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ivil Appeal No. 3 18788 of 1988.
From the Judgment and Order dated 4.4.1983 of the Madhya Pradesh High Court in C.R. No. 26 of 1988.
AND VICE VERSA (WITH S.L.P. (CIVIL) No. 13080 of 1988).
K. Parasaran, Attorney General, F.S. Nariman, Anil B. Divan, B.R. Zaiwala, Gopal Subramaniam, V.P. Sarthi, J.B. Dadachanji, Vijay Gupta, Ms. Anjali K. Verma, Sumeet Kachwa ha, Ashok Sagar, D.N. Misra, S.C. Sharma, O.C. Mathur, A. Subhashini, S.K. Gambhir, D .S. Shastri and Arun Madan for the appearing parties.
Vibhuri Jha, Anil K. Nauriya, Ms. Aruna Mathur, A. Mariarputham and C.L. Sahu for the Interveners.
732 The following Order of the Court was delivered: ORDER Having given our careful consideration for these several days to the facts and circumstances of the case placed before us by the parties in these proceedings, including the pleadings of the parties, the mass of data placed before us, the material relating to the proceedings in the Courts in the United States of America, the offers and counter offers made between the parties at different stages during the various proceedings, as well as the complex issues of law and fact raised before us and the submissions made thereon, and in particular the enormity of human suffering occasioned by the Bhopal Gas disaster and the pressing urgency to provide immediate and substantial relief to victims of the disaster, we are of opinion that the case is pre eminently fit for an overall settlement between the parties covering all litigations, claims, rights and liabilities related to and arising out of the disaster and we hold it just, equita ble and reasonable to pass the following order: We order: (1) The Union Carbide Corporation shall pay a sum of U.S. Dollars 470 millions (Four hundred and seventy Millions) to the Union of India in full settlement of all claims, rights and liabilities related to and arising out of the Bhopal Gas disaster.
(2) The aforesaid sum shall be paid by the Union Carbide Corporation to the Union of India on or before 31 March, 1989.
(3) To enable the effectuation of the settlement, all civil proceedings related to and arising out of the Bhopal Gas disaster shall hereby stand transferred to this Court and shall stand concluded in terms of the settlement, and all criminal proceedings related to and arising out of the disaster shall stand quashed wherever these may be pending.
A memorandum of settlement shall be filed before us tomorrow setting forth all the details of the settlement to enable consequential directions, if any, to issue.
We may record that we are deeply indebted to learned counsel for the parties for the dedicated assistance and the sincere cooperation 733 they have offered the Court during the hearing of the case and for the manifest reasonableness they have shown in accepting the terms of settlement suggested by this Court.
Having heard learned counsel for the parties, and having taken into account the written memorandum filed by them, we make the following order further to our order dated 14 February, 1989 which shall be read with and subject to this order: 1.
Union Carbide India Ltd., which is already a party in numerous suits filed in the District Court at Bhopal, and which have been stayed by an order dated 31 December, 1985 of the District Court, Bhopal, is joined as a necessary party in order to effectuate the terms and conditions of our order dated 14 February, 1989 as supplemented by this order.
Pursuant to the order passed on 14 Febru ary 1989 the payment of the sum of U.S. $ 470 Millions (four Hundred and Seventy millions) directed by the Court to be paid on or before 31 March, 1989 will be made in the manner following: (a) A sum of U.S. $ 425 Millions (four Hundred and Twenty five Millions) shall be paid on or before 23 March, 1989 by Union Carbide Corporation to the Union of India, less U.S. $ 5 Millions already paid by the Union Carbide Corporation pursuant to the order dated 7 June, 1985 of Judge Keenan in the court proceedings taken in the United States of America.
(b) Union Carbide India Ltd. will pay on or before 23 March, 1989 to the Union of India the rupee equivalent of U.S. $ 45 Millions (forty five Millions) at the exchange rate prevailing at the date of payment.
(c) The aforesaid payments shall be made to the Union of India as claimant and for the benefit of all victims of the Bhopal Gas Disaster under the Bhopal Gas Leak Disaster (Registration and Processing of Claims), Scheme, 1985, and not as fines, penalties, or punitive damages.
Upon full payment of the sum referred to in paragraph 2 above: 734 (a) The Union of India and the State of Madhya Pradesh shall take all steps which may in future become necessary in order to imple ment and give effect to this order including but not limited to ensuring that any suits, claims or civil or criminal complaints which may be filed in future against any Corpora tion, Company or person referred to in this settlement are defended by them and disposal of in terms of this order.
(b) Any such suits, claims or civil or criminal proceedings filed or to be filed before any court or authority are hereby enjoined and shall not be proceeded with before such court or authority except for dismissal or quashing in terms of this order.
Upon full payment in accordance with the Court 's direc tions: (a) The undertaking given by Union Carbide Corporation pursuant to the order dated 30 November, 1986 in the District Court, Bhopal shall stand discharged, and all order passed in Suit No. 1113 of 1986 and/or in revision therefrom shall also stand discharged.
(b) Any action for contempt initiated against counsel or parties relating to this case and arising out of proceedings in the courts below shall be treated as dropped.
The amounts payable to the Union of India under these orders of the Court shall be deposited to the credit of the Registrar of this Court in a Bank under directions to be taken from this Court.
This order will be sufficient authority for the Registrar of the Supreme Court to have the amount transferred to his credit which is lying unutilized with the Indian Red Cross Society pursuant to the direction from the International Red Cross Society.
The terms of settlement filed by learned counsel for the parties today are taken on record and shall form part of our order and the record.
The case will be posted for reporting compliance on the first Tuesday of April, 1989.
735 TERMS OF SETTLEMENT CONSEQUENTIAL TO THE DIRECTIONS AND ORDERS PASSED BY THIS HON 'BLE COURT 1.
The parties acknowledge that the order dated February 14, 1989 as supplemented by the order dated February 15, 1989 disposes of in its entirety all proceedings in Suit No. 1113 of 1986.
This settlement shall finally dispose.
of all past, present and future claims, causes of action and civil and criminal proceedings (of any nature whatsoever wherever pending) by all Indian citizens and all public and private entities with respect to all past, present and future deaths, personal injuries, health effects, compensation, losses, damages and civil and criminal complaints of any nature whatsoever against UCC, Union Carbide India Limited, Union Carbide Eastern, and all of their subsidiaries and affiliates as well as each of their present and former directors, officers, employees, agents representatives, attorneys advocates and solicitors arising out of, relating to or connected with the Bhopal gas leak disaster, including past, present and future claims, causes of action and pro ceedings against each other.
All such claims and causes of action whether within or outside India of Indian citizens, public or private entities are hereby extinguished, includ ing without limitation each of the claims filed or to be filed under the Bhopal Gas Leak Disaster (Registration and Processing of Claims) Scheme 1985, and all such civil pro ceedings in India are hereby transferred to this court and are dismissed with prejudice, and all such criminal proceed ings including contempt proceedings stand quashed and ac cused deemed to be acquitted.
Upon full payment in accordance with the Court 's directions the undertaking given by UCC pursuant to the order dated November 30, 1986 in the District Court, Bhopal stands discharged, and all orders passed in Suit No. 1113 of 1986 and or in any Revision therefrom, also stand dis charged.
Sd/ J.B. Dadachanji Sd/ A. Subhashini 15.2.1989 for UCC and UCIL Ltd. Advocate on Record for 15.2.
1989 Union of India.
| The appellant was inducted as a tenant in the building in question under a document of lease.
Since the deed was not executed in accordance with the requirements of law, it remained inoperative.
After the lease period the owner instituted a suit for eviction of the appellant and for a decree for arrears of rent.
During the pendency of the suit the provisions of the Bihar Rent Act were extended to the area, and as such the prayer for withdrawal of the relief for eviction was allowed with leave to file a fresh suit.
However, decree for arrears of rent was passed.
Thereafter a fresh suit was filed.
The Trial Court decreed the suit on both the grounds of personal necessity and default in pay ment of rent.
On appeal the Subordinate Judge reversed the finding on the question of bona fide personal necessity, but affirmed the decree on the ground of default.
The High Court, on appeal maintained the decree.
The present appeal by special leave, is against the High Court 's judgment.
On behalf of the appellant, it was contended that non payment of rent (when the Bihar Rent Act was not applicable to the area) is not relevant and so it could not be legiti mately made the basis for the decree of eviction.
It was submitted on behalf of the respondent that even independent of the Bihar Rent Act the appellant was under a duty to regularly pay the monthly rent and for the default, he must be presumed to be made liable for eviction under Section 11(1)(d) of the Act.
Allowing this appeal, HELD: 1.
There is no manner of doubt that the Act was applied to the area concerned on 14.2.1970 with prospective effect.
The ques 553 tion whether the Legislature intended to include previous default of the tenant in payment of rent within the grounds for eviction has to be answered by construing the language of the relevant provisions in the Bihar Rent Act.
[555C D] 2.
Ordinarily where a tenant offers the rent which is refused by the landlord without any justifiable reason the tenant is held to have fully performed his duty.
Under the Bihar Rent Act, however, the position is a little different.
Even on the refusal by the landlord to accept rent lawfully offered by the tenant, the tenant is under a further duty as mentioned in section 13(1) to remit such rent by postal money order to the landlord.
Where a bona fide doubt arises as to the person who is entitled to receive rent the tenant is permitted by section 13(2) to deposit the rent in the prescribed manner.
The latter part of section 11(1)(d), quoted above, deals with cases attracting section 13.
The result is that if a tenant has made a proper offer to pay the rent and the landlord has unreasonably refused to accept it, the tenant cannot escape the liability of eviction under clause (d) unless he proves that he had further remitted the rent by postal money order.
This position is fully settled.
If the situation is analysed in this light it will be seen that clause (d) can be held to apply only where section 13 of the Bihar Rent Act is attracted.
If section 13 cannot be applied to a particular situation, clause (d) also would not apply.
Section 13 could not obviously be applicable before the Act was extended to the area in ques tion.
Consequently it must be held that the default for the earlier period cannot be the basis for a decree of eviction under section 11(1)(d).
[557G H; 558A C] K.C. Jain vs
B.S. Grewal & Ors., ; distinguished.
Since the question is dependent on an appraisal of the evidence led by the parties, the case should be remitted to the first appellant court for the decision on the ques tion whether the landlord has proved the tenant 's default in payment of rent for the period from December 1973 to April 1974.
If the Subordinate Judge comes to the conclusion that the tenant did default within the meaning of section 11(1)(d) of the Act for two months or more during this period, he would decree the suit; otherwise the suit would be dismissed.
[559B C]
|
ns Nos. 154 and 203 of 1966.
Petition under article 32 of the Constitution of India for the enforcement of fundamentals rights.
section K. Mehta, and K. L. Mehta, for the petitioners (in both the petitions).
N. section Bindra, A. Sreedharan Nambiar , R. H. Dhebar for R. N. Sachthey, for respondent No. 1 (in W. P. 154 of 1966).
1. M. Lall and E., C. Agrawala, for respondent No. 2 (in W.P.No. 154 of 1966).
R. H. Dhebar for R. N. Sachthey, for respondents Nos.
I and_ (in W.P. No. 203 of 1966).
H. R Gokhale and E. C. Agarwala, for respondent No. 6 (in W.P. No. 203 of 1966).
Respondent No. 10 appeared in person (in W.P. No. 203 of 1966).
Ramaswami, J.
In this case the petitioner, Roshan La1 Tandon has obtained a rule from this Court calling upon the respondents to show cause why a writ in the nature of mandamus under article 32 of the Constitution of India should not be issued commanding the respondents not to carry out the directives contained in the notification of the Railway Board No. E(NG)65 PMI 26 dated the 27 the October, 1965, Annexure 'D ' to the Writ Petition, in so far as it grants protection to the existing Apprentice Train Examiners and lays down the procedure to fill upgraded vacancies.
Cause has been shown by, the respondents to whom notice of the rule was ordered to be given.
There were originally two scales for Train Examiners Rs. 100 185 ( 'D ' Grade) and Rs. 150 225 ( 'C ' Grade).
These scales were later revised as a result of the recommendations of the Second Pay Commission and the scale of 'D ' Grade was increased to Rs. 180 240 and that of 'C ' Grade to Rs. 205 280.
On February 18, 1961 the Railway Board issued a letter No. PC 60/PS5/ TP 8, Annexure 'A ' to the Writ Petition to the General Managers 187 of all Indian Railways conveying its decision that vacancies in the Entry Grade of Train Examiners (in the scale Rs. 180 240) with effect from February 18, 1961 should be filled as follows: (i) 50% of the vacancies should be filled from Apprentice Train Examiners who successfully have completed the prescribed (4 years) apprenticeship, the remaining 50% of the vacancies being filled by promotion of skilled artisans.
(ii) 20 /1/O of the annual requirements of Apprentice Train Examiners should be drawn from skilled artisans who are not more than 35 years old on 1st July of the year in which the apprenticeship is likely to commence.
" Promotion to Grade 'C ' of Train Examiners used to take place on the basis of seniority cum suitability without any distinction whether the employee entered Grade 'D ' of the Train Examiners directly or was selected out of the category of skilled artisans.
This rule was laid down by the Railway Board in its letter No. E(S) 1 57 TRS/41, dated January 25, 1958 which states: "Ref : Para 2 of Board 's letter No. E(R) 49 JAC / 13 dated 23 2 50 laying down that 20% of the posts in the TXR grade Rs. 150 225 should be reserved and the TXR in the grade of Rs. 80 160 (since revised Rs. 100 185) promoted from skilled and semi skilled ranks.
The Board have reviewed the position and have decided that promotion to the TXR grade of Rs. 150 225 should hereafter be made solely on the basis of seniority cum suitability and the reservation of only 20% as mentioned above will no longer be operative." (Annexure 'B ' to the Writ Petition).
On the basis of this rule the Divisional Personnel Officer, New Delhi, prepared a seniority list for the Train Examiners of Grade 'D ' of Delhi Division as on December 31, 1964 (Annexure 'C ' to the Writ Petition). 'On October 27, 1965 the Railway Board issued the impugned notification (Annexure 'D ' to the Writ Petition).
The notification states in the first place that on and from April 1, 1966 vacancies in the Entry Grade of Train Examiners scale Rs. 120 240 should not be filled from Apprentice Train Examiners upto 50% as hitherto, but should exclusively be filled by promotion from amongst artisan staff With regard to the next higher grade i.e., Grade 'C ', it was provided that 80% vacancies should be filled by Apprentice Train Examiners who had successfully completed the prescribed training of 5 years (three years in case of Diploma Holders and three years in case of Artisan recruited as Apprentice Train Examiner).
Twenty per cent of the vacancies were to be filled by the Train Examiners from Grade 'D '.
It was 188 further provided that the Train Examiners Grade 'D ' who began as Apprentice Train Examiners and who were to be absorbed in the 'C ' Grade against 80% vacancies reserved for them should not be required to undergo selection before being absorbed in that grade.
As regards 20% vacancies reserved for the other class of Train Examiners the promotion was to be on selection basis.
The materials portion of the notification of the Railway Board dated October 27, 1965 is reproduced below: "RECRUITMENT: (i) Vacancies in the entry grade of Train Examiners in the authorised scale Rs. 180 240 should not be filled from apprentice TX Rs. upto 50% as hitherto, but should exclusively be filled by promotion from amongst artisan staff.
(ii) (a) Vacancies in the next higher grade Rs. 205 280 (AS) should be filled from amongst X X the TXRs in grade Rs. 180 240 (AS) to the extent of 2O%.
(b) The remaining 80% vacancies should be filled by Apprentice TX Rs. who have successfuly completed prescribed apprenticepship mentioned in para 2 below.
(c) 25% of the annual requirements of apprentice TXRS.
should be drawn from skilled artisans who are not more than 35 years old on 1st July of the year in which apprenticeship is likely to commence.
The instructions contained in Board 's letter No. 2(NG) 61MI/101 dated 6 6 62 should be kept in view.
Training 2.
The Appentice TXRs recruited on and from 1/4/66 shall be given a training for a period of five years (three years in the case of diploma holders).
From the same date artisans in lower grades (recruited as apprentice TXRS.) shall be given 'in service ' training for period of three years.
Instructions regarding a revised syllabus for the training of the Apprentice TXRS.
will follow: DISTRIBUTION OF POSTS IN DIFFERENT GRADE Fifty per cent of existing posts of TXRs in grade Rs. 180 240 which were required to be earmarked for(Apprentice TXRS.
in terms of Board 's letter No. PC 60/ PS 6/TP 8 dated 18 2 1961 should be upgraded to scaleRs.
205 280.
189 REVISED DESIGNATIONS AND CLASSIFICATION OF POSTS OF TXRS.
Designation Scale of Pay Classification T. X. Its.
Grade D ' 180 240Non selection T. X. Rs. Grade 'C ' 205 280Selection for promotees from grade ID ' T. X. Rs. Grade 'B ' 250 380Selection T. X. Its.
Grade 'A ' 335 425Non selection Head T. X. Rs. 370 475 Selection Chief T. X. Rs. 450 575 Selection Carriage Foreman Protection to the existing apprentice TXRS.
procedure fill upgraded vacancies.
It has also been decided that with effect from 1 4 66 all the Apprentice TXRS.
(Diploma holders as well as others) on successful completion of their training should be straightaway brought on to the scale Rs. 205 280 (AS) instead of being first absorbed in scale Rs. 180 6 240 as at present.
Consequenty they should be allowed stipend in scale Rs. 180 6 210 during the period of their training.
As regards the apprentice TXRS.
who are undergoing training at present, and will not be brought on to the work working posts before 1 4 66, it has been decided that from the date of this letter, they should be allowed stipend in scale Rs. 180 6 210 during the remaining period of their training.
Their period of training should also be increased to 5 years, on completion of which they should be put on to the working posts in scale Rs. 205 280 (AS).
The Apprentice TXRS.
who have already been or will be absorbed in scale Rs. 180 240 upto 31 3 66 should first be accommodated in scale Rs. 205 280 against the quota of 80% vacancies reserved for them.
Such staff should not be required to undergo a 'Selection ' before being absorbed in that grade.
The upgraded vacancies in scale Rs. 205 280 left over after earmarking those for the apprentices under training on 2 4 66 should be filled by promotion of TXRS.
in scale Rs. 180 240 on a selection basis.
While computing the number of posts available for promotion of TXRS.
in scale Rs. 180 240 the vacancies likely to occur during the period 190 of apprenticeship of the apprentices under training as on 1 4 66 should also be taken into account.
In other words, it would be necessary to keep in reserve only the number of posts equal to the number of apprentices under training as on 1 4 66, who cannot be absorbed in the anticipated vacancies which will arise by the time they qualify.
" The petitioner, Roshan Lal Tandon entered railway service on March 6, 1954 as skilled fitter on the Northern Railway.
He was selected for the training for the post of Train Examiner Grade 'D ' on June 5, 1958 and was confirmed in that grade on October 25, 1959.
The case of the petitioner is that he alongwith the direct recruits formed one class in Entry grade 'D ' and their condition of service was that seniority was to be reckoned from the date of appointment as Train Examiner in Grade 'D ' and promotion to Grade 'C ' was on the basis of seniority cum suitability test irrespective of the source of recruitment.
It was alleged that there was no difference between the apprentices and those selected out of the skilled artisans when they entered Grade 'D ' and that portion of the impugned notification which gave a favourable treatment to the direct recruits in Grade 'D ' with regard to promotion to Grade 'C ' was arbitrary and discriminatory and violated the guarantee under articles 14 and 16 of the Constitution.
It was contended that the petitioner having been brought to grade 'D ' by undergoing the necessary selection and training and having been integrated with the others who had been brought in through direct recruitment in grade 'D ' could not be differentiated for the purpose of promotion to the senior Grade 'C '.
The petitioner has therefore moved this Court for the grant of a writ under article 32 of the Constitution to quash the notification of the Railway Board dated October 27, 1965.
In the counter affidavit respondent No. 1 has denied that there was any violation of the guarantee under articles 14 and 16 of the Constitution.
It was conceded that prior to April 1, 1966 promotion to the post of Grade 'C ' Train Examiner was on the basis of seniority cum suitability but the impugned notification was issued by the first respondent because it Was decided that the posts of senior Train Examiners in Grade 'C ' should be filled by men possessin adequate technical knowledge and so the period of training of senior Train Examiners was increased and it was decided that in future 80 per cent of the vacancies in 'C ' grade should be filled directly by Apprentice Train Examiners and the remaining 20 per cent was to be made available for recruitment from the category of Train Examiners to which the petitioner belonged.
This recruitment of 20 per cent vacancies was to be made on the basis of merit.
It was said that the reorganisation of the Service was made with a view to obtain a better and more technically trained class of Train Examiners.
The reason was that 191 there were more complicated designs.
of Carriages and Wagons, acquisition of modern type of Rolling Stock and greater speed of trains under dieselisation and electrification programmes.
It was.
considered that there should be a better calibre of technically trained and technically qualified personnel for proper maintenance and safety of the Rolling Stock.
