior to the commencement of the Madras Estates Land (Orissa Amendment) Act, 1947.
" The appellants ' contention is that by these amended provisions the Provincial Government was authorised to invest the Collector with power to settle and reduce rents, in any way he liked, unfettered by any of the rules and principles laid down in the Act and the Provincial Government was also at liberty to direct that the reduction of rents should take effect retrospectively, even with reference to a period for which rents had already been paid by the tenant.
Under section 26 of the Orissa Estates Abolition Act, the gross asset of an estate is to be calculated on the basis of rents payable by raiyats for the previous agricultural year.
According to the appellants, the State Government made use of the provisions of the amended Madras Estates Land (Orissa Amendment) Act to reduce arbitrarily the rents payable by raiyats and further to make the reduction take effect retrospectively, so that the diminished rents could be reckoned 23 as rents for the previous year in accordance with the provision of section 26 of the Estates Abolition Act and thus deflate the basis upon which the gross asset of an estate was to be computed.
It is conceded by the learned counsel for the appellants that the amendments in the Madras Estates Land Act are no part of the Estates Abolition Act of Orissa and there is no question of any colourable exercise of legislative powers in regard to the enactment of these provisions.
The legislation, however, has been challenged, as unconstitutional, on two grounds.
First of all, it is urged that by the amended sections mentioned above, there has been an improper delegation of legislative powers by the legislature to the Provincial Government, the latter being virtually empowered to repeal existing laws which govern the relations between landlord and tenant in those areas.
The other ground put forward is that these provisions offend against the equal protection clause embodied in article 14 of the Constitution.
It is pointed out that the Provincial Government is given unfettered discretion to choose the particular areas where the settlement of rent is to be made.
The Government has also absolute power to direct that the reduced rents should take effect either prospectively or retrospectively in particular cases as they deem proper.
It is argued that there being no principle of classification indicated in these legislative provisions and the discretion vested in the Government being an uncontrolled and unfetter ed discretion guided by no legislative policy, the pro visions are void as repugnant to article 14 of the Con stitution.
In reply to these arguments it has been contended by the learned Attorney General that, apart from the fact as to whether the contentions are well founded or not, they are not relevant for purposes of the present case.
The arguments put forward by the appellants are not grounds of attack on the validity of the Estates Abolition Act, which, is the subject matter of dispute in the present case, and it is not suggested that the provisions of the Estates Abolition Act relating to 24 the computation of gross asset on the basis of rents payable by raiyats is in any way illegal.
The grievance of the appellants in substance is that the machinery of the amended Act is being utilised by the Government for the purpose of deflating the gross asset of an estate.
We agree with the learned Attorney General that if the appellants are right in their contention, they can raise these objections if and when the gross assets are sought to be computed on the basis of the rents settled under the above provisions.
If the provisions are void, the rents settled in pursuance thereof could not legitimately form the basis of the valuation of the estate under the Estates Abolition Act and it might be open to the appellants then to say that for purposes of section 26 of the Estates Abolition Act, the rents payable for the previous year would be the rents settled under the Madras Estates Land Act, as it stood unamended before 1947.
The learned counsel for the appellants eventually agreed with the views of the Attorney General on this point and with the consent of both sides we decided to leave these questions open.
They should not be deemed to have been de cided in these cases.
The appellants ' second head of arguments relates to two items of property, namely, buildings and private lands of the intermediary, which, along with other interests, vest in the State under section 5 of the Act.
There are different provisions in the Act in regard to different classes of buildings.
Firstly, dwelling houses used by an intermediary for purposes of residence or for commercial or trading purposes remain with him on the footing of his being a tenant under the State in respect to the sites thereof and paying such fair and equitable rent as might be determined in accordance with the provisions of the Act.
In the second place, buildings used primarily as office or kutchery for man agement of the estates or for collection of rents or as rest houses for estate servants or as golas for storing of rents in kind vest in the State and the owner is allowed compensation in respect thereof.
In addition to these, there are certain special provisions in the Act 25 relating to buildings constructed after 1st January, 1946, and used for residential or trading purposes, in respect to which the question of bona fides as to its construction and use might be raised and investigated by the Collector.
There are separate provisions also in respect to buildings constructed before 1st January, 1946, which were not in possession of the intermediary at the date of coming into force of the Act.
The questions arising in regard to this class of cases have been left open by the High Court and we are not concerned with them in the present appeals.
No objection has been taken by the appellants in respect to the provisions of the Act relating to buildings used for residential or trade purposes.
Their objections relate only to the building used for estate or office purposes which vest in the State Government under the provisions of the Act.
In regard to these provisions, it is urged primarily that the buildings raised on lands do not necessarily become parts of the land under Indian law and the legislature, therefore, was wrong in treating them as parts of the estate for purposes of acquisition.
This contention, we are afraid, raises an unnecessary issue with which we are not at all concerned in the present cases.
Assuming that in India there is no absolute rule of law that whatever is affixed to or built on the soil becomes a part of it and is subject to the same rights of property as the soil itself, there is nothing in law which prevents the State legislature from providing as a part of the estates abolition scheme that buildings, lying within the ambit of an estate and used primarily for management or administration of the estate.
would vest in the Government as appurtenances to the estate itself.
This is merely ancillary to the acquisition of an estate and forms an integral part of the abolition scheme.
Such acquisition would come within article 31(2) of the Constitution and if the conditions laid down in clause (4) of that article are complied with, it would certainly attract the protection afforded by that clause.
Compensation has been pro.
vided for these buildings in section 26(2) (iii) of the 4 26 Act and the annual rent of these buildings determined in the prescribed manner constitutes one of the elements for computation of the gross asset of an estate.
The contention of the appellants eventually narrows down to this that the effect of treating the annual valuation of the buildings as part of the gross asset of the estate in its entirety, leads to unjust results, for if these buildings were treated as separate properties, the intermediaries could have got compensation on a much higher scale in accordance with the slab system adopted in the Act.
To this objection, two answers can be given.
In the first place, if these buildings are really appurtenant to the estate, they can certainly be valued as parts of the estate itself.
In the second place, even if the compensation provided for the acquisition of the buildings is not just and proper, the provision of article 31 (4) of the Constitution would be a complete answer to such acquisition.
As regards the private lands of the proprietor, the appellants have taken strong exception to the provisions of the Act so far as they relate to private lands in possession of temporary tenants.
In law these lands are in possession of the proprietor and the temporary tenants cannot acquire occupancy rights therein, yet they vest, under the Act, in the State Government on the acquisition of an estate, the only exception being made in cases of small land holders who do not hold more than 33 acres of land in any capacity.
Section 8(1) of the Act gives the temporary tenants the right to hold the lands in their occupation under the State Government on the same terms as they held them under the proprietor.
Under the Orissa Tenants Protection Act, which is a temporary Act, the landholder is not entitled to get contractual or competitive rents from these temporary tenants in possession of his private lands and the rent is fixed at two fifths of the gross produce.
It is on the basis of this produce rent which is included in the computation of the gross asset of an estate under section 26 of the Act, that the land holder gets compensation in respect to the private lands in occupation of temporary tenants.
The appellants ' main contention is that although in these lands 27 both the melvaram and kudivaram rights, that is to say, both the proprietor 's as well as the raiyat 's interests are united in the land holder, the provisions of the Act indicated above have given no compensation whatsoever for the kudivaram or the tenant 's right and in substance this interest has been confiscated without any return.
This, in our opinion, is a wrong way of looking at the provisions for compensation made in the Act.
The Orissa Act, like similar Acts passed by the legislatures of other States, provides for payment of compensation on the basis of the net income of the whole estate.
One result of the adoption of this principle, undoubtedly is, that no compensation is allowed in respect of potential values of properties; and those parts of an estate which do not fetch any income have practically been ignorned.
There is no doubt that the Act does not give anything like a fair or market price of the properties acquired and the appellants may be right in their contention that the compensation allowed is inadequate and improper; but that does not affect the constitutionality of the provisions.
In the first place, no question of inadequacy of compensation can be raised in view of the provision of article 31(4) of the Constitution and it cannot also be suggested that the rule for payment of compensation on rental basis is outside the ambit of entry 42 of List Ill.
This point is concluded by the earlier decision of this court in Raja Suriya Pal Singh vs The State of U.P.(1) and is not open to further discussion.
Mr. Narasaraju is not right in saying that the compensation for the private lands in possession of temporary tenants has been given only for the landlord 's interest in these properties and nothing has been given in lieu of the tenant 's interest.
The entire interest of the proprietor in these lands has been acquired and the compensation payable for the whole interest has been assessed on the basis of the net income of the property as represented by the share of the produce payable by the temporary tenants to the landlord.
It is true that the Orissa Tenants Protection Act is a temporary statute, but whether or not it is renewed in future, the (1) 28 rent fixed by it has been taken only as the measure of tile income derivable from these properties at the date of acquisition.
Mr. Narasaraju further argues that his clients are not precluded from raising any objection on the ground of inadequacy of compensation in regard to these private lands by reason of article 31(4) of the Constitution, as the provision of that article is not attracted to the facts of the present case.
What is said is, that the original Estates Abolition Bill, which was pending before the Orissa Legislature at the time when the Constitution came into force, did not contain any provision that the private lands of the proprietor in occupation of temporary tenants would also vest in the State.
This provision was subsequently introduced by way of amendment during the progress of the Bill and after the Constitution came into force.
It is argued, therefore, that this provision is not protected by article 31(4).
The contention seems to us to be manifestly untenable.
Article 31(4) is worded as follows: "If any Bill pending at the commencement of this Constitution in the Legislature of a State has, after it has been passed by such Legislature, been reserved for the consideration of the President and has received his assent, then, notwithstanding anything in this Constitution, the law so assented to shall not be called in question in any court on the ground that it contravenes the provisions of clause (2).
" Thus it is necessary first of all that the Bill, which ultimately becomes law, should be pending before the State Legislature at the time of the coming into force of the Constitution.
That Bill must be passed by the Legislature and then receive the assent of the President.
It is the law to which the assent of the President is given that is protected from any attack on the ground of non compliance with the provisions of clause (2) of article 31.
The fallacy in the reasoning of the learned counsel lies in the assumption that the Bill has got to be passed in its original shape without any change whatsoever, before the provision of clause (4) of article 31 could be attracted.
There is no 29 warrant for such assumption in the language of the clause.
The expression "passed by such Legislature" must mean "passed with or without amendments" in accordance with the normal procedure contemplated by article 107 of the Constitution.
There can be no doubt that all the requirements of article 31(4) have been complied with in the present case and consequently there is no room for any objection to the legislation on the ground that the compensation provided by it is inadequate.
The last contention of the appellants is directed against the provision of the Act laying down the manner of payment of the compensation money.
The relevant section is section 37 and it provides for the payment of compensation together with interest in 30 annual equated instalments leaving it open to the State to make the payment in full at any time prior to the expiration of the period.
The validity of this provision has been challenged on the ground that it is a piece of colourable legislation which comes within the principle enunciated by the majority of this court in the Bihar case referred to above.
It is difficult to appreciate this argument of the learned counsel.
Section 37 of the Act contains the legislative provision regarding the form and the manner in which the compensation for acquired properties is to be given and as such it comes within the clear language of entry 42 of List III, Schedule VII of the Constitution.
It is not a legislation on something which is non existent or unrelated to facts.
It cannot also be seriously contended that what section 37 provides for, is not the giving of compensation but of negativing the right to compensation as the learned counsel seems to suggest.
There is no substance in this contention and we have no hesitation in overruling it.
The result is that all the points raised by the learned counsel for the appellants fail and the appeals are dismissed.
Having regard to some important constitutional questions involved in these cases which needed clearing up, we direct that each party should bear his own costs in these appeals.
Appeals dismissed.
30 Agent for the appellant in Civil Appeal Nos. 71, 72, 73, 75 & 76: M. section K. Sastri.
Agent for the appellant in Civil Appeal No. 74: R.C. Prasad.
| By an agreement with the Fort William Jute Company in 1925 the appellant company became its Managing Agent.
The terms, inter alia, were that the appellant or its successors, unless they chose to resign, were to continue as Managing Agent until they ceased to hold certain shares in the capital of the company and were on that account removed by a resolution of the company or their tenure of office was determined by the winding up of the company.
On termination of the agency, the Managing Agent was to get such reasonable compensation as was agreed upon between the Managing Agent and the company.
Besides this managing agency the appellant held five other managing agencies.
In 1952, the appellant by in agreement with M/s. Mugneeram Bangur & Co., agreed to relinquished the managing agency of the Fort William Jute Co., Ltd., in their favour in consideration of M/s. Mugneeram Bangur and Co. taking over the shares held by the appellant, procuring repayment of loans advanced by the appellant to the Fort William Jute Company and further procuring that the Fort William Jute Company.
will pay com pensation to the appellant.
The appellant intimated the members of the latter company that it would be in the best interest of the share holders to terminate the appellant 's agency which would otherwise continue till 1957 and that M/S. Mugneeram Bengur & Co. had agreed to reimburse the Fort William Jute Co. Ltd. for payment of Rs. 3,50,000 as compensation to the appellant.
The arrangement with M/s. Mugneeram Bangur & Co. was accepted by the Fort William Jute Co. and the appellant tendered resignation.
M/s. Mugneeram Bangur and Co. 94 became the Managing agent.
The appellant received the sum of Rs. 3,50,000 and credited the sum in its profit and loss account as having been received from the Fort William Jute Co. Ltd. on account of compensation for loss of office and in calculating the net profit for the purpose of income tax for the year 1953 54 did not include this amount in the return.
The Income tax Officer in assessment included the amount in the appellant 's taxable income.
The Assistant Appellate Commissioner on appeal modified the assessment holding that the sum received by the appellant as compensation for surrendering the managing agency, which was to enure for five years more and might have continued for another twenty years, was a capital receipt.
The Appellate Tribunal confirmed the order of the Appellate Assistant Commissioner.
At the instance of the Commissioner of Income tax the following question was referred to the High Court: Whether on the facts and circumstances of the case the sum of Rs. 3,50,000 received by the assessee to relinquish the managing agency was a revenue receipt assessable under the Indian Income tax Act?.
The High Court answered the question in the affirmative.
HELD: that the answer should be in the negative.
The transaction in question was not a trading transaction, but one in which the assessee parted with an asset of enduring value.
The compensation received was compensation for loss of capital.
It was inconsequential whether the appellant conducted the remaining agencies after the determination of the one in question.
Where payment is made as compensation for cancellation of a contract which does not affect the trading structure of the business, nor causes 'deprivation of what in substance is source of income, and is a normal incident of the business, the compensation is revenue.
But where the cancellation impairs the trading structure or results in loss of the source of income, the compensation paid for the cancellation of the agreement is normally capital receipt.
Commissioner of Income tax Nagpur vs Rai Bahadur Jairam Yalji, , referred to.
Commissioner of Income tax vs Shaw Wallace and Co. L.R. 59 I.A. 206, explained.
Raja Bahadur Kamakshaya Narain Singh of Ramgarh vs Commissioner of Income tax, Bihar and Orissa, L.R. 70 I.A. 180, Commissioner of Income tax and Excess Profits Tax Madras vs South India Pictures, , Peirce Leslie and Co. Ltd. vs Commissioner of Income tax, Madras, , Commissioner of Income tax, Hyderabad Deccan vs Vazir Sultan and Sons.
and Godrej & Co. vs Commissioner of Income tax, Bombay City, , discussed.
|
No. 85 of 1959.
Writ Petition under article 32 of the Constitution of India for the enforcement of fundamental rights.
A. V. Viswanatha Sastri, R. section Pathak, section N. Andley, Rameshwar Nath and P. L. Vohra, for the petitioner.
K. N. Rajagopala Sastri and D. Gupta, for respondents Nos. 1 and 2. 1961.
April 14.
The Judgment of the Court was delivered by section K. DAS,J.
One Ranjit Singh is the petitioner before us.
The respondents are the Commissioner of Income tax, Lucknow, the Income tax Officer, Lucknow, and the Collectors of three districts in Uttar Pradesh, namely, Dehra Dun, kanpur and Lucknow, being officers under whose orders certain properties of the petitioner and his family have been attached in pursuance of a notice of demand issued under section 29 of the Indian Income tax Act, 1922, in circumstances which we shall presently state.
The facts are shortly these.
In 1948 the Central Government referred a number of cases in which the petitioner was concerned to the Income tax Investigation Commission set up under the relevant provisions 968 of the Taxation on Income (Investigation Commission) Act, 1947 (Act XXX of 1947), hereinafter referred to as the Act.
On May 30, 1948, the Secretary of the Commission issued a notice to the petitioner to furnish a list of businesses or concerns in which the petitioner was interested and to produce the account books, registers etc.
relating thereto.
The petitioner complied with the notice.
Then, an Autho rised Official appointed by the Commission commenced an investigation into the cases in February, 1949, and in due course submitted a report to the Commission.
The Commission heard the petitioner and on April 16, 1949, submitted a report under section 8 A(1) of the Act.
The findings of the Commission appear from the following extract from their report: "The total tax payable on the undisclosed in come upto March 31, 1947 would accordingly be Rs. 6,61,917. . . . . .
The amount of Rs.6,61,917 may be recovered from Mr. Ranjit Singh and from the family assets in the hands of Mr. Ranjit Singh.
In view of the admission recorded as number (iii) in para 6 supra, the tax will also be recoverable from the properties acquired between 1939 and 1947 in the names of Mrs. Ranjit Singh and Mr. Ranjit Singh 's sons Baljit Singh and Satendrajit Singh.
In the circumstances, we recommend that no penalty be levied on the assessee in respect of non disclosures and false or incorrect statements so far made either to the income tax authorities or in the course of the present proceedings (including those before the Authorised Official).
Mr. Ranjit Singh and Mr. Vaidyanatha Ayyar (representative of Mr. Ranjit Singh) have asked that they be allowed sufficiently long time to pay up the tax.
It has been represented that out of taxes already assessed by the Income tax Department about Rs. 3,86,000 is still due and the addition of the amount leviable under this report will bring the assessee 's total liability to about 10 1/2 lakhs.
Mr. Ranjit Singh has asked that he may be permitted to pay up this sum in not 969 more than five years, in instalments of not less than a lakh of rupees at a time.
While we do not wish to go into the details of the offer, we recommend this request for time for favourable consideration by Government." Then, on November 7, 1949, the petitioner, his wife and two sons submitted a petition to the Commission in which they accepted the findings of the Commission as correct and offered to pay the tax in instalments in accordance with certain terms of settlement.
Some of these terms are: "3.
We offer to pay the aforesaid amount of Rs. 6,61,917 as per the following instalments: (1) on or before the 31st March, 1951 Rs. 1,00,000.
(2) on or before the 31st March, 1952 Rs. 2,31,000.
(3) on or before the 30th June, 1952 Rs. 3,30,917.
We, however, pray that so far as the last instalment is concerned in case we are unable to pay the same by the date mentioned above and are able to satisfy the Central Board of Revenue that we have failed to raise the money for reasons beyond our control and for no fault of our own, a suitable extension of time may be granted.
5.In respect of the other instalments, we agree that in case of default in the payment of any one of them, the whole amount of tax outstanding at the time shall become immediately payable.
" The report of the Commission and the terms suggested by the petitioner for a settlement were accepted by the Central Government and an order was passed under section 8 A(2) of the Act on November 21, 1949, which stated in its operative part that a demand notice be served immediately by the Income tax Officer concerned under section 29 of the Indian Income tax Act, 1922, on the petitioner in accordance with the terms and conditions of settlement and that all such other proceedings under the Indian Income tax Act or under any other law as may be necessary be taken with a view to enforce the payment of the demand and terms and conditions of the settlement.
122 970 The respondents allege that a demand notice was accordingly issued to the petitioner on December 2, 1949.
The petitioner alleges, however, that he received the notice in or about April, 1950, after the Constitution of India had come into force.
Thereafter, in pursuance of the demand notice certain payments were made by the petitioner.
The petitioner was, however, unable to make full payment within the stipulated periods mentioned in the demand notice.
The result was that according to the terms of settlement the whole amount outstanding at the time became immediately payable by the petitioner.
Then, certain properties of the petitioner and his family were attached by the Collector of the district concerned in pursuance of the orders received from time to time from the Income tax Officer.
On June 8, 1959, the petitioner filed the present writ petition challenging the legality of the demand notice dated December 2, 1949, and the subsequent proceedings taken in pursuance of that notice.
The case of the petitioner is that after the coming into force of the Constitution of India on January 26, 1950, the demand notice could not be given effect to and the proceedings taken in pursuance of that notice are unconstitutional inasmuch as they violate his fundamental rights guaranteed by the Constitution.
In the petition a reference has been made to Articles 14,31 and 19(1)(g) of the Constitution, but the argument before us has proceeded on the contention urged on behalf of the petitioner that there has been a violation of the fundamental right of equal protection of the laws guaranteed to him under article 14 of the Constitution inasmuch as he has been dealt with differently from other debtors who owe money to the State under a contractual liability.
The substantial prayer of the petitioner is for the issuance of a writ of mandamus directing the respondents not to give effect to the notice of demand dated December 2, 1949, nor to take any proceedings for enforcing the terms of settlement and for recovery of the sums specified therein.
The petition has been contested by the respondents and the principal point taken on their behalf is that 971 the legality of the demand notice dated December 2, 1949, cannot be challenged by the petitioner on the strength of the provisions of the Constitution, because the Constitution is prospective and not retrospective; secondly, it is contended on behalf of the respondents that the subsequent proceedings taken in pursuance of the demand notice aforesaid do not in any way violate the right of equal protection of the laws guaranteed under article 14 of the Constitution.
It is convenient at this stage to refer to some of the earlier decisions of this Court on the question of con.
stitutionality of some of the provisions of the Act.
On May 28, 1954, this Court delivered judgment in Suraj Mall Mohta and Co. vs A. V. Visvanatha Sastri and Another (1).
It is not necessary to state the facts of that decision.
It is enough to say that it was held therein that sub section
(4) of section 5 of the Act war, bad, as it offended the provisions of article 14 of the Constitution.
Sub section (4) of section 5 of the Act having been declared void, Parliament passed the Indian Income tax Amendment Act (33 of 1954) amending section 34 of the Indian Income tax Act, 1922.
As a result of this amendment, the validity of sub section
(1) of section 5 of the Act came in for challenge on the ground that the Income tax Officer could pick out some out of the class of substantial tax evaders and refer their cases under sub section
(1) of section 5 while dealing with other such persons under amended section 34 of the Indian Income tax Act.
In Shree Meenakshi Mills Ltd., Madurai V. A. V. Viswanatha Sastri and Another(2), sub section
(1) ' of section 5 of the Act was held to be bad on that ground.
It should be noted that in none of the petitions disposed of by that judgment had any assessment been made under the Act and this Court only prohibited further proceedings before the Commission under the Act, Finally, on December 20, 1955, came the decision of this Court in M. CT.
Muthiah & two Others vs The Commissioner of Income tax, Madras & Another (3).
In that case, on a reference under B. 5(1) of the Act, the Commission submitted its report to Government under (1) ; (2) (3) 972 s.8(1) of the Act on August 26, 1952 that is, after the coming into force of the Constitution, and the Central Government made its order under section 8(2) of the Act on September 16, 1952.
In these circumstances it was held: "The result, therefore, is that barring the cases of persons which were already concluded by reports made by the Commission and the directions given by the Central Government under section 8(2) of the Act XXX of 1947 culminating in the assessment or reassessment of the escaped income, those cases which were pending on the 26th January 1950 for investigation before the Commission as also the assessment or reassessment proceedings which were pending on the 26th January 1950 before the Income tax Officers concerned in pursuance of the directions given by the Central Government under section 8(2) of the Act would be hit by Article 14 of the Constitution and would be invalidated.
" Lastly, came the decision in Basheshar Nath vs The Commissioner of Income tax, Delhi & Rajasthan and Another (1).
That was a case of a settlement under section 8 A of the Act as in the present case, but the fact which distinguishes that case from the present is that the settlement there was made after the commencement of the Constitution.
It was held therein that the settlement was the result of a procedure which became discriminatory after the commencement of the Constitution and was therefore bad, and as the discriminatory process of investigation continued even after the commencement of the Constitution, the principle laid down in Syed Qasim Razvi vs The State of Hyderabad and Others (2 ) did not apply.
The point which requires emphasis with regard to these earlier decisions is this: they all dealt with the operation of a discriminatory procedure under the different provisions of the Act after the commencement of the Constitution.
The position in the case under our present consideration is that the settlement, the order under section 8 A(2) of the Act, and even the notice of damaged in pursuance of that order all these took (1) [1959] Supp. 1 S.C. R. 528.
(2) 973 place before the coming into force of the Constitution, and this ' vital distinction must be borne in mind in considering the contentions urged by learned Counsel for the petitioner.
The main contention is that the proceedings taken against the petitioner in pursuance of the order under section 8 A(2) are violative of the guarantee of equal protection of the laws under article 14 of the Constitution.
There are, however, two subsidiary contentions which do not directly raise any question of the violation of a fundamental right, and these may be disposed of before we deal with the main contention.
In his petition the petitioner has stated that he received the demand notice dated December 2, 1949 in or about April, 1950.
In the counter affidavit of the respondents it has been stated that the assessee was informed of the demand early in December, 1949.
A copy of the order of the Central Government under section 8 A(2) of the Act dated November 21, 1949, was sent to the petitioner; there is an endorsement in the office copy of the demand notice dated December 2, 1949, that it was sent by registered post, acknowledgment due.
Thereafter, the petitioner paid part of the tax on different dates without raising any objection that he had not received the demand notice before April, 1950.
It was for the first time in April, 1959, some ten years after, that the petitioner asked for a copy of the order under section 8 A(2) and information as to the date when he had received the regis tered notice of demanad.
He also asked for an inspection of the file.
This was, however, refused.
Then, the petitioner made the statement that he had received the demand notice in or about April, 1950.
He said that the statement was based on his knowledge; he did not disclose the source of his knowledge nor did he say how he remembered ten years after, without reference to any documents, that he had received the demand notice in or about April, 1950.
We are unable to accept the statement as correct.
On the materials in the record it is clear that the proceedings against the petitioner culminating in the service of the notice of demand against him were all completed 974 before the coming into force of the Constitution and the petitioner cannot challenge those proceedings under article 14 of the Constitution; for it is well settled that the Constitution is prospective and not retrospective.
On the construction of section 8 A of the Act it has been argued that after the order made by the Central Government under sub section
(2) thereof, a fresh assessment was necessary and as no such assessment was made, all subsequent proceedings for recovery of the tax are illegal.
This is a point which has not been specifically taken in the petition.
That apart, we do not think that there is any substance in this contention.
We may here read section 8 A, so far as it is relevant: "section 8 A. (1) Where any person concerned in any case referred to or pending before the Commission for investigation applies to the Commission at any time during such investigation to have the case or any part thereof settled in so far as it relates to him, the Commission shall, if it is of opinion that the terms of the settlement contained in the application may be approved, refer the matter to the Central Government, and if the Central Government accepts the terms of such settlement, the Commission shall have the terms thereof recorded and thereupon the investigation, in so far as it relates to matters covered by such settlement, shall be deemed to be closed.
(2) For the purpose of enforcing the terms of any settlement arrived at in pursuance of sub ,section (1), the Central Government may direct that such proceedings as may be appropriate under the Indian Income tax Act, 1922 (XI of 1922), the Excess Profits Tax Act, 1940 (XV of 1940) or any other law may be taken against the person to whom the settlement relates, and, in particular, the provisions of the second proviso to clause (a) of sub section (5) of section 23, section 24B, the proviso to sub section (2) of section 25A, the proviso to sub section (2) of section 2 6 and sections 44 and 46 of the Indian Income tax Act, 1922 shall be applicable to 975 the recovery of any sum specified in such settlement by the Income tax Officer having jurisdiction to assess the person by whom such sum is payable as if it were income tax or an arrears of income tax within the meaning of those provisions.
" The scheme of section 8 A is different from that of section 8.
The latter section contemplates an assessment or reassessment in accordance with the direction of the Central Government; see sub section
(4) of s, 8.
That is not the position under section 8 A, sub section
(2) whereof provides for the enforcement of the terms of any settlement arrived at in pursuance, of sub section
There is Do doubt a reference to certain special provisions of the Indian Income tax Act, 1922, regarding assessment of partners in a registered firm, tax payable by the representative of a deceased person etc.; but the reference to those provisions does not necessarily mean that a fresh assessment must be made.
They merely show that these special provisions will be applicable in appropriate cases.
Sub section
(2) ends by saying that "sections 44 and 46 of the Indian Income tax Act, 1922, shall be applicable to the recovery of any sum specified in such settlement by the Income tax Officer having jurisdiction to assess the person by whom such sum is payable as if it were income tax or an arrears of income tax within the meaning of these provisions.
" This clearly shows that the true scope and effect of the sub section is to enforce the terms of any settlement arrived at in pursuance of sub section
(1) and to recover any sum specified in such settlement as if it were income tax or arrear of income tax in accordance with the provisions of sections 44 and 46 of the Indian Income tax Act, 1922.
We are unable, therefore, to accept the construction which learned Counsel for the petitioner seeks to put on the sub section.
This brings us to the main contention that the petitioner has been subjected to a discriminatory procedure after the coming into force of the Constitution by reason of section 8 A(2) of the Act.
Learned Counsel for the petitioner has put his argument in the following way.
He has submitted that what the petitioner agreed to pay to Government was really a 976 debt arising out of a contract viz., the settlement between him and Government and the petitioner is one amongst the larger class of persons who are debtors of Government; against all other debtors Government have the ordinary remedy by way of suit but against the petitioner a special remedy is provided which is more drastic and envisages the imposition of a penalty under section 46 of the Indian Income tax Act, 1922, if the petitioner is in default in making a payment of the amount due.
This, it is argued, is a discriminatory procedure which has been continued even after the coming into force of the Constitution.
We are unable to accept this argument as correct.
First of all, the petitioner does not really belong to the larger class of persons whom learned Counsel has characterised as debtors of Government.
The petitioner belongs to a special class who had evaded payment of Income tax and had entered into a settlement to pay the amount due as income tax or arrear of income tax.
For this class of persons the procedure laid down in section 8 A(2) is one and the same, and no discrimination is made in favour of or against any member of the same class.
The classification is a, reasonable classification having a just relation to the object of the pro vision.
For the recovery of the amount due as income tax or arrear of income tax all these persons are treated on the same, footing.
Neither is there any discrimination between them and other persons similarly placed in the matter of recovery of income tax.or arrears of income tax.
Secondly, it is open to the legislature to make a law as to how particular Government dues should be realised and if the law applies equally to all persons similarly situated, no objection call be taken to such law on the ground of discrimination.
The truth of the matter is that what the petitioner agreed to pay to Government is really income tax which should have been paid in regard to the relevant assessment years but which had escaped assessment and therefore the recovery is to be made according to income tax law.
That is all that section 8 A(2) says.
In the decisions of this Court to which we bad earlier adverted, what was held to be bad was 977 the application of a discriminatory procedure after the coming into force of the Constitution;.
even in Basheshar Nath 's case (1) the Commission applied the discriminatory procedure after the coming into force of the Constitution and then submitted its report on May 24, 1954, and the Central Government accepted the settlement on July 5, 1954.
It was held that the settlement itself was vitiated by the discriminatory procedure adopted by the Commission.
That is not the position here.
In this case everything was con cluded before January 26, 1950, when the Constitution came into force, including the issuance of a notice of demand.
All that remained to be done was the recovery of the amount according to the notice of demand.
Therefore, the crucial question is is the recovery procedure discriminatory in any way, having regard to the undoubted validity of the proceedings which had been taken against the petitioner before ,January 26, 1950? We are unable to answer this question in favour of the petitioner for the reasons which we have already stated.
Learned Counsel for the petitioner relied on the decision in M. L. M. Muthiah Chettiar and Others vs Commissioner of Income tax, Madras (2).
The facts of that case were entirely different and no question arose there of considering the provisions of section 8 A (2) of the Act.
For these reasons we hold that there is no merit in the petition which is, accordingly, dismissed with costs.
Petition dismissed.
(1) [1959] SUPP.
1 S.C.R. 528.
| The land in suit was Khoti land land section 9 of the Khoti Settlement Act, 1880, prior to its amendment prohibited the. transfer of the occupancy right without the consent of the Khot.
Section 31 of the Bombay Tenancy Act, 1939, which came into force from April 1946, amended section 9 of the Khoti Settlement Act by which no consent of the Khot was necessary for transferring the occupancy rights in the land.
In 1892, R sold his occupancy right without the consent of tile Khot to L, the predecessor in interest of respondent No. 1.
In 1945, R 's successor again sold the same occupancy right to the appellant also without the consent of the Khot.