In view of the decision to recruit Apprentice Train Examiners directly in 'C ' Grade with effect from April 1, 1966 those who were Apprentice Train Examiners in Grade 'D ' before that date had to be upgraded in the scale of Rs. 205 280.
It was therefore thought that these posts should be upgraded "so that there should be parity of treatment with the Apprentice Train Examiners who were to join after April 1, 1966".
The first respondent has also controverted the allegation of the petitioner that the procedure outlined in the impugned notification dated October 27, 1965 in regard to the upgraded vacancies was discriminatory.
The main question to be considered in this case is whether the notification by the first respondent dated October 27, 1965 is violative of articles 14 and 16 of the Constitution in so far as it makes a discrimination against the petitioner for promotion to Grade 'C '.
According to the impugned notification the existing Apprentice Train Examiners who had already been absorbed in grade 'D ' by March 31.
1966 should first be accommodated in grade 'C ' in 80% of the vacancies reserved for them without undergoing any selection.
With regard to 20% of the vacancies there is a reservation in favour of the departmental Train Examiners, but the promotion is by selection and not by the test of seniority cum suitability which prevailed before the date of the impugned notification.
It was not disputed by Mr. Mehta on behalf of the petitioner that the Railway Board was competent to say that with effect from April 1, 1966 vacancies in the Entry grade posts of Train Examiners should not be filled from Apprentice Train Examiners upto 50% but should be exclusively filled by promotion from amongst artisan staff.
As regards the recruitment to grade 'C ', the impugned notification states that with effect from April 1, 1966 all the Apprentice.
Train Examiners on successful completion of their training should be straightaway brought on to the scale Rs. 205 280 instead of being first absorbed in scale Rs. 180 6 240 as at present.
The period of training was also increased to 5 years on completion of which they should be put on to the working posts in scale Rs. 205 280.
So far as this portion of the notification is concerned, Counsel for the petitioner did not raise any constitutional objection.
But the contention of the petitioner is that the following portion of the notification was.
constitutionally invalid: "The Apprentice TXRS.
who have already been or will be absorbed in scale Rs. 180 240 upto 31 3 66 should first be accommodated in scale Rs. 205 280 192 against the quota 80% vacancies reserved for them.
Such staff should not be required to undergo a 'Selection ' before being absorbed in that grade.
The upgraded vacancies in scale Rs. 205 280 left over after earmarking those for the apprentices under training on 2 4 66 should be filled by promotion of TXRs in scale Rs. 180 240 on a selection basis.
" In our opinion, the constitutional objection taken by the petitioner to this part of the notification is well founded and must be accepted as correct.
At the time when the petitioner and the direct recruits were appointed to Grade 'D ', there was one class in Grade 'D ' formed of direct recruits and the promotees from the grade of artisans.
The recruits from both the sources to Grade 'D ' were integrated into one class and no discrimination could thereafter be made in favour of recruits from one source as against the recruits from the other source in the matter of promotion to Grade 'C '.
To put it differently, once the direct recruits and promotees are absorbed in one cadre, they form one class and they cannot be discriminated for the purpose of further promotion to the higher grade 'C '.
In the present case, it is not disputed on behalf of the first respondent that before the impugned notification was issued there was only one rule of promotion for both the departmental promotees and the direct recruits and that rule was seniority cum suitability, and there was no rule of promotion separately made for application to the direct recruits.
As a consequence of the impugned notification a discriminatory treatment is made in favour of the existing Apprentice Train Examiners who have already been absorbed in Grade 'D ' by March 31, 1966, because the notification provides that this group of Apprentice Train Examiners should first be accommodated en bloc in grade 'C ' upto 80 per cent of vacancies reserved for them without undergoing any selec tion.
As regards the 20 per cent of the vacancies made available for the category of Train Examiners to which the petitioner belongs the basis of recruitment was selection on merit and the previous test of seniority cum suitability was abandoned.
In our opinion, the present case falls within the principle of the recent decision of this Court in Mervyn vs Collector(1).
In that case, the petitioners who were Appraisers in the Customs Department filed a writ petition under article 32, challenging the validity of the "rotational" system as applied in fixing the seniority of Appraisers and Principal Appraisers.
The system, as laid down in the relevant departmental circulars was that vacancies occurring in the cadre of Appraisers were to go alternatively to 'promotees ' and 'direct recruits '.
According to the petitioners of that case this resulted in inequality, especially in view of the fact that the number of direct recruits over the years was very low.
Promotion to the (1) ; 193 grade of Principal Appraisers was from the cadre of Appraisers; only those who had served as Appraisers for five years were entitled to be promoted to the higher grade.
Since the direct recruits had to wait for five years before they could become Principal Appraiser the promotees below them who had put in five years as Appraisers became Principal Appraisers.
In order to restore the seniority of the direct recruits thus lost, the rotational system was applied to the cadre of Principal Appraisers also i.e., one vacancy was to go to a promotee and the other to a direct recruit.
The plea of inequality in violation of article 16(1) of the Constitution was raised by the petitioners in respect of this also.
It was held by this Court, in the first place, that there was no inherent vice in the principle of fixing seniority by rotation in a case when a service is composed in fixed proportion of direct recruits and promotees.
It was held in the second place that the same could not be said when the rotational system was applied to the recruitment of Principal Appraisers.
The source of recruitment for these was one only, namely, the grade of Appraisers.
There was no question of any quota being reserved from two sources in their case.
In so far therefore as the Government was doing what it called res toration of seniority of direct recruits in Appraisers grade on their promotion to the higher grade it was clearly denying equality of opportunity under article 16 of the Constitution.
At page 606 of the Report Wanchoo, J., as he then was, speaking for the Court observed as follows: "This brings us to the question of Principles Appraisers.
We are of opinion that the petitioners have a legitimate grievance in this respect.
The source of recruitment of Principal Appraisers is one, namely, from the grade of Appraisers.
There is therefore no question of any quota being reserved from two sources in their cases.
The rotational system cannot therefore apply when there is only one source of recruitment and not two sources of recruitment.
In a case therefore where there is only one source of recruitment, the normal rule will apply, namely, that a person promoted to a higher grade gets his seniority in that grade according to the date of promotion subject always to his being found fit and being confirmed in the higher grade after the period of probation is over.
In such a case it is continuous appointment in the higher grade which determines seniority for the source of recruitment is one.
There is no question in such a case of reflecting in the higher grade the seniority of the grade from which promotion is made to the higher grade.
In so far therefore as the respondent is doing what it calls restoration of seniority of direct recruits in Appraisers ' grade when they are promoted to the Principal Appraisers ' grade, it is clearly denying equality of opportunity LP(N)ISCI 14 194 to Apprasiers which is the only source of recruitment to the Principal Appraisers ' grade.
There is only one source from which the Principal Appraisers are drawn, namely, Appraisers, the promotion being by selection and five, years ' experience as Appraiser is the minimum qualification.
Subject to the above all Appraisers selected for the post of Principal Appraisers must be treated equally.
That means they will rank in seniority from the date of their continuous acting in the Principal Appraisers ' grade subject of course to the right of government to revert any of them who have not been found fit during the period of probation.
But if they are found fit after the period of probation they rank in seniority from the date they have acted continuously as Principal Appraisers whether they are promotees or direct recruits.
The present method by which the respondent puts a direct recruit from the grade of Appraiser, though he is promoted later, above a promotee who is promoted to the grade of Principal Appraiser on an earlier date clearly denies equality of opportunity where the grade of Principal Appraiser has only one source of recruitment, namely from the grade of Appraisers.
In such a case the seniority in the grade of Principal Appraisers must be determined according to the date of continuous appointment in that grade irrespective of whether the person promoted to that grade from the Appraisers ' grade is a direct recruit or a promotee.
This will as we have already said be subject to the government 's right to revert any one promoted as a Princivil Appraiser if he is not found fit for the post during the period of probation.
The petition therefore will have to be allowed with respect to the method by which seniority is fixed, in the grade of Principal Appraisers.
That method denies equality of opportunity of employment to the Appraisers who are the only source of recruitment to the grade of Principal Appraisers.
What the impugned method seeks to do is to introduce a kind of reservation in respect of the two categories of Appraisers from which the promotions are made, and that cannot be done when the source of promotion is one.
" We pass on to consider the next contention of the petitioner that there was a contractual right as regards the condition of service applicable to the petitioner at the time he entered Grage 'D and the condition of service could not be altered to his disadvantage afterwards by the notification issued by the Railway Board.
It was said that the order of the Railway Board dated January 25, 1958, Annexure 'B ', laid down that promotion to Grade 'C ' from Grade 'D ' was to be based on seniority cum suitability and this condition of service was contractual and could not be altered thereafter to the prejudice of the petitioner.
In our opinion, there,, 195 is no warrant for this argument.
It is 'true that the origin of Government service is contractual.
There is an offer and acceptance in every case.
But once appointed to his post or office the Government servant acquires a status and his rights and obligations are no longer determined by consent of both parties, but by statute or statutory rules which may be framed and altered unilaterally by the Government.
In other words, the legal position of a Government servant is more one of status than of contract.
The hall mark of status is the attachment to a legal relationship of rights and duties imposed by the public 'law and not by mere agreement of the parties.
The emolument of the Government servant and his terms of service are governed by statute or statutory rules which may be unilaterally altered by the Government without the consent of the employee.
It is true that article 311 imposes constitutional restrictions upon the power of removal granted to the President and the Governor under article 310.
But it is obvious that the relationship between the Government and its servant is not like an ordinary contract of service between a master and servant.
The legal relationship is something entirely different, something in the nature of status.
It is much more than a purely contractual relationship voluntarily entered into between the parties.
The duties of status are 'fixed by the law and in the enforcement of these duties society has an interest.
In the language of juris prudence status is a condition of membership of a group of which powers and duties are exclusively determined by law and not by agreement between the parties concerned.
The matter is clearly stated by Salmond and Williams on Contracts as follows: "So we may find both contractual and status obligations produced by the same transaction.
the one transaction may result in the creation not only of obligations defined by the parties and so pertaining to the sphere of contract but also and concurrently of obligations de fined by the law,itself, and so pertaining to the sphere of status.
A contract of service between employer and employee, while for the most part pertaining exclusively to the sphere of contract, pertains also to that of status so far as the law itself has seen fit to attach to this relation compulsory incidents, such as liability to pay compensation for accidents.
The extent to Which the law is content to leave matters within the domain of contract to be determined by the exercise of the autonomous authority of the parties themselves, or thinks fit to bring the matter within the sphere of status by mining for itself the contents of the relationship, is a matter depending on considerations of public policy.
In such contracts as those of service the tendency in modem times is to withdraw the matter more and more from the domain of contract into that of status." .lm0 (Salmond and Williams on Contracts, 2nd edition p. 12).
196 We are therefore of the opinion that the petitioner has no vested contractual right in regard to the terms of his service and that Counsel for the petitioner has been unable to make good his submission on this aspect of the case.
But for the reasons already expressed we hold that the impugned part of the notification violates the guarantee under articles 14 and 16 of the Constitution and a writ in the nature of mandamus should be issued commanding the first respondent not to give effect to the impugned part of the notification, viz.,: "The Apprentice T.X.Rs. who have already been or will be absorbed in scale Rs. 180 240 upto 31 3 66 should first be accommodated in scale Rs. 205 280 against the quota of 80% vacancies reserved for them.
Such staff should not be required to undergo a 'Selection ' before being absorbed in that grade.
The upgraded vacancies in scale Rs. 205 280 left over after earmarking those for the apprentices under training on 2 4 66 should be filled by promotion of T.X.Rs.
in scale Rs. 180 240 on a selection basis.
While computing the number of posts available for promotion of T.X.Rs.
in scale Rs. 180 240 the vacancies likely to occur during the period of apprenticeship of the apprentices under training as on 1 4 66 should also be taken into account.
In other words, it would be necessary to keep in reserve only the number of posts equal to the number of apprentices under training as on 1 4 66, who cannot be absorbed in the anti cipated vacancies which will arise by the time they qualify.
" The application is accordingly allowed, but there will be no ,order with regard to costs in this case.
Writ Petition No. 203 of 1966 The material facts of this case are parallel to those in Writ Petition No. 154 of 1966 and for the reasons already given we hold that the petitioner is entitled to the grant of a writ in the nature of mandamus commanding the respondents not to give effect to the impugned part of the notification dated October 27, 1965, Annexure 'D ' to the Writ Petition.
The application is accordingly allowed, but there will be no order as to costs in this case.
Petitions allowed.
| Election for the office of Pramukh of a block was held under the provision of the Uttar Pradesh Kshettra Samitis and Zilla Parishads Adhinayam, 1961.
On one of the ballot papers, the second respondent had a third preference recorded in his favour and a second preference in favour of another candidate who was eliminated at one stage.
The Returning Officer did not count the third preference in favour of the second respondent and found at the final counting that the appellant and the second respondent had secured an equal number of votes.
He therefore drew a lot as per the Instructions in Schedule II and declared the second respondent duly elected.
The appellant then filed an election petition on various grounds before the District Judge who dismissed it, holding that the Returning Officer erred in not crediting the second respondent with the third preference and that if that was done there was no necessity for drawing lots at all and that the second respondent should have been declared elected as a result of the counting itself.
The appellant 's writ petition challenging the District Judge 's order was dismissed.
In appeal to this Court he contended that: (1) under rr. 37 and 39 the trial of an election petition takes place in two parts; first, to judge whether the returned candidate 's election is void and then to decide whether any other candidate should be declared to be duly elected, that it was only in the latter case the returned candidate had the right to claim that ballot papers not already counted in his favour should be so counted, and that therefore, the District Judge had no jurisdiction to count the ballot paper containing the third preference in favour of the second respondent; and (2) the ballot paper was an 'exhausted paper ' within Instruction 1(5) of Schedule II to the Rules, and that therefore the District Judge erred in law in counting it in favour of the second respondent.
Held: (1) The District Judge was entitled, to go into the question whether the uncounted ' ballot paper should have been counted in favour of the second respondent.
[249G] According to r. 37(a) read with r, 40 which generally applies the procedure in the Civil Procedure Code to the trial of election petitions under the Act, and r. 43 which deals with the findings of the trial Judge, the returned candidate can take any defence to show that he has been validly elected.
He could therefore allege and prove that certain votes should have been counted in his favour.
[249E G] Jabar Singh vs Genda Lal, ; , explained.243 244 (2) The fact that the Candidate with the second preference in the uncounted ballot Paper *as eliminated at one stage, did not make the ballot paper an 'exhausted paper ' within the definition in the Rules.
The second respondent was a continuing candidate, as per the Rules, and,there was a preference recorded for him on the ballot paper arid the District fudge was right in holding that it should have been counted in his favour, by the Returning Officer.
[250A C]
|
30 of 1950.
Appeal under article 132 (1) of the Constitution of India from the Judgment and Order dated 24th October, 1950, of the High Court of Judicature at Bombay (Bavdekar and Vyas JJ.) in Criminal Application No. 1003 of 1950.
M.C. Setalvad (Attorney General for India) and C.K. Daphtary (Solicitor General for India), with G.N. Joshi for the appellant.
Respondent ex parte.
676 1952.
May 26.
This is an appeal from an order of the Bombay High Court directing the release of the respondent who had been detained under section 3 of the Preventive Detention Act of 1950. 'The learned Attorney General states at the outset that Government does not want to re arrest the respondent but merely desires to test the High Court 's decision on certain points which will have far reaching effects on preventive detentions in the State of Bombay.
Following the precedent of their Lordships of the Privy Council in King Emperor vs Vimlabai Deshpande(1) we proceed to decide the appeal but direct that the respondent shall not in any event be re arrested in respect of the matters to which the appeal relates.
The respondent was originally arrested under an order of the District Magistrate, Belgaum, dated the 26th February, 1950, though he was then beyond the jurisdiction of that authority.
On the 11th of .July, 1950, the Bombay High Court held that a detention of that kind was invalid.
The decision was given in the case of In re GhateC (2).
This necessitated a review of 57 cases, among them the respond ent 'section Orders were passed in all those cases on the 17th of July, 1950.
About 52 of the detenus were released and in the remaining cases fresh orders of detention were passed by the Government of Bombay.
In the respondent 's case the order was in these terms: "Whereas the Government of Bombay is satisfied with respect to the person known as Shri Purushottam Jog Naik of Ulga Village, Taluka Karwar, District Kanara, that with a view to preventing him from acting in a manner prejudicial to the maintenance of public order, it is necessary to make the following order: Now, therefore, in exercise of the powers conferred by sub section (1.) of section 3 of the Preventive (1) I.L.R. at 655.
(2) 677 Detention Act, 1950 (No. IV of 1950), the Government of Bombay is pleased to direct that the said Shri Purushottam Jog Naik be detained.
By order of the Governor of Bombay, Sd/ V. T. Dehejia, Secretary to the Government of Bombay, Home Department.
Dated at Bombay Castle, this 17th day of July, 1950.
" He was served with the grounds of detention on the 26th of July, 1950, and with a fuller set on the 9th of August.
The original grounds were as follows: "In furtherance of your campaign for non payment of rent, you were instigating the people in the Belgaum Dis trict to commit acts of violence against landlords.
``In all probability, you will continue to do so.
" The second set gave the following additional particulars: "The people in Belgaum District, whom you were instigat ing to commit acts of violence against landlords in further ance of your campaign for non payment of rent, were the tenants in Hadalge and round about villages in the Khanapur Taluka of Belgaum District, and the said instigation was carried on by you for some months till your arrest in April, 1949.
" On the 24th of August, 1950, the respondent applied to the Bombay High Court under section 491 of the Criminal Proce dure Code for an order of release.
He succeeded, and the appeal is against that order.
The first ground on which the learned High Court Judges proceeded was that the detention order of the 17th July was defective as it was not expressed inproper legal form.
The basis of their reasoning is this.
Article 166(1) of the Constitution requires that " All executive action of the Government of a State shall be expressed to be taken in the name of the Governor.
" It will be seen that the order of detention states in the preamble 678 `` Whereas the Government of Bombay is satisfied. " and the operative part of the order runs " Now, therefore . the Government of Bombay is pleased to direct etc.
" It does not say that the Governor of Bombay is pleased to direct.
The learned Judges held that this is not an order expressed to be made in the name of the Governor and accord ingly is not protected by clause (2) of article 166.
They conceded that the State could prove by other means that a valid order had been passed by the proper authority, but they held that the writing, (Record No. 3), which purports to embody the order, cannot be used to prove that a valid order was made because the formula set out in article 166(1) was not employed.
We are unable to agree.
Now we do not wish to encourage laxity of expression, nor do we mean to suggest that ingenious experiments regard ing the permissible limits of departure from the language of a Statute or of the Constitution will be worthwhile, but when all is said and done we must look to the substance of article 166 and of the Order.
The short answer in this case is that the order under consideration is "expressed" to be made in the name of the Governor because it says "By order of the Governor.
" One of the meanings of "expressed" is to make known the opinions or the feelings of a particular person and when a Secretary to Government apprehends a man and tells him in the order that this is being done under the orders of the Governor, he is in substance saying that he is acting in the name of the Governor and, on his behalf, is making known to the detenu the opinion and feelings and orders of the Governor.
In our opinion, the Constitution does not require a magic incanta tion which can only be expressed in a set formula of words.
What we have to see is whether the substance of the require ments is there.
It has to be remembered that this order was made under the , and therefore had to conform to its terms.
Section 3 of the Act provides that the State Government may, if satisfied, 679 "make an order directing that such person be detained.
" It is true that under section 3 [(43 a) (a)] of the General Clauses Act the words "the State Government" mean the Governor, but if that be so, then the expression must be given the same meaning in the order which merely reproduces the language of section 3, not indeed because the General Clauses Act applies to the order (it does not) but because the order is reproducing the language of the Act and must therefore be taken to have the same meaning as in the Act itself, particularly as the order concludes with the words, " By order of the Governor of Bombay.
" It will be noticed that section 3 of the enables certain authorities specified by it to make orders of detention.
These include, not only State Governments but also the Central Government, any District Magistrate or Sub Divisional Magistrate and certain Commis sioners of Police.
The list does not include the Governor of a State.
Now, though the term "State Government" appearing in an enactment means the Governor of the State, there is no provision of law which equates the term Governor with the State Government of which he happens to be the head.
On the contrary, the Constitution invests him with certain func tions and powers which are separate from those of his Gov ernment.
It was therefore appropriate that the order in this case should have set out that the Government of Bombay was satisfied and not some other authority not contemplated by the Act and that that Government directed the detention.
It was also proper that the order should have been executed under the orders of the Governor authenticated, under the rules, by the signature of the Secretary.
It is true that addition of the words "and in his name" to the words "By order of the Governor of Bombay" would have placed the matter beyond controversy but we are unable to see how an order which purports to be an order 680 of the Governor of 'BombaY can fail to be otherwise than in his name.
If A signs his name to a communication that commu nication goes out in his name.
Equally, if he employs an agent to sign on his behalf and the agent states that he is signing under the orders of A, the document still goes forth in the name of A.
In our opinion, the High Court was wrong on this Point The next step in the High Court 's reasoning was this.
The learned Judges held that the writing produced as the order did not prove itself because of the defect we have just considered but that nevertheless it was open to the State Government to prove by other means that such an order had been validly made.
The learned Judges therefore called upon Government to make an affidavit setting out the facts.
An affidavit was made by the Home Secretary but the learned Judges were not satisfied and asked for a further affidavit.
The Home Secretary thereupon made a second one but the learned Judges were i still not satisfied and considered that the Minister in charge should have made an affidavit himself.
We do not intend to discuss this matter because once an order of this kind is unable to prove itself and has to be proved by other means it becomes impossible to lay down any rule regarding either the quantum of evidence necessary to satisfy the Court which is called upon to decide the question or the nature of the evidence required.
This is a question of fact which must be different in each case.
Of course, sitting as a court of appeal, it would have been necessary for us to decide this had we reached a different conclusion on the first point and had the State Government desired the re.arrest of the respondent.
But as we are only asked to deal with general principles, all we need say as regards this is that it is not necessary in every case to call the Minister in charge.
if the Secre tary.
or any other person, has the requisite means of knowledge and his affidavit is believed, that will be enough.
681 We wish, however, to observe that the verification of the affidavits produced here is defective. 'The body of the affidavit discloses that certain matters were known to the Secretary who made the affidavit personally.
The verifica tion however states that everything was true to the best of his information and belief.
We point this out as slipshod verifications of this type might well in a given case lead to a rejection of the affidavit.
Verifications should invar iably be modelled on the lines of Order XIX, rule 3, of the Civil Procedure Code, whether the Code applies in terms or not.
And when the matter deposed to is not based on person al knowledge the sources of information should be clearly disclosed.
We draw attention to the remarks of Jenkins C.J. and Woodroffe J. in Padmabati Dasi vs Rasik Lal Dhar(1) and endorse the learned Judges ' observations.
In fairness to the Home Secretary we deem it right to say that his veracity was neither doubted nor impugned by the High Court, but only his means of knowledge.
He was speaking of the "satisfaction" of the Minister and the High Court was not satisfied regarding his knowledge of the state of the Minister 's mind.
The learned Judges considered that the Minister himself would have been a more satisfactory source of information, but as we say, this is not a question of law.
As a matter of abstract law, of course, the state of man 's mind can be proved by evidence other than that of the man himself, and if the Home Secretary has the requisite means of knowledge, for example, if the Minister had told him that he was satisfied or he had indicated satisfaction by his conduct and acts, and the Home Secretary 's affidavit was regarded as sufficient in the particular case, then that would constitute legally sufficient proof.
But whether that would be enough in any given case.
or whether the ' 'best evidence rule" should be applied in strictness in that particular case, must necessarily depend upon its facts.
In the present case, there was the element that 57 cases were dealt with in the course of 6 days (1) Cal.
682 and orders passed in all on one day.
But we do not intend to enter into the merits.
All we desire to say is that if the learned Judges of the High Court intended to lay down as a proposition of law that an affidavit from the Minister in charge of the department is indispensable in all such cases, then they went too far.
The learned Attorney General contended that the Minis ter in charge could not be asked to divulge these matters because of article 163 (3) of the Constitution.
We donor decide this question and leave it open.
Another point which was argued related to the privilege which the Home Secretary claimed on behalf of the State Government under article 22 (6) of the Constitution.
Govern ment disclosed certain facts in the grounds furnished to the detenu and claimed privilege regarding the rest of the facts in its possession.
In our opinion, the grounds supplied were sufficiently specific and they could form a proper basis for the "satisfaction" of the Government.
As regards the rest, Government has claimed privilege in the affidavit of the Home Secretary on the ground of public interest.
This raises further questions which we do not intend to examine as the respondent is not to be re arrested.
The order of release was, in our opinion, wrong, but in view of Government 's undertaking not to re arrest the re spondent, we direct that he be not re arrested in respect of the matters to which this appeal relates.
Order of High Court set aside.
| The petitioner, the Editor of the Searchlight, an English daily newspaper published from Patna, was called upon to show cause before the Committee of Privileges of the Bihar Legislative Assembly why he should not be proceeded against for the breach of privilege of the Speaker and the Assembly for publishing an inaccurate account of the proceedings of the Legislative Assembly.
He moved this Court under article 32 of the Constitution for quashing the said proceeding and the question for decision in substance was whether the said privilege conferred by article 194(3) of the Constitution was subject to the fundamental 97 rights of a citizen under article 19(1)(a) of the Constitution.
This Court by a majority found against the petitioner.
Thereafter the Assembly was prorogued several times, the Committee of Privileges reconstituted and a fresh notice was issued to the petitioner.
By the present petition the petitioner in substance sought to reopen the decision, raise the same controversy once again and contend that the majority decision was wrong.
The question was whether he could be allowed to do so.
Held, that the general principles of res judicata applied and the judgment of this Court could not be allowed to be reopened and must bind the petitioner and the Legislative Assembly of Bihar and the reconstitution of the Committee of Privileges in the meantime could make no difference.
Raj Lakshmi Dasi vs Banamali Sen, ; , applied.
Since this Court had held that the Legislature bad the power to control the publication of its proceedings and punish any breach of its privilege, there could be no doubt that it had complete jurisdiction to carry on its proceedings in accordance with its rules of business and a mere non compliance with rules of procedure could be no ground for interference by this Court under article 32 of the Constitution.
Janardan Reddy vs The State of Hyderabad, ; , referred to.
Prorogation of the Assembly does not mean its dissolution and the only effect it has is to interrupt its proceedings which can be revived on a fresh motion to carry on or renew them.
It was, therefore, not correct to contend that since the Assembly was prorogued several times since after the alleged breach of privilege, the proceeding must be deemed to be dead.
|
ivil Appeal No. 2678 of 1985.
From the Judgment and order dated 30.4.1985 of the Delhi High Court in F.A.O. No. 270 of 1982.
M.C. Bhandare, Sandeep Narain and Shri Narain for the Appellants.
Dr. Shankar Ghosh and N.R. Choudhary for the Respondent.
The Judgment of the Court was delivered by KANIA,J.
The hearing before us now relates to certain objections filed to the Award made by Shri A.C. Gupta a former Judge of this Court who was appointed the sole arbitrator to adjudicate upon the dispute between the parties pursuant to the Order of this Court dated 18th November, 1987 in the circumstances as set out hereinafter.
In order to appreciate the objections, it is necessary to refer to certain facts.
The Settlement Commissioner, Government of India allotted Plot No. 631 at Chitranjan Park, New Delhi measuring 160 sq.
yds to the Respondent under the Settlement Scheme for the refugees from Pakistan for a total price of Rs.4,800.
This allotment was made by the Settlement Commissioner on behalf of the Rehabilitation Department of the Government of India.
The Respondent applied for a loan from the Ministry of Defence for construction of the house on the said plot and a loan of Rs.15,000 was sanctioned in his favour.
Under the House Construction Rules of the Government, the plans and estimates had to be submitted along with the application and a sanctioned amount was paid in four instalments at different stages of construction.
The Respondent started the construction of a building on the said land.
By the end of 1973, the Respondent had constructed a house on the said plot upto the roof level.
By that time he had obtained and used up a sum of Rs.12,000 out of the loan sanctioned to him and only a balance of Rs.3,000 PG NO 517 remained to be paid to him under the said loan.
According to the Respondent, this amount was not sufficient for the final completion of the house and he, therefore, sought the help of Appellant No. I who advanced a sum of Rs.5,000 to him.
In September, 1973 the Respondent entered into an agreement dated September 6, 1973 to sell the house and the said plot to the Appellant No. 1.
The aforesaid amount of Rs.5,000 given by way of loan was shown in that agreement as an advance paid towards the sale price.
The Respondent also executed a General Power of Attorney in favour of Appellant No. 1 inter alia enabling him to carry on construction work on the said land on behalf of the Respondent.
According to the Respondent, the house was not complete but the Appellants who are husband and wife were occupying the same.
Under circumstances, we need not discuss here, on January 29, 1974 another agreement was entered into between Appellant No. 1 and the Respondent which has been described as an agreement for construction.
Under that agreement, Rs.80,000 was to be paid by the Respondent as the price of the construction to be put up by Appellant No. I on the said plot and he was to charge Rs.20,000 as the profits and labour charges.
He was to deposit Rs.15,000 with the Respondent, this transaction was sham and bogus.
Disputes arose Respondent was to return the amount of Rs.1,15,000 within three years in a lump sum and on such payment, Appellant No. I was to hand over the possession of the building and the plot to the Respondent.
Till that amount was paid, Appellant No. 1 was entitled to possess and occupy and enjoy the same and to receive rents thereof.
According to the Respondent, this transaction was sham and bogus.
Disputes arose between the parties and the Respondent filed a suit in August 1977 claiming for the return of the possession of the said plot and the house.
A notice of motion under section 34 of the for stay taken out by the Appellants was dismissed.
An appeal was preferred against the said decision.
In the appeal, which came up for hearing before the Additional District Judge, Delhi.
with the consent of the parties, Shri Bakshi Man Singh was appointed as the sole arbitrator to adjudicate upon the disputes in the suit.
The said Shri Bakshi Man Singh died in July 1979 without making any award.
On an application by the Respondent, the learned Additional District Judge filled up the vacancy by appointing Shri Hari Shanker, Advocate, as the sole rbitrator.
Shri Hari Shanker made and published his award which went against the Appellants.
According to the Appellants, the said award was made ex parte.
The appellants challenged the award by filing objections under sections 30 and 33 of the before the learned Additional District Judge and applied for setting aside the said award.
This application was dismissed by the learned Additional District Judge.
The Appellants PG NO 518 filed an appeal against this decision on October 14,1982 before the Delhi High Court but the said appeal was dismissed by the learned Single Judge of that High Court on April 30, 1985.
This decision of the learned Single Judge was challenged before this Court by way of Special Leave Petition under Article 136 of the Constitution.
Leave was granted and the present Appeal came to be numbered as aforesaid.
This Appeal came up for hearing before a Division Bench of this Court on November 18,1987.
After hearing Counsel for the parties.
in order to ensure fairplay in the action, this Court set aside the award of the Arbitrator and also the judgment of the Delhi High Court and appointed Shri A.C. Gupta, a former Judge of this Court, as the sole arbitrator to adjudicate upon the disputes between the parties.
The arbitrator was directed to make his award with short reasons within four months from the receipt of the the order.
Certain other conditions like payment of compensation and additional expense were imposed on the Appellants.
Pursuant to the said order of this Court, the said Shri A.C. Gupta entered upon the reference and made and made and published his award on March 18,1988.
Under the said award, it was held that the Respondent was entitled to a sum of Rs.58,498.60p and interest on this amount at the rate of 18 per annum from the date of the reference to the date of the award which worked out to a sum of Rs.3,510.
Taking into account the amount paid by the Respondent initially towards the arbitrator 's remuneration and others costs and after setting off the dues of Appellants against the Respondent, it was held that the Respondent claimant was entitled to recover possession of the disputed building from the Appellants and that a sum of Rs.57,753 was payable by the Appellants to the Respondent.
It is this award which is challenged before us now.
The sole submission made by Mr. Bhandare, learned Counsel for the Appellants is that the award is bad in law and liable to be set aside as there is an error of law disclosed on the face of the award.
In this connection, Mr. Bhandare drew our attention to clause 2(b) of the agreement to sell dated September 6, 1973 referred to earlier.
Ten earlier part of the agreement set out that the purchaser (Appellant No. 1) had paid to the seller (Respondent) a sum of Rs.5,000, the receipt of which was acknowledged by the Respondent and the balance amount payable was to be paid in the manner set out in the said clause 2(b) which runs as follows: "The purchaser shall pay to the seller Rs.105 each month against the .sanctioned loan of Rs.15,000 by the fifth day of every English Calendar month till such time the full PG NO 519 amount of loan is recovered from the seller by the Government of lndia.
The first instalment shall commence with effect from 5th October, 1973 The purchaser, if he desires, can also deposit the actual remaining amount towards this loan at any time in lump sum to the Government of India on behalf of the seller.
" It is a common ground that the sum of Rs. 105 per month referred to clause 2(b) of the said agreement was paid by the Respondent only upto January 1976 and that this payment covered upto 23 instalments more than 100 instalments were remaining unpaid.
Mr. Bhandare pointed out that it was contended by the Appellants before the arbitrator that, although the agreement for sale between the parties was not registered and might not convey and interest to Appellant No. 1 in the property, the Appellants had been put in possession of the said land and construction pursuant to the said agreement since September 1973, as appears from the agreement of sale.
and, in view of this, Appellants were entitled to retain possession under the protection afforded by Section 53A of the Transfer of Act.
He drew our attention to the following statements contained in the award of the learned Arbitrator: "The Respondent who has been in possession of the property since September 1973 as would appear from the agreement for sale, claimed that his possession was protected Under Section 53A of the .
Section 53A affords protection to a transferee on certain condition, One of which is that `the transferee has performed or is willing to perform his part of contract '.
Under the agreement for sale, the respondent was required to pay the claimant a monthly sum of Rs. 105 to enable the latter to pay the instalments in discharge of the house building loan.
From the receipts filed it appears that the respondent paid only upto January 1976 which covered 23 instalments only and more than 100 instalments remained to be paid.
There is no valid reason why he should have failed t to carry out his obligation under the contract.
Thus it cannot be said that the respondent had performed or was willing to perform his part of the contract.
Therefore, the respondent was not entitled to retain possession of the disputed property beyond January 1976.
" PG NO 520 It was submitted by Mr. Bhandare that these statements clearly disclose close an error apparent on the face of the award.
It is pointed out by him that, prior to February 1976, the Respondent by his Advocate 's notice dated 16.1.1976 had repudiated the said agreement for sale by contending in his notice that it had been procured by fraud, undue influence and coercion practised by Appellant No. I and it was submitted that the said repudiation was wrongful and in view thereof Appellant No. 1 was absolved from his obligation to make any further payment of Rs.105 per month or to continue to be ready and willing to perform the agreement.
It was submitted by him that the aforestated statements contained in the award ran counter to the settled position in law and disclosed a clear error of law on the face of the award.
He drew our attention to the decision of this Court in International Contractors Ltd. vs Prasanta Kumar Sur, In that case the appellant had purchased the property in dispute from the respondent but soon thereafter there was an agreement for reconveyance of the property to the respondent within a period of two years for almost the same value for which it was sold.
Before the expiry of the stipulated period, the respondent entered into correspondence with the appellant, asking for the completion of the agreed reconveyance and intimating that the purchase money was ready to be paid, but after some further correspondence, the appellant 's solicitors, on his behalf, repudiated the agreement for reconveyance.
The respondent then did not tender the price agreed to be paid and filed a suit for specific performance.
The suit was dismissed by the trial court on the ground that the respondent had not paid the money.
The High Court reversed the decision and decreed the suit.
On an appeal to this Court, it was held that as the appellant had totally repudiated the contract for reconveyance and had tailed lo perform his part of the contract, it was open to the respondent to sue for its enforcement and the High Court was right in holding that respondent was entitled to a decree for specific performance.
In our view, Mr. Bhandare may be right in contending that this decision does show that it has been held by this Court that in certain circumstances once a party to a contract has repudiated a contract, it is not necessary for the other party to tender the amount payable under the contract in the manner provided in the contract in order to successfully claim the specific performance of the contract.
The decision, however, nowhere lays down that where one party to a contract repudiates the contract, the other party to the contract who claims specific performance of the contract is absolved from his obligation to show that he was ready and willing to perform the contract.
Mr. Bhandare 's argument really is to the effect that the Respondent wrongly repudiated the contract by his said letter dated 16th January, 1976, before all the mutual PG NO 521 obligations under the contract had been carried out, that is to say, he committed an anticipatory breach of the contract and in view of this, Appellant No. 1 was absolved from carrying out his remaining obligations under the contract and could claim specific performance of the same even though he failed to carry out his remaining obligations under the contract and might have failed to show his readiness and willingness to perform the contract.
In our view, this argument cannot be accepted.
It is settled in law that where a party to a contract commits an anticipatory breach of the contract, the other party to the contract may treat the breach as putting an end to the contract and sue for damages, but in that event he cannot ask for specific performance.
The other option open to the other party, namely, the aggrieved party, is that he may choose to keep the contract alive till the time for performance and claim specific performance but, in that event.
he cannot claim specific performance of the contract unless he shows his readiness and willingness to perform the contract.
The decision of this Court in International Contractors Limited vs Prasanta Kumar Sur, (supra), properly analysed, only lays down that in certain circumstances it is not necessary for the party complaining of an anticipatory breach of contract by the other party to offer to perform his remaining obligations under the contract in order to show his readiness and willingness to perform the contract and claim specific performance of the said contract.
Mr. Bhandare also referred to the decision of the Andhra Pradesh High Court in Makineni Nagayya and Others v Makineni Bapamma., AIR (45) We do not consider it necessary to refer this decision as it does not carry the case of the Appellants any further.
The ratio of the said decision in no way runs counter to the said position in law set out above.
In the case before us, what the arbitrator has done is to set out in his award the relevant portion of Section 53A of the in terms of the said section.
There can be no dispute that these provisions have been correctly set out.
There is thus no error in the proposition of law set out by the learned Arbitrator in the award.
It may be that there is an error, although that is by no means certain.
in the application of these principles in coming to the conclusion that, notwithstanding the repudiation of the said contract by the respondent, Appellant No. I was not absolved from his obligation to pay the remaining instalments of Rs.105 per month as provided under the contract.
In Coimbatore District Podu Thozillar Samgam vs Balasubramania Foundary and others; , it has been held by this Court that it is an error of law and PG NO 522 not a mistake of fact committed by the Arbitrator which is justiciable in the application before the Court.
If there is no legal proposition either in the award or in any document annexed to the award which is erroneous and constitutes the basis of the award and the alleged mistakes or alleged errors, are only mistakes of fact the award is not amenable to corrections by the Court.
In its judgment, the Court referred to the decision of this Court in Union of India vs A. L. Rallia Ram; , ; and, after referring to certain factors pertaining to awards in arbitration proceedings and the machinery devised by the , pointed out that the award was the decision of a domestic tribunal chosen by the parties and the civil courts which were entrusted with the power to facilitate arbitration and to effectuate the awards, could not exercise appellate powers over the decisions.
This Court reiterated that it was now firmly established that an award was bad on the ground of error of law on the face of it only when in the award itself or in a document actually incorporated in it, there was found some legal proposition which was the basis of the award and which was erroneous.
This view was enunciated by the Judicial Committee in Champsey Bhara and Co. vs Jivraj Balloo Spinning and Weaving Co. Ltd., [1922 23] LR 5O IA 324; This view was again reiterated and emphasised by this Court in Kanpur Nagar Mahapalika v M/s Narain Das Haribansh, 11970] 2 S.C.R. 28; where Ray, J., as the learned Chief Justice then was, observed at page 30 of the Report relying on Champsey Bhara case: "An error of law on the face of the award meant that one could find in the award, or in a document actually incorporated thereto, as, for instance.
a note appended by the arbitrator stating the reasons for his judgment, some legal proposition which was the basis of the award and which one can say is erroneous.
" In State of Orissa & Ors v M/s Lall Brothers, [1988] Judgment Today S.C. 552 it was held by a Bench of this Court that it is not open to the Court to speculate, where no reasons are given by the arbitrator, as to what impelled him to arrive at his conclusions.
Reference was made in this connection (see paragraph 8) to the observations of the Judicial Committee in Champsey Bhara & Co. vs Jivraj Balloo Spinning & Weaving Co. ltd. and of this Court in Jivarajbhai Ujamshi Sheth & Ors.
vs Chintamanrao Balaji and Ors, ; PG NO 523 It was next contended by Mr. Bhandare that the award disclosed an error in law as certain important documents relied on by the Appellants were not referred to or discussed in the award at all.
In support of this contention Mr. Bhandare referred to the decision in K.P. Poulose vs State of Kerala and Another, ; In that case the arbitrator failed to take into account material documents, which were necessary to arrive at for a just and fair decision to resolve the controversy between the parties and it was held that this amounted to legal misconduct on the part of the arbitrator and his award liable to be set aside.
This decision is not of much assistance in the case before us as it is not the contention of Mr. Bhandare that the award is bad on the ground of any misconduct of the arbitrator but on the ground that it discloses an error of law on the face of the record.
Moreover, our attention has not been drawn to any particular document which was essential to resolve the controversy between the parties nor has it been demonstrated that any such document was not taken into account by the arbitrator.
In view of this, there is no basis to support the contention of Mr. Bhandare which must be rejected.
It cannot be even said in this case that the arbitrator was guilty of any legal misconduct or otherwise .
The objections to the Award of Shri A.C. Gupta, therefore, fail and are dismissed.
There will be a judgment in terms of the Award.