The appellant 's case was that the sale deed in 1892 in favour of the predecessor in interest of respondent No. 1 was void as the transfer of the occupancy right was made without consent of the Khot; whereas respondent No. 1 contended that R by the sale deed in 1892 had already lost his right to the property in suit and therefore R 's successors had no title to pass in 1945 in favour of the appellant.
Held, that the occupancy right in a Khoti land could not be transferred without consent of the Khot prior to April 1946, when the Bombay Tenancy Act, 1939, came into force 114 906 Held, further, that in the present case as both the sales of 1892 and 1945 were without the consent of the Khot, it was not necessary to determine whether such a transfer was void or voidable, If void, the plaintiff had no title.
If voidable, the first sale in 1892, validly conveyed title to respondent No 1 's predecessor in interest, and consequently no title passed to the plaintiff under the sale deed in 1945, as the transferor had no title.
|
N: Criminal Appeal No. 154 of 1975.
Appeal by Special Leave from the Judgment and order dated the 18th February 1975 of the Madhya Pradesh High Court at Jabalpur in Criminal Appeal No. 789 of 1972.
Sarju Prasad and section N. Prasad for the Appellant.
Ram Panjwani, Dy.
Advocate General, M.P., H. section Parihar and I. N. Shroff for the Respondent.
The Judgment of the Court was delivered by GOSWAMI, J.
To adjust the duration of imprisonment to the gravity of a particular offence is not always an easy task.
Sentencing involves an element of guessing but often settles down to practice obtaining in a particular court with inevitable differences arising in the context of the times and events in the light of social imperatives.
It is always a 714 matter of judicial discretion subject to any mandatory minimum prescribed by law.
Hegel in his 'Philosophy of Right ' pithily put the difficulty as follows: "Reason cannot determine, nor can the concept provide any principle whose application could decide whether justice requires for an offence (i) a corporal punishment of forty lashes or thirty nine, or (ii) a fine of five dollars or four dollars ninety three, four, etc., cents, or (iii) imprisonment of a year or three hundred and sixty four, three, etc., days, or a year and one, two, or three days.
And yet injustice is done at once if there is one lash too many, or one dollar or one cent, one week in prison or one day, too many or too few".
The present appeal by special leave being limited to sentence we are to consider about the appropriate deserts for the appellant in this case.
The appellant was a Circle organizer in the Tribal Welfare Department at Lohandiguda in the State of Madhya Pradesh.
He was entrusted with the distribution of stipends to Adivasi students of the Tribal Welfare Department School.
He misappropriated a sum of Rs. 500/ meant for four students and also forged certain entries in the bills.
He was convicted under section 409 and section 467 IPC by the Sessions Judge and sentenced for each head of charge to con current four years ' rigorous imprisonment and also to a fine of Rs. 500/ , in default to rigorous imprisonment for six months.
The High Court on appeal maintained the conviction but reduced the sentence to two years ' rigorous imprisonment maintaining the fine.
From a perusal of the judgment of the High Court which is the only document in the paper book in addition to the special leave petition, it is not very clear about the offence of forgery committee by the accused.
We would, however, say nothing more than that.
In judging the adequacy of a sentence the nature of the offence, the. circumstances of its commission, the age and character of the offender, injury to individuals or to society, effect of the punishment on the offender, eye to correction and reformation of the offender, are some amongst many other factors which would be ordinarily taken into consideration by courts.
Trial courts in this country already over burdened with work have hardly any time to set apart for sentencing reflection.
This aspect is missed or deliberately ignored by accused lest a possible plea for reduction of sentence may be considered as weakening his defence.
In a good system of administration of criminal justice pre sentence investigation may be of great sociological value.
Through out the world humanitarianism is permeating into penology and the courts are expected to discharge their appropriate roles.
715 The appellant is a youngman of about 30 years.
He is an educated person who was employed in Government service.
But for the forgery he could have been tried in the court of a first class Magistrate for the offence under section 409 IPC and in that case the maximum sentence of imprisonment would have been two years ' rigorous imprisonment on the face of the High Court 's judgment, as noticed above, the part played by the appellant in the forgery is rather a little obscure.
The appellant is sure to lose his employment under the Government.
There is already indignity heaped upon him on account of conviction.
He has the opportunity to commit such offence as a Government servant in the future.
Any sentence of imprisonment imposed upon him will be a deterrent to others similarly disposed in such unlawful pursuits.
The appellant was refused bail in this Court and he is said to have served about nine months in prison.
While we do not minimise the seriousness of the offences, having regard to the circumstances mentioned above, we are of opinion that it will meet the ends of justice in this case if we order, which we do, that the appellant 's sentence be reduced to one year 's rigorous imprisonment only and in addition to a fine of Rs. 500 only, in default rigorous imprisonment for six months.
The appeal is partly allowed with modification of the sentence as ordered.
P.H.P. Appeal partly allowed.
| Section 45(1) of the , a general provision regulating applications for inter regional route permits within a State requires an application to be made to the appropriate Regional Transport Authority mentioned in the proviso thereto namely, either to the Regional Transport Authority of tho region in which the major portion of the proposed route or area lies or to the Regional Transport Authority of the region in which it is proposed to keep the vehicle or vehicles in case the portion of the proposed route or area in each of the regions are approximately equal.
The appellant applied for a contract carriage permit that would be valid throughout the State of Karnataka, which meant that he proposed to use his vehicle in all the nineteen regions, to the Regional Transport Authority, Mandya, who granted him on 8 2 1972 a contract carriage permit valid for the entire State of Karnataka.
The permit was granted as Mandya region has more motorable roads than any other district in the State.
On appeal preferred by the State Road Transport Corporation, taking the view that geographically Mandya region was smaller in area and, as such, the jurisdiction of the Regional Transport Authority, Mandya was ousted, the permit granted to the appellant was cancelled by the State Transport Appellate Tribunal by its Order dated 19 8 1972, resulting in a writ Proceedings before the Karnataka High Court which was dismissed.
On appeal by Special Leave, the Court, ^ HELD: (1) The word "route" which has been used in association with "area specifically notified by the State Government".
However, the terms and "a line of travel which specifies the highway which may be traversed by a motor vehicle between one terminus and another".
Section 2(1) defines "area" as "area specifically notified by the State Government".
However, the terms and expressions defined in section 2 will apply only if there is nothing repugnant in the subject or context.
Tho first proviso to section 45(1) speaks of the route or area proposed in an application for a permit and, as such, there can be no question of the State Government specifying the area.
The definition of "area" in section 2(1) has therefore no relevance in this context.
[31B D] (2) section 45 uses both the words "route" and "area" whichever is applicable in a given case.
A route as defined is a line of travel between two termini on a highway, but the idea of a route as a notional line that the definition suggests has not been consistently maintained in the Act.
[31D E] (3) A route may mean not only the notional line of travel between one terminus and another, but also the area of the route over which the motor vehicles ply, yet the two terms are not interchangeable.
"A route is an area plus some thing more." This "something" is the notional line of travel between the two termini which distinguishes a route from an area simpliciter.
The first proviso to section 45(1) speaks of "route or area" apparently making a distinction between 29 them to cover applications relatable to either.
A contract carriage does not ply along a fixed "route or routes" but over an "area" which is why an application for a contract carriage permit has to contain a statement as to the pro posed area.
[31G H] Dosa Satyanarayanamurty etc.
vs The Andhra Pradesh State Road Transport Corpn., (644).
C. P. C. Motor Service, Mysore vs The State of Mysore, [1962]Supp.
(1) S.C.R. 717 (725).
C. P. Sikh Regular Motor Service etc.
vs The State of Maharashtra, [1975] (2) S.C.R. 10, followed.
(4)The word "area" in the first proviso to section 45(1) of the Act means the area of motorable roads within the territorial jurisdiction of a regional transport authority.
Except that the territorial jurisdiction of the regional transport authority is fixed in terms of "geographical area "district wise in the State of Karnataka "area" in that wider sense is irrelevant to the purpose of the Act.
[32 B, F] (5) The jurisdiction of a regional transport authority to grant an inter regional permit depends on the existing areas of motorable roads when an application for a permit is made.
[32 G] [On the question of the reasonableness of a provision which requires an application for an inter regional permit to be made to the Regional Transport Authority of the region where the major portion of the proposed route or area lies, the Court observed that this was a matter of policy but added that the policy has not been stated very clearly, and that instead of leaving the law in such a "slippery state," the State should clarify it by appropriate legislation so that the law may be clear and easily ascertainable by the concerned section of the public.]
|
il Appeal No. 1101 of 1967,.
Appeal by certificate from the judgment and order dated September 28, 1966 of the Calcutta High Court in Appeal No. 7 of 1965.
G. L. Sanghi, B. D. Sharma and section P. Nayar, for ;the appellant.
A. K. Sen, B. P. Maheshwari and Shambhu Nath Chunder, for the respondent.
The Judgment of the Court was delivered by Beg, J.
The National Tobacco Co. of India Limited (herein after referred to as "the Company"), the Respondent in the appeal before us, manufactures Cigarettes, at its Factory in Agrapara, upon which Excise duty is vied by the appellant, the Assistant Collector of Central Excise, Calcutta Division (hereinafter referred to as "the Collector").
The rates at which the Excise duty was imposed upon the cigarettes of the Company under the provisions of the Central Excise and Salt Act of 1944 (hereinafter referred to as "the Act") were varied, from time to time, by the provisions of Finance Acts of 1951 and 1956 and the Additional Duties of Excise (Goods of Special Importance) Act of 1957.
The Collector maintained an office at the factory itself for the levy and collection of tax.
The Company was required to furnish quarterly consolidated price lists which used to be accepted for purposes of enabling the Company to clear its goods, but, according to the Collector, these used to be verified afterwards by obtaining evidence of actual sales in the market before issuing final certificates that the duty had been fully paid up.
The particulars of the cigarettes to be cleared were furnished by the Company on forms known as A.R.1 forms required by Rule 9 of the Central ' Excise Rules.
For facilitating collection of duty, the Company, maintained a large sum of money in a current account with the 825 Central Excise authorities who used to debit in this account the duty leviable on each stock of cigarettes allowed to be removed.
This current account, known as "personal ledger account", was maintained under the third proviso to Rule 9 which lays down: 9(1) " * * * * * * Provided also that the Collector may, if he thinks fit, instead of requiring payment of duty in respect of each separate consignment of goods removed from the place or premises specified in this behalf, or from a store room or warehouse duly approved, appointed or licensed by him keep with any person dealing in such goods an account current of the duties payable thereon and such account shall be settled at intervals not exceeding one month and the account holder shall periodically make deposit therein sufficient in the opinion of the Collector to cover the duty due on the goods intended to be removed from the place of production, curing, manufacture or storage".
It appears that the company used to furnish its quarterly price lists to the Collector on forms containing nine columns including one to show the "distributors ' selling price".
Until July 1957, so long as this form was used by the Company, no difficulty seems to have been experienced in checking the prices.
But, after this column was dropped from the new form of six columns, the excise authorities seem to have encountered some difficulty in valuing the cigarettes for vying excise duty.
They. ' therefore, changed the basis of assessment itself from "the Distributors" Selling Price" to "the wholesale cash selling price at which stockists or agents are selling the same to an independent buyer in the open market".
They held the view that such a charge could be made having regard to the provisions of Section 4 of the Act.
The Deputy Superintendent of Central Excise informed the Company,; of this change of basis on 5 11 1958 by a letter which also asked the Company to furnish its price lists immediately "for determining the correct assessable value" of its cigarettes.
On 7th November,, 1958, the Deputy Superintendent served a notice upon the Company demanding, payment of a sum of Rs. 1.67,072,40 as basic Central Excise duty and Rs. 74,574,85 as additional Central Excise duty on account of short levy for a certain brand of cigarettes cleared from the Company 's factory from 10th August, 1958 to 5th November, 1958.
On 12 11 1958, the Deputy Superintendent sent another notice demanding payment of a sum of Rs. 6,16,467,49 as basic Central Excise duty and Rs. 2,10,492,15 as additional central excise duty for short levy in respect of some brands of cigarettes cleared from the factory between 1 11 1957 to 9 8 1958.
On 13 11 1959.
(the Deputy Superintendent sent a 826 third notice to the Company under Rule 10 A of the Central Excise Rules 1944, demanding payment of Rs. 40,726,48 as basic Central Excise duty and Rs. 16,958.50 as additional duty for short levy in respect of various brands.
The Company applied to the Calcutta High Court under Article 226 of the Constitution against the three notices mentioned above, one of which specifically under Rule 10 A and the other two under Rule 10 of the Central Excise Rules.
A learned single Judge of that Court quashed the notices by his order of 15 2 1960 on the ground that the Company had not been given any opportunity of being heard so as to be able to meet the material collected behind its back which formed the basis of the demands under the aforesaid three notices.
On a joint request of both ides.
the High Court did not decide the question whether notices of demand ,were time barred.
But, the learned Judge said : "Nothing in this order will prevent the respondent from proceeding to take any step that may be necessary for such assessment or for the realisation of the revenue in accordance with the law".
The learned Judge had also held that neither the basis adopted by the company nor that put forward by the Collector was correct.
The learned Judge pointed out the correct basis which was considered by him to be in consonance with the provisions of Section 4, sub.s(a) of the Act.
He indicated the various factors required by Section 4 of the Act which had to be taken into account and held: "The determination as to whether a wholesale market exists at the site of the factory or the premises of manufacture or production etc.
or which is the nearest wholesale market, or the price at which the goods or goods of like kind and quality are capable of being sold must necessarily be a complicated question and must be determined carefully upon evidence and not arbitrarily.
Such determination cannot wholly be made ex parte, that is to say, behind the back of the assessee.
A satisfactory determination can only be made by giving all information to the assessee and after giving the assessee an opportunity of establishing his own point of view, or checking and/or challenging any material or evidence upon which the Excise Authorities wish to depend.
" As no appeal was filed by either side against this decision, it became final and binding between parties before us so that the question whether the High Court has correctly interpreted Section 4 of the Act in determining the basis on which the excise duty leviable could be assessed is not under consideration here.
827 When the case went back to the Collector, he issued a fresh notice on 24 4 1960.
As the validity of this notice is the real question now in issue in the appeal before us, it may be reproduced in toto here.
It turns as follows: Registered A/D GOVERNMENT ' OF INDIA Collectorate of Central Excise Office of the Assistant Collector of Central Excise, Calcutta I Division (5, Clive Row), Calcutta NOTICE C. No. VI(b)14/3/58/3886 Dated 21st April.
, 1960 TO M/s. National Tobacco Co. (India) Ltd., Agarpara, 24 Parganas.
In connection with the assessment of Central Excise duties for the periods : 1. from 1st October, 1957 to 5th November, 1958 in respect of 316,885,000 of "No. Ten" brand Cigarettes.
from 1st January, 1958 to 28th January , 1958 in respect of 6,600,000 of "D.L.T. Mag" Cigarettes.
from 1st January, 1958 to 5th February, 1958 in respect of 9594,000 of "May Pole" Cigarettes '.
from 1st January, 1958 to 7th February, 1958 in respect of 3143,500 "Carltons Gold Seal" Cigarettes.
V. from 1st January 1958 to 31st January, 1958 in respect of 1471,250 of "John Peel" Cigarettes.
from 1st January, 1958 to 16th January, 1958 in respect of 8200,000 of "Light House" Cigarettes.
from 1st January, 1958 to 16th January, 1958 in respect of 9070,000 of "Gold Link" Cigarettes.
Please note that a sum of Rs. 10,05,133.25 np.
(Rupees 10 lads five thousand one hundred thirty three and twenty five naya paise only) as basic Central Excise duty and a total sum of Rs. 3,43,208.25 np.
(Rupees three lacs forty three thousand two hundred eight and twenty five naya paise only) as additional duty had been provisionally debited in your account on the basis of the price list supplied to us by you for the quarters 828 (i) beginning October, 1957 dated 17th October, 1957.
(ii) beginning January, 1958 dated nil.
(iii) beginning April, 1958 dated 14th April, 1958, and (iv) beginning July, 1958 dated 14 7 58, and (v) beginning October, 1958, dated nil.
We now propose to complete the assessments for the said periods from the evidence in our possession from which it appears : (i)that there is no wholesale market for the goods covered by your price lists in or near the factory or the 'Place of manufacture and that the nearest wholesale market for the sale is the Calcutta market.
(ii) the wholesale cash price of the articles in question at the time of sale and/or removal of the ,,goods at the Calcutta market at which goods of like kind or quality are sold or are capable of being sold have been ascertained by us and the evidence at our disposal reveals that the prices quoted by you in your price list are not correct.
The prices at, as per chart annexed hereto which has been prepared on the basis of available evidence in terms of section 4 (a) , of the Central Excise and Sale Act, 1955.
The vouchers mentioned in the chart are available for your inspection at any time next week during office hours.
After obtaining inspection of the vouchers please attend at our office at 5 Clive Row, Calcutta on 2nd May 1960 at 10.30 a. 'M. for the purpose of discussing the points mentioned above 4.
We are prepared to give you a personal hearing with regard to all the points indicated above.
If you have any evidence in support of your contention you are at liberty to produce the same at the time of bearing.
Thereafter please note that we propose to make the final assessment in accordance with law.
Sd./ (N. D. MUKhERJEE) Assistant Collector of Central Excise, Calcutta I Division, Calcutta" The Company challenged the validity of this notice by means of a second petition for Writs of Prohibition and Mandamus against the Collector on the ground that the notice was barred by time 829 and was issued without jurisdiction so that no proceedings founded on it could be taken.
It was prayed that the Collector may be ordered to cancel the notice.
The petition was allowed by a learned Single Judge of the Calcutta High Court on 3 1 1964 on the ground that such a notice was barred by the provisions of Rule 10 of the Central Excise Rules 'because the notice was held to be fully covered by Rule 10 and by no other rule.
A Division Bench of the High Court confirmed this view on 8 9 1966 and dismissed the Collector 's appeal.
The case having been certified, under Article 133(a), (b) and (c) for an appeal to this Court, this question is before us now.
The learned Single Judge as well as the Division Bench of the Calcutta High Court said that there was not enough material on record to conclude that there was any "provisional assessment" under Rule 10 B (deleted on 1 8 1959 and substituted by Rule 9 B) which laid down: "10B. PROVISIONAL ASSESSMENT OF DUTY (1) Notwithstanding anything contained in these rules (a) There the owner of any excisable goods makes and subscribed a declaration before the proper Officer to the effect that he is unable for want of full information to state precisely the real value or description of such goods in the proper Form : or (b) Where the owner of any goods has furnished full information in regard to the real value or description of the goods, but the proper Officer requires further proof in respect thereof; or (c) Where the proper Officer deems it expedient to subject any excisable goods to any chemical or other test, The proper Officer may direct that the duty leviable on such goods may, pending the pro duction of such information or proof or pending the completion of any such test, be assessed provisionally.
(2) When the owner of any goods in respect of which the duty has been assessed provisionally under sub rule(1) has paid such duty, the proper Officer may make an order allowing the goods to be cleared for home consumption or for exportation, as case may be and such order shall be sufficient authority for the removal of the goods by the owner: Provided that before making any such order the proper officer shall require the owner to furnish a bond in the proper form binding the Owner to pay the differen 830 tial duty When the final assessment is made.
(3) When the duty leviable on such goods is assessed finally in accordance with the provisions of these rules, the duty provisionally assessed shall be adjusted against the duty finally assessed, and if the duty provisionally assessed, falls short of, or is in excess of, the duty finally assessed.
the owner of the goods shall pay the deficiency or be entitled to a refund, as the case may be." No order directing provisional assessment, contemplated by Rule 10 B, (applicable at the relevant time) has been placed before us.
Nor was the Company asked by the Collector to furnish a bond to pay up the difference after making a final assessment as was required under Rule 10 B.
It was, however, contended for the Collector that the execution of a bond, for the satisfaction of the Collector, could be dispensed with in a case where the Company kept a large sum of money in deposit in the "personal ledger account" to guarantee its ability to meet its liabilities.
It was also pointed out that the learned Single Judge as well as the Division Bench had found that the practice of provisionally approving the price lists supplied by the Company, pending acceptance of their correctness after due verification, had been established as a mater of fact.
It was submitted that this was substantially a "provisional assessment" covered by Rule 10 B, although it may not conform to the technical procedural requirements of such an assessment.
Even if the making of debit entries could, on the facts of the case, be held to be merely provisional think that what took place could not be held to be a "provisional assessment" within the provisions of Rule 10 B which contemplated the making of an order directing such an "assessment" after applying_ the mind to the need for it.
Before proceeding further we will deal with the question whether the Division Bench correctly refused to permit an argument that the impugned notice of 24 4 1960 fell under Rule 10 A.
The ground given for this refusal was that such a case was neither taken before 'the learned Single Judge nor could be found in the grounds of appeal despite the fact that the appellant had ample opportunity of amending its Memorandum of appeal.
The appellant has, however, relied on a previous intimation given to the counsel for the respondent that such a contention would be advanced at the hearing of the appeal and also on an application dated 21 3 1966 praying for permission to add the alternative ground that the impugned notice fell under Rule 10 A.
We think that this refusal was erroneous for several reasons.
Firstly the Company having come to Court for a Writ of Pro hibition on the ground that the impugned notice was issued with 831 out jurisdiction had necessarily to establish the case which it sets, up in paragraph 25 of its Writ Petition, that the notice was not authorised by the rules including Rule 10 A.
As the notice of 21 4 1960 was followed on 4 5 1960 by a correction by another notice of certain statements both the notices were assailed in paragraph 25 (ii) in the following words "The respondent has mala fide and without jurisdiction issued the said impugned notices pretending to falsely state that the aggregate sum therein mentioned has been provisionally debited in your petitioner 's account and pretending to intimate, to your petitioner that the respondent proposed to complete the assessment, And thereby, he is seeking, under the guise of completing an alleged assessment which had already been completed and duty in respect whereof had already been paid, to do indirectly what he could not do directly inasmuch as Rule 10A of the said Rules has no application to the facts of the case and inasmuch as recovery of any duty which might have been short levied under Rule 10 of the Rules is barred by limitation".
This assertion was met by a categorical denial by the Collector in paragraph 26(ii) of the Collector 's affidavit in reply where it was stated that it was denied "that Rule 10 A of the said Rules had no application to the facts of the case as alleged or that the recovery of any duty which had been short levied was barred by limitation under Rule 10 of the said Rules as alleged or at all".
Thus, the applicability of Rule 10 A was very much in issue.
Secondly, We find, from the Judgment of the learned Single Judge that, as the burden lay upon the petitioning Company to demonstrate, for obtaining a Writ of Prohibition, that the impugned notice was not authorised by any rule, its counsel had contended ',, inter alia, that the notice did not fall under Rule 10 A.
The question was thus considered by the learned Single Judge.
Thirdly, the question whether the Collector did or did not have the power to issue the impugned notice under or with the aid of Rule 10 A was a question of law and of jurisdiction.
going to the root of the case, which could be decided without taking further evidence.
Indeed, as the burden was upon the petitioning Company to show that the impugned notice was issued without jurisdiction, a finding that the notice did not fall even within Rule 10 A was necessary before a Writ of Prohibition could issue at all.
We think that the Division Bench ought to have permitted the question to be argued, subject to giving due opportunity to the petitioning Company to meet it on such, 832 terms as the Court thought fit, even if the point was not taken in the grounds of appeal.
Therefore, we will consider this question also.
Rule 10 of the Central Excise Rules, ran as follows "10.
Recovery of duties or charges short levied, or erroneously refunded When duties or charges have been short levied, through inadvertence, error, collusion or mis construction on the part of an officer, or through misstatement as to the quantity, description or value of such goods on the part of the owner, or when any such duty or charge, after having been levied, has been owing to any such 'cause, erroneously refunded, the person chargeable with the duty or charge, so short levied, or to whom such refund has been erroneously made, shall pay the deficiency or pay the amount paid to him in excess, as the case may be, on written demand by the proper officer being made within three months from the date on which the duty or charge was paid or adjusted in the owners account current, if any, or from the date of making the refund".
Rule 10 A reads as follows: "10 A Residuary powers for recovery of sums due to Government.
Where these Rules do not make any specific provision for the collection of any duty, or of any deficiency in duty if the duty has for any reason been short levied, or of any other sum of any kind payable to the Central Government under the Act or "these Rules, such duty, deficiency in duty or sum shall, on a written demand made by the proper officer, be paid to such person and at such time and place, as the proper officer may specify.
" The two rules set out above occur in Chapter III of the Central Excise Rules 1944 headed "Levy and Refund of, and Exemption from Duty".
Rule 7 merely provides that the duty leviable on the goods will be paid at such time and place and to such, person as may be required by the rules.
Rule 8 deals with power to authorise exemptions in special cases.
Rule 9(1) provides for the time and manner of payment of duty.
This rule indicates that ordinarily the duty leviable must be paid before excisable goods are removed from the place where they are manufactured or stocked, and only after obtaining the permission of the officer concerned.
The third proviso 833 to Rule 9 has already been set out above.
Rule 9(2) provides for the recovery of duty and imposition of penalty in cases where Rule 9 sub.
r (1) is violated.
Rule 9A specifies the date with reference to which the duty payable is to be determined.
We are ,not concerned here with Rules 11 to 14 dealing with refunds, rebates, exports under bonds and certain penalties for breaches of Rules.
Rule 52 and 52 A, found in Chapter V, dealing with a number of matters relating to "Manufactured Goods", may also be cited here : "52.
Clearance on payment of duty When the manufacturer desires to remove goods on payment of duty, either from the place or a premise specified under rule 9 or from a store room or other place of storage approved by the Collector under rule 47, he shall make application in triplicate (unless otherwise by rule or order required) to the proper officer in the proper Form and shall deliver it to the Officer at least twelve hours (or such other period as may be elsewhere prescribed or as the Collector may in any particular case require or allow) before it is intended to remove the goods.
The officer, shall, thereupon, assess the amount of duty due on the goods and on production of evidence that this sum has been paid into the Treasury or paid to the account of the Collector in the Reserve Bank of India or the State Bank of India, or has been despatched to the Treasury by money order shall allow the goods to be cleared".
"52A. Goods to be delivered on a Gate pass (1) No excisable goods shall be delivered in a factory except under a gatepass in the proper form or in such other form as the Collector may in any particular case or class of cases prescribe signed by the owner of the factory and countersigned by the proper officer.
" It will be noticed that in Chapter III, the term "assessment" was used only in the former rule 10 B, corresponding to the present rule 9 B, while dealing with provisional assessment of duty.
But, Rule 52 shows that an "assessment" is obligatory before every removal of manufactured goods.
The rules however, neither specify the kind of notice which should precede assessment nor lay down the need to pass an assessment order.
All we can say in that rules of natural justice have to be observed for, as was held by this Court in K. T. M. Nair vs State of Kerala(1), "the assessment of a tax on person or property is atleast of a quasi judicial character".
(1) ; @ 94.
L Sup.
CI/73 834 Section 4 of the Act lays down what would determine the value of excisable goods.
But, the Act itself does not specify a procedure for assessment presumably because this was meant to be provided for by the rules.
Section 37(1) of the Act lays down that "the Central Government may make rules to carry into effect the purposes of this Act".
Section 37, sub.
s (2), particularises without prejudice to the generality of the foregoing power" that "such rules may provide for the assessment and collection of duties of excise, the authorities by whom functions under this Act are to be discharged , the issue of notice requiring payment, the manner in which the duty shall be payable, and the recovery of duty not paid".
It is clear from Section 37 that " assessment and collection of duties of excise" is part of the purposes of the Act, and Section 4, dealing with the determination of value for the purposes of the duty, also seems to us to imply the existence of a quasi judicial power to assess "he duty payable in cases of dispute.
"Collection", seems to be a term used for a stage subsequent to "assessment".
In a case where the basis of a proposed assessment is disputed or where contested questions of fact arise, a quasi judicial procedure has to be adopted so as to correctly assess the tax payable.
Rule 52 certainly makes an "assessment" obligatory before removal of goods unless the procedure for a "provisional assessment" under Rule 10 B (now rule 9 B) is adopted.
But, if no quasi judicial pro ceeding, which could be described as an "assessment" either under Rule 52 or "Provisional assessment" under Rule 10 B (now Rule 9 B) takes place at the proper time and in accord ance with the rules, is the Collector debarred completely afterwards from assessing or completing assessment of duty payable ? That seems to us to be the real question to be decided here.
One of the arguments on behalf of the Collector was that no "assessment", for the purpose of determining the value of excisable goods, having taken place in the case before us, there could be no "levy" in the eye of law.
It was urged that, even if there was no "provisional assessment", as contemplated by Rule 10 B, whatever took place could, at the most, be characterised as an "incomplete assessment", which the Collector could proceed to complete, even after the removal of the goals.
It was contended that such a case would be outside the purview of Rule 10 as it was not determined whether there actually was a short levy.
Hence, it was submitted there was no question of a proceeding barred by the limitation prescribed for making a The demand for a short levy in certain specified circumstances.
Division Bench, while repelling this contention, held : "In the present case, it appears that the procedure adopted was that the respondents issued a price list 835 quarterly.
In that price list, they gave their own estimate as to the value of the goods.
For the time being the excise authorities accepted the value so given, and gave a provisional certificate to that effect, intending to check the market value and then finally determine the value later on.
The procedure for issuing price list of approving the same provisionally and accepting payment therefore according to the estimate of the manufacturer, is a procedure which is not to be found either in the Act or the Rules".
It may be observed that this finding, that the procedure of a provisional acceptance of the Company 's estimates was adopted, seems inconsistent with another finding that what took place was a final adjustment of accounts within the purview of the 3rd proviso to Rule 9, set out above, constituting a "levy" accord to law.
The Division Bench appears to have regarded this procedure of an almost mechanical levy as equivalent to a complete assessment followed by the payment of the tax which constituted a valid "levy".
Hence, it concluded that, there being a legally recognised levy, the only procedure open to the Collector for questioning its correctness was one contemplated by Rule 10 so that a demand for a short levy had to be made within 3 months of the final "settlement of accounts" as provided specifically by Rule 10.
The Division Bench considered this procedure to be an alternative to an assessment under Rule 52 at the proper time and also :to a provisional assessment in accordance with the procedure laid down in Rule 10 B. But, to regard the procedure under Rule 10 as an alternative to an assessment would be to overlook that it presupposes an assessment which could be reopened on specified grounds only within the period given there.
The term "levy" appears to us to be wider in its import than the term "assessment".
It may include both "imposition" of a tax as well as assessment.
The term "imposition" is gene rally used for the, levy of a tax or duty by legislative provision indicating the subject matter of the tax and the rates at which it has to be taxed.
The term "assessment", on the other hand, is generally used in this country for the actual procedure adopted in fixing the liability to pay a tax on account of particular goods or property or whatever may be the object of the tax in a particular case and determining its amount.
The Division Bench appeared to equate "levy" with an "assessment" as well as with the collection of a tax when it.
held that "when the payment of tax is enforced, there is a levy".
We think that, although the connotation of the term "levy" seems wider than that of "assessment", which it includes, yet, it does not seem to 836 us to extend to "collection".
Article 265 of the Constitution makes a distinction between "levy" and "collection".
We also find that in N. B. Sanjana Assistant Collector of Central Excise, Bombay & Ors.
vs The Elphinstone Spinning & Weaving Mills Co. Ltd.,A(1), this Court made a distinction between "levy" and "collection" as used in the Act and the Rules before us.
It said there with reference to Rule 1 0 : "We are not inclined to accept the contention of of Dr. Syed Mohammad that the expression 'levy ' in Rule 10 means actual collection of some amount.
The charging provision Section 3(1) specifically says.
'There shall be levied and collected in such a manner as may be prescribed the duty of excise . ' It is to be noted that subsection (i) uses both the expressions "levied and collected" and that clearly shows that the expression 'levy ' has not been used in the Act or the Rules as meaning actual collection".
We are, therefore, unable to accept the view that, merely because the "account current", kept under the third proviso (erroneously mentioned as second proviso by the Division Bench) to Rule 9, indicated that an accounting bad taken place, there was necessarily a legally valid or complete levy.
The making of debit entries was only a mode of collection of the tax.
Even if payment or actual collection of tax could be spoken of as a de facto "levy" it was only provisional and not final.
It could only be clothed or invested with validity after carrying out the obligation to make an assessment to justify it.
Moreover, it is the process of assessment that really determines whether the levy is short or complete.
It is not a factual or presumed levy which could, in a disputed case, prove an "assessment".
This has to be done by proof of the actual steps taken which constitute "assessment".
Undoubtedly, a mechanical adjustment and ostensible settle ment of accounts, by making debit entries, was gone through in the case before us.
But, we could not equate such an adjustment with an assessment, a quasi judicial process which involves due application of mind to the facts as well as to the requirements of law, unless we were bound by law to give an unusual interpretation to the term "assessment".