Let the decree be drawn up accordingly.
In the facts and circumstances of the case, there will be no order as to costs to the hearing before us.
| The respondent had taken a loan of Rs.15,000 from the Ministry of Defence for construction of a house on a plot allotted to him.
As the amount of loan was insufficient to complete the construction, he took a loan of Rs.5,000 from Appellant No. 1 and on 6th September, 1973 he entered into an agreement to sell the house and the plot to Appellant No. 1.
The aforesaid amount of Rs.5,000 was shown as advance of sale price.
Clause 2(b) of the Agreement provided that the appellant purchaser shall pay to the seller!respondent a sum of Rs.105 every month against the sanctioned loan of Rs. 15,000 till the full amount is recovered from the respondent.
I he payment of Rs. 105 per month was made by the appellant only up to .January 1976 and this payment covered upto 23 instalments, and more than l00 instalments remained unpaid.
On January 29, 1974 another agreement, for construction. was entered into between Appellant No. 1 and the respondent.
Under this agreement, Appellant No. 1 was to complete construction of the house and alter the completion of the house the respondent was to return the cost of construction amounting to Ks.1,15,000 including appellant 's profit of Rs.20,000 and security amount of Rs. 15,000 deposited by the Appellant No. 1 with the respondent, within three years in a lump sum and on payment the Appellant No.
I was to hand over the possession of the building and the plot to the respondent.
Till that amount was paid.
Appellant No 1 was entitled to possess and occupy and enjoy the building PG NO 513 PG NO 514 The house was not completed but the appellants who are husband and wife were occupying the same.
According to the respondent this transaction was sham and bogus and he repudiated the same.
Disputes arose between the parties.
The respondent filed a suit claiming for the return of possession of the said plot of land and house.
The application ot ' the appellant under section 34 of the Arbitration Act was dismissed.
In the appeals preferred by the appellant the Additional District Judge, appointed a sole arbitrator with the consent of the parties.
The arbitrator made and published his award which went against the appellants.
The High Court dismissed the appeal filed by the appellants against the order of the District Judge dismissing their application challenging The Award.
This Court.
in appeal, set aside the award of the Arbitrator and also the judgment of the High Court and appointed Shri A.C. Gupta, a former Judge of this Court as the sole arbitrator.
It was contended before the said Arbitrator that the agreement for sale was not registered and might not convey any interest to appellant No. 1 in the property, but the appellants, who had been put in possession of the said land and construction.
were entitled to retain possession under th4 ' protection affOrded by section 53A of the .
The arbitrator made and published his award which went against the appellants.
The arbitrator held from the receipts filed, that the respondent paid only rent up to than 100 instalments remained to be paid, and that there was no valid reason why the respondent should have failed to carry out his obligation under The contract.
The arbitrator further held that the respondent could not, therefore, claim that his possession was protected, under section 53A of the and was, therefore.
not entitled to retain possession of the disputed property beyond January 1976.
In the objection filed by the appellants challenging the award before this Court it was contended that the award is bad in law and liable to be set aside as there is an error of law disclosed on the face of the award as the statements contained in the award ran counter to the settled position in law that wrongful repudiation by the respondent of the contract by his letter dated 16 January, 1976, before mutual obligation under the contract were carried out, amounted to PG NO 515 an anticipatory breach of contract by him and therefore the Appellant No. 1 is absolved from carrying out his remaining obligation under the contract, and could claim specific performance of the same even though he failed to carry out his remaining obligations under the contract.
Dismissing the objections and upholding the award, the Court, HELD: l.
It is settled in law that where a party to a contract commits an anticipatory breach of the contract, the other party to the contract may treat the breach as putting an end to the contract and sue for damages, but in that event he cannot ask for specific performance.
The other option open to the other party, namely, the aggrieved party, is that he may choose to keep the contract alive till the time for performance and claim specific performance but, in that event, he cannot claim specific performance of the contract unless he shows his readiness and willingness to perform the contract.
[521B C] International Contractors Ltd. vs Prasanta Kumar Sur, [1961]3 SCR 579, distinguished.
It is an error of law and not a mistake of fact committed by the Arbitrator which is justiciable in the application before the Court.
[521A] If there is no legal proposition either in the award or in any document annexed to the award which is erroneous and constitutes the basis of the award and the alleged mistakes or alleged errors are only mistakes of fact the award is not amenable to correction by the Court.
[522A B] Coimbatore District Podu Thozillar Sangam vs Balasubramania Faundary and Others, ; ; Champsey Bhara and Co. vs Jivraj Balloo Spinning Weaving Co. Ltd., [1922 23] LR 50 IA 324, ; Kanpur Nagar Mahapalika vs M/s Narain Das Haribansh, , and State of Orissa & Ors.v.
M/s Lall Brothers, [1988] Judgment Today S.C. 552, referred to.
In this case, what the arbitrator has done is to set out in his award the relevant portion of section 53A of the , in terms of the said section.
There can be no dispute that these provisions have been correctly set out.
There is thus no error in the proposition of law set out by the learned Arbitrator in the award.
It may be that there is an error, although that is by no means certain, in PG NO 516 the application of these principles in coming to the conclusion that, notwithstanding the repudiation of the said contract by the respondent, Appellant No. 1 was not absolved in the facts and circumstances of the case from his obligation to pay the remaining instalments of Rs.105 per month as provided under the contract.
[521F G]
|
Civil Appeal No. 431 of 1957.
Appeal by special leave from the judgment and order dated the September 8, 1955, of /the Calcutta High Court in Income tax Reference No. 77 of 1951.
C. K. Daphtary, Solicitor General of India, R. Ganapathy Iye r and D. Gupta, for the appellant.
N. C. Chatterjee, B. Sen Gupta and D. N. Mukherjee, for the respondent.
May 15.
The Judgment of the Court was delivered by DAS C.J.
This appeal by special leave is directed against the order of the High Court of Calcutta passed or September 8, 1955, 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 first question referred to it in the negative and the second question in favour of the respondent assessee.
The facts leading up to the present appeal are briefly as hereinafter narrated.
The respondent was at all material times a Hindu undivided family of which one B. K. Rohatgi was the eldest male member and as such its karta.
It appears that in 1930 the said B. K. Rohatgi became interested in a concern called the India Electric Works carried on by Milkhi Ram and other persons none of whom was a member of the assessee family.
Evidently it was decided that a Company would be floated, inter alia, for the purpose of acquiring and taking over the said India Electric Works as a going concern.
The said B. K. Rohatgi was one of the promoters of that Company.
Pursuant to an agreement with the vendors of the business of India Electric Works the said B. K. Rohatgi, as such promoter as aforesaid and on behalf of the said Company then to be formed, took over the said business as a going concern on and from March 1, 1930, and carried on the same since then until December 19, 1930, when the contemplated 323 Company was eventually incorporated under the Indian Companies Act as a private company with limited liability under the name of India Electric Works Ltd. (hereinafter called " the said Company ").
Article 132 of the Articles of Association of the said Company provided that the first Managing Director would be the said B. K. Rohatgi or " his assigns or successors in business whether under his name or any other style or firm " and that the said B. K. Rohatgi would continue to be the Managing Director until he would resign or be found guilty of any act of fraud or dishonesty or be removed in the manner thereinafter provided.
Article 133 laid down the circumstances in which and the conditions on which the Managing Director might be removed.
Article 135 provided for the remuneration of the Managing Director which was fixed at Rs. 6,000 per annum or a commission of 15 per cent.
on the net profits of the Company to be computed in the manner therein mentioned.
The powers of the Managing Director were enumerated in article 136 under twenty sub heads.
Article 138 provided that the Company should " forthwith enter into an agreement under the seal with Mr. Benoy Krishna Rohatgi in terms of the draft which has been approved on behalf of the Company.
" For some reason or other, not apparent on the record, it was not till January 31, 1934, that an agreement was actually entered into between the said Company and the said B. K. Rohatgi.
The terms and conditions contained in the agreement and the powers and authorities conferred thereby on B. K. Rohatgi were in substance the same as those mentioned in the Articles of Association referred to above.
Of the total 950 ordinary shares of Rs. 500 each issued and subscribed, 326 shares stood in the name of the said B. K. Rohatgi, 356 shares in the name of his brother R. K. Rohatgi and 10 shares in the name of one Laxminarain said to be an employee of the assessee family.
There is no dispute that prior to the accounting year relevant to the assessment year 1943 44 the Managing Director 's remuneration received by the said B. K. Rohatgi was credited in the books of the 324 Hindu undivided family just as the dividends on the shares held in the names of his brother and of himself had been done.
In para.
6 of the Statement of the Case it is stated: "It was not denied by the Assessee that India Electric Works Limited was floated mainly with the funds provided by the Assessee and Mr. Rohatgi made no contribution in this respect.
Further, all along its career India Electric Works Limited was financed from time to time by the Assessee Hindu Undivided Family.
It was further found that it was for the first time in the year of assessment that the Assessee claimed that the remuneration belonged to Mr. Rohatgi personally.
Up to 1942 43 assessment all along both Mr. Rohatgi and the Hindu Undivided Family Assessee in their accounts treated the whole of the remuneration paid to Mr. Rohatgi as the income of the Hindu Undivided Family. " In the accounting year relevant to the assessment.
year 1943 44 the Managing Director 's remuneration received by B. K. Rohatgi amounted to Rs. 61,282 and during the 1943 44 assessment proceedings it was claimed that the whole of it was the personal earnings of the said B. K. Rohatgi and should not be added to the income of the Hindu undivided family which is the respondent before us.
The Income tax Officer rejected this claim.
On appeal to the Appellate Assistant Commissioner, the latter concurred with the view of the Income tax Officer.
The assessee went up on further appeal to the Income tax Appellate Tribunal.
The Tribunal struck a middle course.
It held that Rs. 61,282 was made up of two kinds of remuneration, namely, (1) remuneration for services rendered by the assessee family in the floatation and financing of the said Company and (2) remuneration for the personal services of the said B. K. Rohatgi.
The Tribunal, therefore, apportioned the amount received between the two categories of remuneration and allocated Rs. 30,000 computed at the rate of Rs. 2,500 per month to the personal services of the said B. K. Rohatgi and the 325 rest to the remuneration due to the services of the assessee family.
On the application of the respondent assessee the Tribunal made a reference under section 66(1) of the Indian Income tax Act and the questions referred were as follows : " (1) Whether on the facts and in the circumstances of this case, the Income tax Appellate Tribunal was justified in apportioning the sum of Rs. 61,282 into two parts assessing one in the hands of the Assessee Hindu undivided family and the other in the hands of Mr. B. K. Rohatgi? (2) If the answer to the above question be in the negative, whether the assessment of the said sum of Rs. 61,282 should be on Mr. Rohatgi personally or on the Assessee Hindu undivided family?" When the reference came up before the High Court for hearing, the learned judges felt that the statement of case submitted by the Tribunal was inadequate and that it, would not be possible for the Court to answer the questions unless certain other facts were clearly stated.
The High Court accordingly directed the Tribunal to submit a further statement of case and to include therein answers to the following questions: " (a) With whose funds were the shares, on the strength of which Mr. Rohatgi has been and is the Managing Director, purchased and to whom do they really belong ? (b) Who has been in enjoyment of the dividend paid on those shares ? (c) In what capacity was Mr. Rohatgi originally appointed to and was holding, at the relevant time, the office of the Managing Director of the India Electric Works Ltd., namely, whether in his personal and individual capacity or otherwise? (d) Besides the qualifying shares, are there any further shares of the Company standing in the name of Mr. Rohatgi and if there, are such shares, with whose funds were such shares acquired and to whom do they really belong ? 326 A further statement of case was accordingly submitted by the Tribunal.
The Tribunal concluded its findings and expressed its opinion on the questions specifically as follows: Questions (a), (b) and (d).
All the shares in the India Electric Works Limited standing In the name of Mr. B. K. Rohatgi (326 shares) and Mr. R. K. Rohatgi (356 shares) were acquired with funds belonging to the assessee family and they belong to the family and the family has been in enjoyment of the dividends paid on those shares.
Besides the 10 qualifying shares there are 316 more shares in the Company standing in the name of Mr. B.K. Rohatgi and those shares also belong to the assessee family.
Question (c) The answer is a matter of inference from the facts above stated.
The Tribunal 's conclusion was that Mr. B. K. Rohatgi was originally appointed to and was at the relevant time holding the office of the Managing Director of the India Electric Works Limited in his capacity as a member and karta of the assessee family.
" Learned counsel appearing before the High Court did not make any attempt to support the Tribunal in its choice of the middle path but conceded that the income was either the income of the family or the personal income of the said B. K. Rohatgi and that there could be no justification for ascribing a portion of it to the remuneration of the said B. K. Rohatgi as an officer of the Company and ascribing the other portion to a return made by the Company to the family for benefits received.
The High Court accordingly answered the first question in the negative.
As regards the second question, the High Court thought that the case was covered by the decision in the case of Commissioner of Income tax, Madras vs S.N.N. Sankaralinga Iyar (1) and expressed the opinion that the assessment of the said sum of Rs. 61,282 should be on, Mr. Rohatgi personally.
Feeling aggrieved by the aforesaid answer, the Commissioner of Income tax applied for and obtained from this Court special leave to appeal to this Court (1) 327 against the order of the High Court.
The learned Solicitor General appearing before us in support of this appeal has not challenged the correctness of the answer given by the High Court to the first question and; therefore, we are now concerned only with the correctness of the.
answer given by the High Court to the second question.
It is now well settled that a Hindu undivided family cannot as such enter into a contract of partnership with another person or persons.
The karta of the Hindu undivided family, however, may and frequently does enter into partnership with outsiders on behalf and for the benefit of his joint family.
But when he does so, the other members of the family do not, vis a vis the outsiders, become partners in the firm.
They cannot interfere in the management of the firm or claim any account of the partnership business or exercise any of the rights of a partner.
So far as the outsiders are concerned, it is the karta who alone is and is in law recognised as, the partner.
Whether in entering into a partnership with outsiders, the karta acted in his individual capacity and for his own benefit or he did so as representing his joint family and for its benefit is a question of fact.
If 'for the purpose of contribution of his, share of the capital in the firm the karta brought in monies out of the till of the Hindu undivided family, then he must be regarded as having entered into the partnership for the benefit of the Hindu undivided family and as between him and the other members of his family he would be accountable for all profits received by him as his share out of the partnership profits and such profits would be assessable as income in the hands of the Hindu undivided family.
Reference may be made to the cases of Kaniram Hazarimull vs Commissioner of Income tax, West Bengal( ') and Dhanwatay V. D. vs Commissioner of Income tax, Madhya Pradesh and Bhopal (2) in support of this view.
The same principle has been applied to the case of a karta appointed as a Treasurer of a Bank and the remuneration received by him for services rendered as such Treasurer has been treated (1) (2) , 328 as the income of the Hindu undivided family of which he was the karta and was assessed in its hands.
The same principle has been extended to the remuneration received by a karta as the managing agent of a Company with limited liability.
(See In re Haridas Purshottam (1)).
Stone, C.J, with whom Chagla, J., agreed, held that as the managing agency was derived from or acquired with the assistance of the joint family property, that is, the mills in which the assessee as karta was beneficially interested, the income from the managing agency received by the assessee must be treated as the income of the family of which he was the karta.
Reference is, however, made to certain decisions in support of the contrary view; but those decisions appear to turn on the facts found to be established in those particular cases.
Thus, in Murugappa Chetty vs Commissioner of Income tax, Madras (2) it had not been established either that the managing agency agreement had, in fact, been obtained by the karta for and on behalf of ' the Hindu undivided family or that the income was earned by utilising the joint family property or utilising it to its detriment.
The case of R. Hanumanthappa vs Commissioner of Income tax, Madras( ') simply follows Murugappa Chetty 's case( ') and does not carry the matter any further.
As will be seen hereafter, to the facts established in the case now before us these two decisions can have no application.
It is then stated that the position of a Managing Director stands on a footing different from that of a partner or a managing agent and, therefore, the principles applicable to the income derived by a karta as a partner or managing agent cannot apply to the remuneration received by the karta as the Managing Director of a Company.
In the first place it is said that under the Indian Companies Act, a Hindu undivided family cannot by reason of the definition given in section 2 (9 A) be, appointed a managing agent of a Company.
In the next place, the office of a managing director, it is urged, involves a personal element and the appointment of a (1) (2) (3)[1952] 22 329 managing director must necessarily be of a particular person for his personal skill and other qualities and therefore, the remuneration received by him must be his personal earnings.
Neither of these two considerations appears to us to be tenable.
Vis a vis the Company the managing director is undoubtedly the individual person who is appointed as such.
The Company is not concerned with the managing direc tor 's Hindu undivided family or the members thereof, just as the outside partners know only the karta in his individual capacity as their partner and are not concerned with his Hindu undivided family or its members.
The question whether the amount received by the karta by way of managing director 's remuneration in the one case or as his share of profits in the partnership business in the other case is his personal income or is the income of his Hindu undivided family cannot arise as between the Company and the karta as the managing director or between the outside partners and the karta as a partner.
Neither the Company nor the outside partners, as the case may be, is or are interested in such a question.
Such question can arise only as between the karta and the members of his family and the answer to the question will depend on whether the remuneration or profit was earned with the help of joint family assets.
The case of Sardar Bahaditr Indra Singh vs Commissioner of Income tax, Bihar and Orissa (1) is clearly distinguishable in that it was expressly provided in the Articles of Association of the Company in that case that the remuneration of the managing director would be his personal income.
In Commissioner of Income tax, Bihar and Orissa vs Darsanram (2) the finding of fact was that the joint family property had not been spent in earning the managing director 's remuneration which was, therefore, held to be the personal earnings of the karta who had been appointed as the managing director.
The case of Commissioner of Income tax, Madras vs section N. N. Sankaralinga Iyer (3) does not help the respondent because of the facts found in that case.
(1) (2) (3) 42 330 In that case it was found that the remuneration of the managing director was earned by him in consideration of the services which he rendered to the bank and no part of the family funds had been spent or utilised for acquiring that remuneration except that the necessary shares to acquire the qualification of a managing director were purchased out of the joint family funds.
It was said that there was no detriment to the family property in any manner or to any extent, as admittedly the shares earned dividends which were included in the income of the family.
Satyanarayana Rao, J., took the view that on the facts of that case it was impossible to infer that the appointment itself was on behalf and for the benefit of the family; or, in other words, that he became the managing director as representing the undivided family.
Viswanatha Sastri, J., in a separate but concurring judgment expressed the view that the mere fact that the assessee had a particular quantity of shares as a manager of a joint family did not ipso facto enable him to function as the managing director.
His personal qualifications were mainly responsible, in addition to the holding of shares, for his selection and appointment as the managing director of the bank.
The remuneration, according to the learned Judge, was really quid pro quo for the work which he did under the contract of service with the bank.
The managing directorship, he held, was in fact a contract of service and it is not as if the family represented by the manager was the managing director.
It was the individual that was appointed and that was functioning as the managing director.
With great respect to the learned judges, it appears to us that they overlooked the principles laid down by the Judicial Committee in Gokul Chand vs Hukam Chand Nath Mal (1) where it was pointed out that there could be no valid distinction between the direct use of the joint family fund and the use which qualified the member to make the gains on his own efforts.
The member of the joint family entered into the Indian Civil Service no doubt by reason of his intelligence and other attainments.
He certainly entered into a personal agreement with the (1) [1921] L.R. 48 I.A. 162.
331 Secretary of State in Council and he received his salary for rendering his personal service.
But all that was made possible by the use of the joint family funds which enabled to him to acquire the necessary qualification and that fact made his earnings part of the joint family properties.
That apart, those decisions do not clearly govern the case now before us.
What are the facts here ? Here was the Hindu undivided family of which B. K. Rohatgi was the karta.
It became interested in the concern then carried on by Milkhi Ram and others under the name of India Electric Works.
The karta was one of the promoters of the Company which he floated with a view to take over the India Electric Works as a going concern.
In anticipation of the incorporation of that Company the karta of the family took over the concern, carried it on and supplied the finance at all stages out of the joint family funds and the finding is that he never contributed anything out of his separate property, if he had any ' The Articles of Association of the Company provided for the appointment as managing director of the very person who, as the karta of the family, had promoted the Company.
The acquistion of the business, the floatation of the Company and appointment of the managing director appear to us to be inseparably linked together.
The joint family assets were used for acquiring the concern and for financing it and in lieu of all that detriment to the joint family properties the joint family got not only the shares standing in the names of two members of the family but also, as part and parcel of the same scheme, the managing directorship of the company when incorporated.
It is also significant that right up to the accounting year relevant to the assessment year 1943 44 the income was treated as the income of the Hindu undivided family.
It is true that there is no question of res judicata but the fact that the remuneration was credited to the family is certainly a fact to be taken into consideration.
It appears to us that the case is governed by the principles laid down in Haridas Purshottam 's case (1).
The recitals in the agreement also clearly point to the fact of B.K. Rohatgi (1) 332 having been appointed managing director because of his being a promoter of the company and having actually taken over the concern of India Electric Works from Milkhi Ram and others.
The finding in this case is that the promotion of the Company and the taking over of the concern and the financing of it were all done with the help of the joint family funds and the said B. K. Rohatgi did not contribute anything out of his personal funds if any.
Ill the circumstances, we are clearly of opinion that the managing directors remuneration received by B.K. Rohatgi was, as between him and the Hindu undivided family, the income of the latter and should be assessed in its hands.
We, therefore, set aside the answer given by the High Court to the second question and answer the same by saying that the assessment of the whole of the sum of Rs. 61,282 should be on the assessee Hindu undivided family.
The result is that this appeal is allowed with costs here and in the Court below.
| R was the karta of the Hindu undivided family which became interested in a business concern which was then being carried on by others.
With a view to taking over the said business as a going concern, a company was floated with R as one of the promoters.
Pursuant to an agreement with the vendors.
of the business and in anticipation of the incorporation of the company, R on behalf of the company, took over the concern, carried it on and supplied the finance at all stages out of the joint family funds.
On December 19, 1930 the contemplated company was incorporated under the Indian Companies Act as 321 ' a private company with limited liability, in which of the total 950 ordinary shares, R had 326 shares and his brother 356 shares.
The Articles of Association of the company provided for the appointment of R as the first managing director of the company.
Prior to the accounting year relevant to the assessment year I943 44 the amount received by R as managing director 's remuneration was credited in the books of the Hindu undivided family just as the dividends on the shares held in the names of R and his brother had been done.
For the assessment year I943 44 it was claimed that the amount which R received as the managing director 's remuneration in the relevant accounting year was his personal earnings and that it should not be added to the income of the Hindu undivided family, but the Income tax Officer rejected this claim.
It was contended for the assessee that under the Indian Companies Act a Hindu undivided family cannot, by reason of the definition given in section 2(9 A) be appointed a managing agent of company and that the office of managing director involves a personal element and the appointment of a managing director must necessarily be of a particular person for his personal skill and other qualities and therefore the remuneration received by him must be his personal earnings.
Held, that though vis a vis the company the managing director was undoubtedly the individual person who was appointed as such and the company was not concerned with the managing director 's Hindu undivided family or the members thereof, the question whether the amount received by the karta by way of managing director 's remuneration was his personal income or was the income of the Hindu undivided family arises as between the karta and the members of his family and would depend on whether it was earned with the help of joint family assets.
In the present case, on the facts found that the promotion of the company, the taking over of the concern and the financing of it were all done with the help of the joint family funds and that R did not contribute anything out of his personal funds, held that the managing director 's remuneration received by R was, as between him and the Hindu undivided family, the income of the latter and should be assessed in its hands.
Kaniram Hazarimal vs Commissioner of Income tax, West Bengal, ; V. D. Dhanwatay vs Commissioner of Income tax, Madhya Pradesh and Bhopal, In re Haridas Purshottam, and Gokul Chand vs Humam Chand Nath Mal, (192I) 48 I.A. 162, relied on.
Commissioner of Income tax, Madras vs section N. N.
Sankaralinga IYer,l ; Murugappa Chetty vs Commissioner of Income tax, Madras, ; Sardar Bahadur Indra Singh vs Commissioner of Incomc tax, Bihar and Orissa, 41 322 and Commissioner of Income tax, Bihar and Orissa vs Darsaram, , distinguished.
|
ON: Civil Appeal No. 1557 of 1986 From the Judgment and Order dated 3.4.1986 of the Bombay High Court in Interim Petition No. 11 of 1986.
K. Parasaran, Attorney General, B. Datta, Additional Solicitor General, S.S. Shroff, S.A. Shroff, R.K. Joshi, Mrs. P.S. Shroff.
Anil K. Sharma and Mohan Parasaran for the Appellant.
F.S. Nariman, S.N. Thakkar, Ravinder Narain, Gulam Vahamwati, section Sukumaran, D.N. Mishra, Adittiya Narain, Mrs. A.K. Verma and Miss Lira Goswami for the Respondent.
The Judgment of the Court was delivered by 1031 THAKKAR, J.
Was the High Court 'right ' in granting the restraint order earlier, and 'wrong ' in vacating the said order later '? By the order in question the Respondent, Western Company of North America (Western Company), was restrained from pro ceeding further with an action instituted by it in a USA Court against the appellant.
Oil and Natural Gas Commission (ONGC).
The said action was targeted at seeking a judgment from the concerned court in U.S.A. on the basis of an arbi tral award rendered by an Umpire in arbitration proceedings held in London but governed by the Indian , 194.0, which was the law of choice of the parties as per the arbitration clause contained in the drilling contract en tered into between the parties.
The Western Company has moved the USA Court for a judgment in terms of the award not withstanding the fact that: 1) ONGC had already initiated proceedings in an Indian Court to set aside the award and the said proceeding was as yet pending in the Indian Court.
2) The said award was not as yet enforceable in India as a domestic award inasmuch as a Judgment in accordance with the Indian law had yet to be procured in an Indian Court, by the Western Company.
The events culminating in the order under appeal may be briefly and broadly recounted.
The appellant, ONGC and the Respondent Western Company, had entered into a drilling contract.
The contract provided for any differences arising out of the agreement being referred to arbitration.
The arbitration proceedings were to be governed by the Indian read with the relevant rules.
A dispute had arisen between the parties.
It was referred to two Arbitrators and an Umpire was also appointed.
The Arbitra tors entered on the reference in London which was the agreed venue for hearing as per the Arbitration Clause contained in the contract.
On October 1, 1985 the Arbitrators informed the Umpire that they were unable to agree on the matters outstanding in the reference.
Consequently the Umpire en tered upon the arbitration and straightaway proceeded to declare his non speaking award (styled as interim award) on October 17, 1985 without affording any hearing to the par ties on the matters outstanding in the reference.
The Umpire did not afford a hearing subsequent to his entering upon the arbitration presumably because even when the matter was within the domain of the Arbitrators (and not of the 1032 Umpire), and the Arbitrators were seized of the matter, the Umpire used to remain present at the hearings conducted by the Arbitrators.
Having been present throughout the proceed ings whilst the Arbitrators were in charge of the same, the Umpire presumably considered it unnecessary to hear the parties or their counsel after he Was seized of the matter and it came within his domain in the wake of the disagree ment between the two Arbitrators.
And the Umpire straight away proceeded to declare the interim award on October 17, 1985.
Thereafter, on November 5, 1985, the Respondent, Western Company, requested the Umpire to authorise one Shri D.C. Singhania to file the award dated October 17, 1985 in the appropriate Court in India.
The Umpire accordingly authorised the said Shri Singhania in this behalf.
And pursuant to the said authority the award rendered by the Umpire was lodged in the Bombay High Court on November 22, 1985.
Subsequently, on November 28, 1985 the Umpire rendered a supplementary award relating to costs which has been termed as 'final ' award.
About a month after the lodging of the award in the High Court of Bombay by the Umpire at the instance of the Respondent, Western Company, the latter lodged a plaint in the U.S. District Court, inter alia, seeking an order (1) confirming the two awards dated October 17, 1985 and November 28, 1985 rendered by the Umpire (2) a Judgment against the ONGC.
(Appellant herein) in the amount of $ 256,815.45 by way of interest until the date of he Judgment and costs etc.
On January 20, 1986, appellant ONGC on its part insti tuted an Arbitration Petition No. 10 of 1986 under Sections 30 & 33 of the Indian for setting aside the awards rendered by the Umpire.
Inter alia the challenge was rooted in the following.
reasoning.
While as per the Indian which admittedly governed the arbitration proceedings the Umpire would come on the scene only provided and only when the Arbitrators gave him notice in writing that they were unable to agree, and the Umpire would enter upon the reference in lieu of the Arbitrators only subsequent thereto, in the present case the Umpire had neither held any proceedings nor had afforded any opportuni ty of being heard to the ONGC after entering upon the refer ence.
The appellant, ONGC, also prayed for an interim order restraining the Western Company from proceeding further with the action instituted in the U.S. Court.
The learned Single Judge granted an ex parte interim restraint order on January 20, 1986 but vacated the same after hearing the parties by his impugned order giving rise to the present appeal by Special Leave.
Interim Order No. 11 of 1986 passed on April 3, 1986 in Arbitration Petition No. 10 of 1986.
1033 In order to confine the dialogue strictly within the brackets of the scope of the problem, four points deserve to be made at the outset before adverting to the impugned order rendered by the High Court.
1) We are not concerned with the merits of the main dispute between the parties which was the subject matter of arbitration and which per tains to the charges payable for a jack up drilling unit and related services provided by Western Company to ONGC.
The equipment was utilised beyond the period stipulated in the contract.
In regard to the employment of the equipment beyond the contractual period West ern Company claimed payment at US $ 41,600 per operating day which was the rate stipulated for the user of the equipment for the stipu lated time frame.
The ONGC on the other hand has contended that in the context of the correspondence between the parties pertaining to the employment of the equipment beyond the stipulated period the Western Company is entitled to claim only US $ 18,500 per day.
The dispute concerns the claim for pay ment for the user of the equipment for the extended period (136 days and 16 hours).
We are however not concerned with the merits of the claim giving rise to the dispute and differences which was referred to the Arbitra tors.
2) We are not concerned with the merits of the contentions raised in the petition instituted by ONGC in the High Court of Bombay in order to challenge the arbitral award rendered by the Umpire except to the limited extent of examining whether ONGC has a prima facie case.
3) We are not concerned with the question as to how an arbitral award which is not a domes tic award in India can be enforced in a Court in India in the context of the Indian legisla tion enacted in that behalf namely the Foreign Awards (Recognition and Enforcement) Act, 1961.
The said Act was enacted in order to give effect to an international convention known as New York Convention to which India has acceded.
The provisions of the said Act would be attracted only if a foreign award is sought to be enforced in an Indian Court.
We are not concerned with such a situation.
The award which is the subject matter of contro versy in the present case is admittedly a domestic award for the purposes of the Indian Courts, governed by 1034 the provisions of the Indian of 1940.
When the Western Company seeks to enforce the award in question in the US Court they do so on the premise that it is a foreign award in the US Court.
In considering the question as regards the proceeding initiated by the Western Company in the US Court, there is no occasion to invoke the provisions of the aforesaid Act.
The provisions of the said Act can be invoked only when an award which is not a domestic award in India is sought to be enforced in India.
Such is not the situation in the present case.
We are therefore not at all concerned with the provisions of the said Act.
4) We are not directly concerned with the law governing the enforcement of the foreign award in an USA Court.
We would be undertaking an inappropriate exercise in being drawn into a discussion in depth as regards the law govern ing enforcement of foreign awards in USA, the procedure to be followed, or as to the inter pretation of the relevant provisions as made by the US Court.
So also it would be inappro priate to speculate on the view that is likely to be taken by the American Court or to antic ipate its interpretation or its verdict in regard to the relevant matters at that end.
The order under appeal may now be subjected to scrutiny.
The High Court has vacated the interim order granted by it earlier on the following grounds: 1) That it was open to the Western Company to enforce the award in the US Court and that accordingly it would not be appropriate to grant the injuction restraining them from enforcing the same at that end.
2) That it was open to the ONGC to contend before the US Court that the petition for setting aside the award which was sought to be enforced in the US Court was already pending in the Indian Court.
3) That the proceeding in the US Court cannot be said to be vexatious or oppressive.
The High Court has examined the question as to whether the 1035 action instituted by the Western Company against ONGC was maintainable in the context of the New York Convention in the light of the relevant Articles of the Convention and has come to the conclusion that an action to enforce the award in question as a foreign award in the US Court was quite in order.
The view is expressed that the mere fact that a petition to set aside the award had already been instituted in the Indian Court and was pending in the Indian Court at the time of the institution of the action in the US Court was a matter of no consequence, for the purposes of consid eration of the question as to whether or not Western Company should be restrained from proceeding further with the action in the US Court.
Now, there cannot be any doubt that the Western Company can institute an action in the US Court for the enforcement of the award in question notwithstanding the fact that the application for setting aside the award had already been instituted and was already pending before the Indian Court.
So also there would not be any doubt or dis pute about the proposition that the ONGC can approach the US Court for seeking a stay of the proceedings initiated by the Western Company for procuring a judgment in terms of the award in question.
But merely on this ground the relief claimed by ONGC cannot be refused.
To say that the Court in America has the jurisdiction to entertain the action and to say that the American Court can be approached for staying the action is tantamount to virtually cold shouldering the substantial questions raised by ONGC and ' seeking an escap ist over simplification of the matter.
The points urged by the ONGC are of considerable importance and deserve to be accorded serious consideration.
Prominence deserves to be accorded to the following factors which appear to be of great significance: 1) It is not in dispute that the arbitration clause contained in the contract which has given rise to the disputes and differences between the parties in terms provides that: "The arbitration proceedings shall be held in accordance with the provisions of the Indian and the rules made thereunder as amended from time to time." (Vide clause 14 of the Contract) 2) There is also an agreement between the parties that the validity and interpretation thereof shall be "governed by the laws of India" (vide clause 18 of the contract) 1036 3) Under the Indian Law, having regard to the scheme of the of 1940, an arbitral award as such is not enforceable or executable.
It is only after the award is filed in the Indian Court and is made a rule of the Court by virtue of a judgment and decree in terms of the award that life in the sense of enforceability is infused in the lifeless award.
(Vide Sections 141 and 172of the ) The situation which emerges is somewhat an incongrous one.
The arbitral award rendered by the Umpire may itself be set aside and become non existant if the ONGC is able to Successfully assail it in the petition under section 30/33 for setting aside the award in question in ' India.
The High Court does not hold that the petition is prima facie liable to fail.
We do not wish to express any opinion on the merits of the petition as in our opinion it would be improper to do so and might occasion prejudice one way or the other.
We are however not prepared to assume for the purpose of the present discussion that the petition is liable to fail.
The question is wide open.
The final decision of the Court cannot and need not be anticipated.
In the light of the foregoing discussion, the following submissions, pressed into service by the appellant, ONGC, require to be examined.
(1) The award sought to be enforced in the USA Court may itself be set aside by the Indian Court and in that 1.
14(1)&(2): "14.(1) When the arbitrators or umpire have made their award, they shall sign it and shall give notice in writing to the parties of the making and signing thereof and of the amount of fees and charges payable in respect of the arbi tration and award.
2) The arbitrators or umpire shall, at the request of any party to the arbitration agreement or any person claiming under such party or if so directed by the Court and upon payment of the fees and charges due in respect of the arbi tration and award and of the costs and charges of filing, the award cause the award or a signed copy of it, together with any depositions and documents which may have been taken and proved before them, to be filed in Court, and the Court shall thereupon give notice to the parties of the filing of the award.
x x x" 2.17.
Judgment in terms of award Where the Court sees no causc to remit the award or any of the matters referred to arbitration for reconsideration or to set aside the award, the Court shall, after the time for making an application to set aside the award has expired, or such application having been made, after refusing it, proceeded to pronounce judg ment according to the award, and upon the judgment so pro nounced a decree shall follow, and no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with, the award.
" 1037 event, an anomalous situation would be created.
(2) Since the validity of the award in ques tion and its enforceability have to be deter mined by an Indian Court, which alone has jurisdiction under the Indian of 1940, the American Court would have no jurisdiction in this behalf.
(3) The enforceability of the award must be determined in the context of the Indian Law as the arbitration proceedings are admittedly subject to the Indian Law and are governed by the Indian of 1940.
(4) If the award in question is permitted to be enforced in USA without its being affirmed by a Court in India or a USA Court, it would not be in conformity with law, justice or equity.
There is considerable force in the argument advanced in the context of the possibility of the award rendered by the Umpire being set aside by the Indian Court.
In that event an extremely anomalous situation would arise inasmuch as the successful party (Western Company) may well have recovered the amount awarded as per the award from the assets of the losing party in the USA after procuring a judgment in terms of the award from USA Court.
It would result in an irrevers ible damage being done to the losing party (ONGC) for the Court in the USA would have enforced a non existent award under which nothing could have been recovered.
It would result in the valuable Court time of the USA Court being invested in a non issue and the said Court would have acted on and enforced an award which did not exist in the eye of law.
The U.S.A. Court would have done something which it would not have done if the Western Company had waited during the pendency of the proceedings in the Indian Court.
The parties would also be obliged to spend large amounts by way of costs incurred for engaging counsel and for incidental matters.
The losing party in that event would be obliged to initiate fresh proceedings in the USA Court for restitution of the amount already recovered from it, pursuant to the judgment rendered by the USA Court in enforcing the award which is set aside by the Indian Court.
Both the sides would have to incur huge expenditure in connection with the at tendent legal proceedings for engaging counsel and for incidental matters once again.
All this would happen if the restraint order as prayed by the losing party is not grant ed.
And all this can be avoided if it is granted.
1038 Equally forceful is the plea urged in the context of the argument that the concerned Court in India alone would have jurisdiction to determine the question regarding enforce ability or otherwise of the award in question, for, admit tedly, the arbitration proceedings are governed by the Indian of 1940.
And that a proceeding under the Indian for affirming the award and making it a rule of the Court or for setting aside can be instituted only in an Indian Court.
The expression "Court" as defined by Section 2(e)1 of the leaves no room for doubt on this score.
Thus the Indian Court alone has the jurisdiction to pronounce on the validity or en forceability of the award in question.
But the successful party (Western Company) has invoked the jurisdiction of the USA Court to seek affirmation of the award.
In fact reliefs Nos. 1 and 2 claimed by the Western Company in the USA Court are in the following terms.
1) An order confirming the interim award dated October 17, 1985.
2) An order confirming the final award dated November 28, 1985.
Thus, while as per the contract, parties are governed by the Indian and the Indian Courts have the exclu sive jurisdiction to affirm or set aside the award under the said Act, the Western Company is seeking to violate the very arbitration clause on the basis of which the award have been obtained by seeking confirmation of the award in the New York Court under the American Law.
Will it not amount to an improper use of the forum in America in violation of the stipulation to be governed by the Indian law which by neces sary implication means a stipulation to exclude the USA Court to seek an affirmation and to seek it only under the Indian from an Indian Court? If the re straint order is not granted, serious prejudice would be occasioned and a party violating the very arbitration clause on the basis of which the award has come into existence will have secured an order enforcing the order from a foreign court in violation of that very clause.
When this aspect was pointed out to the learned counsel for the Western Company in the context of another facet of this very question namely the possibility of the Indian Court taking one view and the American 1.
"2(e) "Court" means a Civil Court having jurisdiction to decide the questions forming the subject matter of the reference if the same had been the subject matter of suit, but does not, except for the purpose of arbitration proceed ings under section 21 include a Small Cause Court.
" 1039 Court taking a contrary view, counsel stated that though the Western Company had made a prayer for confirmation of the award, the New York Court had no jurisdiction under the Convention to confirm or set aside the award.
It is not appropriate on the part of this Court to anticipate the decision of the New York Court.
If the Western Company is aware of the legal position and is sure of the legal posi tion that the New York Court has no jurisdiction to confirm the award, pray why has the Western Company prayed for the said relief in the New York Court? We cannot proceed on the basis of the assertion made on behalf of the Western Company that the New York Court has no such jurisdiction.
For ought we know the prayer made by the Western Company may well be granted and the legal position propounded by the counsel before us may not prevail with the New York Court.
Surely, the Western Company itself is not going to contend before the New York Court that even though it has sought this relief the Court has no jurisdiction to grant it.
In any case, the Western Company could have amended the plaint lodged in the New York Court by deleting this prayer which it has not done so far.
Be that as it may, as the matter presently stands the appellant has invoked the jurisdiction of the New York Court to pronounce on the same question which is required to be pronounced upon by the Indian Court notwithstanding the fact that only an Indian Court has the jurisdiction to pronounce upon this vital question in view of the stipulation contained in the arbitration agreement itself.
The appellant has invoked the jurisdiction of the New York Court in a matter which it could not have invited the New York Court to decide.
The Western Company has also invoked the jurisdiction of a Court other than the Court which as per the arbitration agreement has the jurisdiction in the matter.
And there is a likelihood of conflicting decisions on the very vital issue resulting in legal chaos.
The apprehension about legal chaos is more than well found ed.
Assuming that the American Court decides that it has jurisdiction to confirm the award and confirms the award, whereas the Indian Court forms the opinion that the award is invalid and sets it aside, what will happen? The Western Company would have recovered the amount as per the award in question by obtaining a judgment in the American Court upon the award being confirmed by the said Court.
And the losing party, ONGC, would be helpless to recover the amount not withstanding the fact that the award has been set aside by the Indian Court, for, the amount would then not be recover able under the American law in the American Court, the latter having held the award to be valid.
The questions posed to the counsel for the Western Company in this behalf and his answers relevant to the material extent, in his own words, along with the questions deserve to be quoted: 1040 QUESTIONS ANSWERS It is an award under Indian law Yes: this is precisely what regardless of the fact that it the convention contemplates was rendered by the umpire while The N.Y.proceedings is not sitting in London.