Here, we do not find any such definition of assessment or any compelling reason to bold that what could at most be a mechanical provisional collection, which would become a "levy" in the eve of law only after an "assessment", was itself a levy or an assessment.
Rules 10 and 10A, placed side by side, do raise difficulties of interpretation.
Rule 10 seems to be so widely worded as to (1) ; 2045.
837 cover any "inadvertence, error, cullusion or misconstruction on the part of an officer", as well as any "misstatement as to the quantity, description or value of such goods on the part of the owner" as causes of short levy.
Rule 10 A would appear to cover any "deficiency in duty if the duty has for any reason been short levied", except that it would be outside the purview of Rule 10A if its collection is expressly provided for by any Rule.
Both the rules, as they stood at the relevant time, dealt with collection and not with assessment.
They have to be harmonised, In N. B. Sanjana 's case (Supra), this Court harmonised them by indicating that Rule 10A, which was residuary in character, would be inapplicable if a case fell within a specified category of cases mentioned in Rule 10.
It was pointed out in Sanjana 's case (Supra).
that the reason for the addition of the new Rule 10A was a decision of the Nagpur High Court in Chhotabhai Jethabhai Patel vs Union of India(1), so that a fresh demand may be made on a basis altered by law.
The Excise authorities had then made a fresh demand, under the provisions of Rule 10 A, after the addition of that Rule, the validity of which challenged but upheld by a Full.
Bench of the High Court of Nagpur.
This Court, in Chhotabhai Jethabhai Patel & Co., vs Union of India ( 2 ) also rejected the assessee 's claim that Rule 10 A was inapplicable after pointing out that the new rule had been specifically designed" for the enforcement of the demand like the one arising in the circumstances of the case".
We think that Rule 10 should be confined to cases where the demand is being made for a short levy caused wholly by one of the reasons given in that rule so that an assessment has to be reopened.
The findings given by the Calcutta High Court do not show that, in the case before us, there was either a short levy or that one of the grounds for a short levy given in Rule 10 really and definitely existed.
No doubt the Division Bench gave a reason for the way in which the claims became time barred, in the following words: "It is quite possible, that the Excise authorities, in an attempt tohelp the, appellants, by facilitating the movements of goods, inadvertently allowed the claims to be barred by limitation.
That, however, is not a matter which can affect the question of limitation.
The bar of limitation has been imposed by Statute.
The morality of the case or the conduct of the parties is therefore irrelevant unless the law provides that the court on that ground can afford relief ' (1) A.I.R, 1952 Nag.
139, (2) [1962] Supp. 2 S.C.R. 1 838 This finding was presumably given to show that the impugned notice fell within the purview of Rule 10 because the demand was due to a short levy caused by "inadvertence" of the officer concerned.
It will be noticed that the Division Bench did not go beyond finding a "possibility" of such inadvertence.
This is not a finding that it was definitely du. , to it.
No finding which could clearly relate the, case to any cause for short levy found in Rule 10 was given.
Moreover, we find that there was no case taken up by the Company in its petition before the High Court that any short levy resulted from an inadvertence.
of the officer concerned in the process of assessment.
The case set up was that of a levy after a completed assessment, in accordance with law, which could not, according to the Company, be reopened.
If, therefore, as we find from the conclusions recorded by the High Court itself what took place was not an "asseessment" at all in the eye of law, which could not be reopened outside the provisions of Rule 10, we think that the case will fall beyond Rule 10 as it stood at the relevant time.
The notice set out above does not purpoe, to be issued under any particular rule probably because the Collector,.
in the circumstances of the case, was not certain about the rule under which the notice could fall.
But, as was pointed out by this Court in Sanjana 's case (Supra), the failure to specify the provision under which a notice is sent would not invalidate it if the power to issue such a notice was there.
The notice alleges that it is a case of "incomplete assess ment".
The allegations contained in it have been characterised by the learned counsel for the Company as a change of front intended to cover up the neglet of the Collector in failing to comply with the correct procedure of making either an assessment before delievery contemplated by Rule 52 or a provisional assessment under Rule 10 B. We are unable to hold, either upon the findings given by the High Court or upon facts transpiring from the affidavits filed by the parties that the notice was a mere cloak for some omission or error or inadvertence of the Collector in making a levy or an assessment.
We may point out that Rule 10 itself has been amended and made more reasonable in 1969 so as to require a quasi judicial procedure by serving a show cause notice "within 3 months from the date on which the duty or charge was paid or adjusted in the owner 's account current, if any".
This amendment, made on 11 10 1969, indicates that the quasi judicial procedure.
for a finding on an alleged inadvertence, error, collusion, or misconstruction by an officer, or misstatement by the assessee, as the cause of an alleged short levy resulting from an assessment, can now be embarked upon and not necessarily completed 839 within the prescribed period.
We are, however, concerned with the procedure before this amendment took place.
At that time, it was certainly not clear whether a case would fall under Rule 10 even before the short levy or its cause was established.
Furthermore, in the present case, the reason for an alleged short levy could be a change of basis of proposed assessment under instructions from higher authorities mentioned above.
Even that change of basis was held by the High Court to be erroneous.
Until the High Court indicated the correct basis there was an uncertainty about it.
Such a ground for an alleged short levy would be analogous to the reason for the introduction of Rule 10 A itself _ which, as pointed out in N. B. Sanjana 's case (Supra), was 'a change in the law.
One could go back still further and come to the conclusion that the real reason ',or the alleged short levy was a failure of the Company to supply the fuller information it used to supply previously and not just a misstatement.
If the case does not clearly come within the classes specified in Rule 10, this rule should not be invoked because, as was rightly contended for the appellant, a too wide construction put on Rule 10 would make Rule 10A useless.
The two rules have to be read together.
It is true that Rule 10 A seems to deal only with collection and not with the ascertainment of any deficiency in duty or its cause by a quasi judicial procedure.
If, however, it is read in conjunction with Section 4 of the Act, we think that a quasi judicial proceeding, in the circumstances of such a case, could take place under an implied power.
It is well established rule of construction that a power to do something essential for the proper and effectual performance of the work which the statute has in contemplation may be implied [See Craies on Statute Law (Fifth Edition) P. 105] The question whether there was or was not an implied power to hold an enquiry in the circumstances of the case before us, in view of the Provisions of Section 4 of the Act read with Rule 10 A of the, Central Excise Rule, was not examined by the Calcutta High Court because it erroneously shut out consideration of the meaning and applicability of Rule 10A.
The High Court 's view was based on an application of the rule of construction that where a mode of performing a duty is laid down by law it must be performed in that mode or not at all.
This rule flows from the maxim : "Expressio unius act exclusio alterius.
" But, as we pointed out by Wills, J., in Colquohoun vs Brooks(1) this maxim "is often a valuable servant, but a dangerous master . ".
The rule is subservient to the basic principle that Courts must endeavour to ascertain the legislative intent and (1) (1888) 2 ,62. 840 purpose, and then adopt a rule of construction which effectuates rather than one that may defeat these.
Moreover the rule of prohibition by necessary implication could be applied only where a specified procedure is laid down for the performance of.
a duty.
Although Rule 52 makes an assessment obligatory before goods are removed by a manufacturer, yet, neither that rule nor any other rule, as already indicated above, has specified the detailed procedure for an assessment.
There is no express pro hibition anywhere against an assessment at any other time in the circumstances of a case like the one before us where no " assessment", as it is understood in law, took place at all.
On the other hand, Rule 10A indicates that there are residuary powers of making a demand in special circumstances not foreseen by the framers of the Act or the rules.
If the assessee disputes the correctness of the demand an assessment becomes necessary to protect the interests of the assessee.
A case like the one before us falls more properly within the residuary class of unforeseen cases.
We think that, from the provisions of Section 4 of the Act read with Rule 10A, an implied power to carry out or complete an assessment, not specifically provided for by the rules, can be inferred.
No writs of prohibition or mandamus ",ere, therefore, called for in the circumstances of the case.
Consequently, we allow this appeal and set aside the orders of the Calcutta High Court.
The Collector may now proceed to complete the assessment.
In the circumstances of the case, the parties will bear their own costs throughout.
| The respondent manufactures cigarettes at its factory upon which Excise Duty is levied by the Assistant Collector of Central Excise, Calcutta Division.
The rates varied according to the provisions of Finance Act, 1951, and 1956 and the Additional Duty of Excise (Goods of Special Importance) Act, 1957.
The Company was required to furnish quarterly consolidated price lists and the particulars of cigarettes to be cleared were furnished by the Company as required by Rule 9 of the Central Excise Rules.
For facilitating collection of duty, the Company maintained a large sum of money in a Current Account with the Central Excise authorities, who used to debit this account for the duty leviable on each stock of cigarettes allowed to be removed.
The Company used, to furnish its quarterly price lists to the Collector ,on forms containing nine columns and until July 1957, so long as this form was used by the Company, no difficulty was experienced in checking prices.
But after this column was dropped from the new form of six, columns, the Excise authorities encountered some difficulty in valuing the cigarettes for levying Excise Duty.
They therefore, changed the basis of assessment from the Distributors selling price to the wholesale cash selling price at which stockists or agents were selling the same in the open market.
The authorities informed the Company of this change of basis on 5 11 58 by letter, which also asked the Company to furnish its price lists immediately for determining the correct assessable value of its cigarettes.
Two days thereafter, the authorities served a notice upon the Company demanding payment of Rs. 1,67,072,40 P. as Basic Central Excise Duty and Rs. 74,574,85 P. as Additional Central Excise Duty on ground of short levy for a certain brand of cigarettes cleared from Company 's Factory between 10th August 1958, After another five days, the authorities sent another notice demanding more than Rs. 6 lakhs as Basic Central Excise Duty and more than Rs. 2 lakhs as Additional Central Excise Duty.
On the following day, the authorities sent a third notice under Rule 10 A of the Central Excise Rules, demanding more than Rs. 40,000/as Central Excise Duty and more than Rs. 16,000/ as Additional Duty.
The Company challenged these notices by a writ before the High Court.
, The High Court quashed the notices on the ground that the Company had not been given an opportunity of being heard.
No appeal was filed by the other side against this decision, but when the case went back to the Collector, he issued P. fresh notice on 24 4 1960.
By this notice, for certain periods, a sum of more than Rs. 10 lakhs was levied as Basic Central Excise Duty and a total sum of more than Rs. 3 lakhs as Additional Duty, and this amount had been provisionally debited in the Company 's Account on the basis of the price list supplied by the Company and the Company was informed that if it desired a personal hearing, it 823 can appear before the authorities to make the final assessment in accordance with law.
The Company challenged the validity of this notice dated 24 4 60 on the ground that the notice was barred by limitation and was 'issued without jurisdiction, so that no proceedings could be taken.
The learned single Judge, as well as the Divisional Bench of the High Court allowed the petition on the ground that the notice was barred by time under Rule 10 of the Central Excise Rules because the notice was held to be fully covered by Rule 10 and by no other rule.
The case was certified under article 33(a), (b) and (d) for an appeal to this Court.
Rule 10 of the Central Excise Rules provides that when duties or charges have been short levied through inadvertence or misconstruction etc., the person chargeable with the duty so short levied, shall pay the deficiency or pay the amount paid to him in excess on written demand by the proper officer within three months from the date on which the duty or charge is paid or adjusted in the owner 's account, if any, or from the date of making the refund.
It was contended that this was substantially a provisional assessment covered by Rule 10 B.
The Division Bench of the High Court, however, refused to agree that the impugned notice of 24 460 fell under Rule, 10 A.
The reason given for this refusal was that such a case was neither taken before the learned single Judge, nor could be found in the grounds, of the appeal despite the fact that the appellant had ample opportunity of amending its Memorandum of Appeal.
Allowing the appeal.
HELD : (i.) That the High Court erroneously refused to consider whether the impugned notice fell under Rule 10 A.
The applicability of Rule 10 A was very much in issue because the Collector in his affidavit denied that Rule 10 A of the said rules had any application to the facts of the case.
(ii) It cannot be accepted that merely because the current account kept under Rule 9 indicated that an accounting had taken place, there was necessarily a legally valid or complete levy.
The making of debit entries was only on ground of collection of the tax.
Even if payment or actual collection of tax could be spoken of as a defective levy, it was only provisional and not fINal.
It could only be closed or invested with validity after carrying out the obligation to make an assessment that really determines whether the levy is short or complete.
It is not a faCtual or presumed levy which could prove an assessment.
This has to be done by proof of the actual steps taken which constitute assessment.
[836D] A mechanical adjustment, or settlement of accounts by making debit entries was gone through in the present case, but it cannot be said that any such adjustment is assessment which is a quasi judicial process and involves due application of mind to the facts, as well as to the requirements of law.
Rule 10 and 10 A seems to be so widely worded as to cover any inadvertence error etc.; whereas Rule 10 A would appear to cover any deficiency in duty if the duty has for any reason, been short levied, except that it would be outside the purview of Rule 10 A if its collection is expressly provided or by any rule.
Both the rules as they stood at the relevant time, deal with collection, and not with assessment.
In N. B. Sanjana 's case ; this Court indicated that Rule 10 A which was residual.
in character, would be inapplicable if a case fell within a specified category of cases mentioned in Rule 10.
It was pointed out in Sanjana 's case that the reason for the addition 824 of the new rule 10 A was a decision of the Nagpur (Chotabhai Jethabhai 's case; A.I.R. 1952 Nagpur 139), so that a fresh demand may be made on a basis altered by law.
The excise authorities had made a fresh demand under Rule 10 A, the validity of which was challenged, but it was upheld by a Full Bench decision of the High Court of Nagpur.
This Court, in Chotabhai Jethabhai 's case also rejected the assessee 's claim that Rule 10 A was inapplicable after pointing out that the new rule was specifically designed for the enforcement of the demand like the present one.
[836F 837E] (iii)The present case, therefore, falls within the residuary clause of unforeseen cases from the provisions of section 4 of the Act, read with Rule 10 A, an implied power to carry out or complete an assessment, not specifically provided for by the rules, can be inferred.
Therefore, it is wrong to hold that the case falls under Rule 10 and not under Rule 10 A.
|
Civil Appeal No. 2480 of 1977 From the Judgment and Order dated 28.3.77 of the Gujarat High Court in L.P.A. No. 232 of 1976.
R.N. Karanjawala 2nd P.H Parekh for the appellant.
M.N. Phadke, S.C. Patel and R.N. Poddar for the respondents.
The Judgement of the Court was delivered by PATHAK, J.
This appeal by special leave arises out of a writ petition filed by the appellant in the Gujarat High Court challenging an order terminating his services.
634 The appellant was appointed to the post of Sales Tax Officer by an order dated March 22, 1972.
The order recited that the appointment was on probation for a period of two years.
The period of two years expired, and the appellant continued in service and no order was made confirming his appointment.
On March 31, 1975 the appellant 's services were terminated.
Aggrieved by the termination of his services, the appellant filed a writ petition in the High Court of Gujarat, but by his judgment and order dated April 21, 1976 a learned Single Judge dismissed the writ petition.
An appeal was filed by the appellant, and an Appellate Bench of the High Court dismissed the appeal by its judgement and order dated March 28.
1977 Three points have been raised before us in this appeal.
The first contention is that the order terminating the appellant 's services was passed mala fide, the second is that on the expiry of the period of probation the appellant must be deemed to have been confirmed, and inasmuch as his services have been terminated without complying with clause (2) of Article 311 the order is invalid.
The last contention is that the principles of natural justice were violated inasmuch as on the facts of the present case the appellant.
even as a probationer, was entitled to be heard before his services were terminated.
On the first contention, the learned Single Judge as well as the Appellate Bench examined the material on the record and came concurrently to the conclusion that the allegation of mala fide was without foundation.
Learned counsel for the appellant has taken us through the record and has endeavored to show that the appellant had discharged his duties ably and with integrity, and there was no reason for terminating his services.
Various particulars were set forth in the special leave petition filed in this Court in support of that assertion.
Now, it appears that substantially the same allegations were set forth by the appellant in his writ petition, but in the affidavit filed in reply by the State Government those allegations were denied.
On the contrary, it was asserted that the appellant 's services were terminated entirely because of his unsatisfactory record and that the order was not vitiated by any illegality or unfairness.
In support of the plea of mala fides, the appellant alleged that his services had been terminated because he had taken proceedings against an assessee, Messrs. Shriraj & Company who, according to the appellant, enjoyed political favour and influence with the authorities.
The allegation 635 has been denied in the counter affidavit.
During the hearing of the special leave petition this Court directed the State Government to file a specific affidavit relating to the facts alleged in the writ petition regarding a confidential enquiry initiated by the Government.
The affidavit filed in reply admits that an enquiry was initiated against the appellant on the complaint of the said assessee, but it maintains that there was no mala fides on the part of the Ministers concerned and that a persual of the record relating to that enquiry shows that the allegation of mala fides is wholly baseless.
We have considered the matter carefully and we find no sufficient reason to differ from the finding of the High Court that the allegation of mala fides is not established.
We think it desirable to observe that where a finding of fact has been rendered by a learned Single Judge of the High Court as a Court of first instance and thereafter affirmed in appeal by an Appellate Bench of that High Court, this Court should be reluctant to interfere with the finding unless there is very strong reason to do so.
The second contention on behalf of the appellant is that the appellant must be deemed to have been confirmed inasmuch as he was allowed to continue in service even after the expiry of the period of probation of two years specified in the order of appointment.
We are of opinion that when the order of appointment recited that the petitioner would be on probation for a period of two years, it conformed to Rule 5 of the Recruitment Rules which prescribes such period of probation.
The Rule states further that the period of probation may be extended in accordance with the rules.
The period of two years specified in the Rule is merely the initial period for which an officer may be appointed on probation.
As the terms of the same Rule indicate, the period of probation may be extended.
The period of two years does not represent the maximum period of probation.
It is next urged that as no rules have been framed indicating the manner for extending the period of probation, there is no power to extend the period of probation.
The argument suffers from a fallacy.
The power to extend the period of probation must not be confused with the manner in which the extension may be affected.
The one relates to power, the other to mere procedure.
Merely because procedural rules have not been framed does not imply a negation of the power.
In the absence of such rules, it is sufficient that the power is exercised fairly and reasonably, having regard to the context in which the power have been granted.
636 It is then submitted that the appellant enjoyed a legitimate expectation of being confirmed on the expiry of two years of probation and on successfully completing the qualifying tests and training undergone by him.
We are not impressed by that contention.
It was open to the State Government to consider the entire record of service rendered by the appellant and to determine whether he was suitable for confirmation or his services should be terminated.
There was no right in the appellant to be confirmed merely because he had completed the period of probation of two years and had passed the requisite tests and completed the prescribed training.
The function of confirmation implies the exercise of judgment by the confirming authority on the overall suitability of the employee for permanent absorption in service.
The second contention must also be rejected.
The last contention is that the appellant should have been heard before his services were terminated.
The order of termination does not contain any stigma or refer to any charge of misconduct on the part of the appellant.
It is said that the State Government terminated the appellant 's services because a complaint had been made against him by Messrs. Shriraj & Company, whose case had been dealt with by him, and that the appellants should have been given a hearing to show that there was no basis for the complaint.
There would have been substance in this contention if the appellant 's services had been terminated on the ground of misconduct committed in connection with the case of Messrs. Shriraj & Company.
On the contrary, it appears from the record before us that the appellant 's services were terminated because on an overall appreciation of his record of service he was found unsuitable for being absorbed in the service.
A distinction is sought to be drawn between a probationer whose services are terminated on the expiry of the period of two years and a probationer, who has completed the normal span of two years and whose services are terminated some time later after he has put in a further period of service.
We are unable to see any distinction.
It is perfectly possible that during the initial period of probation the confirming authority may be unable to reach a definite conclusion on whether the candidate should be 637 confirmed or his services should be terminated.
Such candidate may A be allowed to continue beyond the initial period of two years in order to allow the confirming authority to arrive at a definite opinion.
It seems to us difficult to hold that a candidate enjoys any greater right to confirmation if he is allowed to continue beyond the period of probation.
B In our judgment there is no force in this appeal, and it is dismissed but in the circumstances without any order as to costs.
S.R. Appeal dismissed.
| The services of the appellent who was appointed to the post of Sales Tax Officer, by an order dated March 22, 1972 on probation for a period of two years, but continued thereafter in service without any order confirming him in his appointment were terminated on March 31, 1975.
The writ petition filed in the High Court of Gujarat, challenging the said terminated was dismissed, by a judgment dated April 21, 1976.
Finding no basis for the allegation of mala fide on facts the court held that there was no right to confirmation on the expiry of the period of probation, and therefore, there was no violation of the provisions of Clause (2) Article 311 of the Constitution.
An appeal filed by the appellant was dismissed by the Division Bench, on March 28, 1977.
Hence the appeal, by special leave of the Court.
Dismissing the appeal, the Court, ^ HELD 1.1.
The allegation of mala fides is wholly baseless and has not been established.
Where a finding of fact has been rendered by a learned Single Judge of the High Court as a Court of first instance and thereafter affirmed in appeal by an Appellate Bench of that High Court, the Supreme Court should be reluctant to interfere with the finding unless there is very strong reason to do so.
[635C D1 2.1 When the order of appointment recited that the appellant would be on probation for a period of two years, it conformed to Rule 5 of the Recruitment Rules which prescribes such period of probation.
Under the Rule the period of probation may be extended in accordance with the rules.
The period of two years specified in the Rule is merely the initial period for which an officer may be appointed on probation and does not represent the maximum period of probation In terms of the said rule the period of probation may be extended.
[635E F] 633 2.2 The power to extend the period of probation must not be confused A with the manner in which the extension may be effected.
The one relates to power, the other to mere procedure.
Merely because procedural rules have not been framed does Dot imply a negation of the power.
In the absence of any rule indicating the manner for extending the period of probation, it is sufficient that the power is exercised fairly and reasonably, having regard to the context in which the power has been granted.
[635G H] B 3.1 There is no question of any legitimate expectation of being confirmed or even right to confirmation on the expiry of two years of probation and on successfully completing the qualifying tests and training undergone by a Government employee.
It was open to the State Government to consider the entire record of service rendered by its employee and to determine whether he was suitable for confirmation or his services should be terminated.
The function of confirmation implies the exercise of judgment of the confirming authority on the overall suitability of the employee for permanent absorption in service.
[636A B] 3.2 The contention that the appellant should have been heard before his services were terminated is not correct since the order of termination does not contain any stigma or refer to any charge Or misconduct on the part of the appellant and the termination was on the basis of an overall appreciation of his record of service disentitling him to be absorbed in the service.
No distinction lies between a probationer whose services are terminated on the expiry of two years and a probationer who has completed the normal span of two years and whose services are terminated some time later after he has put in a further period of service.
It is perfectly possible that during the initial period of probation the confirming authority may be unable to reach a definite conclusion on whether the candidate should be confirmed or his services should be terminated.
Such candidate may be allowed to continue beyond the initial period of two years in order to allow the confirming authority to arrive at a definite opinion.
A candidate does not enjoy any greater right to confirmation if he is allowed to continue beyond the initial period of probation.
[636G H; 637A B]
|
Appeal No. 804 of 1963.
Appeal by special leave from the judgment and decree, dated January 3, 1961 of the Orissa High Court in Appeal under Orissa High Court Order No. 3 of 1959.
25 K. R. Chaudhuri, for the appellant.
C. B. Aggarwala, B. Parthasarathy, J. B. Dadachanji, O.C. Mathur, and Ravinder Narain, for respondent No. 1.
The Judgment of the Court was delivered by Ramaswami, J.
This appeal is brought by special leave on behalf of the judgment debtor against the judgment of the Orissa High Court, dated January 3, 1961 in Letters Patent Appeal No. 3 of 1959.
The deceased plaintiff filed Original Suit No. 500 of 1941 against the appellant defendant in the Court of the Additional Munsif, Aska claiming Rs. 970 on the basis of a promissory note.
The suit was dismissed on August 17, 1942.
The plaintiff preferred an appeal No. 178 of 1942 before the District Judge who allowed the appeal and set aside the decree of the Munsif and decreed the suit ex parte on March 9, 1943.
Against this decree of the appellate Court, the appellant filed Second Appeal No. 100 of 1943 in the Orissa High Court which set aside the decree of the District Judge on November 11, 1946 and remanded the suit to the lower appellate court for disposal.
The lower appellate court in its turn remanded the suit to the trial court by its judgment, dated April 11, 1947.
In the meantime the original plaintiff died and the present respondents were brought on record as his legal representatives.
The suit was again dismissed by the trial court on November 29, 1947 but on appeal the Additional Subordinate Judge set aside the judgment and decree of the Munsif on November 30, 1948.
The appellant carried the matter in Second Appeal No. 12 of 1949 to the Orissa High Court which dismissed the appeal on August 27, 1954.
After the ex parte decree was passed inappeal No. 178 of 1942 by the District Judge on March 9,1943, the plaintiff executed the decree, attached the propertiesin dispute and himself purchased the properties in Court auction.
The plaintiff also took delivery of the properties on May 17, 1946 and since that date the respondents have been in possession of the properties and enjoying the usufruct.
After the decree of the High Court, dated November 11.
1946 in Second Appeal No. 100 of 1943 the appellant made an application for restitution in the Court of the Additional Munsif in Miscellaneous Judicial Case No. 34 of 1947.
The plaintiff obtained a stay of the hearing of the Miscellaneous Judicial Case from the Court of the Additional District Judge but on March 30, 1948 the order of stay was discharged.
In Civil Revision No. 75 sup, Cl/66 3 2 6 of 1948 the High Court also granted interim stay in the proceedings in the Miscellaneous Judicial Case at the instance of the plaintiff but the order of stay was vacated by the High Court on April 28, 1949.
Thereafter the present appellant got the Miscellaneous Judicial Case stayed till disposal of his Second Appeal after remand.
On July 12, 1956 the Miscellaneous Judicial case was allowed by the Munsif and an order of restitution was made in favour of the appellant.
The respondents filed an appeal before the Subordinate Judge of Berhampur who allowed the appeal and set aside the order of restitution.
The appellant took the matter before the High Court in Miscellaneous Appeal No. 24 of 1958 which was allowed by P. V. Balakrishna Rao, J. on October 3, 1958 and it was ordered that the restitution of the properties should be made to the appellant subject to the condition that he must deposit the amount decreed in favour of the plaintiff decree holder.
The order of the learned Single Judge was, however, set aside in Letters Patent appeal by a Division Bench which held that the appellant was not entitled to restitution of properties sold in the execution case.
The question presented for determination in this case is whether the appellant was entitled to restitution of his properties purchased by judgment debtor in execution of the decree passed by the District Judge on the ground that the decree was set aside by the High Court and the suit was remanded for rehearing and fresh disposal under the provisions of section 144 of the Civil Procedure Code which states as follows 144 (1) Where and in so far as a decree or order is varied or reversed, the Court of first instance shall, on the application of any party entitled to any benefit by way of restitution or otherwise, cause such restitution to be made as will, so far as may be, place the parties in the position which they would have occupied but for such decree or such part thereof as has been varied or reversed; and, for this purpose, the Court may make any orders, including orders for the refund of costs and for the payment of interest, damages, compensation and mesne profits, which are properly consequential on such variation or reversal.
" On behalf of the responds Mr. aggarwala made the submission that after the suit was re heard a decree was passed in favour of the respondents and that decree was eventually affirmed by the High Court., and the appellant was, therefore, not entitled to 27 restitution under the provisions of this section.
We are unable to accept this argument as correct.
The properties of the appellant were sold in execution at the instance of the respondents who were executing the ex parte decree passed by the District Judge on March 9, 1943.
In this execution case, the properties of the appellant were sold and the respondents got delivery of possession on May 17, 1946.
It is true that the suit was eventually decreed after remand on August 27, 1954 by judgment of the High Court, but we are unable to accept the argument of the respondents that the execution sale held under the previous ex parte decree which was set aside by the High Court, is validated by the passing of the subsequent decree and therefore the appellant is not entitled to, any restitution.
It is evident that the application for restitution was filed by the appellant in 1947 in Miscellaneous Judicial Case, No. 34 of 1947 before the passing of a fresh decree by the High Court in the Second Appeal.
At the time of the application for restitution, therefore, the appellant was entitled to restitution,.
because on that date the decree in execution of which the properties.
were sold had been set aside.
We are of the opinion that the appellant is entitled to restitution notwithstanding anything which happened subsequently as the right to claim restitution is based upon the existence or otherwise of a decree in favour of the plaintiff ' at the time when the application for restitution was made.
The principle of the doctrine of restitution is that on the reversal of a decree, the law imposes an obligation on the party to the suit who received the benefit of the erroneous decree to make restitution to the other party for what he has lost.
This obligation arises automatically on the reversal or modification of the decree and ' necessarily carries with it the right to restitution of all that has been done under the erroneous decree; and the Court in making restitution is bound to restore the parties, so far as they can berestored, to the same position they were in at the time when the Court by its erroneous action had displaced them from.
It should be noticed, in the present case, that the properties were purchased ' by the decree holder himself in execution of the ex parte decree and not by a stranger auction purchaser.
After the ex parte decree was set aside in appeal and after a fresh decree was passed on remand, the sale held in execution of the ex parte decree becomes invalid and the decree holder who purchased the properties in executions of the invalid decree is bound to restore to the judgment debtor what he had gained under the decree which was subsequently set aside.
The view that we have expressed is borne out by the decision of the Judicial Committee in Zain Ul Abdin Khan vs 28 Muhammad Asghar Ali Khan(1) in which a suit was brought by the judgment debtor to set aside the sale of his property in execution of the decree against him in force at the time of the sales, but afterwards so modified, as the result of an appeal to Her Majesty in Council, that, as it finally stood, it would have been satisfied without the sales in question having taken place.
The judgmentdebtor sued both those who were purchasers at some of the sales, being also holders of the decree to satisfy which the sales took place, and those who were bona fide purchasers at other sales, under the same decree, who were no parties to it.
The Judicial Committee held that, as against the latter purchasers, whose position was different from that of the decree holding purchasers, the suit must be dismissed.
At page 172 of the Report, Sir B. Peacock observed as follows "It appears to their Lordships that there is a great distinction between the decree holders who came in and purchased under their own decree, which was afterwards reversed on appeal, and the bona fide purchasers who came in and bought at the sale in execution of the decree to which they were no parties, and at a time when that decree was a valid decree, and when the order for the sale was a valid order." The same principle has been laid down by the Calcutta High Court in Set Umedmal and another vs Srinath Ray and another (2 ) where certain immovable properties were sold in execution of an exparte decree and were purchased by the decree holder himself.
After the confirmation of the sale, the decree was set aside under section 108 of the Civil Procedure Code, 1882 at the instance of some of the defendants in the original suit.
On an application unders.
244 of the Civil Procedure Code, 1882 having been made by adecree, to set aside the sale held in execution of the ex parte decree the defence was that the application could not come under section 244 of the Civil Procedure Code, 1882, and that the sale could not be set aside, as it had been confirmed.
It was held by the Calcutta High Court that the ex parte decree having been set aside the sale could not stand, inasmuch as the decree holder himself was the purchaser.
At page 813 Maclean, C.J. stated : "As regards the second point, viz., whether, notwithstanding the confirmation, the sale ought to be set aside, (1) I.L,R. 10 All, 166.
(2) I.L.R. 29 the fact that the decree holder is himself the auction purchaser is an element of considerable importance.
The distinction between the case of the decree holder and of a third party being the auction purchaser is pointed out by their Lordships of the Judicial Committee in the case of Nawab Zainal abdin Khan vs Mahommed Asghar Ali (I.L.R. 10 All., 166), and also in the case of Mina Kumari Bibee vs Jagat Sattani Bibee (I.L.R. , which is a clear authority for the proposition that where the decree holder is himself the auction purchaser, the sale cannot stand, if the decree be subsequently set aside.
I am not aware that this decision, which was given in 1883, has since been impugned.
" The same view has been expressed in Raghu Nandan Singh vs Jagdish Singh(1) where it was held that if an ex parte decree has been set aside, it cannot by any subsequent proceeding be revived and if a decree is passed against judgment debtors on re hearing, it is a new decree and does not revive the former decree.
The same opinion has been expressed in Abdul Rahaman vs Sarafat Ali(2) in which it was pointed out that as soon as an ex parte decree was set aside, the sale, where the decree holder was the purchaser, falls through and was not validated by a fresh decree subsequently made.
The same principle was reiterated by the Bombay High Court in Shivbai Kom Babya Swami vs Yesoo.(3).
In that case, an ex parte decree was passed against the defendant, in execution of which the defendant 's house was sold and purchased by the plaintiff decree holder.
The ex parte decree was subsequently set aside; but at the retrial, a decree was again passed in plaintiffs favour.
In the meanwhile, the defendant applied to have the sale of the house set aside.
It was held, in these circumstances, by the Bombay High Court that the previous sale of the house in execution under the previous decree which had been set aside should itself be set aside as being no longer based on any solid foundation; but subject in all the circumstances to the condition that the defendant should pay up the amount due under the second decree within a specified time.