Since law in a parallel proceeding but India does not make it enforce an independent concurrent able on mere filing of the award one permissible under US but only on it being made a rule Law and under article 1 of the (subject to its being corrected N.Y. Convention acceded to varied annulled or modified) by the U.S. the N.Y. Court should a parallel proceeding be will take into considerati permitted for its enforcement on the pendency of the pro outside India before it has bec ceedings in India; but it ome enforceable in India? Parti is for that Court to so c ularly when the Indian Court is exercise its discretion already seized of the matter and under article VI parties are bound by Indian law? Western company has prayed for: 1.
An order confirming the The proceedings in New York Iterim award dated and Bombay do not involve October 17,1985. "the very matters which wi ll" have to be death with Now these are the very matters by the Bombay High Court" which will have to be dealt with The Bombay Court will not by the Bombay High Court in the have to consider whether to matter arising out of the filing issue an order of enforcem of the award The award may be ent against assets of ONGC, confirmed (or set aside) decree as will the New York Court.
may be passed (or refused).
Can Moreover, the New York Co these very matters be permitted urt will not have to deci to be agitated in the parallel de, as the Bombay Court proceedings under "American Law" will, whether to set aside when parties have in express terms the award.
While the co agreed to be goverend by the law mplaint in the New York in India? And what will happen if case does make a prayer the Indian Court and the American to confirm (as well as Court take conflicting views ? enforce) the awards, the Which view will prevail? Will New York Court is without jurisdiction under the convention to confirm or set aside an award; it is only competent 1041 there not be legal chaos? to "recognised and enforce" foreign awards, as stated in paragraph 13 of the New York complaint.
Thus, whatever the prayer for relief, the Bombay Court alone will decide the issues of confirmation/set aside,and there will not be any conflicting jurisdiction.
There is no question as to which Court decision would prevail in the event of a conflicting result: the Indian Court judgment setting aside the awards.
In that event ONGC could take the Indian Court decision to a court in the United States to have it recognized and enforced so as to recover any monies that Western may have obtained pursuant to an American Court order.
The possibility of conflicting act comes in parallel pro ceedings such as these does not mean that one court must assert exclusive jurisdiction in order to prevent "legal chaos".
The submission that while the validity of the award is required to be tested in the context of the Indian Law if the Western Company is permitted to pursue the matter in the American Court, the matter would be decided under a law other than the Indian Law, by the American Court.
Admitted ly, Western Company has prayed for confirmation of the award.
The American Court may still proceed to confirm the award.
And in doing so the American Court would take into account the American law and not the Indian law or the Indian of 1940.
And the American Court would be doing so at the behest and the instance of Western Compa ny which has in terms agreed that the arbitration proceed ings.
will be governed by the Indian of 1940.
Not only the matter will be decided by a Court other than the Court agreed upon between the parties but it will 1042 be decided by a Court under a law other than the law agreed upon.
Should or should not such an unaesthetic situation be foreclosed? The last submission is also quite impressive.
If the Western Company is right in the posture assumed by it in this Court at the time of the hearing that the American Court has no jurisdiction to confirm the award in view of the New York Convention is correct, the resultant position would be this: The award rendered by the Umpire, the validi ty of which is not tested either by an American Court or an Indian Court will have been enforced by an American Court.
It will be an extremely uphill task to persuade the Court to hold that a foreign award can be enforced on the mere making of it without it being open to challenge in either the country of its origin or the country where it was sought to be enforced.
And that its validity may perhaps be tested for academic purposes in the country of origin after the award is enforced and for seeking restitution later on if possible and if there are assets which can be proceeded against in the country where the award has been enforced.
It is essen tial to emphasise at this juncture and in this context that under the Indian law, an arbitral award is unenforceable until it is made a rule of the Court and a judgment and consequential decree are passed in terms of the award.
Till an award is transformed into a judgment and decree under Section 17 of the , it is altogether lifeless from the point of view of its enforceability.
Life is in fused into the award in the sense of its becoming enforce able only after it is made a rule of the Court upon the judgment and decree in terms of the award being passed.
The American Court would have therefore enforced an award which is a lifeless award in the country of its origin and under the law of the country of its origin which law governs the award by choice and consent.
We are of the opinion that the appellant, ONGC, should not be obliged to face such a situation as would arise in the light of the aforesaid discussion in the facts and circumstances of the present case.
To drive the appellant in a tight comer and oblige it to be placed in such an inex tricable situation as would arise if the Western Company is permitted to go ahead with the proceedings in the American Court would be oppressive to the ONGC.
It would be neither just nor fair on the part of the Indian Court to deny relief to the ONGC when it is likely to be placed in such an awk ward situation if the relief is refused.
It would be diffi cult to conceive of a more appropriate case for granting such relief.
The reasons which have been just now articulat ed are good and sufficient for granting the relief and accordingly it appears unnecessary to examine the meaning and content of the relevant arti 1043 cles of the New York Convention for the purposes of the present appeal.
All the same we will briefly indicate the questions which were debated in the context of the Conven tion since considerable debate has centred around the inter pretation and scope of some of the articles of the Conven tion.
Article V(1)(e) provides that recognition and enforce ment of the award will be refused if the award "has not yet become binding on the parties or has been set aside or suspended by a competent authority of the country in which or under the law of which that award was made.
" It was contended on behalf of Western Company that the legislative history of the New York Convention discloses that under the Geneva Protocol given effect to by the Arbitration (Proto col and Convention) Act, 1937 it was provided that an award would not be enforced if it was not considered as 'final ' and it was not 'final ' if it is proved that any proceedings for the purpose of contesting the validity of the award were pending.
This provision aroused a great deal of controversy as it was felt that the requirement of the Geneva Convention that the award has become final in the country in which it has been made was considered to be burdensome and inadequate and that the New York Convention has accordingly changed the format and the word "final" was replaced by the word "bind ing" in article V(1)(e) .In these premises it was argued that for the purposes of the Convention the award should be considered as binding if no further recourse to another arbitral tribunal was open and that the possibility of recourse to a Court of law should not prevent the award from being binding.
On the other hand it was contended on behalf of ONGC that an award should be treated as binding only when it has become enforceable in the country of origin.
It was argued that the word "binding" was used in the sense of an award from which the parties could not wriggle out.
So far as the present matter is concerned it is unnecessary to examine this aspect at length or in depth for we are not resting our decision on the question as to whether the American Court is likely to refuse enforcement or not.
As we indicated at the outset, it would be improper for us to anticipate the decision of the American Court on this as pect.
We are inclined to rest our decision on the reasoning which we have indicated a short while ago.
We would there 1.
"V(1)(d) Recognition and enforcement of the award may be refused, at the request of the party against whom it is invoked, only if that party furnishes to the competent authority where the recognition and enforcement is sought, proof that: (e) The award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which, or under the law of which, that award was made.
" 1044 fore consider it appropriate to refrain from getting drawn into an academic debate on this issue.
We however consider that it is desirable to bring into focus certain aspects of the matter in the context of the debate on this point.
The significance of the expression "not yet become binding on the parties" employed in Article V(1)(e) cannot be lost sight of.
The expression postulates that the Convention has visualised an award which becomes binding at a point of time later than the making of the award.
In other words the provision has in its contemplation the fact that an award in some cases may become binding on the mere making of it and in some cases may become binding only at a later stage.
If this was not so there was no point in using the expression "not yet become binding".
The award which is sought to be enforced as foreign award will have thus to be tested with reference to the key words contained in Article V(1)(e) of the Convention and the question will have to be answered whether the award has become binding on the parties or has not yet become binding on the parties.
It is evident that the test has to be applied in the context of the law of the country governing the arbitration proceedings or the country under the law of which the award was made.
This conclusion is reinforced by the views expressed by Albert Jan Van den Berg in his treatise The New York Arbitration Convention of 1958 Towards a Uniform Judicial Interpretation at page 341 as under: "Most of the authors are also of the opinion that the moment at which an award becomes binding within the meaning of Article V(1)(e) is to be determined under the law governing the award.
However, they also differ at which moment this should be assumed under that law. ' He has also referred to a judgment rendered by the Italian Supreme Court which supports this proposition.
Says the author: "Furthermore, whilst declaring that the Con vention has eliminated the "double Exequatur", the Italian Supreme Court held that the Court of Appeal has correctly ascertained that the award in question, made in the United States, had become binding under the relevant law of the United States." (Corte di Cassazione (Sez. 1), April 1, 1980 No. 2448, Lanificio Waiter Banci S.a.S. vs Bobbie Brooks Inc. (Italy No. 40) affirming Corte di Appello of Florence, October 8, 1977 (Italy No. 29).
1045 The author has also adverted to this dimension of the matter at pages 338 to 340 of his treatise in the following pas sage: "Furthermore, the Courts have unanimously held that the party against whom the enforcement is sought has to prove that the award has not become binding.
It still happens in some cases that a respondent merely asserts that the award has not become binding.
In these cases the courts have invariably held that the respondent should furnish proof to this ef fect.
The above interpretation of the term "binding" is also almost unanimously affirmed by the authors.
To this extent there exists a uni formity of interpretation.
The uniformity of the interpretation begins to waver, however, when it comes to the question at which moment an award can be considered to have become binding under Article V(1)(e).
Although in no case has it been held hitherto that the award in question was to be consid ered as not having become binding, the various reasonings are diverse.
If this situation continues, it may occur that an award will not be considered as binding by one court, whilst the same award would have been considered as binding by another court.
In finding the answer to the question at which moment the award can be considered binding, the prevailing judicial interpretation seems to be that this question is to be determined under the law applicable to the award.
The law applicable to the award is according to Arti cle V(1)(e), the law of the country in which, or under the law of which, that award was made (the country of origin).
Several courts appear to search under the applicable law for the moment at which the award can be considered to be inchoate for enforcement in the country of origin.
Others attempt to find an equivalent of the term "binding" under the arbitration law of the country of origin.
Before the Court of Appeal of Naples, the Italian respondent had resisted to request for enforcement of an award made in London, alleg ing that the award should have been declared.
enforceable in England.
The Court rejected the 1046 defence, reasoning that the legal effect of the award was not to be determined under Italian law, according to which an award becomes binding only upon an enforcement order of the Pretore, but should be assessed under English law according to which the leave for enforcement is not necessary in order to confer binding force upon the award.
Another example is the Court of First Instance of Strasbourg before which the French respond ent had asserted that the enforcement of an award made in F.R. Germany could not be grant ed because a leave for enforcement had not been issued by a German Court.
Whilst observ ing that the Convention has abolished the "double exequatur", the Court reasoned that the award had become binding when it had been deposited with the German Court.
The latter is indeed a prerequisite for the binding force (verbhindliehkeit) of an award under German law.
The binding force of an award under German law was also considered by the Court of Appeal of Basle.
The Court referred to the Report of the Swiss Federal Council (Conseil federal) accom panying the implementation of the Convention in Switzerland, in which it is stated that "an award is binding within the meaning of Article V(1)(e) when the award complies with the conditions required for being capable for being declared enforceable in the country in which it was made." The Court held that the award was binding on the ground that a decla ration of enforceability of the award had been issued by the Court of First Instance of Hamburg.
This decision might create the impression that in order to be binding under Article V(1)(e), an award made in F.R. Germany must have been declared enforceable by a German Court.
Howev er, the Swiss Consell federal merely meant to say that "binding" should be understood as "ready for enforcement" and not as "enforced".
If the Court had followed this interpretation, it would probably have reached the same con clusion as the above mentioned Court of First Instance of Strasbourg which considered the award to be binding under German law once it had been deposited with the German Court.
Nevertheless, both courts have in common that they considered the ques 1047 tion at which moment an award becomes binding within the meaning of Article V(1)(e) under the law applicable to the award.
Following propositions emerge from the passage quoted hereinabove.
(1) That the enforceability must be determined as per the law applicable to the award.
(2) French, German and Italian Courts have taken the view that the enforceability as per the law of the country which governs the award is essential pre condition for asserting that it has become binding under Article V(1)(e).
The aforesaid passages and the propositions emerging therefrom thus buttress and reinforce the view which has been expressed by us.
It was next contended on behalf of Western Company that in the five cases decided under the New York Convention involving parallel proceedings, in no case did a Court decide that an injunction such as sought by ONGC was neces sary.
In two of these five cases, Norsolor vs Pabalk (France), and Fertilizer Corporation of India vs IDI Manage ment (US) the Courts, concerned about the possibility of conflicting results, ordered a stay of their enforcement proceeding; in the FCI case the court did so only upon the providing of a guarantee to secure the amount of the award at issue.
In the other three cases, the court declined to exercise their discretion to stay an enforcement proceeding (Gutaverken (Sweden), Southern Pacific Properties vs Egypt (The Netherlands), and St. Gobain (France).
The Court in SPP did so only because the respondent refused to provide secu rity, thus demonstrating its bad faith.
In SPP there was in fact a conflicting result when the Dutch Court entered an enforcement order on the very same day as a French Court annulled the award.
Such is the argument.
We are afraid that this argument loses sight of the fact that in the present matter we are not concerned with the question as to whether a foreign court should adjourn the decision on the enforce ment of the award under Article VI.
1 We are not enforcing any foreign award and the question 1.
"Article VI If an application for the setting aside or suspension of the award has been made to a competent author ity referred to in Article V(1)(e) the authority before which the award is sought to be relied upon may, if it considers it proper, adjourn the decision on the enforcement of the award and may also, on the application of the party claiming enforcement of the award, order the other party to give suitable security.
" 1048 is not whether or not a decision on enforcement should be adjourned.
It is the American Court which will have to address itself to that question if an occasion arises.
The decisions relied upon by the counsel for the Western Company have relevance from the perspective of the problem faced by a Court enforcing a foreign award before which a prayer for adjournment of the.
decision is made.
In so far as we are concerned, the question is whether the Western Company should be restrained by us from proceeding with the action instituted in the American Court.
We are therefore not persuaded by the aforesaid submission urged by learned counsel for the Western Company.
In the result we are of the opinion that the facts of this case are eminently suitable for granting a restraint order as prayed by ONGC.
It is no doubt true that this Court sparingly exercises the jurisdiction to restrain a party from proceeding further with an action in a foreign court.
We have the utmost respect for the American Court.
The question however is whether on the facts and circumstances of this case it would not be unjust and unreasonable not to restrain the Western Company from proceeding further with the action in the American Court in the facts and circum stances outlined earlier.
We would be extremely slow to grant such a restraint order but in the facts and circum stances of this matter we are convinced that this is one of those rare cases where we would be failing in our duty if we hesitate in granting the restraint order, for, to oblige the ONGC to face the aforesaid proceedings in the American Court would be opperssive in the facts and circumstances discussed earlier.
But before we pass an appropriate order in this behalf, we must deal with the plea that the High Court does not have the jurisdiction to grant such a restraint order even if the proceeding in the foreign court is considered to be oppressive.
Counsel for the Respondent has placed reli ance on Cotton Corporation of India vs United Industrial Bank, ; in support of this plea.
In Cotton Corporation 's case, the question before the Court was wheth er in the context of Section 41(b) of the Specific Relief Act, the Court was justified in granting the injunction.
The said provision runs thus: "41.
An injunction cannot be granted: ( a ) . . . . . . . . . . (b) to restrain any person from instituting or prosecuting 1049 any proceeding in a court not subordinate to that from which the injuction is sought; . . . . . . . . . " (Emphasis added) This provision, in our opinion, will be attracted only in a fact situation where an injuction is sought to restrain a party from instituting or prosecuting any action in a Court in India which is either of ordinate jurisdiction or is higher to the Court from which the injuction is sought in the hierarchy of Courts in India.
There is nothing in Cotton Corporation 's case which supports the proposition that the High Court has no jurisdiction to grant an injunction or a restraint order in exercise of its inherent powers in a situation like the one in the present case.
In fact this Court had granted such a restraint order in V/O Tractoroex port, Moscow vs M/s Tarapore & Company and Anr., ; and had restrained a party from proceeding with an arbitration proceedings in a foreign country (in Moscow).
As we have pointed out earlier, it would be unfair to refuse the restraint order in a case like the present.
one for the action in the foreign Court would be oppressive in the facts and circumstances of the case.
And in such a situation the Courts have undoubted jurisdiction to grant such a restraint order whenever the circumstances of the case make it neces sary or expedient to do so or the ends of justice so re quire.
The following passage extracted from paragraph 1039 of Halsbury 's Laws of England Vol.
24 at, page 579 supports this point of view: "With regard to foreign proceedings the court will restrain a person within its jurisdiction from instituting or prosecuting proceedings in a foreign court whenever the circumstances of the case make such an inter position necessary or expedient.
In a proper case the court in this country may restrain person who has actually recovered judgment in a foreign court from proceeding to enforce that judgment.
The jurisdiction is discretionary and the court will give credit to foreign courts for doing justice in their own jurisdiction.
" It was because this position was fully realized that it was argued on behalf of the Respondent that the action in the U.S.A. Court could not be considered as being oppressive to the ONGC.
We have already dealt with this aspect and reached a conclusion adverse to Western Company.
There is thus no merit in the submission that the High 1050 Court of Bombay has no jurisdiction in this behalf.
It was also urged that the ONGC had suppressed the fact that it had appeared in the U.S.A. Court and had succeeded in persuading the U.S.A. Court to vacate the seizure order obtained by the Western Company and had thereby disentitled itself to seek an equitable order.
In our opinion in the first place there was no deliberate suppression, and in any case it was not necessary to apprise the Court about the said development.
It would therefore not be proper to refuse relief to the ONGC on this account.
We are therefore unable to accede to this submission either.
Before we conclude we consider it necessary to place on record the fact that it is perhaps on account of some under standing gap that it is observed by the High Court in its judgment: "It was also not disputed that an award could be enforced in the USA without the Respondents obtaining a decree in terms of the award from this Court.
" The learned Additional Solicitor General has solemnly stated before us that no such concession was made by him.
The learned counsel for the Western Company, with the fairness expected of him, has confirmed that the learned Additional Solicitor General had not made any such concession.
Whilst nothing turns on it, we are adverting to this aspect for the sake of fairness to the learned Additional Solicitor Gener al.
And now we come to the conclusion.
While we are inclined to grant the restraint order as prayed, we are of the opin ion that fairness demands that we do not make it uncondi tional but make it conditional to the extent indicated hereafter.
There are good and valid reasons for making the restraint order conditional in the sense that ONGC should be required to pay the charges payable in respect of the user of the rig belonging to the Western Company at the undisput ed rate regardless of the outcome of the petition instituted by the ONGC in the High Court for setting aside the award rendered by the Umpire.
India has acceded to the New York Convention.
One of the objects of the New York Convention was to evolve consensus amongst the covenanting nations in regard to the execution of foreign arbitral awards in the concerned Nations.
The necessity for such a consensus was presumably felt with the end in view to facilitate interna tional trade and commerce by removing technical and legal bottle necks which directly or indi 1051 rectly impede the smooth flow of the river of international commerce.
Since India has acceded to this Convention it would be reasonable to assume that India also subscribes to the philosophy and ideology of the New York Convention as regards the necessity for evolving a suitable formula to overcome this problem.
The Court dealing with the matters arising out of arbitration agreements of the nature envi sioned by the New York Convention must therefore adopt an approach informed by the spirit underlying the Convention.
It is no doubt true that if the arbitral award is set aside by the Indian Court, no amount would be recoverable under the said award.
That however does not mean that the liabili ty to pay the undisputed amount which has already been incurred by ONGC disappears.
It would not be fair on the part of ONGC to withhold the amount which in any case is admittedly due and payable.
The Western Company can accept the amount without prejudice to its rights and contentions to claim a larger amount.
No prejudice will be occasioned to ONGC by making the payment of the admitted amount regardless of the fact that the Western Company is claiming a larger amount.
And in any case, ONGC which seeks an equitable relief cannot be heard to say that it is not prepared to act in a just and equitable manner regardless of the niceties and nuances of legal arguments.
These are the reasons which make us take the view that the restraint order deserves to be made conditional on the ONGC paying the undisputed dues at an early date subject to final adjustment in the light of final determination of the dispute.
We accordingly allow this appeal and direct as under: The appeal is allowed.
The order passed by the Bomby High Court on April 3, 1986 is set aside.
The order passed by the Bombay High Court on January 20, 1986 is restored subject to the conditions engrafted hereafter.
II The appellant ONGC shall pay to the Respondent Western Company, in the manner indicated hereinafter, the amount payable at the undisputed rate of $ 18,500 per day for the period as computed by the Umpire in his award amounting to $ 2,528,339 along with interest at 12% till the date of pay ment.
1052 III The said amount will be paid to the Respondent, Western Company, by wire transfer to their Bank Account No. 144 0 33008 at Manufacturers Hanover Trust Company, New York, U.S.A. within four weeks of the Respondent filing an under taking (without prejudice to their rights and contentions) in this Court in the terms indicated hereinbelow, namely, (a) to accept the said amount subject to the final outcome of Arbitration Petition No. 10 of 1986 pending in the High Court of Bombay or the appeal, if any, arising from the order passed by the High Court in the said matter and (b) further provided the Respondent files an undertaking in this Court to treat the said payment by way of protanto satisfac tion in respect of (i) the Award in question, in case it stands confirmed or (ii) a fresh award, if any, that may be passed in future in connection with the original cause of action or (iii) in respect of the original claim giving rise to the arbitration proceedings in question.
IV In case the Respondent, Western Company, files undertak ings in this Court as contemplated in Clause III hereinabove and yet the appellant ONGC fails to make the payment in the manner indicated in Clause II hereinabove within four weeks of the date of filing of the said undertakings the order of stay granted as per Clause I hereinabove shall stand vacat ed.
V The learned Single Judge before whom the Arbitration Petition No. 10 of 1986 is pending shall refer the matter to a Division Bench having regard to the fact that (1) it raises important and complex questions and (2) that it is desirable that the matter is expeditiously disposed of and a Letters Patent Appeal is avoided and (3) that the matter concerns a commercial transaction of international charac ter.
The learned Chief Justice of Bombay High Court may constitute a Division Bench to hear this matter with a request to the Division Bench to dispose of the same expedi tiously.
1053 VII The Division Bench constituted by the Chief Justice will afford reasonable opportunity to the parties to file their statements of claims, affidavits etc.
and shall post the matter for directions within two weeks of the statements, affidavits etc.
being filed.
The Division Bench will direct that the matter is posted for hearing at the earliest and will hear the matter from day to day and dispose it of expeditiously, preferably within six months (excluding the time granted at the joint request of the parties or at the instance of the Respondent) of the commencement of the arguments.
VIII There will be no order regarding costs.
IX Parties will be at liberty to apply to this Court for further directions from time to time in case of necessity.
N.P.V. Appeal Allowed.
| A drilling contract was entered into by the appellant and the respondent which provided that in the case of dif ferences arising out of the aforesaid contract, the matter shall be referred to arbitration, that the arbitration proceedings shall be held in accordance with the provisions of the Indian , and that the validity and interpretation thereof shall be governed by the laws of India.
The agreed venue for hearing was London.
A dispute arose between the parties and it was referred to Arbitration.
Consequent upon the inability of the two Arbitrators to agree on the matters outstanding in the reference, the Umpire entered upon the arbitration and straight away rendered his interim award, without affording any hearing to the parties and the same was lodged in the 1025 High Court at the instance of the respondent.
Subsequently, the Umpire rendered a final award relating to costs.
About a mouth after the lodging of the award in the High Court, the respondent filed a plaint in the U.S. District Court seeking an order confirming the interim and final awards and a judgment against the appellant for the payment of a sum of $ 256,815.45 by way of interest until the date of judgment and costs etc.
The appellant, however, instituted a Petition under Sections 30 and 33 of the for setting aside the aforesaid awards and for an interim order restraining the respondent from proceeding further with the action instituted in the U.S. Court.
A Single Judge of the High Court granted exparte interim restraint order but vacated the same after hearing the parties.
The High Court held that the action to enforce the award as a foreign award in the U.S. Court was quite in order and that the mere fact that a petition to set aside the award had already been instituted in the Indian Court and was pending at the time of the institution of the action in the U.S. Court was a matter of no consequence for the purposes of consideration of the question as to whether or not the respondent should be restrained from proceeding further with the action in the U.S. Court, that it was open to the respondent to enforce the award in the U.S. Court and, therefore, it would not be appropriate to grant the injunction restraining enforcement, and that it was open to the appellant to contend before the U.S. Court that the petition for setting aside the award cannot be said to be vexatious or oppressive.
In the appeal to this Court it was submitted on behalf of the appellant that the award sought to be enforced in the U.S. Court may itself be set aside by the Indian Court and in that event, an extremely anomalous situation would be created, that since the validity of the award in question and its enforceability have to be determined by an Indian Court which alone has jurisdiction under the Indian Arbitra tion Act of 1940, the American Court would have no jurisdic tion in this behalf, that the enforceability of the award must be determined in the context of the Indian Law as the Arbitration proceedings are subject to the Indian Law and are governed by the Indian of 1940, and that if the award in question is permitted to be enforced in U.S. Court without its being confirmed by a court in India or U.S. Court it would not be in conformity with law, justice or equity.
1026 On behalf of the respondent it was contended that the action in the U.S.A. Court could not be considered as being oppressive to the appellant and that even if it is so, the High Court has no jurisdiction to grant such a restraint order, and that the appellant had suppressed the fact that it had appeared in the USA Court and succeed in pursuading the USA Court to vacate the seizure order obtained by the respondent and thereby disentitled itself to seek any equi table order.
Allowing the appeal, this Court, HELD: 1. I Under the Indian law, an arbitral award is unenforceable until it is made a rule of the Court, and a judgment and consequential decree are passed ' in terms of the award.
Till an award is transformed into a judgment and decree under Section 17 of the Indian , it is altogether lifeless, from the point of enforceability.
Life is infused into the award in the sense of its becoming enforceable only after it is made a rule of the Court upon the judgment and decree in terms of the award being passed.
[1042D E] 1.2 In the instant case, the arbitration proceedings are governed by the Indian of 1940 and a pro ceeding under the Act for affirming the award and making it a rule of the Court or for setting it aside can be institut ed only in an Indian Court.
The expression "Court" as de fined by Section 2(e) of the Act leaves no room for doubt on this score and the Indian Court alone has the jurisdiction to pronounce on the validity or enforceability of the award.
[1038A B] 2.1 Article V(1)(e) of the New York Convention provides that recognition and enforcement of the award will be re fused if the award "has not yet become binding on the par ties or has been set aside or suspended by a competent authority of the country in which or under the law of which that award was made." [1043A B] 2.2 The significance of the expression "not yet become binding on the parties" employed in Article V(1)(e) cannot be lost sight of.
The expression postulates that the Conven tion has visualised a time later than the making of the award.
[1044A B] 2.3 The award which is sought to be enforced as foreign award will have to be tested with reference to the key words contained in Article V(1)(e) of the Convention and the question will have to be answered whether the award has become binding on the parties or has not yet become binding on the parties.
The test has to be applied in the 1027 context of the law of the country governing the arbitration proceedings or the country.
under the law of which the award has been made.
[1044C D] 2.4 The enforceability must be determined as per the law applicable to the award.
French, German and Italian Courts have taken the view that the enforceability as per the law of the country which governs the award is the essential pre condition for asserting that it has become binding under Article V(1)(e).
[1047B C] 2.5 India has acceded to the New York Convention.
One of the Objects of the New York Convention was to evolve consen sus amongst the covenanting nations in regard to the execu tion of foreign arbitral awards in the concerned Nations.
The necessity for such a consensus was felt with the end in view to facilitate international trade and commerce by removing technical and legal bottle necks which directly or indirectly impede the smooth flow of the river of interna tional commerce.
Since India has acceded to this Convention it would be reasonable to assume that India also subscribes to the philosophy and ideology of the New York Convention as regards the necessity for evolving a suitable formula to overcome this problem.
The Court dealing with the matters arising out of arbitration agreements of the nature envi sioned by the New York Convention must, therefore, adopt an approach informed by the spirit underlying the Convention.
[1050G H; 1051A B] 3.
Section 41 (b) of the Specific Relief Act will be attracted only in a fact situation where an injunction is sought to restrain a party from instituting or prosecuting any action in a Court in India which is either of co ordi nate jurisdiction or is higher to the Court from which the injunction is sought in the hierarchy of Courts in India.
[1049B C] 4.1 There cannot be any doubt that the respondent can institute an action in the U.S. Court for the enforcement of the award in question notwithstanding the fact that the application for setting aside the award had already been instituted and was already pending before the Indian Court and that the appellant can approach the U.S. Court for seeking a stay of the proceedings initiated by the respond ent for procuring a judgment in terms of the award in ques tion.
Merely on this ground the relief claimed by the appel lant cannot be refused.
[1035B D] 4.2 As per the contract, while the parties are governed by the Indian and the Indian Courts have the exclusive jurisdiction to affirm or set aside the award under the said act, the respondent is seeking to violate the very arbitration clause on the basis of 1028 which the award has been obtained by seeking confirmation of the award in the New York Court under the American Law.
This amounts to an improper use of the forum in American in violation of the stipulation to be governed by the Indian law which by necessary implication means a stipulation to exclude the USA Court to seek an affirmation and to seek it only under the Indian from an Indian Court.
If the restraint order is not granted, serious prejudice would be occasioned and a party violating the very arbitra tion clause on the basis of which the award has come into existence will have secured an order enforcing the order from a foreign court in violation of the very clause.
[1038D G] 5.1 The respondent has prayed for confirmation of award.
The American Court may still proceed to confirm the award, and in doing so it would take into account the American law and not the Indian law or the Indian of 1940.
The American Court will be doing so at the behest and at the instance of the respondent which has in terms agreed that the arbitration proceedings will be governed by the Indian of 1940.
Not only the matter will be decided by a court other than the court agreed upon between the parties but it will be decided by a court under a law other than the law agreed upon.
Such an unesthetic situation should not be allowed.
Even though it was conceded by the respondent that the American Court has no jurisdiction to confirm the award in view of the New York Convention, in the event of the award rendered by the Umpire, the validity of which is not tested either by an American Court or an Indian Court, being enforced by an American Court, it will be an extremely uphill task to pursuade the Court to hold that a foreign award can be enforced on the mere making of it without it being open to challenge in either the country of its origin or the country where it was sought to be enforced.
[1041H; 1042A, B C] 5.2 In the event of the award rendered by the Umpire being set aside by the Indian Court, an extremely anomolous situation would arise inasmuch as the successful party may well have recovered the amount awarded as per the award from the assets of the losing party in the USA after procuring a judgment in terms of the award from the USA Court, which would result in an irreversible the damage being done to the losing party for the Court in USA would have enforced a non existing award under which nothing could have been recovered.
It would also result in the valuable court time in the USA being invested in a nonissue and the said Court would have acted on and enforced an award which did not exist in the eye of law.
The USA Court would have done something which could not have been done if the respondent company 1029 had waited during the pendency of the proceedings in the Indian Court.
The losing party in that event would be obliged to initiate fresh proceedings in the USA Court for the amount already recovered from it, pursuant to the judg ment rendered by the USA Court in enforcing the award which is set aside by the Indian Court.
All this would happen if the restraint order as prayed by the losing party is not granted and this can be avoided if it is granted.
[1037D H] 5.3 The American Court would have enforced an award which is a lifeless award in the country of its origin and under the law of the country of its origin which law governs the award by choice and consent.
[1042E F] 6.
I It would neither be just nor fair on the part of the Indian Court to deny relief to the appellant when it is likely to be placed in such an awkward situation if the relief is refused.
It would be difficult to conceive of a more appropriate case for granting such relief.
[1042G H] 6.2 The facts of this case are eminently suitable for granting a restraint order.
No doubt, this Court sparingly exercises the jurisdiction to restrain a party from proceed ing further with an action in a foreign court.
However, the question is whether on the facts and circumstances of this case it would not be unjust and unreasonable not to restrain the respondent from proceeding further with the action in the American Court.
This is one of those rare cases where the Court would be failing in its duty if it hesitated in granting the restraint order, for, to oblige the appellant to face the aforesaid proceedings in the American Court would be oppressive in the facts and circumstances of the case.
[1048C F] 6.3 It would be unfair to refuse the restraint order in a case like the present one for the action in the foreign court would be oppressive in the facts and circumstances of the case and in such a situation the courts have undoubted jurisdiction to grant such a restraint order, whenever the circumstances of the case make it necessary or expedient to do so or the ends of justice so require.
[1049D E] 6.4 There was no deliberate suppression by the appel lant, and it would, therefore, not be proper to refuse relief to the appellant on this account.
[1050B C] 6.5 While this Court is inclined to grant the restraint order, fairness demands that it should not be unconditional.
There are good and valid reasons for making the restraint order conditional in the sense 1030 that the appellant should be required to pay the charges payable in respect of the user of rig belonging to the respondent Company at the undisputed rate regardless of the outcome of the petition instituted by it the High Court for setting aside the award rendered by the Umpire.
[1050E G].
6.6 It is no doubt true that if the arbitral award is set aside by the Indian Court no amount would be recoverable under the said award.
That, however, does not mean that the liability to pay the undisputed amount which has already been incurred by the appellant disappears.
It would not be fair on the part of the appellant to withhold the amount which in any case is admittedly due and payable.
The re spondent can accept the amount without prejudice to its rights and contentious, to claim a larger amount.
No preju dice will he occasioned to the appellant by making the payment of the admitted amount regardless of the fact that the respondent is claiming a larger amount.
In any case the appellant which seeks an equitable relief cannot be heard to say that it is not prepared to act in a manner just and equitable regardless of the niceties and nuances Of legal arguments.
[1051B E] [The order passed by the High Court on April 3, 1986 set aside, and the earlier order passed by it on January 20, 1986 restored subject to certain conditions imposed by the Court.] Cotton Corporation of India vs United Industrial Bank, ; ;V/O Tractoroexport, Moscow vs M/s Tarapore England Vol.
24 page 579 para 1039 referred to.
|
minal Appeal No. 554 of 1984.
From the Judgment and Order dated 27.9.1984 of the Allahabad High Court in Government Appeal No. 1634 of 1977 M.R. Sharma, Ms. Anjana Sharma and R.D. Upadhayaya for the Appellant.
Arvind K. Nigam, Ms. Kamini Jaiswal and A.S. Pundir for the Respondent.
The Judgment of the Court was delivered by G.N. RAY, J.
This appeal is directed against the Judgment dated September 27, 1984 passed by the Division Bench of the Allahabad High Court setting aside the judgment dated April 30, 1977 passed by the learned Additional Sessions Judge, Second Court, Kanpur (Dehat).
By the impugned Judgment, the Division Bench of the Allahabad High Court allowed the appeal preferred by the State of Uttar Pradesh against the judgment of acquittal.
in Sessions Trial No. 235 of 1976 and convicted the accused/appellant Mohd. Aslam under Section 302 I.P.C. and sentenced him to imprisonment for life.
The prosecution story in short is that there is long standing enmity between Abdul Salem and Abdul Hamid Kham Pradhan on one side and the complainant Abdul Hamid on the other.
Such enmity arose out of rival claim in placing 'sawai 'on the Akbara of Tajias at the time of Moharram.
Sawai is a kind of flag which is put on Tajias at the time of Moharram.
Over such dispute a civil litigation was going on between the said parties and there were also criminal proceedings under Section 107 read with Section 117 of the Code of Criminal Procedure between the said parties.
Shamim Raza was nephew and son in law of Abdul Hamid, the complainant and the said Shamim Raza was doing pairvi of the said cases on behalf of Abdul Hamid.
For the aforesaid reasons, Abdul Salem and Abdul Hamid Khan Pradhan, became inimical towards Shamim Raza and Abdul Hamid.
Mohd. Aslam, the accused/appellant is the son of Abdul Salem.
Both the parties were residents of village Bara, 448 within Police Station Akbarpur in the District of Kanpur.
On December 25, 1975 at about 6.00 P.M. Shamim Raza was sitting on a wooden bench in front of a hair cutting shop of Iiyas in village Raza.
Mohd. Umar and Abdul Khaliq (P.W.1) were also sitting with him and the said three persons were talking.
The Gumti of one Mohd. Laiq was at a short distance towards the east of that place.
Bhurey (P.W.2), Qamruddin (P.W.3) and Abdul Hamid were standing near the said Gumit and had also been talking.
There was light coming from electric bulbs at that place.
At that time, the accused/appellant, Mohd. Aslam came there armed with a double barrel gun.
He challenged Shamim Raza and threatened to kill anyone who would come forward.
Thereafter, he fired two shots.
By said shots, Shamim Raza and Mohd. Umar sustained gun shot injuries and both of them fell down.
Shamim Raza died on the spot and the condition of Mohd. Umar also became serious.
Such occurrence was seen by Mohd. Umar, Abdul Hamid, Bhurey and Qamruddin.
Peer Mohammed (P.W.10) took Mohd. Umar to Lala Lajpatrai Hospital at Kanpur for treatment and at 7.50 PM.
R.C. Asthana (P.W.8) examined Mohd. Umar.
Abdul Hamid went to his house and got a report of the occurrence written by Mohd. Raizwan (P.W.4) and took the said report to Akbarpur Police Station which was about 4 miles away and lodged the F.I.R. at 7.15 P.M. Station Officer incharge of the Akbarpur Police Station, Mr. Jagdamba Prasad Misra, took up the investigation of the case and he interrogated Abdul Hamid at the Police Station and thereafter reached the scene of occurrence at about 7.55 P.M.
He found the dead body of Shamim Raza lying at the scene of occurrence and he prepared inquest report and other connected papers.
He also interrogated Bhurey, Qamruddin and Abdul Khaliq who were the eye witnesses, He, also prepared the site plan and found blood on the wooden bench and also on the ground and collected portion of the blood stained wooden bench and blood stained bricks.
The injured Mohd. Umar was interrogated in the hospital on January, 1976.
The post mortem examination on the body of Shamim Raza was performed by Dr. Prakash (P.W.6).
Mohd. Umar died in the hospital on January 4, 1976 and his post mortem examination was performed by Dr. B.D. Misra at Kanpur on January 5,1976.
The accused/appellant Mohd. Aslam denied the prosecution allegations against him and alleged that he was falsely implicated on account of enmity and party faction.
He also denied that he had been absconding from the village and he examined two witnesses in defence.
The learned Additional Sessions Judge did not find the prosecution case and the evidences acceptable.
Accordingly, he acquitted the accused/appellant.
The State 449 thereafter preferred an appeal before the Allahabad High Court and as aforesaid, the Allahabad High Court allowed the said appeal, set aside the judgment of acquittal passed by the learned Sessions Judge and convicted the accused/appellant under Section 302 I.P.C. and sentenced him to suffer rigorous imprisonment for life.
Learned counsel appearing for the accused/appellant has strenuously contended that the High Court did not appreciate the salutory principles governing the judgment of acquittal.
He has contended that the learned Sessions Judge had taken pains in analysing in detail the evidences adduced in the case and gave reasonings for each of the findings as to why the prosecution case could not be accepted and what were the intrinsic deficiency in the evidences adduced in the case in support of the prosecution.
The learned counsel has contended that the law is well settled that in a case of acquittal, the appellate Court should not interfere with the judgment of acquittal if such judgment is based on consideration of the evidences adduced in the case and there is no perversity in coming to the finding for passing the judgment of acquittal.
In such a case of acquittal, the High Court in exercise of its appellate power should not endeavour to appreciate the evidence on its own in order to come to different finding unlike in an appeal arising from the judgment of conviction.
The learned counsel has contended that it has been established convincingly that there was party faction between the two groups over a dispute to place Sawai on Tajias and both civil and criminal proceedings were instituted between the two groups.
The learned counsel has contended that Abdul Hamid, the father in law of the deceased, Shamim Raza, was the principal man with whom Abdul Salem and Abdul Hamid Khan Pradhan had disputes and differences.
There was no earthly reason to bear malice and grudge against Shamim Raza who was only a son in law of Abdul Hamid Khan Pradhan.
Accordingly, there was no reason to kill him particularly in the presence of eye witnesses as alleged.
Such fact was taken note of by the learned Sessions Judge in analysing the acceptability of the prosecution case and credibility of the witnesses examined in support of the prosecution case.
The learned counsel for the appellant has also submitted that there was no reason for injuring Mohd. Umar by the accused/appellant.
He has contended that the alleged incident of gun shot injuries had not happened in the manner alleged by the prosecution but after such incident, the complainant and the other alleged eve witnesses falsely implicated the ac 450 cused/appellant because of the old enmity between the two groups.
The learned counsel has contended that in a very short time, a written complaint was lodged in the Akbarpur Police Station which is admittedly four miles away from the place of occurrence.
The prosecution story is that after the incident the said written complaint was reduced in writing by a person other than the complainant and thereafter the complainant went to the Police Station to file the written complaint.
If the incident had taken place at about 6.00 P.M. as alleged by the prosecution, it is practically impossible to lodge the said written F.I.R. at Akbarpur Police Station by 7.15 P.M., particularly when Abdul Hamid, the complainant did not straightaway go to the Akbarpur Police Station but he had been to his house and got a report of the occurrence written by Mohd. Raizwan (P.W.4) and then lodged the F.I.R. at the Akbarpur Police Station.
The learned Sessions Judge had taken note of this very important fact in not accepting the prosecution case.
Unfortunately, the High Court failed to appreciate the strong reasonings given by the learned Sessions Judge in not accepting the prosecution case.
The learned counsel has also submitted that there is serious discrepancy so far as the injury of Mohd. Umar is concerned.
Admittedly, Mohd. Umar got injured by a gun shot at the back but the manner in which the injured was sitting and the direction from which the gun was fired by the appellant, could not have caused gun shot injuries at the back of Mohd. Umar.