On behalf of the respondents reference was made to the decision of this Court in Lal Bhagwant Singh vs Rai Sahib Lala Sri Kishen Das.
(4 ) But the ratio of that case has no application to the present case.
It should be noticed that the decree in that case was affirmed at all stages of the litigation except that the amount of (1) 14 Calcutta Weekly Notes, 182.
(3) I.L.R. (2) 20 Calcutta Weekly Notes, 667.
(4) 30 the decree was slightly altered from Rs. 3,38,300 and odd to Rs. 3,76,790 and odd which amount was ultimately decreed by the Privy Council in the appeal which the judgment debtor preferred from the decision of the Oudh Chief Court which restored the decree of the trial Judge who decreed a sum of Rs. 3,88,300.
It was held by this Court that the Privy Council had merely restored the amended decree without altering the provisions as to payment by instalments or extending the time for payment by instalments and its decree did not in any way alter the position of the parties as it stood under the amended decree, and, the sale was not in consequence of any error in a decree which was reversed on appeal by the Privy Council and so the judgment debtor was not entitled to restitution.
In the present case the material.facts are manifestly very different.
For the reasons expressed, we are satisfied that the appellant is entitled to restitution of the properties sold in execution of the export decree subject to equities to be adjusted in favour of the respondent decree holders.
We order that the appellant should be restored back to possession of the properties sold in the execution case subject to the condition that he deposits the amount of Rs. 970 in the Court of the Munsif, Aska within two months from this date.
If no deposit is made within this time this appeal will stand dismissed with costs.
But if the appellant makes the deposit within the time allowed the sale of the properties in the execution case will be set aside and the respondents will make over the possession of the properties sold to the appellant.
The appellant will not be entitled to any past mesne profits but if the respondents do not deliver the possession of the properties the appellant will be entitled to the future mesne profits from the respondents from the date of deposit till the actual date of delivery of possession.
Learned Counsel for the appellant has informed us that the deposit has already been made by the appellant in pursuance of the order of the learned Single Judge of the High Court, dated October 3, 1958.
If the deposit has already been made the appellant will be entitled to take possession of the properties through the executing court and to future mesne profits from the date of this judgment till the actual date of delivery of possession.
We accordingly allow the appeal to the extent indicated above.
In the circumstances of the case we do not propose to make any order as to costs.
Appeal allowed in part.
| A money suit against the appellant was dismissed by the trial court but the first appellate court passed an ex parte decree against him.
The appellant 's property was sold in execution and purchased by the decreeholder.
The appellant went to the High Court which set aside the exparte decree and remanded the suit.
The appellant then filed an appli cation for restitution under section 144 of the Code of Civil Procedure.
It was stayed pending proceedings in the main suit. 'Me suit was finally decided against the applicant, by the High Court.
Thereafter the trial court allowed the appellant 's application for restitution.
After intermediate proceedings the High Court decided in Letters Patent Appeal that the appellant was not entitled to restitution.
He appealed to this Court by special leave.
HELD: The application for restitution was filed by the appellant before the passing of a fresh decree by the High Court in second appeal.
At the time of the application therefore the appellant was entitled to restitution because on that date the decree in execution of which the properties were sold had been set aside.
The appellant was therefore entitled to restitution notwithstanding anything which happened subsequently.
[27 C E] The principle of the doctrine of restitution is that on the reverse of a decree the law imposes an obligation on the party to the suit who received the benefit of the erroneous decree to make restitution to the other party for what he has lost.
The Court in making restitution is bound to restore the parties so far as they can be restored to the same position they were in at the time when the Court by its erroneous action had displaced them from.
[27 E F] Zainal Abdin Khan vs Muhammad Asghar All Khan, I.L.R. 10 All 166, relied on.
Set Umedmal & Anr.
vs Srinath Ray & Anr.
I.L.R. 27 Cal.
810, Raghu Nandan Singh vs Jagdish Singh, , Abdul Rahaman vs Sarafat Ali, and Shivbai Kom Babya Swam vs Yesoo, I.L.R. , referred to.
Lal Bhagwant Singh vs Rai Sahib Lala Sri Kishen Das, , distinguished.
|
ivil Appeal No. 1739 of 1973.
Appeal by Special Leave from, the Judgment and Order dated 22.10.1973 of the Jammu and Kashmir High Court in Letters Patent Appeal No. 9/72) F.S. Nariman, O.C. Mathur, P.N. Tiwari and D.N. Mishra, for the appellants.
Dushiant Kumar Rampal respondent.
(in person) The Judgment of the Court was delivered by BHAGWATI, J.
, We pronounced our order on this appeal on 17th December, 1976 and we now proceed to give our reasons.
We may point out that the respondent was not represented by a lawyer and he argued case in person and though he is a lay man, not well versed in the science of law and in the art and skill of advocacy, we must admit that he argued his case with conspicuous ability.
Prior to 5th September, 1969 there was only one Univer sity for the entire territory of the State of Jammu & Kash mir, namely, the University of Jammu & Kashmir.
It was constituted under the Jammu & Kashmir University Act, 1965 (hereinafter referred to as the Act of 1965) and, as provid ed in section 20, its central authorities included the Senate and the Central Council.
The Central Council was the executive body of the University and it had the power inter alia to appoint teachers and to define their duties.
The respondent was appointed as a lecturer in English by the Central Council on 25th April, 1966 and after his period of probation was over he was confirmed as lecturer with effect from 29th April, 1967.
The conditions of service of the respondent, like those of other confirmed teachers, were regulated by the Statutes made by the Senate from time to time under the provisions of Act of 196.5.
Statute 2 provided that every salaried teacher of the University shall have to execute a written contract with the UniverSity and the conditions of service of teachers appointed by the University shall be those embodied in the agreement of service annexed to the Statutes and every teacher shall execute such agreement before he enters upon his duties or as soon as possible thereafter.
It appears that though Statute 2 required an agreement of service to be executed by a teacher, no such agreement of service was executed by the respondent on his appointment as 47 lecturer.
But it was common ground between the parties that the conditions of service of the respondent were governed by the provision set out in the form of agreement of service annexed to the Statutes.
Clause (6) of this agreement and this clause admittedly governed the respondent stipulated that in all matters, the teacher would "abide by the Stat utes and Regulations from time to time in force in the University, and in particular, by those determining his/ her grade, increment, conditions of service, rules of superannu ation and provident fund rules, provided that no change in the Statutes and Regulations in this regard shall be deemed to have adversely affected the teacher.
" The respondent was thus clearly bound by any changes which might be made in the Statutes from time to time and no change made in the Stat utes was to be regarded as having adversely affected the respondent and he could not complain against it.
The case of the respondent was that he satisfactorily carried on his duties as lecturer and earned his increments from year to year.
On 5th September, 1969 the Governor of Jammu & Kashmir promulgated Ordinance No. 10 of 1969 establishing in place of the University of Jammu & Kashmir, two separate univer sities, namely, the University of Kashmir for the Kashmir division and the University of Jammu for the Jammu division of the State.
This Ordinance was replaced by the Jammu & Kashmir University Act, 1969 (hereinafter referred to as the Act of 1969) which came into force on 30th October, 1969.
The:Act of 1969 made a slight departure from the earlier Act in the constitution of the various authorities of each University, Section 20 of the Act of 1969 provided that the authorities of each university shall include the University Council and the Syndicate.
The University Coun cil was constituted supreme authority of the university while the Syndicate was entrusted with the chief executive authority.
Whereas under the earlier Act, the power to appoint all teachers of the University was entrusted to the Central Council.
there was bifurcation of this power between the University Council and the Syndicate under the Act of 1969.
The University Council was given the power to appoint teachers of the status of a reader and above white the power to appoint teachers below the status of a reader was en trusted to the Syndicate.
The Syndicate was thus the au thority under the Act of 1969 vested with the power to appoint and that power would also carry with it the power to dismiss teachers below the status of a reader.
Since the University of Jammu & Kashmir came to an end on the repeal of the Act of 1965 and two new universities, one of Kashmir and the other of Jammu, were established, some provision had to be made in the Act of 1969 for continuance of the Stat utes and Regulations so that there might be no hiatus or break causing dislocation in the functioning of the two new universities.
Section 51 of the Act of 1969.
therefore.
provided that all Statutes and Regulations made under the Act of 1965 and in force immediately before the commencement of the Act of 1969 shall so far as may be consistent with the provisions of the latter Act, continue to be in force in each University and section 48.
sub sec.
(2) gave power to the special officer to "examine the Statutes and Regulations continued under section 51 of this Act and propose such modifica 48 tions, alterations and additions therein as may be necessary to bring such Statutes and Regulations in conformity with the provisions of this Act" and provided that the modifica tions, alterations and additions proposed by the Special officer shall, if approved by the Vice Chancellor, be deemed to have been made by the competent authority under the Act of 1969 and shall continue in force until altered or superseded by the authority constituted under the Act of 1969.
There was also the problem of ensuring continuance of service of the existing employees of the University of Jammu & Kashmir and their allocation between the two succeeding universities and this problem was solved by the enactment of section 52 in the Act of 1969.
That section, in so far as material, provided as follows: "52.
Continuance of service of the existing employees and their allocation Notwithstanding anything contained in this Act or any Statute or Regulation made thereunder or in any other law for the time being in force.
(1) all employees of the University of Jammu and Kashmir constituted under the Jammu and Kashmir University Act, 1965 (other than those serving on contract.
or on deputation 'in the University or those serving m the Publication Bureau of the University) who immediately before the commencement of this Act, were holding or discharging the duties of any post of office in connection with the affairs of the said University shall, subject to the provisions of sub section (2), continue in service on the same terms and conditions as regulated their service before such commencement; (2) the Chancellor may in consultation with the pro Chancellor by order allocate the employees of the University of Jammu & Kashmir (other than those serving on contract or deputation in the University or those serving in the Publication Bureau of the University) between the University of Kashmir and the University of Jammu constituted under this Act in such manner as he may consider necessary and every such allocation shall be deemed to b e an appointment, transfer or promotion as the case may be,to the post or office by the competent authority under this Act: Provided that in making such allocations the conditions of service of employment of such employees shall not be varied to their disad vantage; (3) x x x x x (4) all persons who immediately before the commencement of this Act were holding or discharging the duties of any post or office in connection with the affairs of the Univer sity of Jammu and Kashmir, on 49 contract basis or by virtue of their deputa tion to such posts or offices from other services in the State.
unless otherwise or dered by the Chancellor after consulting the Pro Chancellor, shall cease to hold such posts or to discharge such duties after 60 days from the commencement of this Act and all such contracts with or deputations to he University of Jammu & Kashmir shall stand terminated with effect from the expiry of the said period of 60 days.
" Since most of the teachers had entered into an agreement of service with the University of Jammu & Kashmir as provided in Statute 2 and the rest were also treated as having en tered into such agreement of service by reason of the com pulsive force of Statute 2 though in fact such agreement of service had not been executed by them, perhaps due to inad vertence, the Chancellor took the view that all of them held their posts on contract basis and hence, proceeding on the assumption that sub sec.
(4) of section 52 was attracted in their case, he made an order dated 24th December, 1969 ' directing that the appointments of the teachers set out in Schedule (1 ), which also included the respondent, shall continue on the respective posts mentioned In that schedule on the terms and conditions embodied in Schedule II with effect from 9th January, 1970.
Schedule II contained the terms and conditions on which teachers mentioned in Schedule I were continued in service of the University of Jammu and clause 9(ii) of that Schedule read as follows: "The Vice Chancellor may when he deems it necessary suspend the teacher on grounds of misconduct, insubordination, inefficiency or unsatisfactory performance of duty, when he suspends the teacher he shall report it to the university Council/Syndicate at the next meeting.
" The respondent and some other teachers were of the view that the terms and conditions set out in Schedule II effected a change in their conditions of service to their prejudice and hence they made a representation to the Chancellor and other authorities of the University of Jammu.
It does not appear from the record as to what happened to this representation but presumably it was rejected.
Now we come to the events which formed the immediate cause for the predicament of the respondent.
It appears that certain complaints were received by the Vice Chancel lor against the conduct of the respondent and the Vice Chancellor took the view that these complaints were of a serious character and needed to be enquired into and pending such enquiry, it was not desirable that the respondent should be allowed to continue to work as a lecturer.
The ViceChancellor accordingly passed an order dated 21st May, 1970 directing that the respondent be placed under suspen sion with immediate effect.
This order was purported to be passed by the Vice Chancellor in exercise of the powers vested in him under clause 9(ii) of Schedule II of the Order dated 24th December, 1969 and section 13 (4) of the Act of 1969.
It may be convenient at this stage, before we proceed 50 further, to refer to section 13(4), since considerable argument before us turned upon it Section 13 deals with the powers and duties of the Vice Chancellor and sub section (4) of that section reads as follows: "(4) The Vice Chancellor may take action as he deems necessary in any emergency which, in his opinion, calls for immediate action.
He shall in such a ease and as soon as may be thereafter, report his action to the officer, authority or other body of the Uni versity concerned who or which would ordinari ly have dealt with the matter.
" Sub section (6) of section 13 is also material and it is in the following terms: "(6 ) The Vice Chancellor shall give effect to the orders of the University Council and the Syndicate of the University concerned regarding the appointment, dismissal and suspension of persons in the employment of the University and shall exercise general control over the affairs of the University.
He shall be responsible for the discipline of the University in accordance with this Act, Stat utes and Regulations.
" The Vice Chancellor, immediately after passing the Order of suspension, placed it before the Syndicate at its next meeting held on 24th June, 1970.
The respondent had also in the meantime submitted his representation against the Order of suspension and this representation also came up before this meeting of the Syndicate.
The Syndicate considered the Order of suspension made by the ViceChancellor as also the representation submitted by the respondent and passed a resolution rejecting the representation of the respondent recording the action taken by the Vice Chancellor and di recting that articles of charge be framed and communicated to the respondent and he may be required to submit his explanation in writing and a committee consisting of the Vice Chancellor and three other persons be appointed to investigate the matter and submit its finding to the Syndicate.
The Registrar of the University thereafter passed ,an order dated 6th June, 1970 declaring that, during the period of suspension, the respondent would not be enti tled to get full salary but he would be paid only subsist ence allowance at an amount equal to half pay and half dearness allowance in accordance with the usual practice followed by the University.
It may be pointed out that with effect from 21st May, 1971, that is after the expiry of a period of one year from the date of suspension, the subsist ence allowance payable ' to the respondent was raised to 75% of the pay and dearness allowance.
A charge sheet contain ing twelve charges was then given to the respondent and he was required to submit his explanation.
The respondent gave his explanation to the charges leveled against him and while doing so, he also objected to the constitution of the Committee which was appointed to enquire into the charges.
In consequence of his objection, the constitution of the committee was changed and the Vice Chancellor was kept out of it.
The enquiry by the Committee 51 commenced on 12th March, 19:71 and it went on for some time, but before it could be completed, the respondent filed a writ petition in the High Court of Jammu & Kashmir challeng ing the validity of the Order dated 24th December, 1969, the Order dated 6th June, 1970 in regard to payment of subsist ence allowance and also impugning the legality of the enquiry proceedings.
There were various grounds taken by the respondent in the writ petition but it is not necessary to refer to them in detail having regard to the course which the appeal has taken before us.
The writ petition was heard by a Single Judge of the High Court and by a judgment dated 28th April, 1972 the learned Judge dismissed the writ petition.
The respondent there upon preferred a Letters Patent appeal in the High Court.
During the pendency of the appeal, the departmental enquiry which was started against the respondent.
was completed and the committee made a report absolving the respondent of all the charges except charges Nos. 1 and 12 of which the respondent was found guilty.
The syndicate, after considering the report of the committee, resolved to issue a notice to the respondent to show cause why "the punishment for termination of his services from the University be not imposed on him" on the ground of charges Nos. 1 and 12.
Pursuant to this resolu tion, a show cause notice was issued to the respondent which led to the filing of a petition by the respondent in the Letters Patent appeal for taking notice of these subse quent events.
The respondent in this petition challenged the report of the committee as also the resolution of the Syndicate on various grounds which are no longer material.
The University filed its reply to the petition denying the allegations made against the committee and disputing the grounds on which the validity of the enquiry was challenged on behalf of the respondent.
The Letters Patent appeal thereafter came to be heard by a Division Bench of the High Court and the Division Bench, by a judgment dated 22nd October, 1973, took the view that the Order dated 24th December, 1969 was violative of section 52, sub section (1) of the Act of 1969 and the Order of suspension dated 21st May, 1970 was "defective for want of jurisdiction and other legal infirmities" and these two orders were accordingly quashed and set aside by the Division Bench.
The Division Bench also held that "as a necessary corollary to our find ings on the two impugned orders and also in consequence of our observations on the legal aspect of the show cause notice issued to the appellant to terminate his service, the same also deserves to be quashed." The Division Bench accordingly allowed the appeal, set aside the judgment of the learned Single Judge and issued a writ of certiorari quashing the Order dated 24th December, 1969 and the Order of suspension dated 21st May, 1970 as also the show cause notice issued to the respondent and directed the reinstate ment of the respondent.
The University and the Vice Chan cellor thereupon preferred the present appeal with special leave obtained from this Court.
The appeal was heard by this Court for some time on the points which were decided against the University and the Vice Chancellor and certain further points were also raised by the respondent in support of the order made by the Division Bench of the High Court.
52 But it is not necessary to examine the arguments advanced on behalf of the parties on these various points, since before the hearing of the appeal could be concluded, a partial settlement was arrived at between the University and the Vice Chancellor on the one hand and the respondent on the other.
It was agreed between the parties as a result of this settlement that the University should drop the disci plinary proceedings action against the respondent and that the respondent should be allowed to join service within fourteen days from the date of the order to be made by this Court and upon his joining, his pay should be fixed as lecturer taking in view the increments which he would have earned but for the suspension.
It was also declared in the settlement that there shall be no stigma whatsoever attached to the respondent and so far as the personal allegations made by him against the University authorities we;re con cerned, they would stand withdrawn by him.
The settlement also provided that the respondent should be given benefit of continuity of service and if the validity of the Order of suspension was ultimately upheld by this Court and it was held that the respondent was not legally entitled to any thing more than the subsistence allowance actually paid to him, the matter would be left to the Chancellor to determine in his sole and.
absolute discretion as to whether any additional amount at all, and if so, what amount, may be paid to the respondent for the period of suspension ex gratia without any liability on the part of the University.
The Chancellor was authorised to determine this matter in consultation with the Pro Chancellor or in such other manner as he thought proper and he could do so, even without giving any opportunity to either party to make his or their submis sions in the matter.
Having regard to this settlement, the only two questions which remained to be resolved by this Court were, first, whether the Order of suspension was valid, and secondly, if the Order of suspension was valid, whether the respondent was entitled to anything more than the subsistence allowance actually paid to him.
These two questions we shall now proceed to decide.
The first question is whether the Order of suspension made by the Vice Chancellor was a valid Order or it suffered from any legal infirmities.
The respondent assailed the validity of the order of suspension on the ground that it was made in purported exercise of the power conferred under clause (9) (ii) of Schedule II to the Order dated 24th December, 1969, but this Order w. as itself void and inoper ative as it was in conflict with the provisions of section 52, subsection (1) of the Act of 1969.
The argument of the respondent was that immediately before the commencement of the Act of 1969, he did not hold or discharge the duties of any post or office in connection with the affairs of the University on contract basis, nor was he on deputation from any other service of the State of Jammu & Kashmir and he was, therefore, not covered by section 52, sub sections (4) under which the Order dated 24th December, 1969 was purported to be made, but his case was governed by section 52, subsection (1) which ensured him continuity in service on the same terms and conditions as before and hence the order dated 24th December, 1969 altering his terms and conditions as set out in 53 Schedule II was invalid.
This argument would have required us to consider whether the employment or the respondent under the University of Jammu & Kashmir immediately prior to the commencement of the Act or 1967 was on contract basis, because the provision in regard to deputation being inapplicable, it is only if the employment of the respondent was on contract basis that the Order dated 24th December, 1969 could be justified under section 52, sub section (4).
But we shall, for the purpose of the present appeal, proceed on the assumption that the case of the respondent was gov erned by subsection (1) and not sub section (4) of section 52 and the order dated 24th December, 1969 in so far as it determined any different terms and conditions for the re spondent was not valid, since we find that, in the view which is being taken by us, it is not necessary to examine this question.
Undoubtedly, the effect of tins assumption would be to put clause (9) (ii) of Schedule II to the order dated 24th December, 1969 out of the way of the respondent and it would not be available to the University and the Vice Chancellor m support of the Order of suspension.
But even so, we think the Vice Chancellor had power to make the Order of suspension and he was within his authority in doing so.
We have already pointed out that by reason of Statute 2 read with clause (6) of the Form of Agreement annexed to the Statutes made under the Act of 1965, the respondent was bound by any changes which might be made in the Statutes from time to time and no change made in the Statutes was to be regarded as having adversely affected the respondent.
Now, the Statutes made under the Act of 196.5 continued to be applicable to the University by reason of section 51, but section 48, sub section (2) provided for making of modifica tions, alterations and additions in the Statutes with a view to bringing them in conformity with the provisions of the Act of 1969.
The Special Officer accordingly proposed certain modifications in the Statutes which were found necessary to bring the Statutes in conformity with the provisions of the Act of 1969 and.
these modifications were approved by the Chancellor by an Order dated 24th December, 1969 and by reason of section 48, sub section (2) they were deemed to have been made by the competent authority under the Act of 1969.
This Order dated 24th December, 1969 substituted Chapter iV in the Statutes by a new Chapter and Statute 24(ii) in the newly substituted Chapter made the same provision as clause (9)(ii) of .Schedule II to the Order made under sub section (4) of section 52.
Now, obvi ously, if Statute 24(ii) were a valid provision, the Vice Chancellor would have power to suspend a teacher "on the ground of misconduct, insubordination, inefficiency or unsatisfactory performance of duty" and the Order of suspen sion made against the respondent would be within the au thority of the ViceChancellor.
The respondent, there fore, assailed the validity of Statute 24(ii) on the ground that it was not necessary for the purpose of bringing the Statutes m conformity with the provisions of the Act of 1969 and was hence not within the terms of section 48, subsection (2).
Turning to the language of section 48, sub section (2) it is clear that the power conferred on the Vice Chancellor under 54 that provision to approve modifications in the ' Statutes is a power which can be exercised only where the modifications are necessary for bringing the Statutes in conformity with the provisions of the Act of '1969, and if it is found that any modifications purported to be approved by the Chancel lor are plainly unnecessary from the point of view of bring ing the Statutes in conformity with the provisions of the Act of 1969 ', it would be outside the power of the Chancel lor to approve them.
The Chancellor cannot say that it is for him to decide in his subjective opinion whether the modifications proposed to be made are necessary for bringing the Statutes in conformity with the Act of 1969 and that his subjective opinion is immune from scrutiny in a court of law.
Of course, if the view taken by the Chancellor is a reasonably possible view, the Court would not interfere with the Order made by him approving the modifications, but if what has been done by him is plainly and egregiously wrong, the Court would certainly interfere on the ground that the order made by the Chancellor is beyond the power conferred on him by section 48, sub section(2).
The question which, therefore, arises for consideration is whet.her Statute 24(ii,) could reasonably be said to be necessary for bring ing the Statutes in conformity with the provisions of the Act of 1969.
We may first refer to section 13, sub section (4) of the Act of 1969 which confers power on the Vice Chancellor to take such action as he deems necessary in any emergency which in his opinion calls for immediate action.
A similar provision was also made in section 13, sub section (4) of the Act of 1965.
But the Act of 1969 introduced a new provision in sub section (6) of section 13 to the effect that the Vice Chancellor shall be responsible for the disci pline of the University in accordance with the Act, Statutes and Regulations.
The Vice Chancellor was, thus, entrusted under sub section (6) of section 13 with the task of main taining discipline in the University and the entrustment of this task carried with it by necessary implication power to.
take whatever action was necessary for the purpose of main taining discipline, provided of course such action was in accordance with the Act of 1969 ' and the Statutes and Regu lations.
Since sub section (6) of section 13 was a new provision enacted in the Act of 1969, it was necessary to make Statutes for the purpose of enabling the Vice Chancel lor to effectively discharge the responsibility of maintain ing the discipline of the University and for that purpose, vesting power in the Vice Chancellor to suspend a teacher pending departmental enquiry against him.
It was with this object of bringing the Statutes in confirmity with sub section (6) of section 13 that Statute 24(ii) was added by way of modification in the Statutes by the Order dated 24th December, 1969.
We may concede straight away .that if there was anything in the Act of 1969 which was inconsistent with the conferment of power of interim suspension on the Vice Chancellor, Statute 24(ii) could not be approved by the Chancellor, because no Statute can be made is in conflict with any provision of the Act.
But we do not find anything in the Act of 1969 which militates against vesting of power in the ViceChancellor to order interim suspension of a teacher and hence Statute 24(ii) must be held to be a Stat ute validly approved by the Chancellor 55 within his authority under section 48, sub section (2).
The view taken by the Chancellor that Statute 24(ii) was neces sary for bringing the Statutes in conformity with sub sec tion (6) of 'section 13 can not in any event be said to be so plainly erroneous that the Court would strike down Stat ute 24(ii) as invalid.
Now, if Statute 24(ii) is valid, there can be no doubt that the respondent would be bound by it and in that event, the order of suspension made by the ViceChancellor would be clearly within the power conferred on him by that Statute.
It is true that the Order of sus pension did not recite StatUte 24(ii) as the source of power under which it was made, but it is now well settled, as a result of several decisions of this Court, that when an authority makes an order which is otherwise within .its competence, it cannot fail merely because it purports to be made under a wrong provision of law, if it can be shown to be within its powers under any other provision a wrong label cannot vitiate an order which is otherwise within the power of the authority to make, Vide Hukamchand Mills Ltd. vs State of Madhya Pradesh(1) and P. Balakotaiah vs Union of India.(2) We may also point out that the Order of suspension was, in any event, justified by the provision in section 13, sub section (4).
The Order of suspension, in fact, recited that it was made in exercise of the power conferred under section 13, sub section (4).
Sub section (4) of section 13 is general in terms and provides that the ViceChancellor shall be entitled to.
take such action as he deems necessary in any emergency which in his opinion calls for.
immediate action.
It does not talk specifically of an order of interim suspension of a teacher but the width and amplitude of the language of the provision would clearly include action by way of interim suspension of a teacher, ' when there is in the opinion of the Vice Chancellor an emergency calling for immediate action.
The respondent contended that the power to order interim suspension is a quasi judicial power and it would not be comprehended within the language of sub section (4) of section 13.
But this contention is clearly falla cious and the premise on which it is based is unsound.
It is not correct to say that an order of interim suspension is a quasi judicial order and in any event, the language of sub section (4 ) of section 13 is sufficiently wide and comprehensive to take within its scope and ambit every kind of action which may be considered necessary by the ViceChancellor in an emergency and there is no reason why such action should not include making of an order of interim suspension.
The Vice Chancellor, therefore, clearly had power under section 13, sub section (4) to make an order of interim suspension if he thought it necessary to make such an order in an emergent situation which in his opinion called for immediate action.
The respondent sought to contend that at the date when the order of suspension was passed, there was no emergency which called for immediate action on the part of the Vice,Chancellor and, therefore, the foundation for taking action under section 13, sub section (4) was wanting and the order of suspension could not be justified under that provision.
(1) ; (2) ; 5 240SCI/77 56 But this contention cannot be entertained by us since it has not been taken as a ground of challenge in the writ peti tion.
Whether or not there was 'an emergency requiring immediate action on the part of the Vice Chancellor .is entirely a question of fact and if the respondent wanted to contest the validity of the exercise of power by the Vice Chancellor under section 13, sub section (4) in making the order of suspension, he should have pleaded in the writ petition that the order of suspension was outside the power conferred under section 13, sub section (4) as there was no emergency.
The respondent was aware from the recital con tained in the order of suspension that it was made by the Vice Chancellor in exercise of the power conferred under section 13, sub section (4) and, therefore, if the respond ent wanted to challenge the exercise of this power on.
the ground that there was no emergency justifying its exercise, he should have made an averment to that effect in the writ petition.
If such averment had been made in the writ peti tion, the University and the Vice Chancellor would have had an opportunity of meeting it in the affidavit in reply filed by them, but no such averment having been made in the writ petition, the University and the Vice Chancellor were not called upon to meet it.
Hence, we cannot permit the re spondent to challenge the validity of the order of suspen sion on the ground that there was no emergency attracting the applicability of section 13, sub section (4).
The order of suspension made by the Vice Chancellor was plainly and indubitably an order which the Vice Chancellor had power to make under section 13, sub section (4).
It may be noted that immediately after making the order of suspension the ViceChancellor placed it before the Syndicate at its next meeting as required by the second part of section 13, sub section (4) and the Syndicate approved of the action taken by the Vice Chancellor by rejecting the representation of the respondent and recording the fact of the making of the order of suspension.
We may also refer to one other contention urged on behalf of the respondent and that was that by reason of section 52, sub section (1) the respondent was entitled to continue in service of the University on the same terms and conditions as regulated his service before the commencement of the Act of 1969 and in view of the provide to sub section (2) of section 52 the conditions of service of the respondent could not be varied to his disadvantage and, therefore, neither Statute 24(ii) nor section 13, sub section (4) could operate to confer on the Vice Chancellor power to make the order of suspension which he did not possess under the old terms and conditions.
This contention, plausible though it may seem, is, in our opinion, not well founded.
Section 52, sub section (1) undoubtedly continued the service of a teacher on the same terms and conditions as regulated his service before the commencement of the Act of 1969 and that was subject to the provisions of sub section (2) of section ,52, but this subjection to the provisions of sub section (2) did not import the requirement set out in the second proviso that the conditions of service of a teacher shall not be varied to his disadvantage.
The words "subject to the provi sions of sub section (2)" employed in subsection (1) of section 52 were intended merely 'to clarify that a 57 teacher shall continue in service on the same terms and conditions but subject to any allocation which may be made by the Vice Chancellor under sub section (2) of section 52.
Nothing in sub section (1) should be construed as in any way derogating from the power of the Vice Chancellor to make an allocation of the teacher under section 52, sub section (2).
The proviso to sub section (2)imposed a limi tation on the power of the Chancellor to make an allocation by providing that in making such allocation the conditions of service of the employee shall not be varied to his disad vantage and it could not be construed.
as a substantive provision adding a requirement in sub section (1 ) that even though the terms and conditions of service may permit alter ation to the disadvantage of an employee, such alteration shall be inhibited.
We must, therefore, consider the impact of sub section (1) of section 52 unaffected by the provision to sub section (2).
Now, it is obvious that even if the respondent was entitled to continue in service on the same terms and conditions as before by reason of sub section (1) of section 52, these very terms and conditions provided that he would be bound by any changes which might be made in the Statutes from time to time Vide Statute 2 read with clause (6) of the Form of the Agreement annexed to the Statutes made under the Act of 1965.
If, therefore, any changes were made in the terms and conditions of service of the respondent by Statutes validly made under, the Act of 1969, the respondent could not complain of any infraction of the provision of sub section (1) of section 52.
Statute 24(ii) was, as already pointed out above, a Statute validly made under section 48, sub section (2) and hence the Vice Chan cellor was entitled to make the order of suspension against the respondent in exercise of the power conferred by that Statute.
Section 13, sub section (4) of the Act of 1969 could also be availed of by the Vice Chancellor for sustain ing the order of suspension, since it conferred the same power on the Vice Chancellor as section 13, sub section (4) of the Act of 1965 and exercise of the power conferred by it as against the respondent did not involve any violation of sub section ( 1 ) of section 52.
We are, therefore, of the view that the order of suspension was a valid order made by the Vice Chancellor in exercise of the power conferred upon him under Statute 24(ii) as also section 13, sub section (4) of the Act of 1969.
Now, if the order of suspension was a valid order, it suspended the contract between the respondent and the Uni versity and neither the respondent was bound to perform his duties under the contract nor was the University bound to pay any salary to him.
The respondent was entitled to receive from the University only such subsistence allowance as might be payables under the rules and regulations govern ing his terms and conditions of service.
The legal position in regard to the right of a master to suspend his servant is now well settled as a result of several decisions of this Court.
The law on the subject was succinctly stated the following words by Hegde,J. in V P Gindroniya vs State Madhya Pradesh (1): (1) [1970] 3 S.C.R. 448.
58 "The general principle is that an em ployer can suspend an employee of his pending an enquiry into his misconduct and the only question that can arise in such a suspension will relate to the payment of his wages during the period of such suspension.
It is now well settled that the power to suspend, in the sense of a right to forbid a employee to work, is not an implied term in an ordinary contract between master and servant, and that such a power can only be the creature either of a statute governing the contract, or of an express term in the contract itself.
Ordi narily, therefore, the absence of such a power either as an express term in the contract or in the rules framed under some Statute would mean that an employer would have no power to suspend an employee of his and even if he does so in the sense that he forbid the employee to work, he will have to pay the employee 's wages during the period of suspension.
Where, however, there is power to suspend either in the contract of employment or in the statute or the rules framed thereunder the order of suspension has the effect of temporarily sus pending the relationship of master and servant with the consequence that the servant is not bound to render service and the master is not bound to pay.
It is equally well settled that an order of interim suspension can be passed against the employee while an enquiry is pending into his conduct even though there is no such term in the contract of employment or in the rules, but in such a case the employee would be entitled to his remuneration for the period of suspension if there is no statute or rule under which, it could be withheld.
The distinction between suspending the contract of a service of a servant and suspending him from performing the duties of his office on the basis that the contract is subsisting is important, The suspension in the latter case is always an implied term in every contract of service.
When an employee is suspended in this sense, it means that the employer merely issues a direction to him that he should not do the service required of him during a par ticular period.
In other words, the employer is regarded as issuing an order to the employee which because the contract is sub sisting, the employee must obey.
" It will, therefore, be seen that where there is power con ferred on the employer either by express term in contract or by the rules governing the terms and conditions of service to suspend an employee, the order of suspension has the effect of temporarily suspending the relation of master and servant with the consequence that .the employee is not bound to render service and the employer is not bound to pay.
In such a case the employee would not be entitled to receive any payment at all from the employer unless the contract of employment or the rules governing the terms and conditions of service provide for payment of some subsistance allow ance.
Here, as we have held, 59 the Vice Chancellor had the power to suspend the respondent under Statute 24(ii,) or in any event under section 13, sub section (4) and hence the respondent could not claim payment of his salary during the period of suspension.
The only ' payment which the respondent could claim to receive from the University was subsistence allowance.
if the rules governing the terms and conditions of his service made such a provision.
The University stated that it had adopted as a matter of practice the rules relating to Civil Servants of the State of Jammu & Kashmir for the purpose of payment of subsistence allowance to its employees and in fact the University Council at its meeting held on 22nd February, 1971 formally accorded approval to this practice.
The respondent was, therefore, clearly not entitled to receive from the University anything more than the subsistence allowance actually paid to him, which, we are told, was paid on the same basis as that prevailing under the rules relat ing to Civil Servants of the State of Jammu & Kashmir.
These were the reasons for which we made our order dated 17th December, 1976 upholding the validity of the order of suspension dated 21st May, 1970 and holding that the respondent was not entitled to anything more than the subsistence allowance paid to him during the period of sus pension under the order of the Registrars dated 6th June, 1970.
| Respondent 1, a conductor of the Mysore Government Road Transport Department was dismissed.
for misconduct on 25 1 1961.
The legality of the said dismissal order was questioned in the High Court under article 226 with a further prayer to declare that he had continued in service since the date of his suspension and commencement of disciplinary proceedings.
The High Court allowed the writ petition on 11 9 1964 and quashed the dismissal order with an observa tion viz. "It is further ordered that this is without preju dice to the holding of fresh enquiry if they consider the same necessary".
On 1 8 1961.
the Road Transport Corpora tion was constituted and the Government Road Transport Department was abolished.
Such of the employees who had exercised their option as per the notice dated 23 6 1961, were taken over by the appellant corporation.
The re spondent No. 1 was not given the option as he was dismissed by that date.
On a complaint under the.
Contempt of Courts Act against respondent 2 and the appellant, that there was disobedience to the order of the High Court dated 12 9 1964, the respondent 1 was paid ,,he salary by the State Govern ment for the period 25 1 1961 to 31 7 1971.
Since he was not paid back salary and allowances and also the salary due from 1 8 1961, the respondent filed a writ petition No. 1579/66 which was again allowed.
On a concession made by the counsel for the State Government that the State Govern ment was willing to make available to the petitioner an option to become an employee of the appellant corporation, the High Court held: "Notice shall be in the same form in which it was served on other employees and with a month 's time to exercise his option.
If he exercises his option to become an employee of the corporation the petitioner will have all.
the benefits.
such as continuity in service, seniority, the benefit of the old conditions of service applicable in Mysore Government Road Transport Department.
The petitioner will also be entitled to the salary for the period ' between August 1, 1961 and the date of his appoint ment as an employee of the corporation".
On appeal by special leave by the corporation, the Court, HELD: (1) The order of the High Court dated 11 9 1964 could not possibly amount to a declaration that the first respondent had continued in the service of either the Mysore Government or had become the servant of the appellant corpo ration, a separate legal entity which came into existence by means of a Notification under section 3 of the Road Transport Corporation Act, 1950.
As a separate legal entity the corpo ration could not be said to have stepped automatically into the shoes of the Mysore Road Transport Department, there being no provision of the Act or Rules made thereunder to that effect.
[927 A D] (2) The declaratory relief asked for not having been granted, that relief would be deemed to have been refused.
Failure to go in appeal against that decision operates as a bar for claiming such a relief in the subsequent writ petition.
[931 B] (3) The effect of the High Courts ' order setting aside the dismissal was that the stigma of dismissal was removed from the record of the first respondent.
The winding of the department on the facts of the case, operates as the discharge of the respondent.
The respondent cannot be deemed to be the corporation 's employee inasmuch as he has not exercised any option nor did be ask for a notice of option in the original writ petition filed by him.
[931 D E] 926 Mysore State Road Transport Corporation vs A. Krishna Rao & Anr., C.A. No. 1720 of 1967 S.C. decided on 6 8 1969, followed.
(4) Neither the Act nor the two notifications under section 34(1) of the Act contain any provision.
which could entitle an employee of the Mysore Government Road Transport Depart ment to get a notice automatically.
The notifications could apply only to those persons who, on 1 8 1961 had already exercised an option to serve under the corporation in pursu ance of notice issued to them.
It makes no provision for persons to whom for any considerable reason, no notice has been issued.
[928 D F] (5) When the first respondent applied in the High Court for another writ or direction under article 226 in 1966, the High Court over stepped the limits of mere interpretation or application of the law and indulged in what is nothing short of legislation by directing the State Government to serve a notice calling upon the first respondent to exercise his option on the question whether he wanted to become an employee of the Mysore State Road Transport Corporation in the same way in which other employees of the Transport Department had been asked to exercise their option.
[929 C E] (6) The State Government owed no duty to the first respondent to pay him after transport department was wound up in the absence of any contract 10 show what duty the Government could have to employ the first respondent after its transport department was wound up or to direct the corporation to do so.
[929 G H] (7) In order to compel the corporation to do anything only a general direction u/s 34 of the Act could be given by the Government.
There neither could be a special direction with regard to a particular case nor was any special direction given by the Government for any such case.
The High Court could not take upon itself the power to fill any gap in the provision of the.
Act, even if there be one, and compel the Government to perform a function which the Gov ernment was not under any kind of obligation to discharge.
The High Court could not give a specific direction to make a provision to meet what it thought was required in a particular or individual case if such a case fell outside the provisions made by the Act and the rules.
There is no justification at for such assumption of powers by the High Court.
[929 H, 930 A B]
|
tter of the Contempt of Court proceedings relating to the printing, publishing and circulation of a pamphlet over the name of Hira Lal Dixit (General Secretary, Praja Socialist Party, Mainpur) entitled "HAMARA VAHAN VIBRAG" arising out of (Civil) Petition No. 379 of 1953.
(Hira Lal Dixit vs The State of Uttar Pradesh).
The Attorney General for India (P. A. Mehta, with him) to assist the Court.
S.C. Issacs (R. Patnaik and section section Shukla, with him) for respondent No. I (Hira Lal Dixit).
Mohan Lal Saxena and section section Shukla for respondent No. 2 (Kishore Dutt Paliwal).
S.S. Shukla for respondent No. 3 (Printer, Sainik Press).
679 1954.
October 1.
The Judgment of the Court was delivered by DAS J.
This Rule was issued by this Court on the 16th September, 1954, calling upon the respondents to appear and show cause why they should not be proceeded against for contempt of this Court.
It is desirable to mention at the outset the cir cumstances in which it became necessary for this Court to issue this Rule.
On the 14th September, 1954, there were on that day 's cause list for hearing and final disposal two appeals, being 'Appeal No. 182 of 1954 (Saghir Ahmad vs The State of Uttar Pradesh and Others) and Appeal No. 183 of 1954 (Mirza Hasan Agha vs The State of Uttar Pradesh and Others).
A large number of writ petitions, 224 in number, under article 32 of the Constitution raising the same questions were also on the cause list for that day.
Both the appellants and all the petitioners were engaged in carrying on businesses as carriers of passengers and goods by motor buses or lorries on different routes under licenses issued by the State of Uttar Pradesh and in cases where the route passed into or through the State of Delhi, countersigned by that State.
Some of these persons had originally been granted permanent permits by the Regional Transport Authority.
Pursuant to the policy of nationalisation of road transport business the State of Uttar Pradesh made declarations under section 3 of the Uttar Pradesh State Road Transport Act, 1950, to the effect that road transport services on certain routes should be run and operated by the State Government in the manner mentioned in the relevant declarations and it also published schemes of road transport services under section 4 of that Act.
In furtherance of its object the State Government began to serve notices on the licensees to stop plying buses on specified routes.
The appellant thereupon applied to the Allahabad High Court for a writ of mandamus directing the State Government and its Minister of Transport to withdraw the declaration made under section 3 of the Uttar Pradesh Road Transport Act, 1950, in respect of their respective routes and directing them and their officers to refrain from proceeding further under sections 4 and 680 5 of that Act and not to interfere with the operation of their respective stage carriages and for other ancillary reliefs.
By an order made on the 17th November, 1953, the Allahabad High Court dismissed those, applications.
The two petitioners thereupon filed these two appeals in this Court after having obtained a certificate from the Allahabad High Court under article 132(1) of the Constitution.
The appellants obtained orders for stay of proceedings until the determination of their appeals.
In view of the decision of the Allahabad High Court many other persons holding licenses for plying motor stage carriages or contract carriages came direct to this Court with applications under article 32 for appropriate writs and obtained interim stay.
As already stated, the two appeals and all those numerous applications were posted on the cause list for the 14th September, 1954, for final disposal.
The respondent, Hira Lal Dixit, was the petitioner in one of those writ applications.
The two appeals were called on for hearing on that day and were part heard.
The hearing continued for the whole of the 15th and 16th September, 1954, and was concluded on the 17th September, 1954, when the Court took time for considering its decision.
The Court has not 'yet delivered its judgment.
A large number of persons, presumably the petitioners in the writ petitions or otherwise interested therein, attended the Court on all those dates, for the result of the decision of the appeals would also conclude the writ petitions.
It appears that on the 15th September, 1954, a leaflet printed in the Hindi language and characters, consisting of 18 pages, intituled "Hamara Vahan Vibhag" meaning "Our Transport Department", purporting to be written by the respondent Hira Lal Dixit and containing a foreword purporting to be written by Sri Krishna Dutt Paliwal and a block photograph of the respondent, Hira Lal Dixit, on the front page was distributed in the Court premises.
The leaflet contained a graphic account of the harassment and indignity said to have been meted out to the writer by the State officers and the then State Minister of Transport in connection with the cancellation and eventual restoration of his license 681 in respect of a passenger bus.
The second paragraph on page 15 of that leaflet contained a passage of which the following is an English translation prepared by an advocate of this Court duly authorised in that behalf" The public has full and firm faith in the Supreme Court, but sources that are in the know say that the Government acts with partiality in the matter of appointment of those Hon 'ble Judges as Ambassadors, Governors, High Commissioners, etc., who give judgments against Government but this has so far not made any difference in the firmness and justice of the Hon 'ble Judges.
" The leaflet containing the above offending paragraph having been brought to its notice the Court on the 16th September, 1954, issued the present rule and sent a copy of the rule to the Attorney General for India.
All the respondents have been duly served.
They have filed affidavits and have appeared before us by their respective advocates.
The respondent, Sri Krishna Dutt Paliwal, the writer of the foreword, who was present in Court, made the following statement to the Court through his advocate, Sri Mohan Lal Saksena: " When I wrote the foreword I did not go through the whole manuscript.
I was only told that it dealt with the working of the Transport Control.
Now that my attention has been drawn to the passage objected to I am sorry that I wrote a foreword to the pamphlet and I offer my apology to the Court.
I never knew that the pamphlet was intended for circulation and I was not a party to its circulation.
" One., Devendra Sharma, the General Manager of the Sainik Press, Agra, where the offending leaflet was printed, filed an affidavit on behalf of the respondent Press stating that at the time when the leaflet had been given to the Press for being printed he did not notice the paragraph in question, that his attention was drawn to it only after the service of the present Rule, that he was sorry that it, had been printed in the Press and that he never had the slightest intention of committing any contempt of this Court.
In his affidavit as well as through his advocate, Sri section Sukla, the 682 respondent Press represented by Devendra Sharma who was present in Court tendered an unqualified apology to the Court.
In view of the statements made in Court by the advocates of these two respondents this Court accepts their apology and discharges the rule as against them and nothing further need be said about them.
Learned counsel appearing for the respondent, Hira Lal Dixit, strongly urged that the passage complained of could not possibly be capable of any derogatory meaning or implication and could not be regarded as constituting a contempt of Court.
There are innumerable ways by which attempts can be made to hinder or obstruct the due course of administration of justice in Courts.
One type of such interference is to be found in cases where there is an act or publication which scandalises the Court itself.
A situation of that type was considered by this Court in the case of Brahma Prakash Sharma and Others vs The State of Uttar Pradesh(1), and the principles governing a case of that type were discussed and laid down in the judgment of the Court.
The present case does not fall within that category, for here there has been no scandalising of the Court itself.
The question here is whether the offending passage is of such character and import or made in such circumstances as would tend to hinder or obstruct or interfere with the due course of administration of justice by the Court.
To begin with, the leaflet was written by a person who was himself the petitioner in one of the writ petitions which were on the cause list for hearing.
The actual timing of the publication of the leaflet is significant.
It was circulated at a time when the appeal and the writ petitions including that of the respondent, Hira Lal Dixit, himself were posted on the cause list and the appeals, on the decision of which depended the fate of those numerous petitions, were being actually heard.
The place of publication was also not without significance.
It was distributed in the Court premises where a very large number of licensees had fore gathered.
The fact of distribution of the leaflet in the Court premises was denied in the affidavit of this respondent but when a (1) 683 suggestion was made that evidence be recorded on this point the learned counsel appearing for him did not press for it and accepted the position that the leaflet was in fact distributed in the Court premises.
In the circumstances, the only other question that remains is as to what was the meaning and purpose of the offending passage in the leaflet.
Learned counsel for the respondent, Hira Lal Dixit, maintained that the passage in question was perfectly innocuous and only expressed a laudatory sentiment towards the Court and that such flattery could not possibly have the slightest effect on the minds of the Judges of this august tribunal.
We do not think flattery was the sole or even the main object with which this passage was written or with which it was published at the time when the hearing of the appeals was in progress.
It no doubt begins with a declaration of public faith in this Court but this is immediately followed by other words connected with the earlier words by the significant conjunction "but.
" The words that follow are to the effect that sources that are in the know say that the Government acts with partiality in the matter of appointment of those Judges as Ambassadors, Governors, High Commissioners, etc., who give judgments against the Government.
The plain meaning of these words is that the Judges who decide against the Government do not get these high appointments.
The necessary implication of these words is that the Judges who decide in favour of the Government are rewarded by the Government with these appointments.
The attitude of the Government is thus depicted surely with a purpose and that purpose cannot but be to raise in the minds of the reader a feeling that the Government, by holding out high hopes of future employment, encourages the Judges to give decisions in its favour.
This insinuation is made manifest by the words that follow, namely, "this has so far not made any difference in the firmness and justice of the Hon 'ble Judges.
" The linking up of these words with the preceding words by the conjunction "but" brings into relief the real significance and true meaning of the earlier words.
The passage read as a 684 whole clearly amounts to this: "Government disfavours Judges who give decisions against it but favours those Judges with high appointments who decide in its favour: that although this is calculated to tempt Judges to give judgments in favour of the Government it has so far not made any difference in the firmness and justice of the Judges.
" The words "so far" are significant.
What, we ask, was the purpose of writing this passage and what was the object of the distribution of the leaflet in the Court premises at a time when the Court was in the midst of hearing the appeals ? Surely, there was hidden in the offending passage a warning that although the Judges have "so far" remained firm and resisted the temptation of deciding cases in favour of Government in expectation of getting high appointments, nevertheless, if they decide in favour of the Government on this occasion knowledgeable people will know that they had succumbed to the temptation and had given judgment in favour of the Government in expectation of future reward in the shape of high appointments of the kind mentioned in the passage.
The object of writing this paragraph and particularly of publishing it at the time it was actually done was quite clearly to affect the minds of the Judges and to deflect them from the strict performance of their duties.
The offending passage and the time and place of its publication certainly tended to hinder or obstruct the due administration of justice and is a contempt of Court.
These is another aspect of the matter.
Even if the passage about the Judges were not in the leaflet the rest would still amount to a serious contempt of Court.
There is in ' it a strong denunciation of the State of Uttar Pradesh, a party to the appeal and the petitions ' regarding the very matters then under the consideration of this Court.
It was not fair comment on the proceedings but an attempt to prejudice the Court against the State and to stir up public feeling on the very question then pending for decision.
The manner in which the leaflets were distributed, the language used in them and the timing of their publication could only have had one object, namely, to try and influence 685 the Judges in favour of the petitioner and the others who were in the same position as himself.
This again is a clear contempt of this Court.
It is well established, as was said by this Court in Brahma Prakash Sharma and Others vs The State of Uttar Pradesh (supra), that it is not necessary that there should in fact be an actual interference with the course of administration of justice but that it is enough if the offending publication is likely or if it tends in any way to interfere with the proper administration of law.
Such insinuations as are implicit in the passage in question are derogatory to the dignity of the Court and are calculated to undermine the confidence of the people in the integrity of the Judges.
Whether the passage is read as fulsome flattery of the Judges of this Court or is read as containing the insinuations mentioned above or the rest of the leaflet which contains an attack on a party to the pending proceed ings is taken separately it is equally contemptuous of the Court in that the object of writing it and the time and place of its publication were, or were calculated, to deflect the Court from performing its strict duty, either by flattery or by a veiled threat or warning or by creating prejudice in its mind against the State.
We are, therefore, clearly of opinion and we hold that the respondent, Hira Lal Dixit, by writing the leaflet and in particular the passage in question and by publishing it at the time and place he did has committed a gross contempt of this Court and the qualified apology contained in his affidavit and repeated by him through his counsel cannot be taken as sufficient amends for his misconduct.
It should no doubt be constantly borne in mind that the summary jurisdiction exercised by superior Courts in punishing contempt of their authority exists for the purpose of preventing interference with the course of justice and for maintaining the authority of law as is administered in the Court and thereby affording protection to public, interest in the purity of the administration of justice.
This is certainly an extraordinary power which must be sparingly exercised but where the public interest demands it, the Court will 88 686 not shrink from exercising it and imposing punishment even by way of imprisonment, in cases where a mere fine may not be adequate.
After anxious consideration we have come to the conclusion that in all the circumstances of this case it is a fit case where the power of the Court should be exercised and that it is necessary to impose the punishment of imprisonment.
People must know that they cannot with impunity hinder or obstruct or attempt to hinder or obstruct the due course of administration of justice.
We, therefore, find respondent, Hira Lal Dixit, guilty of contempt of Court, make the Rule absolute as against him and direct that he be arrested and committed to civil prison to undergo simple imprisonment for a fortnight.
He must also pay the costs, if any, incurred by the Union of India.
Order accordingly.
| The petitioner was an applicant in one of the writ petitions which had been filed in the Supreme Court challenging the validity of U. P. Road Transport Act, 1951.
During the hearing of the writ petitions a leaflet printed in the Hindi language and intituled "Our Transport Department" purporting to be written by the petitioner was distributed in the Court premises.
The leaflet contained a graphic account of the harassment and indignity said to have been meted out to the writer by the State officers and the then State Minister of Transport in connection with the cancellation and eventual restoration of his license in respect of a passenger bus.
87 678 The second paragraph at page 15 of that leaflet contains a passage of which the following is the English translation : " The public has full and firm faith in the Supreme Court, but sources that are in the know say that the Government acts with, partiality in the matter of appointment of those Hon 'ble Judges as Ambassadors, Governors, High Commissioners, etc., who give judgments against Government but this has so far not made any difference in the firmness and justice of the Hon 'ble Judges.
" Held, (1) that the offending passage and the time and place of its distribution tended to hinder or obstruct the due administration of justice and was a contempt of Court.
(2)It was not fair comment on the proceedings but an attempt to prejudice the Court against the State and to stir up public feeling on the very question then pending for decision.
The manner in which the leaflets were distributed, the language used in them and the timing of their publication could only have had one object, namely, to try and influence the Judges in favour of the petitioner and the others who were in the same position as himself.
This again was clear contempt of the Supreme Court.
(3)It is not necessary that there should in fact be an actual interference with the course of administration of justice but it is enough if the offending publication is likely or if it tends in any way to interfere with the proper administration of law.
Such insinuations as were implicit in the passage in question were derogatory to the dignity of the Court and were calculated to undermine the confidence of the people in the integrity of the Judges.
Brahma Prakash Sharma and Others vs The State of Uttar Pradesh ([1953] S.C.R. 1 169) referred to.
|
Appeal No. 2221 of 1993.
From the Judgment and Order dated.5.5.
1993 of the Madhya ' Pradesh High Court in M.P. No. 4420 of 1991.
Harish N. Salve and L.R. Singh for the Appellant.
Anoop Choudhary, A.K. Sanghi, S.V. Deshpande and section K. Agnihotri for the Respondents.
The Judgment of the Court was delivered by Mohan, J.
Leave granted in SLP filed by Indian Medical Council, Jabalpur.
All these appeals are dealt with under a common judgment since they arise out of the same judgment passed in Misc.
Petition No.4420 of 1991 by the Madhya Pradesh High Court, Jabalpur Bench.
One Dr.
Nelson ,father of respondent1 was serving in Madhya Pradesh State Public Health in the Department of Surgery in the Medical College at Jabalpur.
His wife, Dr. (Mrs.) Shobha Nelson was also working as a Lecturer in the Department of Obstetrics and Gynecology in Medical College in a purely temporary capacity.
Nelson applied for foreign assignment.
He was selected for the same.
Therefore.
a request was made by the Government of India (Department of Personnel and Administrative Reforms) vide its letter dated 2nd of January.
1975 790 requesting the State Government to spare the services of Dr .
S.K. Nelson for foreign assignment with Zanzibar Government.
The Under Secretary to the Government of Madhya Pradesh, Department of Public Health and Family Planning replied on 15.4.1975 that it was not possible for the State Government to spare his services.
However, Dr. Nelson proceeded on two months ' vacation with effect from 1.5.75.He wrote a letter to the Dean of Medical College Jabalpur that he was proceeding, on long leave owing, to unavoidable family circumstances.
Even after the expiry of the period of leave he did not rejoin the post.
His request for further extension of leave was rejected.
Notwithstanding the same Dr. Nelson and his wife proceeded to Tanzania and the first respondent, Silas Nelson, also accompanied them.
It also requires to be mentioned in passing that a request was made to the Government of madhya Pradesh to spare the services of Dr. Shobha Nelson.
It was pointed out by tile State Government that she being ;A temporary servant she had no lien and she will have to resign the State service before joining her duties in Zanzibar.
She also absented unauthorisedly and proceeded to Tanzania along with her husband.
The first respondent claimed to have passed G.C.E. 'O ' level as well as 'A ' level examinations from the University of London conducted by the Education Council of the Government at Dar es Salam in Tanzania.
He also claimed that he had obtained credits in 'A ' level in three subjects i.e. Biology, Physics and Chemistry and 'O ' level in six subjects i.e. Biology, Chemistry, English language.
English Literature, Mathematics and Physics.
On this basis he claimed that he was entitled to admission in any Medical College in India.
According to him these examinations are considered to be equivalent qualifying examinations and pre requisite for admission to any Medical College.
It was also stated that Rani Durgawati University of Jabalpur had given an equivalence certificate.
He obtained admission in Muhmbili Medical College in the Faculty of Medicine.
which is affiliated to the University of Dar es Salam, in the year 1989.
lie had completed one year at the same college and University.
Thereafter he was pursuing his study in the second year.
Having regard to the fact that he had studied the subjects in Anatomy, Physiology, Biochemistry, Preventive and Social Medicine including, Behavioural Science and Biostatistics, Medical Psychology and Developmental Studies and Medical Surgery, he had undergone a wider course.
Therefore, according to him, he possesses the eligibility criteria for admission to the MBBS Degree Course at Jabalpur.
A request was made by the father of the first respondent to nominate the first respondent to MBBS Course directly under Central Government quota.
This request related not only to the first respondent but also his sister.
However, the Central Government advised Dr. Nelson to approach the Medical Council oflndia 791 and the concerned University in jabalpur seeking their concurrence to the migration of his two children from the University of Dar es Salam.
Tanzania to Medical College in jabalpur.
On 20th December, 1989, Dr. nelson approached the appellant, Medical Council of India (hereinafter referred to as the Council) for grant of no objection to the transfer.
This request was turned down on 12.1.90 as migration was not permissible under the Rules.
The position was further made clear by the letter of the appellant dated 28.12.90.
Aggrieved by this the first respondent and his sister Kumari Divya Nelson filed Writ Petition Misc.
Petition No. 2535 of 1990 before the Madhya pradesh high Court at Jabalpur.
The prayer was for a writ of mandamus to direct the respondents to grant admission to them to the 2nd year of MBBS Degree Course at Medical College jabalpur.
It was contended that the Council had not authority to object or refuse the issue of no objection certificate since its primary function is to prescribe minimum standards of medical education.
It is the University alone which should be concerned about the admission.
The High Court by its judgment dated 12.7.91 allowed the writ petition.
It directed the appellant and other authorities to consider the case of respondent 1 and his sister within a period of two months for their admission in the Medical College, jabalpur in the light of clause 'E ' of the mandatory recommendations approved under Section 33 of the .
It was also held that though the Council had considered the case of the candidates yet it had not looked into the individual merits regarding their eligibility for transfer to Medical College,jabalpur which affiliated to Rani Durgawati Vishwa vidyalaya, jabalpur.
Besides teh impugned letter of the council does not show any application of mind as it is not speaking order.
In complete with the above directions the Executive Committee of the appellant (Council) reconsidered the case on 20.8.91.
The question was whether the migration of the respondent on individual merit to Medical College.
jabalpur under clause v 'e ' of the Migration Rules was permissible.
It was concluded that the migration could not be allowed since the ground were not sufficient for such migration.
It was also of the view that the facts stated for considering the individual case on merits were not relevant.
What is important to be considered is the course of study the student had already undergone vis a vis the course being taught in the Medical College in Which the migration is sought.
The candidate had not also finished enough materials to make comparison with 792 the course of study conducted in medical College at jabalpur.
For these reasons the request for migration was rejected.
The same was reiterated by a letter dated 4.1.92.
After this, a review petition was filed to recall the order dated 12.7.91 of the High Court.
However the review petition was dismissed by the High Court.
An application for contempt was also dismissed.
There upon Misc, Petition No. 4420 of 1991 came to be filed seeking admission in the 2nd year or the 1st professional M.B.B.S. Course at Medical College, Jabalpur on the same grounds as were alleged previously.
direction was issued on 23.12.1991 to give provisional admission.
After admission of the writ petition the same order was continued.
Though an application was preferred by the respondents 2 to 4 to have the order vacated on the ground that migration from an unrecognized Medical College to a recognised Medical College was not permissible, the same was dismissed.
Some interesting development took place during this stage.
The candidates did not produce the required document.
Hence provisional admission was not granted to them by the respondents 2 to 4.
That led to the filing of Interlocutory Application No. 2805 of 1992 for further direction.
Respondents 2 to 4 also filed an application for direction on 26.3.92 inter alia pointing out that before grant of provisional admission, the writ petitioners were required to submit proof of their having passed 1st year course at Tanzania.
In the absence of such proof the admission was impossible.
Further in which year of the MBBS course the first respondent was to be admitted, was not free from difficulty.
it was averred that even without passing the first year from the university of Dar es Salam the claim is made for admission to the second year.
This is nothing but fraud the High Court strangely permitted the writ petitioner.
Kumari Divya Nelson to withdraw herself from the petition and it directed respondent 1 alone could prosecute his studies.
The authorities were directed to grant provisional admission his filing necessary forms and depositing admission fees without insisting on the production of any other certificate or testimonials or syllabus of Dar es Salam University.
For non compliance with this direction a contempt application was taken but by the first respondent.
On peril of contempt the Dean (Respondent 4) had not other option but to comply with the order of provisional admission.
Against this order directing provisional admission without insisting on the production of any other documents SLP (C) No. 10498 of 1992 was preferred.
Leave was granted on 7.9.92 by this court staying the operation of the order dated 18.5.92 of the High Court.
This Court directed that the interim order well subsist 793 till the disposal of the writ petition before the High Court and requested the High Court to dispose of the writ petition of the respondent I expeditiously.
By the impugned judgment dated 5th March, 1993 the writ petition was allowed The resolution dated 20th August, 1991 refusing to accede to the request of the writ petitioner respondent (1) for migration was quashed holding that there was no application of mind by the Council.
lt is under these circumstances these appeals by special leave to appeal have come to be preferred.
Mr. harish N. Salve, learned counsel for the appellant would submit the following grounds attacking the impugned judgment: The High court erred in directing admission to respondent I in recognised medical college in India from an unrecognized college by way of migration/ transfer.
WI the more so.
when such impermissibility has been recognised by this Court in Medical Council of India, New Delhi vs Rajendra section Sankpal and Ors.
(C. A Nos. 3 4 of 1991 dated 21.10.92) and order dated 6.12.1990 of this Court passed in Medical Council of India vs Ms. Sunita Anant Chavan & Ors.
(I.A. Nos. 2 7 in Transfer Petition (Civil) Nos. 230 235 of 1989).
The High Court misread Regulation V. Under that Regulation migration is allowed from a recognised medical college to another recognised college and that too within three moths after passing of the first professional examination.
In so far as the first respondent has neither undergone study in a medical college recognised by the Council nor has he passed the first professional examination, he could not he admitted to the second year.
The first respondent failed in the subject of Anatomy which is one of the papers taught in the first year at Dar es Salam University.
Under the Examination Regulation of the said University he was required to sit in the supplementary examination in the failed subject before the beginning of the next academic year.
Thus he was required to clear the said paper within six weeks.
Should he fails in the supplementary examination he ceases to be a student of the College/University.
In so far as the first respondent did not take the supplementary examination he ceased to be a student of Dar es Salam University.
Therefore, the question of migration could not arise at all.
The first yen course of Dar es SalamlJniversitv is not equivalent to the first phase of MBBS Examination in India.
794 Equivalence has to be decided by only an expert body, that too, on technical and academic matters.
It is not in the domain of assessment or evaluation by the Court.
The High Court should not have embarked on the determination of equivalence on the basis of sketchy materials placed before it.
The High Court erred in relying on.
Minakshi Malik, vs University of Delhi; , There, the candidate was not, in any matter, ineligible while here, the first respondent is ineligible.
The High Court erred overlooking that an administrative authority like the appellant is not required to pass reasoned orders.
The decree awarded by Dar es Salam University is not recognised and :Is not included under any of the Schedules of the Medical Council of India Act, 1956.
Therefore, there was no occasion for the appellant to decide the equivalence.
Should the first respondent be anxious he should have placed all the materials.
In opposition to this, learned counsel for the respondents, argues that the Council has taken a self contradictory stand.
In one breath, it will contend that there are no materials to decide the equivalence and in the other breath it would say it is not equivalence.
Under these circumstances, in view of the cryptic order passed, the High Court itself decided finding that the Council had not applied its mind.
The High Court was satisfied on the basis of documents there is equivalence.
The High Court is well entitled to do so.
More so, having regard to the ruling of Minakshi Malik 's case (supra) Equity also must weigh in favour of the first respondent.
In any event, the first respondent had passed his pre Medical test successfully in the year 199 1.
He also belong s to scheduled tribe.
Therefore, on the basis of these two documents his candidature could be considered for admission to first year MBBS Course for the ensuing academic year of 1993 94 as otherwise, the career of a young man would be completely ruined.
The factual position with regard to study of the first respondent in Dar es Salam University requires to be carefully analysed.
The claim of the first respondent is that he has passed G.C.E. 'O ' level as well as 'A ' level examinations from the University of London conducted by the Education Council of the Government at Dar es Salam in Tanzania.
He claims to have obtained credits in 'A ' level in the following three subjects (i) Biology, (ii) Physics; and 795 (iii) Chemistry In `O ' level he claim.
,; to have obtained credits in the following six subjects (i) Biology, (ii) Chemistry, (iii) English Language, (iv) English Literature, (v) Mathematics; and (vi) Physics On this basis, he claims admission to any Medical College in India as these are considered to be equivalent qualifying examinations and prerequisite for admission to any Medical College.
It is claimed on behalf first respondent at Rani Durgawati University of Jabalpur has given an equivalence certificate.
That is extracted below "With reference to your above cited letter, it is to inform you that students have passed in five subjects at least at the G.C.E. (Ordinary Level) and two subjects at the (Advanced Level) from University of London, are treated as having successfully completed the 12 year Pre University/Higher Secondary in India.
Hence, if your son Shri Silas Supragya Nelson has passed above examination then he may appear in Pre Medical test examination as desired by you." According to first respondent, he was admitted in Muhmbili Medical College in the Faculty of Medicine which is affiliated to the University of Dar es Salam in the year 1989 and has completed one year at the same College and University.
In the First year he had studied subjects in Anatomy, Physiology Biochemistry, Preventive and Social Medicine which includes Behavioural Science and Bio statistics, Medical.
Psychology and Development Studies & Medical Surgery whereas at Rani Durgawati University, the subjects taught in the first year are Anatomy, Physiology, and Biochemistry.
Thus the courses followed at Dar es Salam University are much wider.
It was further claimed that his course in the said Medical College is equivalent to first year course of MBBS Degree awarded by Rani Durgawati University, Jabalpur and, therefore, he possesses the eligibility criteria for admission to the MBBS Degree Course at Jabalpur.
796 On the said basis migration is sought.
Dar es Salam University is not recognised by the Medical Council of India.
Therefore, front all unrecognised institution admission is sought to a recognised institution.
With the object of maintaining and regulating, standards of medical education in the country, the Parliament enacted "the ".
Under Section 6 of the Act.
the Medical Council of ' India has been incorporated, which is a body corporate having a perpetual succession and a common seal Section 12 of the Act makes provisions for recognition of medical qualifications granted by medical institutions in countries with which there is a scheme of reciprocity.
Under this section, the schedules are given providing list of recognised medical institutions & qualifications.
The first schedule gives list of recognised medical qualifications granted by universities/medical institutions in India; whereas schedule second gives the list of recognised medical qualifications granted by medical institutions outside India.
University of Dar es Salam & its medical institution is not included in the second schedule and therefore the qualifications imparted by that institution are not recognised.
That apart, section 14 of the Act makes provisions for recognition of medical qualifications (granted by countries in which there is not scheme of reciprocity.
The Central Government has not considered Dar es Salam University for such recognition.
It was in this context the following order came to be passed by the appellant "The Director, Medical Education, Madhya Pradesh, Bhopal Subject: Migration of Silas Nelson and Divya Nelson from Dar es Salam Medical College, Tanzania to Medical Collage, Jabalpur.
Sir, With reference to your letter No. 6151/DME/IV dated 12.5.1990 I am to state that the matter regarding, Migration of Silas Nelson and Divya Nelson from Dar es Salam Medical College, Tanzania to Medical College,Jabalpur was duly placed before the Executive Committee of this Council at its meeting held on 20th August, 1991 for consideration.
The Committed decided as under: 797 The Executive Committee considered the matter with regard to the migration of the above candidates on individual merit to Medical College Jabalpur under Clause V(e) of the migration rules and did not allow these migration since the grounds are not sufficient for migration and the facts stated in the individual cases are not very relevant for grant of permission for migration.
For considering any such cause of migration, it is important to consider the cause of study the student has already undergone vis a vis the course being taught in the Medical Colleges in which the migration is sought.
Further it is observed that the candidates seeking their migration have also brought no records to show the course of study being conducted at their medical college for making comparison with the study being conducted in Medical College, Jabalpur.
Hence the applications for migration of the above candidates are rejected.
Your faithfully, (Mrs. M. Sachdeva) Off.
Secretary.
" Concerning migration the rule also is to the effect that the same can be allowed by the University concerned within three months after the passing of the first professional examination.
Then, the question of equivalence arises.
The equivalence came to be decided in the following manner: "Reference Letter dated 28.12.1991 of Dy.
Registrar (General) R.D. University, Jabalpur.
Regarding letter of ku.
Divya Nelson and 2/ Silas Nelson to the University.
I have gone through prospectus of University of Dar es Salam (1990 90) For M.D. degree which is equivalent to M.B.B.S. of Universities abroad (as per letter No. H/Q/G.N/17862 dated 2nd May, 1990 of Director of Training and Occupational Health Service, attached in the file).
For examination at the end of first year in Dar es Salam University the subjects are: 798 Anatomy/Histology Behavioural Sciences Only one Biochemistry Year study.
Physiology Development studies Where in Indian Universities the First MBBS Course which is of 18 months the subjects examined are (As premedical Council of India) Anatomy Physiology one and half, Biochemistry Year study As the detailed syllabus of the 5 subjects taught in one year at Dar es Salam University is not given in the Prospectus, it is difficult to know whether the course is equal as only three subjects are taught in Indian University for one and half years indicating that these subjects are taught in more detail here in our University.
However, in general the subjects taught there in first year included Anatomy, Physiology and Biochemistry (along with other two subjects) which are also the subjects of first M.B.B.S. (one and half years course) here also.
For mote clarification, the Medical Council of India may be consulted because they are the main authority in India in this respect.
Dean, Faculty of Medicine of our University was also consulted in this matter/ sd/ Protessor & Head.
Dept. of Biochemistry Medical College & Chairman Board of Studies for Anatomy, Physiology & Biochemistry.
This may be put up before the standing for confirmation.
" We cannot understand when this was the position with reference to equivalence how the High Court had donned the role of an expert body and would say as follows "The petitioner has filed documents showing that Dr. R.K. Gupta, Reader in Pharmacology of the Medical College, Jabalpur was sent on deputation for teaching in the medical college affiliated to Dar es Salam University.
The petitioner, by filing the documents, wants to show that persons having requisite qualifications for teaching in the Medical College, Jabalpur were posted or appointed at the medical college affiliated to Dar es Salam University.
The documents filed by the petitioner show that the subjects taught in the first year M.B.B.S. at Muhibili Medical 799 College, Dar es Salam University and the subjects taught at the Medical College, Jabalpur are the same.
to us the material consideration is the qualifications necessary for admission to the first year M.B.B.S. course.
The documents on record show that the educational qualifications for admission to the Medical College, Jabalpur and the Muhbili Medical College of Dar es Salam University are the same and there is equivalence of courses.
As there is equivalence of courses required for admission to the first year M.B.B.S. courses in Muhibili Medical College and the Medical College, Jabalpur, the petitioner is entitled to be transferred to the first year M.B.B.S. course of the Medical College, Jabalpur and should be permitted to appear in the examination conducted by the Rani Durgawati University, Jabalpur.
" This is totally unwarranted because the High Court does not have the necessary expertise in this regard.
As to the equivalence we have already extracted the opinion of the Chairman of Board of Studies for Anatomy, Physiology and Biochemistry.
From the above extract it is clearly seen that the Council is the main authority in this respect.
Then again, the High Court had gone wrong in concluding that the individual cases are relevant for the grant of permission for migration.
In our considered view, as rightly concluded by the Council, what is material is the course of study which a student has undergone vis a vis the courses being taught in the Medical College in which the migration is sought.
What the Council was endeavouring to point out was the materials placed before it by the present first respondent were not sufficient to decide the equivalence.
The criticism of the Council, by the High Court, is also not warranted.
First of all, no certificate was produced by the first respondent that he had completed the first year course in Dar es Salam.
Unless and until that is done the question of admission to the second year MBBS could not arise.
The first respondent had not appeared in the supplementary examination.
If that is so, according to the Regulations of Dar es Salam University, he is deemed to have discontinued from that Course.
In such a case the question of giving admission to Medical College at Jabalpur could never arise.
Therefore, looked at from any point of view, the Medical Council of India which is the authority to decide the equivalence, has come to the correct conclusion, in that, there cannot be a migration from unrecognised institution to a recognised Medical College.
The judgment of the High Court is wholly unsupportable.
Once we have arrived at this conclusion the question arises whether the case of the first respondent could be considered for the academic year 1993 94 based on his performance in the pre Medical test for the year 1991.
The statement of 800 marks obtained in pre Medical Test, 1991 is as under: "Subjects Max.
Marks Marks Obtained Physics 300 127 Chemistry 300 220 Botany 300 160 Zoology 300 214 English 300 217 1200 721" He also claims that he belongs to Scheduled Tribe.
We do not have material to show as to whether he was granted admission to any Medical College on the basis of his performance in the pre Medical test for the year 199 1.
However, in the petition for special leave to appeal the appellant has made the following averments "In the said Count er affidavit, on oath the respondent no.1 deliberately, knowingly an d willfully made a false statement that he had never appeared in the Pre Medical Test held in the year 1991 and failed.
It was further stated that in fact it was his younger brother Sushrut who had appeared in the T.M.T Examination of 1992.
The petitioner herein has made an inquiry and has come to know that the respondent no.1 appeared in the Pre Medical Test, 1991 vide application No. 27811 and was allotted Roll No. 624227 but failed to qualify and complete in the said test. .
Since the writ petitioner respondent no.1 appeared in the Pre Medical Test, 1991 vide application No. 27811 and was allotted Roll No. 624227 but failed to qualify and complete, he was not at all eligible for admission to the undergraduate medical course in India.
" If this be the correct position, he would not be entitled to be considered for admission for the academic year 1993 94 on the basis of his performance in the Pre Medical test held in the year 199 1.
It is for the concerned authority to verify the factual situation and decide the matter.
801 We make it clear that if his case has already been considered for admission on the basis of performance in the Pre Medical test 1991 and rejected there is no need to consider his case once again for the year 1993 94.
Otherwise, it may be considered on the basis of performance in the pre Medical test for the year 1991 as against the quota intended for Scheduled Tribe, if his status as belonging to Scheduled Tribe is established provided there is no legal impediment in doing so.
Subject to the above directions, civil appeals will stand allowed.
However, there shall be no order as to costs.
I.A. No. 1 of 1993 in SLP (C) 6161 of 1993 is also allowed.
U.P. Appeal allowed.
| On the death of H, who as the mother of the last male owner had succeeded to the estate, the respondents claimed the estate and brought a suit for its recovery on the strength of the pedigree which they set up that they were the sons of the halfsisters of the last male owner and therefore came before the agnates.
The suit was contested by some of the agnates, of whom the appellant was one, who challenged the correctness of the pedigree, and maintained that the respondents ' mothers were not the half sisters of the last male owner.
The trial court agreed with the respondents ' case and decreed the suit and this was confirmed by the High Court.
The High Court relied on exhibit 1, a petition dated November 2, 1917, which S, one of the brothers of the third plaintiff, on his own behalf and on behalf of his brothers had filed in Suit NO. 31 Of 19I7 which was a suit instituted by some of the agnates of H 's husband questioning the alienations made by H. In the petition,, S alleged that the applicants were the legal claimants to the properties in the suit and prayed to be added as co defendants to the suit.
The petition contained a pedigree which supported the pedigree set up 815 by the respondents, and the High Court held that exhibit I was admissible under section 32(5) of the Indian Evidence Act.
The oral evidence of P.W. 2 and P.W. 4 supported the respondents ' case as to the pedigree set up by them and the High Court held that their evidence was admissible under section 50 Of the Indian Evidence Act.
On appeal to the Supreme Court, it was contended for the appellant (1) that exhibit I was not admissible under section 32(5) Of the Indian Evidence Act because (a) the statement therein was a joint statement of three persons of whom one alone was dead, and (b) it was not made before disputes had arisen ; and (2) that the testimony of P.W. 2 and P.W. 4 did not fall within the purview Of section 50 Of the Indian Evidence Act and that the High Court erred in admitting and accepting such evidence.
Held: (1) that section 32(5) Of the Indian Evidence Act was applicable to the statements as to pedigree in exhibit I because : (a) they were really made by S for self and on behalf of his brothers, and that, in any case, they were as much statements of S as of the other two brothers who are alive.
Chandra Nath Roy vs Nilamadhab Bhattacharjee, (1898) I.L.R. , approved.
(b) they were made before the precise question in dispute in the present litigation had arisen, as the respondents were not preferential heirs at the time of the previous suit and no question arose or could have arisen then as to the relationship between them and the last male owner.
(2) that the evidence of P.W. 2 and P.W. 4 that they were present at the marriage of the mother of plaintiffs 1 and 2 as also at the Upanayanam ceremonies of plaintiffs 1 and 2, showed the opinion of those witnesses as to the relationship as expressed by their conduct, and was admissible under section 50 Of the Indian Evidence Act.
The word " opinion " in section 50 Of the Indian Evidence Act means something more than mere retailing of gossip or hearsay; it means judgment or belief, that is, a belief or a conviction resulting from what one thinks on a particular question.
Such belief or conviction may manifest itself in conduct or behaviour which indicates the existence of the belief or opinion.
Under section 50 such conduct or outward behaviour as evidence of the opinion held is relevent and may be proved.
Chander Lal Agarwala vs Khalilay Rahman, I.L.R. , approved.
Conduct, as an external perceptible fact, may be proved either by the testimony of the person himself whose opinion is evidence under section 50 or by some other person acquainted with the facts which express such opinion, and as the testimony must relate to external facts which constitute conduct and is given by persons personally acquainted with such facts, the testimony is in each case direct within the meaning of section 60 of the Indian Evidence Act.
816 The observations 'of Hutchins, J., in Queen Empress vs Subbarayan, Mad. 9, that section 50 of the Indian Evidence Act seems to imply that a person whose opinion is a relevant fact cannot be called to state his own opinion as expressed by his conduct and that his conduct may be proved by others only when he is dead or cannot be called, disapproved.
|
Appeals No. 488 and 489 of 1969.
Appeals by special leave from the judgment and order, dated November 4, 1968 of the Delhi High Court in Letters Patent Appeal No. 30 of 1968.
A.C. Mitra, section Ray, B.K. Chakravarti, H.K. Puri and B.N. Kirpal, for the appellant (in C.A. No. 488 of 1969) and the respondent (in C.A. No. 489 of 1969).
Jagdish Swarup, Solicitor General, V. C. Mahajan and S.P. Nayar, for the respondents (in C.A. No. 488 of 1969) and the appellants (in C.A. No. 489 of 1969).
179 The Judgment of the Court was delivered by Shah, J.
The Rampur Distillery Company Ltd. hereinafter called 'the Rampur Company ' is a manufacturer of industrial alcohol.
In 194.3 the Rampur Company appointed Govan Brothers its managing agent for 20 years.
In July 1946 a group.
of persons who may be referred to 'as.
the 'Dalmia Group ' assumed control over Govan Brothers.
V.H. Dalmia who became Managing Director of Govan Brothers, besides being a director of a number of other companies, held important positions in several trade associations.
On March 19, 1953, information was lodged by the Registrar of Joint Stock Companies, Delhi, that V. Ii.
Dalmia and others had committed offences of criminal breach of trust.
By virtue of section 330 of the , the manaing agency of the Rampur Company was to expire on August 15, 1960, unless before that date the managing agent was re appointed for a fresh term in accordance with the provisions of the .
On December 10, 1959 the Rampur Company reappointed Govan Brothers, Managing Agent for ten years with effect from August 15, 1960, and applied to the Central Government that the extension of the managing agency of Govan Brothers be approved.
The Central Government granted extension for five years under section 326 of the with effect from August 15, 1960.
In the report of the Commission headed by Mr. Justice Vivian Bose 'appointed to enquire into and report on the working of the 'Dalmia Jain Group of Industries ', the dealings of V.H. DaImia in relation to the financial affairs of some of the companies of which he was a director was severely criticized.
In the view of the Commission, V.H. DaImia was in the year 1946 47 guilty of grossly improper conduct in relation to several companies of which he was a director.
In May 1964 the police lodged criminal proceedings against V.H. Dalmia and 23 others in the Court of the District Magistrate, Delhi, charging them with being parties to a "criminal conspiracy having for its objects the commission of criminal breach of trust of the assets of the Dalmia Jain Airways Ltd., and committing offences of forgery and falsification of accounts", and that criminal breach of trust was committed by them in respect of amounts "running into crores of rupees".
The proceedings so instituted are still pending.
On September 23, 1964, the Rampur Company passed another resolution appointing Govan Brothers Managing Agent for five years with effect from August 15, 1965, and applied to the Central Government to accord approval to the appointment.
This appli 180 cation was referred by the Central Government to the Company Law Board which was constituted under section 10E of the , with authority to.
exercise the powers of the Central Government among others to deal with applications under section 326 of the .
The Campany Law Board extended the tenure of Govan Brothers till March 31, 1967.
Another application by the Rampur Company dated August 25, 1966 for extension of the term of the managing agency upto August 1970 was rejected by the Board.
The Rampur Company then moved a petition in the High Court of Delhi on June 10, 1967, for an order quashing the decision of the Board and for an order extending the term of the managing agency till March 31, 1970.
A single Judge of the High Court granted the petition holding that the managing agent was a private limited company and the reasons for failure to extend the managing agency agreement of Govan Brothers being "entirely personal to V.H. Dalmia" were "completely irrelevant in so far as the affairs of the Managing Agent company or of the petitioner 'Company (Rampur Company) were concerned." In appeal against that order a Division Bench of the High Court observed that where a Managing Agent is a corporate body, the acts and 'conduct of the Directors of that body become the object of scrutiny in determining whether such a corporate body may be considered to be a fit and p.roper person for appointment or reappointment as Managing Agent, and that the enquiry must cover all relevant 'activities and actions of the Directors of the corporate body.
The High Court accordingly set 'aside the order and remitted the case for a fresh decision.
The learned Judge who heard the petition after remand proceeded to dismiss the writ petition.
In appeal against the order the High Court observed that in determining whether a person was fit 'and proper to be appointed a managing agent his "acts and activities" in the past cannot be ignored altogether, and coupled with other circumstances, may provide a valid ground for not approving an appointment, but since under section 326(2)(b) the Board has to consider the fitness and propriety of a managing agent at the date of the proposal the Board has also "to take into consideration the subsequent conduct, acts and activities of the person", and the Board having failed to consider the entirety of the "acts and activities" of V.H. Dalmia the opinion formed by the Board was "incomplete" and not "in accordance with the provisions of section 326(2)(b) of the ".
The High Court accordingly set aside the order and directed the Board to take into consideration material circumstances, namely, the "acts and activities" of V.H. Dalmia during the years subsequent to 1947 in forming the requisite opinion under section 326(2)(3.).
181 Against that order two appeals have been preferred one by the Company Law Board, and the other by the Rampur Company with special leave.
Section 326 of the provides: "(1) In respect of any company to which neither the prohibition specified in section 324 nor applies, a managing agent shall not be appointed or ' reappointed, (a) except by the company in general meeting; and (b) unless the approval of the Central Government has been obtained for such appointment or reappointment.
(2) The Central Government shall not accord its approval under sub section (1) in any case, unless it is satisfied (a) that it is not against the public interest to allow the company to have a managing agent; (b) that the managing agent proposed is, in its opinion, a fit and proper person to be appointed or reappointed as such, and that the conditions of the managing agency agreement proposed are fair and reasonable; and (c) that the managing agent proposed has fulfilled any conditions which the Central Government require him to fulfil.
" The Rampur Company in a general meeting resolved that the managing agency of Govan Brothers be continued till August 14, 1970, and applied for the approval of the Company Law Board By sub section
(2) of section 326 the Board is enjoined not to accord its approval unless it is satisfied that it is.
not against the public interest to allow the Company to have a managing agent, that the managing agent proposed is, in its opinion, ,a fit and proper person to be appointed or re appointed as such, and that the conditions of the managing agency agreement proposed are fair and reasonable.
The section uses the present tense.
The satisfaction must be with reference to the three conditions existing in praesenti., but in adjudging whether a person is fit and proper to be appoint past actings and conduct cannot be ignored.
In considering whether a person is fit to be appointed a managing agent the Board is not restricted to a consideration of his acts, conduct 'and activities proximate to the date of the application: the Board has to consider his acts and activities past and present, the interest of the share holders and the general interests of the public in allowing 182 the management to be continued by the Directors of the Company and other circumstances which have a heating on the question.
The Board apparently restricted itself to the findings recorded by the Commission headed by Mr. Justice Vivian Bose relating to the dealings of V.H. Dalmia with the companies of which he was a director between the years 1945 and 1947.
The criticism by the Commission of the conduct of V.H. Dalmia, suggested that there were serious grounds for complaint against him, but these observations related to acts and omissions many years before the date on which the application was made.
The Board had to consider "whether Govan Brothers is a fit and proper person to be appointed managing agent" on a review of all the relevant circumstances, the criticism by the Commission, the progress made by the Rampur Company while under the management of V.H. Dalmia and others since 1946 47, the interests of the shareholders, the creditors and of the public generally, and also that a complaint was pending in a Criminal Court against V.H. Dalmia and others charging them with committing serious offences.
The Solicitor General appearing for the Union of India contended that by the use of the expression "in its opinion" occurring in section 326(2)(b) of the , it is meant that the subjectice satisfaction of the Central Government is determinative of the question whether the proposed person is fit and proper to be appointed managing agent, and if the Board reached the conclusion (as it has done in the present case on considerations which are not irrelevant) that Govan Brothers is not a fit and proper person to be appointed managing agent, the decision based on the satisfaction cannot be challenged before the High Court.
The argument is that the existence of the satisfaction as well as the decision reached on that satisfaction are immune from the scrutiny of the Court.
We are unable to agree.
By sub section
(2) of section 326 of the , the Central Government is invested with power to decide whether it is against the public interest to allow the Company to.
have a managing agent, whether the person proposed iS fit and proper to be appointed or reappointed managing agent, whether the conditions of the managing agency agreement proposed are fair and reasonable, and whether the managing agent proposed has fulfilled the conditions which the Central Government has required him to fulfil.
Investment of that power carries with it a duty to act judicially: i.e. to hold an enquiry in a manner consistent with rules of natural jusitice, to consider all relevant matters, to ignore irrelevant matters, and to reach a conclusion without bias, without predilection and without prejudice.
The satisfaction contemplated by section 326 must, therefore, be the result of an objective appraisal of the relevant materials.
The reason is clear.
By Section 326 several restrictions upon the power of the Companies and individuals to carry on business are 183 imposed in the interest of the shareholder, the creditors, and in the larger interests cf the public.
The order made by the Central Government under section 326 may result in serious detriment of the Company and the proposed managing agent, but in the larger public interest, if it is valid, they have to suffer it.
Exercise of the power conferred upon the Central Government is restrictive of valuable: rights of the Company and of the proposed managing agent, and severely restricts the liberty of contract.
The scheme of the section implies investigation and a decision on the matters set out therein.
Section 326 lays down conditions by sub section
(1)(a) in which the Central Government may override the resolution of the general body of shareholders in certain specified conditions.
Upon the Central Government is imposed a duty not to accord approval to the appointment or reappointment of a proposed managing agent in the light of els.
(a), (b) & (c) of sub section
Though the sub section is enacted in form negative in substance it confers power upon the Government subject to the restrictions imposed by els.
(a), (b) & (c) to refuse to accord approval.
Sub section (2) imposes upon the Central Government the duty not to accord approval to appointment or re appointment of a proposed managing agent unless the Government is satisfied that the managing agent is a fit and proper person to be appointed, that the conditions of the managing agency agreement are fair 'and reasonable and that the managing agent has fulfilled the conditions which the Central Government required him to fulfil.
Thereby the Central Government is not made the final arbiter of the existence of the grounds on which the satisfaction may be founded.
The satisfaction of the Government which is determinative is satisfaction as to existence of certain objective facts.
The recital about satisfaction may be displaced by showing that the conditions did not exist, or that No. reasonable body of persons properly versed in law could have reached the decision that they did.
The Courts however are not concerned with the sufficiency of the grounds on which the satisfaction is reached.
What is relevant is the satisfaction of the Central Government about the existence of the conditions in els.
(a), (b) & (c) of sub section
(2) of section 326.
The enquiry before the Court, therefore, is whether the Central Government Was satisfied as to the existence of the conditions.
The existence of the satisfaction cannot be challenged except probably on the ground that the authority acted mala fide.
But if in reaching its satisfaction the Central Government misapprehends the nature of the conditions or proceeds upon irrelevant materials, or ignores relevant materials, the jurisdiction of the Courts to examine the satisfaction is not excluded.
The power in our judgment, is a quashi judicial power and not ad 184 ministrative: it necessarily implies a duty arising from the nature of the act empowered to be done, the object for which it is to be done, the conditions in which it is to be done, and its repercussion upon the power of the Company, the shareholders, the creditors and the general public for whose benefit the power is to be exercised.
The Solicitor General appearing for the Board invited our attention to the judgment in The Barium Chemicals Ltd. and Anr.
vs The Company Law Board and Others(1).
But in that case Hidayatullah and Shelat, JJ., held that the action of the Board under section 237(b) was administrative.
Shelat, J., with whom Hidayatullah, J., agreed, observed at p. 362: "There is no doubt that the formation of opinion by the Central Government is a purely subjective process.
There can also be no doubt that since the legislature has provided for the opinion of the government and not of the court such an opinion is not subject to a challenge on the ground of propriety, reasonableness ' or sufficiency.
But the Authority is required to arrive at such an opinion from circumstances suggesting what is set out in sub clauses (i), (ii) or (iii).
If these circumstances were not to exist, can the government still say that in its opinion they exist or can the Government say the same thing where the circumstances relevant to the clause do not exist ? .
But the expression 'circumstances suggesting ' cannot support the construction that even the existence of circumstances is a matter of subjective opinion.
That expression points out that there must exist circumstances from which the Authority forms an opinion that they are suggestive of the crucial matters set out in the three sub clauses.
" Sarkar, C.J.,I. and Mudholkar, J., did not agree with that view.
Bachawat, J. expressed no opinion on the nature of the power conferred by section 237.
But in Rohtas Industries Ltd. vs
S.D. Agarwal Another(2) in dealing with an application challenging the action of the Company Law Board under section 237(b) of the this Court held that the opinion formed is not open to challenge, but the circumstances can.
The view expressed by Sarkar, C.J., and Mudholkar, J., was disapproved.
Some reliance was sought to be placed upon the observations made in Nakkuda Ali vs
M.F. De. section Jayaratne(3), in which the Judicial Committee observed: (1) (2) ; (3) 185 "After all, words such as these are commonly found when a legislature or law making authority confers power on a minister or official.
However read, they must be intended to serve in some sense as a condition limiting the exercise of an otherwise arbitrary power.
But if the question whether the condition has been satisfied is to be conclusively decided by the man who wields the power the value of the intended restraint is in effect nothing.
No doubt he must not exercise the power in bad faith: but the field in which this kind of question arises is such that the reservation for the case of bad ' faith is hardly more than a formality.
Their Lordships therefore treat words in reg. 62 'where the Controller has reasonable grounds to believe that any dealer is unfit to be allowed to continue as a dealer ' as imposing a condition that there must in fact exist such reasonable grounds known to the Controller before he can validly exercise the power of cancellation.
" In Nakkuda Alli 's case(1) the Controller of Textiles in Ceylon made an order cancelling the appellant 's licence to act as a dealer.
The Controller acted under a Defence Regulation which authorised him to cancel a licence "when the Controller has reasonable ground to believe that any dealer is unfit to be allowed to continue as a dealer".
In the view of the Judicial Committee a condition imposed "that there must in fact exist such reasonable grounds known to the Controller, before he can validly exercise the power of cancellation", but certiorari to correct the order did not lie, and there was no other means for obtaining redress.
That was a case under the Defence Regulations, and the Judicial Committee was of the view in our judgment erroneously that the duty to act judicially arises only from an express provision to that effect.
It was pointed out and we think rightly by Lord Reid in Ridge vs Baldwin(2) that when an enactment requires an official to have reasonable grounds for the decision, the law was not so defective that the aggrieved person cannot bring up the decision for review, however seriously he may be affected, and however obvious it may be that the official acted in breach of his statutory obligation.
Again in Padfield and Others vs Minister of Agriculture, Fisheries and Food and Others(3), the Minister declined to refer a complaint to the Committee of Investigation established under the Agricultural Marketing Act, 1958, that the price differential worked unfairly against the south east region of England where milk was more valuable and the cost of transport was less and the price of land was high.
The Minister informed the applicants that the complaint raised wide issues and which he did not consider suitable (1) (2) [1964] A.C. 40.
(3) ; 186 for investigation.
He claimed that he had unfettered discretion.
The House of Lords remitted the case with a direction that the Minister should consider the complaint.
We are, therefore, unable to agree that because the exercise of the power depends upon satisfaction, its exercise cannot be subjected to judicial review the Government being the final arbiter of the conditions in which the power may be exercised.
But in dealing with a petition against an order made by the Board under section 326 of the , the High Court is not constituted a Court of Appeal over the judgment of the Board.
The Court has merely to consider whether in arriving at its decision the Board has restricted itself to the enquiry contemplated to be made and has taken into consideration all the relevant circumstances and that its decision is not vitiated by irrelevant or ,extraneous matters.
The High Court was, therefore, right in holding that in determining whether Govan Brothers is a person fit and proper to be reappointed managing agent, the past conduct and actings which Were relevant to the issue had to be taken into account i.e., the Board had to consider the entire conduct and actings past and present of the Directors of Govan Brothers before rejecting the petition filed by the Rampur Company.
The appeal filed by the Rampur Company must therefore fail.
It must, however be pointed out that the time during which the managing agency of Govan Brothers is to remain in operation is fast running out.
The Solicitor General appearing on behalf of the Company Law Board and the Union of India has assured us that with the co operation of the Rarmpur Company, the Board will take steps to dispose of the application within one month from the date on which the order reaches the Company Law Board.
The appeals fail and are dismissed.
There will be no order as to costs in this Court.
P.K.P.S. Appeals dismissed.
| The provisions of sections 3, 4 and 5 of the Minimum Wages Act (XI of 1948) empower the appropriate Government to fix the minimum rate of wages in an industrial dispute between the employer and the employed and it is a criminal offence not to pay the wages thus fixed under the Act.
Held, that the restrictions imposed upon the freedom of contract by the fixation of minimum rates of wages though they interfere to some extent with the freedom of trade or business guaranteed under article 19(1)(g) of the Constitution are not unreasonable and being imposed in the interest of general public and with a view to carry out one of the Directive Principles of State Policy as embodied in article 43 of the Constitution are protected by the terms of el.
(6) of article 19.
section 1.
vs The State of Madras, (1954) 1 M.L.J. 518 referred to.
|
: Criminal Appeal No. 60 of 1981.
Appeal by Special Leave from the Judgment and Order dated 8 4 1980 of the Punjab and Haryana High Court in Criminal Revision No. 342 of 1980.
M. section Dhillon for the Appellant.
T. section Arora for the Respondent.
The Judgment of the Court was delivered by FAZAL ALI, J.
This appeal by special leave is directed against the Judgment of the Punjab and Haryana High Court dated 8th April, 1980 by which the respondent Sarwan Singh was acquitted of the charge under section 406 of the Indian Penal Code.
It appears that the respondent accused was charged under section 406 of the Penal Code for misappropriating the amounts deposited with him as a cashier of the Tanda Badha Co operative Society, District Patiala.
The challan was presented against the accused on the 13th October, 1976.
The trial court after recording the evidence acquitted the respondent of the charge under section 408 but convicted the respondent of the charge under section 406 and sentenced him to rigorous imprisonment for one year and to pay a fine of Rs. 1,000/ .
The respondent then filed the appeal to the High Court which allowed the appeal and acquitted the respondent mainly on the ground that the prosecution launched against the respondent was clearly barred by limitation under sections 468 and 469 of the Code of Criminal Procedure.
The High Court was of the view that the charge sheet clearly shows that the embezzlement is said to have been committed on 22nd August, 1972 and the audit report, through which the offence was detected is dated 5th January, 1973.
Taking any of these dates, the prosecution was barred by limitation under section 468 (2) (c) of the Code.
In our opinion, the High Court has taken the correct view of the law.
Section 468(2) (c) may be extracted thus: Sec.
468 (2) (c): "three years, if the offence is punishable with imprisonment for a term exceeding one year but not exceeding three years.
" 351 Section 469 (1) (a) and (6) may be extracted thus: "(a) on the date of the offence; or (b) where the commission of the offence was not known to the person aggrieved by the offence or to any police officer, the first day on which such offence comes to the knowledge of such person or to any police officer, whichever is earlier;" In the instant case as the charge sheet clearly mentions that the offence was committed on the 22nd August, 1972, the bar of limitation contained in section 468 (2) (c) clearly applies and the prosecution therefore, is clearly barred by limitation.
Even assuming that so far as, the offender is concerned, the commission of the offence came to knowledge of the officer concerned, it would be so according to charge sheet on January 5, 1973, the date when the audit report was made.
Even if this extreme position be accepted, the prosecution would still be barred by limitation under section 469(b) of the Code of Criminal Procedure, 1973.
Counsel for the State of Punjab was unable to assail the point of law derived by the High Court regarding the interpretation of section 468.
The object of the Criminal Procedure Code in putting a bar of limitation on prosecutions was clearly to prevent the parties from filing cases after a long time, as a result of which material evidence may disappear and also to prevent abuse of the process of the court by filing vexatious and belated prosecutions long after the date of the offence.
The object which the statutes seek to subserve is clearly in consonance with the concept of fairness of trial as enshrined in article 21 of the Constitution of India.
It is, therefore, of the utmost importance that any prosecution, whether by the State or a private complainant must abide by the letter of law or take the risk of the prosecution failing on the ground of limitation.
The prosecution against the respondent being barred by limitation the conviction as also the sentence of the respondent as also the entire proceedings culminating in the conviction of the respondent herein become non est.
For these reasons given above, we hold that the point of law regarding the applicability of Section 468 of the Code of Criminal Procedure has been correctly decided by the Punjab and Haryana High Court.
This Court has also taken the same view in a number of decisions.
The result is that the appeal fails and is dismissed.
The respondent will now be discharged from his bail bonds.
S.R. Appeal dismissed.
| The appellant, a starving youth was given shelter by a kindly couple by engaging him as a domestic servant.
The reward of that kindness was the murder of the lady of the house and her three year old son and causing serious injury to her five year old son.
The appellant was, therefore, charged and convicted under sections 302 and 307 of the Penal Code and sentenced under section 307 to imprisonment and to death under section 302.
The High Court confirmed the death sentence and hence the appeal after obtaining special leave of the Court.
Maintaining the conviction under sections 302 and 307 I.P.C. and the sentence under the latter section, but modifying the death sentence under section 302 to one of life imprisonment, the Court ^ HELD: 1.
Altering the sentence of the appellant to imprisonment for life for the offence under section 302 of the Penal Code, while maintaining the sentence under section 307 Penal Code the two sentences to run concurrently will meet the ends of justice, in the instant case, under the following circumstances: [267A B] (a) He was just about 21 years of age on the date of the offence and, very probably, a sudden impulse of sex or theft made him momentarily insensible.
(b) The evidence of Sunil shows that immediately after the crime, he was found sitting in the chowk of the house crying bitterly.(c) Having achieved his purpose, he did not even try to run away, which he could easily have done since his injuries were not of such a nature as to incapacitate him from fleeing from an inevitable arrest.
(d) Though he was not insane at the time of the offence in the sense that he did not know the nature and consequences of what he was doing, still he was somewhat unhinged.
He was kept in a mental hospital from July 19, 1973 to February 2, 1975 where he had shown aggressive symptoms and once even attacked another patient.
(e) The basic evidence in this case is of a child of five who answered many vital questions with a nod of the head, one way 260 or the other.
The extreme sentence cannot seek its main support from evidence of this kind which, even if true, is not safe enough to act upon for putting out a life.
(f) Non availability of the useful data on the question of sentence which the trial court proposed to pass due to the trial Judge 's failure to ask the appellant what he had to say on the question of sentence and (g) the appellant has been in jail for ten long years and probably would have earned by now the right to be released, after taking into account the remissions admissible to him, were he sentenced to life imprisonment.
[265 E H, 266A, C D, G] 2.
The Trial Judge had a safe expedient in section 235(2) of the Code of Criminal Procedure, 1973, which he needlessly denied to himself on technical consideration that by reason of section 484(2) (a) of the Code section 235 (2) did not apply to trials which were pending on the date when the new Code came into force.
The Trial Judge ought to have questioned the appellant on the sentence, whether the letter of section 235(2) governed the matter or not.
That would have furnished to the court useful data on the question of sentence which it proposed to pass.
In any case, the trial would not have been invalidated if the court were to apply the provisions of section 235 which were introduced into the Code, ex debito justiciae.
[266 D F] 3.
A witness who, by reason of his immature understanding was not administered oath and who was privileged, by reason of his years, not to make his answers in an intelligible and coherent manner is unsafe to be trusted whole sale.
Children, in the first place, mix up what they see with what they like to imagine to have seen and besides, a little tutoring is inevitable in their case in order to lend coherence and consistency to their disputed thoughts which tend to stray.
[266 A B, C] But, in the instant case, there are unimpeachable and the most eloquent matters on the record which lend an unfailing assurance that Sunil is a witness of truth, not a witness of imagination as most children of that age are.
[263H,264A] 4.
An assessment of the following corroborative evidence, in the instant case, clearly indicate that it was the appellant who committed the murder of Geeta and her son Anil and caused injuries to Sunil: (a) the presence of the appellant proved by quite a large number of injuries during the incident; (b) his conduct in not raising hue and cry at least after the robbers had made good their escape, if any at the time of the killing of the mistress of the house, but little while later, he quietly walked to a neighbour and trotted out the story that a few Badmashes intruded into the house and killed Geeta and her son; (c) the pattern of the crime, that is, Anil was sleeping alongside his mother receiving an injury and getting killed while the mother was assaulted and Sunil being assaulted in order that he should not be left alive to identify the culprit, whom Sunil could easily identify as he was a household servant engaged mainly to look after the two boys: (d) the nature of injuries which were found on the person of the appellant are typically of the kind which a woman in distress would cause while defending herself, and cannot be by a Badmash but would otherwise deal with him if indeed the Badmash wanted to put the appellant out of harm 's way; (e) the weapons with which Geeta was defending herself at different stages of her life saving fight with the appellant were snatched by the appellant and he hit her with those weapons, that is how similar injuries were found on the person of the deceased and the appellant by the same two weapons.
[264 A H, 265 B C] 261
|
ition (Criminals No. 126 of 1982.
(Under Article 32 of the Constitution of India) Ram Jethmalani, Miss Rani .
Jethmalani, Harjinder Singh and K. K. Sood for the Petitioner.
O.P. Rana and R.N. Poddar for the Respondent.
The Judgment of the Court was delivered by VARADARAJAN, J.
On 31st March, 1982, after hearing learned counsel for both the parties, we quashed the order of detention in this case, observing that our reasons will follow.
We proceed to give the reasons.
This Writ Petition under Article 32 of the Constitution of India is by Smt.
Bimla Dewan, wife of the detenu Shri Dev Raj Dewan, 44 resident of House, No. 53, Gadodia Road, 146/2 THAN Singh Nagar, Anand Parbat, Delhi, for quashing the order of detention dated 25.9.1981 issued by the Commissioner of Police, Delhi under section 3 (2) of the .
The detenu was detained from 26. 9. 1981.
The order of detention is said to have been approved by the respondent, Lieutenant, Governor, Delhi, by order dated 1.10.1981 under sec.
3 (4) of the Act.
The detenu had been detained in the Central Jail.
Tihar.
New Delhi.
It is alleged in the petition that the detenu is a social worker, who is in active politics, and had contested the Municipal Elections of the Municipal Corporation of Delhi from the Anand Parbat constituency in 1977 and was defeated by a Congress l candidate by a narrow margin of 360 votes, and due to political rivalry he has been involved from time to time in a number of false cases, in most of which he has succeeded in proving his innocence and was acquit ted.
It is further alleged in the petition that out of sheer political vendetta the detenu has been detained maliciously with full know ledge that the alleged activities of the detenu, even if true, do not fall within the concept of threat to public order.
The arrest or prosecution of the detenu, cannot by itself, be a ground of detention It is only the material on the basis of which the detenu is arrested, prosecuted or convicted that can constitute a ground of detention.
But no such material, including the blue film mentioned in item 28 of paragraph 2 of the grounds of detention has been supplied to the detenu and it has, therefore, become impossible for him to make any effective representation against his detention.
No opportunity was given to the detenu to make a representation to the detaining authority.
The detenu challenged his detention by filing Criminal Writ Petition No. 126 of 1981 in the High Court of Delhi on 13.10.1981.
But since no order had been passed in that petition though arguments were heard in November 1981, this writ petition has been filed in the Supreme Court on 3.3.1982.
It is alleged in the grounds of detention in which 32 instances have been given that those acts of the detenu show that he is a desperate and dangerous character who acts in a manner which is prejudicial to maintenance of public order, that his activities are hazardous to the community and he has not stopped his violent, anti social and criminal activities in spite of his prosecution in a number of cases, and that in these circumstances his detention under 45 section 3 (2) of the National security Act, 1980 has been considered A essential n order to stop his criminal activities.
In the counter affidavit it is stated at the outset that the High Court of Delhi has by an order dated 4.3.1982 dismissed Criminal Writ Petition No. 126 of 1981 which was filed for quashing the very same order of detention dated 25.9.1981 and that the present Writ Petition is consequently not maintainable and only an appeal to this Court against the judgment of the High Court could be filed.
It is contended that there is nothing on record to show that the detenu is a social worker.
The counter affidavit further proceeds to state that the criminal history of the detenu as disclosed in the grounds of detention goes to show that he has been a serious threat to maintenance of public order and that whenever any police officer or any other agency tried to interfere in the matter he had assaulted, obstructed or attempted to murder him and that detention under the Act is the only way to prevent him from indulging in activities which are prejudicial to maintenance of public order.
It is stated that copies of all first information reports mentioned in the grounds of detention were supplied to the detenu and that the detaining authority has specifically mentioned in the grounds of detention that the detenu has a right of representation to the Lieutenant Governor and the Advisory Board.
The respondent has prayed for dismissal of the Writ Petition for the aforesaid reasons.
Instances Nos.
I to 22, 24 and 28 relate to criminal cases, in all of which the detenu has been found to be not guilty and acquitted.
Instance No. 23 relates to a case in which the detenu has been discharged.
Instance No. 28 relates to a blue film of naked picture for public circulation/exhibition alleged to have been recovered on 23/24.6.1979 by the Police from the Karnal Restaurant of the detenu.
Since all these instances relate to cases in which the detenu has been found to be not guilty and acquitted none of these instances can legitimately be taken into consideration for detaining the detenu under section 3 (2) of the .
Mr. Ram Jethmalani, Senior Advocate who , appeared for the petitioner in this case submitted that in the there is no provision like section SA in COFEPOSA (Conservation of Foreign Exchange and Prevention of Smuggling Act) and, therefore, if one of the grounds Is bad the order of detention has to be quashed in its entirety and that as the detaining authority has based the order of detention on, 46 grounds Nos. 1 to 24 and 28 also, the order of detention is unsustainable.
The learned counsel for the respondent did not submit anything to controvert that submission of Mr. Ram Jethmalani.
We are of the opinion that since the detaining authority would naturally have been influenced by these grounds as well for coming to the conclusion that the detenu requires to be detained under the provisions of the Act, the entire order of detention ii unsustainable.
Before considering the other instances, it is necessary to note what Hidayatullah, C.J. has observed in Arun Ghosh vs State of West Bengal.(1) It is this: "Take the case of assault on girls.
A guest at a hotel may kiss or make advances to half a dozen chamber maids.
He may annoy them and also the management but he does not cause disturbance of public order.
He may even have a fracas with the friends of one of the girls but even then it would be a case of breach of law and order only.
Take another case of a man who molests women in lonely places.
As a result of his activities girls going to colleges and schools are in constant danger and fear.
Women going for their ordinary business are afraid of being way laid and assaulted.
The activity of this man in its essential quality is not different from the act of the other man but in its potentiality and in its effect upon the public tranquillity there is a vast difference.
The act of the man who molests the girls in lonely places causes a disturbance in the even tempo of living which is the first requirement of public order.
He disturbs the society and the community.
His act makes all the women apprehensive of their honour and he can be said to be causing disturbance of public order and not merely committing individual actions which may be taken note of by the criminal prosecution agencies." Instances Nos.
25 to 27 and 29 to 32 relate to criminal cases which are said to have been pending against the detenu on the date of order of detention.
We shall first consider instances Nos.
25 to 27 and 30 to 32.
Instances 25 and 27 relate to cases in which the detenu is alleged to have been arrested I for the reason that whisky was being served in a restaurant belonging to him.
instances No. 26 relates to the alleged recovery of a loaded English revolver and 5 live cartridges from the detenu 's Kamal Restaurant on 24.6.1979.
Instance No. 30 relates to a case in which the detenu is said to have.
(1) AIR.
1970 SC.
47 been arrested on the complaint of a lady that the detenu bad A conspired for the murder of her husband, who was murdered while he was returning after Seeing a cinema on 16.8.1981.
Instance No. 31 relates to a case arising out of a report sent by a Sub Inspector of Police, Anand Parbat against the detenu alleging that Smt.
Praveen Kapoor and Smt.
Shielawati Kapoor, members of the family of deceased Vinod Kapoor apprehended danger to their lives at the hands of the detenu.
Instance No. 32 relates to the arrest of the detenu on the complaint of Smt.
Sheilawati Kapoor that the detenu threatened her with dire consequences when she went to Tees Hazari Courts to see her son Ashok on 10.9.1981.
We are clearly of the opinion that these instances cannot in law amount to any interference with the maintenance of public order and could not constitute grounds for detention under the .
We now come to instance No. 29 which lates to the arrest of the detenu on the complaint of one Prem Kumar Narang Municipal Councillor that when the Corporation Staff wanted some persons for prosecution, one Ram Singh came to rescue them and that later on the detenu came alongwith 70 other persons and started throwing stones etc.
resulting in damage to a building.
On that complaint a First Information Report dated 28.12.1979 under sections 147, 148, 149 323 and 427 I.P.C. is said to have been submitted by the Police.
A mere allegation in the report of the Municipal Councillor, without anything more, cannot constitute a ground for detention under the There is no allegation in that instance that law enforcement authorities had any valid reason to believe the allegations made in the complaint to be true even while the case registered on that complaint was pending trial and posted to 29.10.1981.
There is no allegation in that instance that the building at which stones etc.
are alleged to have been thrown is situate in a public place and that the alleged act of the detenu and 70 other persons has caused apprehension in the minds of the residents of the locality in regard to maintenance of public order.
We are, there fore, unable to hold that this instance has any potentiality to interfere with and has effect upon the public tranquillity and order and, that it cannot constitute a ground for detention under the .
It is necessary to mention in passing the fact that it is admitted in the Writ Petition itself that Criminal Writ Petition No. 126 of 1981 had been filed in the High Court of Delhi on 13.10.1981 48 for quashing the very same order of detention dated 25.9.1981 and that arguments in that Petition had been heard in November 1981 itself.
In the counter affidavit it is stated that the High Court of Delhi has by an order dated 4.3.1982 dismissed that Writ Petition and, therefore, only an appeal against that order would lie to this Court and this Writ Petition is not maintainable.
Though the learned counsel for the respondent invited our attention to certain portions of that order dated 4.3.
1982 of a Division Bench of the Delhi High Court dismissing Writ Petition No. 126 of 1981 it was not contended by him that only an appeal against that order would lie to this Court and that this Writ Petition is not maintainable.
It is, therefore, unnecessary for us to go in detail into this ground of objection taken in the counter, affidavit.
For the reasons mentioned above we are of the opinion that the order of detention dated 25.9.1981 is unsustainable and liable to be quashed.
There will be no order as to costs.
H.L.C. Petition allowed.
| The Andhra Pradesh Land Encroachment Act, 1905 was enacted to check unauthorised occupation of government lands.
Under section 2 of the Act all public roads, streets, lands, paths, bridges etc, are deemed to be government property.
Any person who is in unauthorised occupation of any land which is the property of the government is liable to pay assessment as provided in section 3 of the Act.
Section 5 provides that any person, liable to assessment shall also be liable to pay an additional sum by way of penalty.
Under section 6(1) the Collector, Tahsildar or Deputy Tahsildar has the power to summarily evict any person unauthorisedly occupying any land for which he is liable to pay assessment under section 3 after issuing a show cause notice as provided in section 7.
Some time between the years 1932 and 1937 certain lands were acquired by the Government of Nizam of Hyderabad for the benefit of a University.
A question having arisen as to whether three specific plots of land had been included in the acquisition, the University filed a suit in 1956 praying for the eviction of the occupant.
This suit was dismissed in 1959 on the ground that one of the plots had not been acquired by the Government and in respect of the other two plots the University had failed to prove its possession within 12 years before the filing of the suit.
The trial court found that the heir of the original owner of the plots had encroached on the said two plots in 1942.
The judgment of the trial court was confirmed by the High Court in 1964.
The State Government was not a party to those proceedings.
The University activated the State Government for summary eviction of the heir of the original owner from the three plots of lands.
The Tahsildar initiated action and passed an order of eviction under section 6(1) of the Act on December 15, 1964.
Appeals against the order were rejected by the Collector in 1965 and by the Revenue Board in 1968.
The respondents who purchased the plots during the pendency of the appeal before the Revenue Board were impleaded as parties 501 to the proceedings on the death of the heir of the original owner and.
their appeal from the decision of the Revenue Board was rejected by the Government in 1973 The respondents challenged the order of eviction by a petition under article 226 which was dismissed by a Single Judge of the High Court who held that the question of title to the property could not properly be decided by him under Article 226 but the fact that there was a finding by the Civil Court that there was encroachment by the alleged encroacher was sufficient to entitle the Government to initiate action under the provisions of the Land Encroachment Act.
The appeal of the respondents was allowed by the Division Bench which held that a dispute relating to as far back as 1942 could not be dealt with in summary proceedings under the provisions of the Land Encroachment Act.
The summary remedy could not be resorted to unless there was an attempted encroachment or encroachment of a very recent origin; nor could it be availed of in cases where complicated questions of title arose for decision.
Dismissing the appeals, ^ HELD: (I) The summary remedy for eviction provided by section 6 of tho Act can be resorted to by the Government only against persons who are in unauthorised occupation of any land which is the property of the Government.
If there is a bonafide dispute regarding the title of the Government to any property, the Government cannot take a unilateral decision in its own favour that tho property belongs to it and on that basis take recourse to the summary remedy provided by s 6.
In the instant case there was unquestionably a genuine dispute , between the State Government and the respondents as to whether the three plots of land bad been the subject matter of acquisition proceedings taken by the then Government of Hyderabad, and whether the University for whose benefit the plots were alleged to have been acquired had lost title to the property by operation of the law of limitation.
The respondents had a bonafide claim to litigate and they could not be evicted save by the due process of law.
The summary remedy prescribed by section 6 was not the kind of legal process which was suited to adjudication of complicated questions of title.
That procedure was, therefore, not the due process of law for evicting the respondents.
[506 H; 507 A; 507 D H] 2.
The view of the Division Bench that the summary remedy provided for by section 6 could not be resorted to unless the alleged encroachment was of "a very recent origin" cannot be stretched too far.
It is not the duration, short or long, of encroachment that is conclusive of the question whether the summary remedy prescribed by the Act can be put into operation for evicting a person.
What is relevant for the decision of that question is more the nature of the property on which the encroachment is alleged to have been committed and the consideration whether the claim of the occupant is bonafide.
Facts which raise a bonafide dispute of title between the Government and the occupant must be ad judicated upon by the ordinary courts of law.
The duration of occupation is relevant in the sense that a person who is in occupation of a property openly for 502 an appreciable length of time can be taken prima facie to have a bona fide claim to the property requiring an impartial adjudication according to the established procedure of law.
In the instant case, the long possession of the respondents and their predecessors in title raised a genuine dispute between them and the Government on the question of title.
Whether the title to the property had come to be vested in the Government as a result of acquisition and whether the heir of the original owner had encroached upon that property and perfected his title by adverse possession had to be decided in a properly constituted suit.
[508 A D; 508 E G]
|
Appeal No. 1125 of 1970.
Appeal under section 116 A of the Representation of the People Act, 1951 from the judgment and order dated March 26, 1970 of the Assam and Nagaland High Court in Election Petition No. 2 of 1969.
S.V. Gupte, S.K. Ghose, Advocate General, Nagaland, Naunit Lal, A. R. Bharthakar, R. C. Choudhry and B. K. Dass, for the appellant.
A. section R. Chari, R. K. Garg, D. P. Singh, R. K. Jain, V. J. Francis and section Chakravarty, for the respondent. 425 On January 14, 1971 the Court passed, the following ORDER After hearing the arguments we are of the view that unders.
116A of the Representation of the People Act, 1951 as amend ed by the Act of 1966, the respondent is entitled to support the judgment of the High Court without preferring an appeal against, an order made against him if the ultimate decision in the petition is in his favour.
The reasons for this order will be given hereafter.
The Judgment of the Court was delivered by Hegde, J.
The decision on the question of law considered by this Bench was announced on the 14th of this month.
We are now proceeding to give our reasons in ' support of that decision.
On September 14, 1970, two of us (Shah, C.J. and Grover, J.) passed the following order "This appeal raises an important question of procedure.
We have heard leaned Counsel appearing on behalf of the parties.
Mr. Gupte appearing for the appel lant contended that the charge under section 123(6) read with section 77 of the Representation of the People Act was not made out.
Mr. Chari appearing on behalf of the respondent contended that he was entitled to submit without preferring a substantive appeal to this Court that the charges in respect of which the appellant has been absolved by order of the High Court are proved and he should be permitted to raise those questions in this appeal.
Our attention has not been invited to any case which interprets the provisions of section 116(A) of the Representation of the People Act at it stands after the amendment made in the year 1967.
In view of the importance of the question, we direct that the case be referred to a larger bench of five judges.
Hearing expedited.
Though, the entire appeal was referred to a larger bench for decision, at the hearing it was considered advisable to decide only the question of law set out in the order and not the whole case.
We accordingly heard arguments only on that question.
In our opinion that question is concluded by the decision of this Court in Ramanbhai Ashabhai Patel vs Debhi Ajitkumar Fulsinji and ' Ors.
(1) (1) ; 426 Mr. section V. Gupte , learned Counsel for the appellant tried to distinguish that decision on two grounds viz. (1) that the decision in question was rendered in an appeal to this Court by special leave and as such the jurisdiction of this Court was much wider than that conferred on this Court by section 116A of the Representation of the People Act, 1951 and (2) that the scope of an appeal under section 116A before, its amendment in 1966 was different than from its scope at present.
We are unable to accept either of these two contentions.
In the above decision, it was ruled that this Court has power to decide all the points arising from the judgment appealed against and even in the absence of an express provision like 0.
XLI, r. 22 of the Code of Civil Procedure, this Court can devise appropriate procedure to be adopted at the hearing and there could be no better way of supplying the deficiency than by drawing upon the provisions of a general law like the Code of Civil Procedure and adopting such of those provisions as are suitable.
The decision of, the Court did not rest either on the ground that the appeal before it was brought by special leave of this Court or on the interpretation of section 116A as it than stood.
The reasons behind the rule laid down by this Court are found at p. 725 of the report.
Therein it is observed : "It is true that the rules framed by this Court in exercise of its rule making powers do not contain any provision analogous to 0.
XLI, rule 22 of the Code of Civil Procedure which permits a party to support the judgment appealed against upon.
a ground which has been found against him in that judgment.
The provision nearest to, it is the one contained in 0.
XVIII, r. 3 of the Rules of this Court which requires parties to file statement of cases.
Sub rule (1) of that rule provides that Part I of the statement of the case shall also set out the contentions of the parties and the points of law and fact arising in the appeal.
It further provides that in Part II a party shall set out the propositions of law to be urged in support of the contentions of the party lodging the case and the authorities in support thereof.
There is no reason to limit the provision of this rule only to those contentions which deal with the points found in favour of that party in the judgment appealed from.
Apart from that we think that while dealing with the appeal before it this Court has the power to decide all the points arising from the judgment appealed against and even in the absence of an express provision like 0.
XLI, r. 22 of the Code of Civil Procedure it can devise the appropriate procedure to be adopted at the hearing.
There could be no better way of supplying the deficiency than by drawing upon the provisions of a 427 general law like the Code of Civil Procedure and adopting such of those provisions as are suitable.
We cannot lose sight of the fact that normally a party in whose favour the judgment appealed from has been given will not be granted special leave to appeal from it.
Considerations of justice, therefore, require that this Court should in appropriate cases permit a party placed in such a position to support the judgment in his favour even upon grounds which were negatived in that judgment." The decision referred to above will govern the question of law with which we are connected in this case.
The appeal was already directed by the Chief Justice to be posted before the Bench presided over by Mitter J. for further hearing.
| In an election petition there were charges under section 123(6) read with section 77 of the Representation of the People Act, 1951 against the appellant.
The High Court decided against him.
although absolving him of certain charges.
The appellant filed an appeal in this Court under section 116A of the Representation of the People Act, 1951 as amended in 1966.
The respondent contended that he was entitled to submit without preferring a Substantive appeal to this Court that the charges in respect of which the appellant had been absolved by the High Court were proved and he should therefore be allowed to raise those questions.
On the matter being referred to a large bench , HELD : The respondent 's contention must be accepted.
In Rambhai Ashabhai Patel 's case it was ruled that this Court has power to decide all the points arising from the judgment appealed against and even in the absence of an express provision like OXLI r. 22 of the Code of Civil Procedure, this Court can devise appropriate procedure to be adopted at the hearing and there could be no better way of supplying the deficiency than by drawing upon the provisions of a general law like the Code of Civil Procedure and adopting such of those provisions as are ,suitable.
The decision of the Court did not rest either on the ground that the appeal before it was brought by special leave or on the interpretation of section 116A as it then stood.
[426 D G] Rai anbhai Ashabhai Patel vs Debbi Ajitkumar Pulsinji & Ors. ; , followed and applied.
|
ivil Appeal Nos.
1192 94 of 1971.
From the judgment and order dated the 20th October, 1976 of the High Court of Madras in Tax Cases Nos.
205 to 207 of 1971.
S.T. Desai, A.K. Verma and J.B. Dadachanji for the Appellant.
A.K. Sen and A.V. Rangam for the Respondent.
The Judgment of the Court was delivered by VENKATARAMIAH J.
The appellant in these three appeals by special leave is a company engaged in the business of manufacture and sale of art silk yarn.
It has its factory at Sirumughai in the District of Coimbatore in the State of Tamil Nadu.
The appellant is registered as a dealer carrying on business at Coimbatore.
In the course of its business, it sold during the relevant period large quanti 46 ties of art silk yarn to various purchasers some of whom were weavers residing in the States of Maharashtra and Gujarat who had been issued cards under a scheme called 'Export Promotion Scheme ' entitling them to buy specified quantities of art silk yarn from specified manufacturers.
The question involved in these appeals relates to the exigibility of the sales effected in favour of Export Promotion Scheme card holders belonging to the States of Maharashtra and Gujarat to tax under the (hereinafter referred to as 'the Act ').
The assessment years are 1962 63, 1963 64 and 1964 65.
The details of the Export Promotion Scheme for distribution of art silk yarn referred to above were these: There were certain weavers in India who were entitled to an incentive in the form of import licences to import art silk yarn from abroad.
The said import entitlement was cut to a certain extent and indigenous art silk yarn at concessional price was allotted to them.
To regulate the scheme of allotment, a committee called the 'Art Silk Yarn Distribution Committee ' was constituted by the Government of India.
The Committee made allotments to different weavers by issuing allotment cards.
These allotment cards contained details of the quantity of allotment and the rayon yarn manufacturer from whom the allotted quantity of yarn could be drawn.
As per the terms of the card, the yarn manufacturer should offer to the allottee rayon yarn within seven days of the date of the card without waiting for the allottee to approach him.
A firm contract for the supply of yarn should be completed within a period of twenty one days from the date of allocation of the card.
If a firm commitment was not entered into by the allottee with the yarn manufacturer within twenty one days from the date of allocation of the card, the yarn manufacturer should return the allocation card to the Distribution Committee with suitable remarks on the card and a covering letter explaining the reasons for the return of the card.
Even in the case of actual fulfilment of the quota covered by the allocation card, the said card should be returned to the Distribution Committee after the delivery of the yarn was completed.
This in brief was the Scheme.
In the instant case, the appellant had supplied art silk yarn to certain card holders who were residing, as stated earlier, outside the State of Tamil Nadu.
It is stated that the appellant had a selling agent and distributor by the name M/s. Rayonyarns Import Company Ltd. at Bombay and the case of the appellant was that it had 47 supplied art silk yarn to the card holders in the States of Maharashtra and Gujarat through the said agent and the delivery of the goods was effected at Bombay.
In the assessment proceedings before the Joint Commercial Tax Officer, Coimbatore for the year 1964 65, the appellant claimed that the sales of art silk yarn through its agent at Bombay were not inter State sales as defined by section 3(a) of the Act as the movement of the goods in question from the State of Tamil Nadu to the State of Maharashtra or the State of Gujarat was not occasioned by the sales in question and that they were in fact sales which had taken place outside the State of Tamil Nadu.
The Joint Commercial Tax Officer rejected the contention of the appellant and treated the sales effected in favour of the Export Promotion Scheme card holders through the appellant 's agent at Bombay as inter State sales and levied tax under the Act accordingly.
He also revised the orders of assessment for the years 1962 63 and 1963 64 bringing to tax the turnover relating to transactions of similar nature during those years.
In the appeals filed by the appellant against the order of assessment for the year 1964 65 and of revised assessment for the years 1962 63 and 1963 64 before the Appellate Assistant Commissioner, (Commercial Taxes), Coimbatore, the orders passed by the Joint Commercial Tax Officer were affirmed.
The appellant then filed three appeals before the Tamil Nadu Sales Tax Appellate Tribunal (Additional Bench), Coimbatore against the orders passed in appeal by the Appellate Assistant Commissioner.
The Tribunal also held that the sales in favour of the Export Promotion Scheme card holders outside the State of Tamil Nadu were inter State sales and were liable to be taxed under the Act.
Aggrieved by the orders of the Tribunal, the appellant preferred three revision petitions before the High Court of Madras.
These petitions were dismissed.
Thereafter the appellant has come up in appeal to this Court by special leave.
Section 3(a) of the Act provides that a sale or purchase of goods shall be deemed to take place in the course of inter State trade or commerce if the sale or purchase occasions the movement of goods from one State to the other.
In order to substantiate its case, the appellant has placed before us the documents relating to one transaction stating that the decision on the true nature of the said transaction would govern all other transactions of sale in dispute as they were all of a similar kind.
Those documents relate to the supply of art silk yarn to a firm known as M/s. Ramesh Silk Fabrics at Surat in the State of Gujarat made in June, 1964.
The purchaser was issued an allocation card on November 7, 1963 bearing No. 48 3124.
Under the card, M/s. Ramesh Silk Fabrics was entitled to purchase 273 Kgs.
of indigenous art silk yarn from the appellant.
The following were the relevant terms of the card: "1.
The rayon manufacturers and/or our approved dealers shall ensure that the quantity sold is not more than the quantity allocated as indicated in column No. 4(b) on the reverse of the card.
The rayon manufacturer shall offer yarn to the allottee within seven days from the date of allocation card without waiting for the allottee to approach him.
Contract for the supply of yarn shall be concluded within 21 days from the date of the allocation card.
Particulars of the quantity of yarn sold by the rayon yarn manufacturer his approved dealer with the date of or sale shall be entered and signed by the seller in column (5) on the card.
No supply shall be made on allotment card on which corrections have not been attested by the Secretary or the Manager.
If firm commitment is not entered into by the allottee with the yarn manufacturer, the yarn manufacturer shall return the allocation card to the Distribution Committee, with suitable remarks on the card and a covering letter explaining the reasons for returning the card.
Allocation cards shall be returned to the Distribution Committee after the delivery of yarn has been completed.
" At the back of his allocation card, in column 4(a) the appellant is shown as the manufacturer and in column 4(b) the quantity allotted is shown as 273 Kgs.
Column (5) of the allocation card shows that quantity of 268 Kgs. had been supplied as per Invoice No. BC/132.
Then we have the Invoice No. BC/132 prepared in the name of the appellant by its agent, Rayon yarn Import Co. Pvt. Ltd. and signed by the agent for and on behalf of the appellant.
The cases containing goods sold had been marked as 5829, 8479 and 8505.
The Invoice contains a note which reads as follows: 49 "We have charged you 2% Central Sales Tax for which purpose you are required to send us immediately your regular 'C ' form correct in all respects as required by the law in force for the time being in the absence of which you are required to remit us balance sum of Rs . being the difference between the rate charged and the revised rate at 10% applicable in such case.
" But actually 2% tax was added and it was shown in the invoice as local sales tax of Maharashtra at 2% of the price.
A delivery order dated June 3, 1964 prepared by the agent at Bombay on behalf of the appellant also refers to the numbers of the cases containing goods as 5829, 8479 and 8505.
What is of significance is a letter dated May 23, 1964 written by the agent at Bombay to the appellant.
By that letter, the agent requested the appellant to send from the factory 69 cases of yarn bearing specific numbers including case No. 5829, 8479 and 8505.
The said letter further stated that the invoices of sale would be sent after the goods were sold by the agent.
What is attempted to be made out by the appellant is that the appellant was informing its agent at Bombay from time to time as and when goods were manufactured the number of the cases in which the goods had been packed and at the request of its agent it had despatched the goods to Bombay but not as a result of any sale of the said goods in favour of a purchaser.
According to the appellant, the sale had taken place at Bombay and the movement of goods to Bombay from the State of Tamil Nadu was not connected with the sale in question.
In order to constitute an inter State sale as defined in section 3(a) of the Act, two factors should co exist (i) a sale of goods and (ii) movement of goods from one State to another under the contract of sale.
If there is a conceivable link between a contract of sale and the movement of goods from one State to the other in order to discharge the obligation under the contract of sale, the inter position of an agent of the seller who may temporarily intercept the movement ought not to alter the inter State character of the sale.
The facts which are glaring in this case are: (1) the allotment of a certain quantity of art silk yarn produced by the appellant in favour of the allocation card holder; (2) the requirement that the appellant should offer to sell the quantity of goods allotted to the card holder within seven days; 50 (3) the requirement that contract of sale should be completed within twenty one days of the date of the allocation card; (4) the requirement that the card should be returned to the Committee if no contract of sale was concluded as stated above; and (5) the fact that the goods have been supplied expressly against the quota allotted under the allocation card.
Admittedly the allocation card bearing No. 3124 was issued on November 7, 1963 and it required the appellant to offer to sell the quantity of art silk yarn mentioned in it to the purchaser within seven days without even waiting for the purchaser approaching the appellant with a request to supply the goods in question.
The card contemplated a contract of sale to be completed within twenty one days of the date of its issue.
The invoice in question contained the number of the allocation card.
In the letter dated May 23, 1964 the agent requested the appellant to send the cases bearing Nos.
5829, 8479 and 8505 by lorry from Sirumughai and the said boxes were later on admittedly delivered to the purchaser on June 3, 1964.
These facts cumulatively suggest that the goods in question had been transported from the factory site of the appellant to Bombay for delivery to the purchaser as a result of the contract of sale established in accordance with the terms of the allocation card.
It is, however, argued on behalf of the appellant relying upon the decision of this Court in Tata Engineering and Locomotive Co. Ltd. vs Commissioner of Commercial Taxes, Jamshedpur and Anr.
that the sale effected by the appellant 's agent at Bombay could not be treated as the immediate case of movement of goods from the State of Tamil Nadu to the State of Maharashtra or the State of Gujarat, as the case be may.
The facts in the aforesaid case are distinguishable from the facts in the present case since it was held in that case that the procedure followed by the manufacturer, the appellant in that case together with the absence of any firm orders placed by the purchasers indicated that there were no transactions of sale within the meaning of section 2(g) of the Act and assuming that any firm orders had been received by the appellant therein, they could not be regarded as anything but mere offers.
This Court further held in that case that the appropriation of goods was done 51 at the appellant 's stockyard situated in the State where the vehicles were delivered to purchasers and it was open to the appellant till then to allot any vehicle to any purchaser or to transfer a vehicle from one stockyard to another.
One strong circumstance which existed in that case was the absence of the firm orders which occasioned the movement of goods from the State of Bihar to other States as can be seen from the following passage in that decision: "As regards the so called firm orders it has already been pointed out that none have been shown to have existed in respect of the relevant periods of assessment.
Even on the assumption that any such orders had been received by the appellant they could not be regarded as anything but mere offers in view of the specific terms in Exhibit 1 (the dealership agreement) according to which it was open to the appellant to supply or not to supply the dealer with any vehicle in response to such order.
" In the instant case there is clear evidence of the existence of a prior contract of sale as per terms of the allocation card.
The fact that actual sale pursuant to the said contract of sale had taken place subsequently does not militate against the transaction being treated an inter State sale under Section 3 (a) of the Act, since the movement of the goods delivered to the buyer was occasioned by the contract of sale brought into existence under the terms of the allocation card.
It was, however, faintly suggested that the evidence of what took place between the appellant and the allottee within twenty one days of the issue of the allocation card was lacking in this case.
Evidence about these facts was within the knowledge of the appellant and the appellant had not placed it before the assessing authority.
It is likely that if such evidence had been produced it would have gone against the appellant.
Even apart from that the finding recorded by the assessing authority the appellate authority, the Tribunal and the High Court on the basis of the terms of the allocation card and other material on record that there was a contract of sale within the stipulated time between the appellant and the allottee of art silk yarn is unassailable.
In the circumstances no assistance can be derived by the appellant from the case of Tata Engineering and Locomotive Co. Ltd. (supra).
The decision of this Court in Kelvinator of India Ltd. vs The 52 State of Haryana relied on by the appellant has also no bearing on this case.
The assessee in that case had its factory where it manufactured refrigerators at Faridabad in the State of Haryana and it moved the goods manufactured by it to its godown at Delhi.
The excise pass utilised for such movement was always in favour of self.
During the transport of goods, the assessee paid octroi payable for bringing goods into Delhi.
At Delhi, the assessee sold the goods to its distributors.
The Court on a consideration of the material before it held that even though there were prior distribution agreements entered into between the assessee and its distributors, the goods in question had not been moved pursuant to the said agreements from Faridabad to Delhi, and hence there was no inter state sale.
The facts of this case are, however, close to the facts in English Electric Company of India Ltd. vs The Deputy Commercial Tax officer & Ors.
Here also the assessee had its factory in the State of Tamil Nadu.
Its registered office was at Calcutta but it had branch offices at Madras, Bombay and other places.
A Bombay buyer wrote to the Bombay branch of the appellant in that case asking for lowest quotation in respect of the goods which were being manufactured in the factory in Tamil Nadu.
After some correspondence between the Bombay branch and the Madras branch, the Bombay branch, wrote to the Bombay buyer giving all the required particulars.
The Bombay buyer thereafter placed an order with the Bombay branch for certain goods.
The Bombay branch informed the Madras branch about the order placed by the Bombay buyer.
On receipt of the invoice from the Madras branch the Bombay branch wrote to the Bombay buyer that some of the goods indented by him were ready for despatch and asked for despatch instructions.
On receipt of such instructions, the Bombay branch asked the Madras Branch to send goods to Bombay.
The railway receipts were sent through the Bombay branch.
The goods were delivered to the Bombay buyer through clearing agents and the insurance charges were collected from the Bombay buyer.
The assessee claimed in the assessment proceedings that the sale was not an inter State sale but one which had taken place at Bombay between the Bombay branch and the Bombay buyer, The said contention was rejected by this Court with the following observations: "The appellant in the present case sent the goods direct from the Madras branch factory to the Bombay buyer 53 at Bhandup, Bombay.
The railway receipt was in the name of the Bombay branch to secure payment against delivery.
There was no question of diverting the goods which were sent to the Bombay buyer.
When the movement of goods from one State to another is an incident of the contract it is a sale in the course of inter State sale.
It does not matter in which State the property in the goods passes.
What is decisive is whether the sale is one which occasions the movement of goods from one State to another.
The inter State movement must be the result of a covenant, express or implied, in the contract of sale or an incident of the contract.
It is not necessary that the sale must precede the inter State movement in order that the sale may be deemed to have occasioned such movement.
It is also not necessary for a sale to be deemed to have taken place in the course of inter State trade or commerce, that the covenant regarding inter State movement must be specified in the contract itself.
It will be enough if the movement is in pursuance of and incidental to the contract of sale.
When a branch of a company forwards a buyer 's order to the principal factory of the company and instructs them to despatch the goods direct to the buyer and the goods are sent to the buyer under those instructions it would not be a sale between the factory and its branch.
If there is a conceivable link between the movement of the goods and the buyer 's contract, and if in the course of inter state movement the goods move only to reach the buyer in satisfaction of his contract of purchase and such a nexus is otherwise inexplicable, then the sale or purchase of the specific or ascertained goods ought to be deemed to have taken place in the course of inter State or commerce as such a sale or purchase occasioned the movement of the goods from one State to another, The presence of all intermediary such as the seller 's own representative or branch office, who initiated the contract may not make the matter different.
Such an interception by a known person on behalf of the seller in the delivery State and such person 's activities prior to or after the implementation of the contract may not alter the position.
" In the instant case, the allocation card was first sent in November, 1963 asking the appellant directly to make an offer of the 54 goods to the allottee.
The allottee was expected to communicate his desire to purchase the goods within twenty one days of the date of the allocation card.
Such communication brought into existence a contract sale directly between the appellant and the buyer.
The goods were admittedly sent pursuant to the said contract of sale.
The interposition at a later stage of the selling agent who acted on behalf of the appellant in the preparation of the invoice and the delivery of the goods would not alter the true character of the sale as the selling agent was just a conduit pipe.
The goods having been despatched from one State to another State pursuant to a contract of sale which came into existence directly between the appellant and the buyer within a few days after the date of the allocation card, the sale was an inter State sale.
The Tribunal and the High Court were, therefore, right in upholding the orders of the assessing authority levying tax under the Act on all sales which had taken place in favour of the Export Promotion Scheme card holders in Gujarat and Maharashtra even though the selling agent of the appellant at Bombay had on behalf of the appellant also dealt with such card holders at Bombay, as the transactions in question satisfied the tests laid down in the case of English Electric Company of India Ltd. (supra).
In the result the appeals fail and are dismissed with costs.
P.B.R. Appeals dismissed.
| The appellant and the deceased were collaterals.
On the death of his brother, the deceased was looking after the affairs of his brother 's wife and children.
Some while before on the day of occurrence, the deceased attended the marriage of his brother 's daughter.
The prosecution case against the appellant was that he nursed a grievance against the deceased that it was he who induced his sister in law not to invite him, (the appellant) and his brothers to the marriage and incensed by such insult he wanted to teach the deceased a lesson.
After the marriage, armed with a gandhala (a common agricultural implement with a flat, rectangular iron strip with three sides blunt, embedded in a wooden handle which is used for digging holes) the appellant and his brothers emerged suddenly and in a joint assault the appellant struck a blow on the head of the deceased with the blunt side of the gandhala.
The Sessions Judge held that the appellant struck the blow on the head with intent to cause such bodily injury as was sufficient in the ordinary course of nature to cause death and that, therefore, he was guilty of culpable homicide amounting to murder punishable under section 302 I.P.C. Affirming the conviction and sentence the High Court was of the view that there was no specific and positive evidence as to the motive for the murder but that it was more probable that the accused had joined the marriage and that "something happened on the spur of the movement", which resulted in the infliction of the injury leading to the death of the deceased.
In appeal it was contended that the offence amounted to culpable homicide not amounting to murder punishable under section 304 part II I.P.C. because all that could be attributed to the appellant was knowledge that a blow struck on the head with the blunt side of the gandhala would cause an injury, which was likely to cause death but that in any event when he struck the blow he could not be attributed with intention to cause death.
Allowing the appeal, ^ HELD: The appellant having been found to have struck the deceased with the blunt side of the gandhala in the heat of the moment without premeditation 840 and in a sudden fight all the requirements of Exception 4 to section 300 are met.
Having held that it was more probable that the appellant had also attended the marriage but that something had happened on the spur of the moment resulting in the infliction of the injury and eventual death of the deceased the High Court erred in applying clause.
Thirdly of section 300.
Giving a solitary blow on a vital part of the body resulting in death cannot always necessarily reduce the offence to culpable homicide not amounting to murder punishable under section 304 part II of the Code.
If a man deliberately struck another on the head with a heavy log or an iron rod or a lathi so as to cause a fracture of the skull, in the absence of any circumstances negativing the presumption, he must be deemed to have intended to cause death or such bodily injury as is sufficient to cause death.
The intention must be gathered from the kind of weapon used, the part of the body hit, the amount of force employed and the circumstances attendant upon death.
[843 B C] Under clause Thirdly of section 300 culpable homicide is murder if the act which causes death is done with intention of causing a bodily injury and that injury is sufficient in the ordinary course of nature to cause death i.e. the injury found was one that was intended to be inflicted.
[844 F G] Virsa Singh vs State of Punjab ; at 1503 applied.
Gudur Dusadh vs State of Bihar , Chahat Khan vs State of Haryana, A.I.R. 1972 S.C. 2574, Chamru Budhwa vs State of Madhya Pradesh, A.I.R. 1954 section C. 652, Willie (Williams) Slaney vs State Of Madhya Pradesh ; , Harjinder Singh (alias Jinda) vs Delhi Admn. ; & Lakshman Kalu Nikalje vs State of Maharashtra ; referred to.
In the instant case the genesis of the quarrel was not known.
The prosecution alleged that the appellant and his brothers had a grouse against the deceased and that they went to the marriage armed with weapons to teach the deceased a lesson.
The defence version, on the other hand, was that they were invited to the marriage.
In a controversy of such a nature the prosecution should have examined the sister in law of the deceased who was a material witness to ascertain the truth, failure to do which made the prosecution case infirm.
[847 B C] Secondly when the appellant struck a blow with blunt side of the gandhala it could not be said that he intended to cause such bodily injury as was sufficient in the ordinary course of nature to cause death.
If a man is hit with the blunt side on the head with sufficient force it is bound to cause death.
The fact that the gandhala was used with sufficient force was not by itself sufficient to raise an inference that the appellant intended to cause such bodily injury as was sufficient to cause death.
He could only be attributed with the knowledge that it was likely to cause an injury which was likely to cause death.
Therefore, the case does not fall within clause Thirdly of section 300 I.P.C [845 E H]
|
vil Appeal No. 277 1 of 1981.
From the Judgment and Order dated 5.2.1980 of the Andhra Pradesh High Court in S .A.
No. 526 of 1977.
Jagdish K. Agarwal (N.P.) for the Appellant.
A Subba Rao for the Respondents.
KANIA, J. This is an appeal by special leave from the decision of a learned Single Judge of the Andhra Pradesh High Court in Second Appeal No. 526 of 1977.
As we are, with respect, in agreement with the conclu sions arrived at by the learned Single Judge of the High Court, we propose to set out only the bare facts essential for the purposes of our judgment.
The appellant was the plaintiff and the respondent was the defendant in Suit.
O.S. No. 789 of 1973 filed in the Court of the Third Assistant Judge, City Civil Court, Hyd erabad.
The appellant prayed for a decree for recovery of possession of the suit premises from the respondent and for mesne profits till the delivery of possession of the prem ises.
The case of the appellant was that she was the owner of the suit premises and the respondent was in the occupa tion of the said premises on payment of Rs.30 per month.
The respondent had been 215 irregular in the payment of the said rent and had been a source of perpetual nuisance.
It was on this ground that the eviction of the premises was sought by the appellant.
In his written statement the respondent took a preliminary objec tion that the City Civil Court had no jurisdiction to enter tain the suit as the suit fell within the jurisdiction of the Rent Controller at Hyderabad.
Two petitions had earlier been filed by the appellant before the Rent Controller for eviction of the respondent and the Rent Controller had rejected the same on the ground that the purported tenancy of the respondent was hit by section 3 of the A.P. Rent Control Act and hence, the eviction suit was not entertain able by the Court of Rent Controller.
This conclusion was arrived at on a plea to the said effect taken by the re spondent.
In the Court of learned Third Assistant Judge of the City Civil Court at Hyderabad the respondent took up the plea that the suit fell exclusively within the jurisdiction of the Rent Controller and hence the City Civil Court had no jurisdiction to entertain the suit.
Certain pleas were made regarding amendments in the law with which we are not con cerned in this appeal.
What is material to note for our purposes is that the learned Assistant Judge took the view that as the respondent had, before the Rent Controller, taken up the plea that it was not the Rent Controller but the City Civil Court which had the jurisdiction to entertain the eviction petition against him, and the said plea was upheld, it was not open to the respondent to take up the inconsistent plea before the City Civil Court that it was the Rent Controller and not the City Civil Court which had jurisdiction to entertain the proceedings.
It was held that the respondent could not be allowed to approbate and repro bate and that he was estopped by way of pleading to take up an inconsistent plea regarding jurisdiction.
On the basis of this conclusion, and other conclusions with which we are not concerned, the suit was decreed by the learned Assistant Judge in favour of the appellant.
The decision of the learned Assistant Judge was upheld in an appeal filed by the respondent in the Court of the learned Additional Chief Judge of the City Civil Court at Hyderabad.
On a second appeal preferred by the respondent, the learned Single Judge of the High Court took the view that in matters of jurisdiction the question of estoppel does not arise.
If the City Civil Court has no jurisdiction to entertain the suit, the doctrine of estoppel could not be invoked so as to confer jurisdiction on the Court of City Civil Court.
On the question of jurisdiction the learned Judge took the view that the City Civil Court had no jurisdiction to entertain the suit as it lay exclusively within the jurisdiction of the Rent Controller.
216 Learned counsel for the appellant submitted that the learned Judge of the High Court was in error,as the earlier decisions of the Rent Controller to the effect that it was the City Civil Court and not the Rent Controller who had the jurisdiction to entertain the suit for eviction filed by the appellant against the respondent, constituted res judicata between the parties on the question of jurisdiction.
It was submitted by him that, even if that decision was wrong, the issue of jurisdiction was finally decided between the par ties and that decision was that it was the Civil Court and not the Rent Controller that had the jurisdiction to enter tain and dispose of the suit for eviction.
He further sub mitted that the respondent could not be permitted to take inconsistent pleas as he was barred by the principles of estoppel from taking up the plea before the Civil Court that it was the Rent Controller who had the exclusive jurisdic tion to entertain the suit.
He placed reliance on a decision rendered by a Division Bench comprising two learned Judges of this Court in Avtar Singh and Others vs Jagjit Singh and Another, ; which took the view that the Civil Court 's decision regarding lack of jurisdiction will operate as res judicata in a subsequent suit.
In that case the Civil Court declined jurisdiction.
The Civil Court took the view that it had no jurisdiction to try the suit in question and directed the return of the plaint for representation to the appropriate Revenue Court.
When the claim was filed in the Revenue Court, the Court took the view that it had no juris diction to try the claim.
Thereupon, a suit was again insti tuted in the Civil Court for the lame relief.
This suit failed throughout on the ground of res judicata.
I?he High Court affirmed the dismissal and the Division Bench of this Court took the view that the High Court was right in taking the view hat the principles of res judicata were applicable to the issue of jurisdiction.
In our opinion, the contention of learned counsel for the appellant cannot be upheld.
We find that in Mathura Prasad Bajoo Jaiswal and Others vs Dossibai N.B. Jeejeebhoy; , at p. 836 a Bench comprising three learned Judges of this Court has taken the view that a decision on the question of jurisdiction of the court or a sure question of law unrelated to the right of the parties to a previous suit, is not res judicata in the subsequent suit.
The Court observed: "It is true that in determining the application of the rule of res judicata the Court is not concerned with the correct ness or otherwise of the earlier judgment.
The matter in issue, if it is one purely of fact, decided in the earlier proceeding by a competent court must in a subsequent litiga tion between the same parties be regarded as finally decided and cannot be reopened.
A mixed question of law and fact determined 217 in the earlier proceeding between the same parties may not, for the same reason, be questioned in a subsequent proceed ing between the same parties.
But, where the decision is on a question of law, i.e. the interpretation of a statute, it will be res judicata in a subsequent proceeding between the same parties where the cause of action is the same, for the expression "the matter in issue" in section 11 of the Code of Civil Procedure means the right litigated between the par ties, i.e. the facts on which the right is claimed or denied and the law applicable to the determination of that issue.
Where, however, the question is one purely of law and it relates to the jurisdiction of the Court or a decision of the Court sanctioning something which is illegal, by resort to the rule of res judicata a party affected by the decision will not be precluded from challenging the validity of that order under the rule of res judicata, for a rule of proce dure cannot supersede the law of the land.
" The same view has been reiterated by a Bench comprising three learned Judges of this Court in Sushil Kumar Mehta vs Gobind Ram Bohra (dead) through his Lrs.; , We find that the decision of three learned Judges of this Court in Mathurn Prasad Bajoo Jaiswal and Others vs Dossibai N.S. Jeejeebhoy, has not been noticed at all by the Division Bench comprising two learned Judges of this Court which delivered the judgment in Avtar Singh and Others vs Jagjit Singh and Another, and hence, to the extent, that the judg ment in Avtar Singh 's case takes the view that the principle of res judicata is applicable to an erroneous decision on jurisdiction, it cannot be regarded as good law.
In our opinion a court which has no jurisdiction in law cannot be conferred with the jurisdiction by applying principles of res judicata.
It is well settled that there can be no estop pel on a pure question of law and in this case the question of jurisdiction is a pure question of law.
In our view, therefore, the High Court was, with re spect, right in its conclusions arrived at and the appeal must be dismissed.
The appeal is dismissed.
Looking to the facts and cir cumstances of the case there will be no order as to costs.
G.N. Appeal dis missed.
| The Respondent landlord filed a suit under the Andhra Pradesh Rent Control Act for recovery of possession and for mesne profits.
The apPellant defendant raised a preliminary objection that the City Civil Court had no jurisdiction to entertain the suit.
In the two eviction petitions filed earlier by the appellant, the Respondent took the plea that since the alleged tenancy was hit by Section 3 of the A.P. Rent Control Act, eviction suit was not entertainable by the Rent Controller.
Decreeing the suit in favour of the appellant, the trial Court held that it was not oPen to the Respondent to take such inconsistent plea regarding jurisdiction; that he cannot be allowed to approbate and reprobate and he was estopped from doing so.
On apPeal by respondent, the deci sion was upheld by the First Appellate Court.
On a second apPeal preferred by the respondent, the High Court reversed the trial court 's order.
Aggrieved by the decision of the High Court, the appel lant preferred this apPeal, by special leave, contending that the principles of Res Judicata and estopPel were ap plicable.
Dismissing the apPeal, this Court, HELD: 1.
A court which has no jurisdiction in law cannot be conferred with the jurisdiction by applying principles of res judicata.
It is well settled that there can be no estop pel on a pure question of law.
[217F] 214 Mahtura Prasad Bajoo Jaiswal and Ors.
vs Dossibai N.B. Jeejeebhoy; , ; Sushil Kumar Mehta vs Gobind Ram Bohra (dead) thro ' his Lrs.; , ; relied on.
Avtar Singh and Ors.
vs Jagjit Singh and Anr., ; ; referred to.
In the instant case, the question of jurisdiction is a pure question of law.
The High Court was right in its conclusions that in matters of jurisdiction to entertain the suit, doctrine of estoppel could not be invoked; and that the City Civil Court had no jurisdiction to entertain the suit, as it lay exclusively within the jurisdiction of the Rent Controller.
[216A B]
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Civil Appeals Nos.
1867 1924, 1952 of 1975 and 9 to 66 of 1976.
From the Judgments and orders dated the 18 4 75, 28 4 75 and 27 5 75 of the Mysore (Karnataka) High Court in Writ Appeal Nos.
1034 1039/74 and 116 to 143/75, 951 74, 922 923/74, 32/75, 1035 of 1974 and 976 to 1033/74 respectively.
L. N. Sinha, Sol.
General in C.A. No. 1891 and 1952 for the appellants in C.As.
1867 1924 and Respondent in CA 1952/75 and K.S. Puttaswamy, 1st Addl.
Government Advocate (In Cas.
1867 1924 and 1952/75) B. R. G. K. Achar.
section G. Sundaraswamy, K. section Gourishanker and K. N. Bhatt for the Appellants in C.As.
1952/75 and Respondents in C.A. 1891/75.
L. N. Sinha, Sol.
General in (CA 9) K. section Puttaswamy, Asstt.
Government Advocate, Narayan Netter and B. R. G. K. Achar for the Appellants in C.As. 9 to 66 of 1976.
section V. Gupta (In CA 1890/75), section section Javali and B. P. Singh for Respondents in CAs.
1875 to 79, 1882 83 1885, 1887 90, 1893, 1895, 1897, 1902 08, 1909, 1910, 1912, 1914, 1917, 1920, 1923 24/75 and for R. 2 in C.As.
1867, 1874, 1880 81, 1884, 1889 1901, 1903 1906 07 and 1921/75 and for Respondent in Appeals Nos. 9, 13 18, 20, 21, 39 44, 54, 56, 58, 60 63 and for Respondent No. 1 in Cas 19, 22 23, 37, 43, 46, 51, 55, 59, 65 and Respondent No. 2 in C.As 38 of 1975.
The Judgment of the Court was delivered by RAY, C.J.
These appeals are by certificate from the judgment dated 18 April, 1975 of the High Court of Karnataka.
The respondents were the petitioners in the High Court.
The respondents are either holders of Bane lands in the District of Coorg or holders of such lands who purchased timber standing on them from such holders.
The respondents in the High Court asked for writ directing the Divisional Forest officer of the State to issue permits to the respondents to remove trees standing on Bane lands as particularised in the petition.
1090 The Divisional Forest Officer refused permits to the respondents to cut trees and remove timber.
The two grounds on which the respondents challenged the order of refusal are these.
First, the respondents claimed a vested right to redeem the trees on Bane lands on payment of 50 per cent of the value of timber under Coorg Land and Revenue Regulation of 1899 and the rules framed thereunder.
Second the respondents claimed that, by section 75 of the Karnataka Land Revenue Act, 1964, an absolute right was conferred on them in respect of trees on Bane lands and the Government have no right even to demand 50 per cent of the value.
The learned Single Judge referred to the provisions of Coorg Land and Revenue Regulation of 1899 and in particular rule 97 thereof.
The learned Single Judge came to the conclusion that rules conferred a right on the holders of Bane land to redeem the trees standing on such Bane lands.
He also held that under the rules, the respondents were required to pay 50 per cent of the value of the timber to the State along with other incidental charges.
The contention of the State that the Coorg Land and Revenue Regulation, 1899 was repealed and, therefore, the respondents had no right under those Regulations to remove timber was repelled by the learned Single Judge.
The learned Judge held that section 202 of the Karnataka Land Revenue Act of 1964 did not affect the right acquired by the holders of Bane lands in spite of repeal of the Coorg Land and Revenue Regulation of 1899.
In this view of the matter, the learned Single Judge did not consider it necessary to express any opinion on the second contention of the respondents whether under section 75 of the Karnataka Land Revenue Act of 1964, the State had no right to demand 50 per cent of the value.
The Division Bench on appeal held that the respondents could be divided into two categories.
As to the first category, the Division Bench in sub paragraph (1) of paragraph 59 of the judgment said that those who deposited before 15 January, 1974, 50 per cent of the value of timber as determined by the Divisional Forest officer, could be granted permits to cut and remove timber.
If there was any difference between the 50 per cent of the actual value of timber and the amount paid on the basis of determination by the Divisional Forest officer, the Divisional Forest officer would recover the difference as mentioned in the said paragraph 59(1).
In sub paragraph (2) of paragraph 59, the Division Bench dealt with respondents who did not fall within category 1, but made applications before 15 January, 1974.
The Solicitor General appearing for the State with his usual fairness said that he did not want to take up time of the Court in going into the merits of the appeals.
He accepted the conclusions of the High Court in paragraph 59 of the judgment.
The result is that the conclusions of the High Court in paragraph 59 are affirmed.
The matter, however, does not end there because counsel for the respondents submitted that the Division Bench went into the nature and tenure of Bane lands and expressed views which are not correct 1091 and which in any event were not necessary for the purpose of the present case.
The learned Single Judge rightly did not express any view on the second question as to whether the Bane land holders could ask for removal of trees without payment of full value.
The Division Bench, however, in paragraphs 16 and 20 dealt with the legal position of Bane lands prior to 1 November, 1899, in paragraph 30 on the legal position between 1 November 1899 and 1 April 1964 and in paragraphs 36 and 43 on the legal position after 1 April 1964.
The Division Bench of the High Court in paragraphs 17 and 19 of the judgment dealt with Bane and Kumki lands and equated the same.
It may be stated here that one of the respondents Consolidated Coffee Ltd., also filed an appeal from the judgment of the High Court.
The Solicitor General contended that the Consolidated Coffee Ltd. was not competent to file an appeal because the company had obtained relief and could not, therefore, attack the judgment.
Having heard the Solicitor.
General and counsel for the respondents, we are of opinion that the course adopted by the learned Single Judge was correct.
The Division Bench of the High Court need not have gone into the question on the nature and tenure of Bane lands and expressed opinion on rights of the parties.
These observations were not necessary.
We, therefore, hold that we affirm the conclusions of the Division Bench of High Court as stated in paragraph 59 of the judgment and make it clear that the observations and opinions expressed by the Division Bench on the nature and tenure of Bane lands and rights of the parties will not bind the parties on these questions in future.
It will be open to both parties, namely, the appellants and respondents to urge their rival contentions on these questions if in future there will be any dispute between the parties.
The directions given by the Division Bench in paragraph 59 of the judgment will be followed by the parties.
The directions are explicable because of 15 January 1974 being taken as the dividing line with regard to persons who made payment and persons who did not make payment consequent upon the repeal of Rule 137 of the Karnataka Forest Rule, 1969.
The appeals are dismissed.
Parties will pay and bear their own costs.
S.R. Appeals dismissed.
| "Bane lands" are forest lands granted for the service of the "Warg", holding rice fields to which they are allotted to be held, free of revenue, for grazing, leaf manure/firewood and for timber required in the Warg, capable of being alienated only along with the Warg lands u/s 97 of the Coorg Land and Revenue Regulation 1899, which is in pari materia with Rule 151 A and B made under the Indian Forest Rules 1954.
The holders of the Bane Land had the right to redeem the trees standing on such Bane lands subject to the payment of seignorage etc.
Under Rule 137 of the Karnataka Forest Rules 1969, effective from 1st March 1969, redemption of the growth on "Bane lands" was allowed on payment of 50% of the value of the timber.
Rule 137 was however deleted w.e.f. 15th January 1974.
The various appellants who were holders of "Bane Lands" challenged, under article 226.
the orders of the Forest authorities demanding full value of the timber sought to be "redeemed" by them contending that (i) they had vested right to redeem the trees on Bane lands on payment of 50% of the value of timber under the Coorg Land and Revenue Regulations of 1899 and (ii) Section 75 of the Karnataka Land Revenue Act, 1964 vested in them an absolute right in respect of the trees on Bane lands and the Government therefore had no right even to demand 50% of the value.
All the writs were accepted by the Mysore High Court following its earlier decision in I.L.R. (Karnataka) 1975 Vol. 25, p. 443 (Ramaraju Naidu vs Divl.
Forest officer) holding that the Rules conferred a right on the holders of Bane lands to redeem the trees standing on such lands on payment of 50% of the value of the timber to the State along with other incidental charges.
The court did not express any opinion whether the State had no right to demand 50% of the value under the Karnataka and Revenue Act of 1964.
Allowing the State appeal against I.L.R. (Karnataka) 1975 Vol.
25 page 443 the Division Bench held [in State of Karnataka vs Ramaraju Naidu I.L.R. (Karnataka) 1975 Vol.
25 p. 1361] that (i) the Bane holders had no propriety right to the soil of Bane Land and to the trees standing thereon but only limited privilege to collect grass leaves timber etc.
for domestic purposes (ii) Even after section 75(1) of the Karnataka Land Revenue Act was enacted the Bane holders did not become holders or occupants as defined in the Act and ownership of trees did not accrue to them and (iii) Section 79 of the Karnataka Land Revenue Act which preserved the preexisting privileges of Bane holders has no application to Bane lands.
Keeping 15 1 74, the date of deletion of Rule 137 of the Karnataka Forest Rules 1969, the Division Bench, however directed that (1) the respondents who deposited before 15th January 1974, 50% of the value of timber as determined by the Forest officer could be granted permits to cut and remove timber, with liberty to the Forest officer to recover and any differential amount between the 50% of the actual value of timber and amount paid on the basis of prior determination and (ii) those respondents who have made applications under rule 137 before 15th January 1974, but not deposited the amount could also be granted permits on deposit of 50% of the value of timber.
Dismissing the State appeals, by certificate, the court ^ HELD: (1) The learned single judge in ILR (Karnataka) 1975 Vol.
25 p. 443 rightly did not express any view on the second question as to whether 1089 the Bane Land holders could ask for removal of trees without payment full of value u/s 75 of the Karnataka Land Revenue Act, 1964.
[1091A] Ramaraju Naidu vs Divl.
Forest Officer I.L.R. (Karnataka) 1975, Vol.
25 p. 443 (partly affirmed).
(ii) The directions given by the Division Bench are explicable because of 15th January 1974 being taken as the dividing line with regard to persons who made payments and persons who did not make payment consequent upon the repeal of Rule 137 of the Karnataka Forest Rules, 1969.
[109lF] [Their Lordships left open to the parties to urge their rival contentions on the questions of the nature and terms of Bane lands and right, if in future, there will be any dispute between them, in view of their making clear that the observations and opinions of the High Court Division Bench should not operate as res judicata]
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