The learned Sessions Judge having noted such discrepancies had rightly rejected the prosecution case implicating the accused/appellant.
He has also submitted that the doctor had noted that Mohd. Umar sustained gun shot injuries from a bullet but the injuries sustained by the other deceased, namely, Shamim Raza was a gun shot injury from pellets.
It was nobody 's case that different guns had been used by the accused/appellant for injuring the said two persons differently.
Because of such discrepancy, the learned Sessions Judge was not inclined to accept the prosecution case and the suggestion.given by the prosecution witnesses that Mohd. Umar might have turned his back in a reflex and received the gun shot injuries at the back was not accepted by the learned Sessions Judge.
The learned counsel for the appellant has also contended that the alleged eye witness were in the faction of the complainant Abdul Hamid and they were partisan witnesses.
Accordingly, their testimonies were required to be considered with extreme care and caution.
The learned Sessions Judge, therefore, after noting the various discrepancies in the prosecution case, was not inclined to place reliance on the evidences adduced by the alleged eye witnesses and acquitted the accused/appellant.
451 Such order of acquittal, in the facts of the case and the reasons indicated by the learned Sessions Judge, was not required to be interfered with in appeal by the High Court.
We are, however, unable to accept the submissions made by the learned counsel for the appellant.
In an appeal arising from an order of acquittal, the appellate Court is not precluded from appreciating the evidences on its own if the reasons given by the learned trial Judge in passing the order of acquittal, do not stand scrutiny and are against the weight of the evidences adduced in the trial.
The appellate Court, will be quite justified in setting aside the order of acquittal if it appears to the court of appeal that improper consideration of the materials and evidences on record was made and the reasonings of the trial Judge are wholly unjustified.
It is only necessary that the court of appeal should weigh the reasonings of the learned trial Judge with care and caution in the light of the evidences adduced in the case by giving cogent reasons as to why such findings are unreasonable and against the evidence.
In the instant case, the High Court has taken care in analysing each and every finding of the learned Sessions Judge in the light of the evidences adduced in the case and has given cogent reasons as to why such findings were unreasonable and not acceptable.
It is an admitted position that the two persons suffered gun shot injuries on December 25, 1975 in the evening and one of the injured persons died on the spot and the other was removed to hospital.
He got serious injuries and later on sccummbed to such injuries.
The mere fact that there was enmity and bitterness between the two groups, by itself, does not establish that the eye witnesses falsely implicated the accused/appellant.
Shamim Raza was the son in law of Abdul Hamid and it was established in evidence that he was looking after the cases between the parties and making 'pairvi 'in civil and criminal cases.
In our view, the High Court is justified in holding that because of such positive role taken by Shamim Raza, he had incurred displeasure of the other group which acted as a motive for the gun shot injuries.
The learned Sessions Judge doubted the prosecution case because of lodging the F.I.R. at 7.15 p.m. at Akbarpur Police Station which was about four miles away from the place of occurrence where the incident, according to the prosecution, had taken place at about 6.00 P.M.
We do not think that such F.I.R. could not have been lodged by that time.
The High Court has considered the reasonings of the learned Sessions Judge on the question of lodging the F.I.R. at Akbarpur Police Station within a short time and has, in our view, given very good 452 reasons in not accepting the views entertained by, the learned Sessions Judge.
In our view, the learned Sessions Judge was also not justified in holding that the gun shot injuries suffered by Mohd. Umar had not been property explained by the prosecution because the doctor had noted that such injuries were caused by bullet and not by pellets.
The injuries suffered by Mohd. Umar as noted by the doctor do not run counter to the prosecution case that such injuries were caused by the gun used by the accused/ap pellant.
The High Court is right, in our view, in holding that the size of the pellet depends on the type of cartridge used in a gun.
It cannot be held as a matter of course that simply because the pellets injuring the deceased Shamim Raza were smaller in size than the size of the pellets used in injuring Mohd. Umar, both the injuries could not have been inflicted by the same gun.
The High Court, in our view, is also justified in not accepting the reasonings of the learned Sessions Judge that the injuries caused at the back of Mohd. Umar were not possible and run counter to the evidences adduced by the prosecution.
There was interval though very short between the two shots and it is not at all unlikely or highly improbable that because of the inherent reflex, the other injured, Mohd. Umar, had turned his side and received the injuries at the back portion.
In the instant case, there are eye witnesses to the occurrence and there are no intrinsic discrepancies in their evidences.
Even if it is assumed that such eye witnesses belong to the group of the complainant, their evidences are not liable to be discarded on that score if such evidences otherwise inspire confidence and get corroborated by other evidences and from the nature of injuries, sustained by the deceased persons.
The High Court is right in holding that although Abdul Khaliq (P.W.1) belonged to a group and appeared to be a partisan witness, his evidence was not required to be discarded on that ground but was required to be closely scrutinised.
The High Court, in our view, is also justified in holding that Qamruddin (P.W.3) was not related to Shamim Raza, deceased or the complainant and he did not belong to any of the rival groups.
This witness had no enmity with the accused/appellant or his father.
Qamruddin (P.W.3) has been rightly held by the High Court, as an independent and reliable witness.
It appears to us that all the findings made by the learned Sessions Judge were considered in detail by the High Court and the findings of the learned Sessions Judge were not accepted by the High Court by indicating that such findings were against the weight of the evidences and the same were wholly unreasonable.
In the aforesaid circumstances, we do not find 453 any reason to take a contrary view in this appeal and set aside the order of conviction made by the High Court.
The appeal therefore fails and is dismissed.
By the Order dated April 8, 1986, this Court granted bail to the accused/appellant.
In view of the dismissal of this appeal the bail stands cancelled and the accused/appellant is directed to surrender and serve out the sentence.
V.P.R. Appeal dismissed.
| The appellant along with others was tried for offences under Section 302 read with Sections 148, 149 and 323 of the Indian Penal Code.
The case of the prosecution was that on 16.9.80 Mammed Kutty at 6.00 a.m. in the morning pelted stones at the house of the deceased.
At about 12.00 noon while Mammed Kutty and his brother Abdulla Kutty were passing in front of the house of the deceased, a protest was made by the deceased in respect of the morning incident which was denied.
At about 2.00 p.m. when the deceased was sitting with his wife (PW 4) and others on the varandah of his house, 5 persons including the appellant came to his courtyard and challenged him to come out, if he wanted to beat Mammed Kutty and Abdulla.
The deceased stepped out into his courtyard and asked the accused persons not to create a scene, when the appellant and the other accused gave some blows to the deceased on his hand.
Thereafter the deceased raised his hand to give a blow to the appellant, when the appellant took out a dagger from his waist and gave an injury on the upper part of the chest of the deceased near the left shoulder and above the armpit.
The deceased ran towards the house of PW1 and fell on the varandah.
Therefore, the accused persons escaped.
The victim was removed to the Medical Hospital where he was examined by PW 9, but soon thereafter expired.
The F.I.R. was lodged at 7.15 p.m. and after investigation the chargesheet was submitted against the five accused persons.
At the trial the prosecution examined 4 eye witnesses, PW1 to PW4, and PW8 the doctor who held the post mortem examination.
693 The trial court on consideration of the materials on record came to the conclusion that the charges leveled against the accused persons had not been established beyond all reasonable doubt, and on that finding acquitted all the accused including the appellant.
Great importance was attached to the injury found on the person of Abdulla and adverse inference was drawn against the prosecution case.
On appeal by the State, the High Court convicted the appellant under Section 302 and sentenced him to undergo rigorous imprisonment for life.
Another accused (Alavi) was convicted under Section 323 of the Penal Code and sentenced to payment of fine of Rs. 250.
The acquittal of the remaining 3 accused persons by the Trial Court was affirmed.
The High Court held that mere non disclosure of the superficial injuries on the person of Abdulla even if those injuries had been caused in the same occurrence, do not in any manner affect the persecution case.
In the appeal to this court it was contended on behalf of the appellants that the statements made in the First Information Report, the evidence of the eye witnesses in connection with the morning incident of pelting of stones, show that it was a concoction and that none had pelted any stone on the house of the deceased, and that if this part of the prosecution case is disbelieved then it has a bearing on the main occurrence itself.
It was further submitted, that the prosecution had suppressed the real manner of occurrence in as much as Abdulla was first assaulted by the prosecution party on the same day at about 130 p.m. and that he was hospitalised after receiving the injuries, reliance being placed on the evidence of DW1 who had stated that he had examined the injuries on the person of Abdulla on 16.9.80 at 430 p.m.
Allowing the appeal in part, this Court, HELD:1.
It is well settled that if the evidence of the eye witnesses is held to be reliable and inspires confidence then the accused cannot be acquitted solely on the ground that some superficial injuries found on the person of the accused concerned, had not been explained by the prosecution.
[696 H] In the instant case, so far as the four eye witness are concerned they have been named in the FIR.
The FIR was lodged at 7.15 p.m., the same evening, within two hours of the death of the victim.
The FIR mentions the 694 details of the occurrence, and the version disclosed therein had been supported by the eye witness before the Court.
No reason has been shown as to why the evidence of these P.Ws should not be accepted.
[697 C] 2.The prosecution has admitted that the accused persons were not carrying any weapon in their hands and during the protest made, a sudden quarrel and fight took place between the prosecution party and the accused persons.
This part of the version had been admitted at the trial by the eye witnesses in their evidence, who also stated that first the appellant and the other co accused gave blows on the hand of the deceased and that the knife blow was given by the appellant when the deceased was trying to give a counter blow to the appellant.
[697 F] In view of the admitted position that a sudden right and quarrel preceded the giving of the knife blow by the appellant to the victim which in all probability was given not while the victim and the appellant were standing face to face but during struggle between them, causing tailing of the injury, it shall not be just and proper to hold that the appellant had an intention to cause the death of the victim, but only knowledge that injury which he was causing was likely to cause death.
In such a circumstance it is not possible to uphold the conviction of appellant under Section 302 of the Indian Penal Code.
It is therefore set aside, and the appellant convicted under Section 304 Part 11 of the Indian Penal Code and sentenced to undergo rigorous imprisonment for 7 years.
[697 H,698 A C]
|
N: Criminal Appeal No. 276 of 1991.
From the Judgment and Order dated 16.7.1990 of the Orissa High Court in Criminal Appeal No. 117 of 1990 And Death Reference No. 1 of 1990.
H.K. Puri (Amicus Curiae) for the Appellant.
A.D. Giri, Solicitor General and A.K. Panda for the Respondent.
The Judgment of the Court was delivered by K. JAYACHANDRA REDDY, J.
Leave granted.
This is a case of death sentence.
The fact that such a sentence is awarded even in the year 1990 would immediately suggest that the offence involved should be of a grave nature.
Yes, the offence is not only grave but heinous and inhuman.
A girl aged five years was a victim of rape and thereafter murder.
The sole appellant before us was tried, convicted and sentenced to death by the Sessions Court and confirmed by the High Court.
It is a 301 case depending entirely on circumstantial evidence and the obvious contention is that the circumstantial evidence is wholly insufficient to bring home the guilt to the accused.
No doubt the offence is a shocking one but the gravity of the offence cannot by itself overweigh as far as legal proof is concerned.
Invariable in such cases a person last seen with the victim, unless otherwise there are circumstances prima facie exonerating him, would be the prime suspect but in the ultimate judicial adjudication suspicion, howsoever strong, cannot be allowed to take the place of proof.
With that caution in mind we shall now proceed to examine the facts and circumstances as put forward and the various arguments advanced.
The deceased Disco alias Sukumari, a girl aged 5 years was the daughter of P. Ws 1 and 6, the father and the mother who were drummers by castes.
They belong to village Badachatra, an interior part of Mayurbhanj District.
They had three children and the deceased was the eldest.
In the year 1988 during Kalipuja time the accused who was the resident of Tulsibani village about one kilometre away, came to the house of P.Ws 1 and 6.
He named their newly born daughter.
He took his meals in their house and went away saying that he would come with the new dresses for the newly born daughter.
Next day i.e. on 9.11.88 he came to their house in the morning with new dresses.
He told the parents that he would take the deceased with him to Bombay Chhak to get new dresses for the other two children.
He took his lunch and went with deceased towards Bombay Chhak.
Sometime after his departure P.W 6 told her husband P.W.1 to proceed to Bombay Chhak as the deceased might be crying.
Accordingly P.W. 1 accompanied by one Sambhu proceeded towards that Chhak.
On the way they met one Babuli and asked him whether he had seen the accused and the deceased to which he replied in the negative.
P.W. 1 came back to the village and sat in the shop of P.W. 2 who informed that he had seen the accused going towards village Tulsibani alongwith the deceased.
P.W. 1 and Sambhu then went to that village but could not find them there.
Therefore they went to Jharpokharia Police Station and gave a report to the Officer in charge P.W.11 stating that the deceased.
P.W. 1 again went to the Tulshibani Village where a person informed him that he has seen the accused going towards his house.
P.W. 1 went there and enquired the accused.
He told P.W. 1 that the deceased had gone back home but P.W. 1, caught hold of him but the accused squirmed away from his grip.
P.W. 1, however, again caught him and took him to his Village and according to P.W. 1 302 on being questioned the accused confessed to have raped and committed murder of the deceased.
The accused is alleged to have pointed the place where he had thrown the dead body, whereafter P.W. 1 and others proceeded in that direction.
P.W. 11 the Police Officer also came in a jeep and took the accused into custody, drew up F.I.R. and sent the same to the Police Station for registration of a case.
The accused is alleged to have led the Police party to the spot where the dead body was lying.
P.W. 11 found the deceased lying with injuries on her vagina and other parts.
He held the inquest in the presence of P.W. 4 and others and sent the dead body for post mortem.
P.W. 7 conducted the post mortem.
He noticed abrasions all over the body.
He also found one bruise on the left side of the forehead and a lacerated wound of 2.5 cm x 1 cm x muscle deep starting from the posterior angle of vagina along the perinium upto the anus.
On internal examination he found the following injuries. "(1) Soft tissues and muscles below the external injuries to the neck were contused with extra vassation of blood into the soft tissues.
(2) Heamatoma under the scalp corresponding to external injury No. 11.
(3) The hymen was torn and the floor of the vagina i.e., vaginal channel was lacerated.
This injury corresponds to external injury No. 15.
" The Doctor opined that all the injuries were antemortem and homicidal in nature and cause of death was due to asphyxia and shock as a result of strangulation and also due to injuries to the vagina.
He also opined that the injuries on the neck suggest that the deceased was strangulated by pressure of hands.
So far injury to the vagina is concerned, he was of the opinion that the same could have been caused by forcible penetration of a male organ.
The accused also was examined on 10.11.88 itself by another Doctor P.W 8 for some abrasions on his genital.
P.W. 8, however, categorically stated that on examining the accused he could not find any recent sign of sexual intercourse.
The prosecution relied on some blood stains which were found on his dhoti but the accused explained away by saying that they were caused by the bleeding of his gums.
The accused when examined under Section 313 pleaded not guilty.
He however, admitted that he went to the house of P.W. 1 but denied the rest of the case.
303 The trial court did not accept the P.W. 1, s evidence regarding the extra judicial confession alleged to have been made by the accused.
It held that nobody else has mentioned about this extrajudicial confession and at any rate it was supposed to have been made in the presence of the police.
We have also examined the evidence of P.W. 1 as well as the evidence of the other witnesses.
The trial court has rightly rejected this part of the prosecution case regarding the alleged extra judicial confession.
As a matter of fact we do not find anywhere mentioned that such a confession was made by the accused to P.W. 1 neither in the F.I.R. nor in the evidence of other witnesses who were also said to have been present when the accused was brought to the village by P.W. 1.
P.W. 6, who is no other than the wife of P.W. 1, did not even mention about it.
The trial court, however, relying on the other circumstances convicted the accused under Sections 302 and 376 I.P.C. and sentenced him to death subject to confirmation by the High Court and for seven years ' rigorous imprisonment for the offence of rape.
The sentences are directed to run concurrently.
The High Court confirmed the conviction and sentence awarded by the trial court.
As already mentioned this case rests purely on circumstantial evidence.
It is well settled that the circumstantial evidence in order to sustain the conviction must satisfy three conditions; 1) the circumstances from which an inference of guilt is sought to be drawn, must be cogently and firmly established; ii) those circumstances should be of a definite tendency unerringly pointing towards the guilt of the accused; iii) the circumstances, taken cumulatively, should form a chain so complete that there is no escape from the conclusion that within all human probability the crime was committed by the accused and none else, and it should also be incapable of explanation on any other hypothesis than that of the guilt of the accused.
In the leading case Hanumant and Another vs The State of Madhya Pradesh, it is also cautioned thus: "In dealing with circumstantial evidence there is always the danger that conjecture or suspicion may take the place of legal proof.
It is therefore right to remember that in cases where the evidence is of a circumstantial nature, the circumstances from which the conclusion of guilt is to be drawn should in the first instance be fully established and all the facts so established should be consistent only with the hypothesis of the guilt of the accused.
Again, the 304 circumstances should be of a conclusive nature and tendency, and they should be such as to exclude every hypothesis but the one proposed to be proved.
In other words, there must be a chain of evidence so far complete as not leave any reasonable ground for a conclusion consistent with the innocence of the accused and it must be such as to show that within all human probability the act must have been done by the accused.
" Mahajan, J., as he then was, has also aptly referred to a passage containing the warning addressed by Baron Alderson to the Jury in Reg vs Hodge, which is stated as under; "The mind was apt to take a pleasure in adapting circumstances to one another and even in straining them a little, if need be, to force them to form parts of one connected whole; and the more ingenious the mind of the individual, the more likely was it, considering such matter, to over reach and mislead itself, to supply some little link that is wanting, to take for granted some fact consistent with its previous theories and necessary to render them complete.
" In Dharam Das Wadhwani vs State of Uttar Pradesh, it was held that " unlike direct evidence the indirect light circumstances may throw may vary from suspicion to certitude and care must be taken to avoid subjective pitfalls of exaggerating a conjecture into a conviction. " In Jagta vs State of Haryana, ; it was held that "The circumstances that the accused could not give trustworthy explanation about the injuries on his person and about his being present on the scene of ;occurrence are hardly sufficient to warrant conviction.
" It may not be necessary to refer to other decisions of this Court except to bear in mind a caution that in cases depending largely upon circumstantial evidence there is always a danger that the conjecture or suspicion may take the place of legal proof and such suspicion however so strong cannot be allowed to take the place of proof.
The Court has to be watchful and ensure that conjectures and suspicions do not take the place of legal proof.
The Court must satisfy that the various circumstances in the chain of evidence should be established clearly and that the completed chain must be such as to rule out a reasonable likelihood of the innocence of the accused.
Bearing these principles in mind we shall now consider the reasoning of the courts below in coming to the conclusion that the accused along has committed the offence.
305 The trial court relied on the following circumstances: "(a) 'Last seen ' theory that the accused and the deceased were last seen together.
(b) Conduct of the accused that the accused attempted to flee away when he could be seen at his village by P.W.1; (c) False explanation the accused when questioned gave false explanation regarding the whereabout of the deceased; (d) Recovery of the dead body of the deceased on the showing of the accused That the accused pointed out the place where the dead body of the deceased was lying inside a paddy field; (e) Presence of injury on the genital as well as stains of blood on the wearing apparel and nailclippings of the accused.
" The evidence of P.Ws 1, 2 and 6 are relied upon in support of the first circumstance namely that the deceased was last seen in the company of the accused.
P.W. 1 the father and P.W. 6 the mother deposed that on the day of occurrence the accused came to their house and took the deceased towards Bombay Chhak to purchase new clothes.
The accused only admitted to the extent namely that he had been to their house and denied the rest of the prosecution case.
However, we shall accept the evidence of P.Ws 1 and 6 to the effect that the accused took the deceased on that day to Bombay Chhak.
But that by itself is not enough to conclude that the deceased was last seen in the company of the accused because even according to them on being enquired, the accused told them that he sent the girl back in a truck.
Even otherwise the distance between the two villages is not much.
P.W. 2 's evidence, however, is relied upon that the deceased was going in the company of accused.
P.W. 2 is also a native of the same village to which P.Ws 1 and 6 belong.
He deposed that on a Wednesday he had been to village pond to take his bath at about 12 noon and while returning she saw the accused going towards east with a minor girl aged about 5 years but P.W. 2 does not say that the deceased was in his company.
He, however, proceeded to depose that he found P.W. 1 searching for some one and thereupon P.W. 2 told him that he has seen the accused with a minor girl going towards the paddy field.
He admitted that did not know whose daughter was in the company of the accused.
In the cross 306 examination he further admitted that he did not talk to the accused.
No. doubt P.W. 2 's evidence, to some extent, corroborates the evidence of P.Ws 1 and 6 but unfortunately even at the stage of inquest this circumstance namely that the deceased was last seen in the company of the accused, was not noted.
We will advert to this aspect at a later stage.
The important and crucial circumstance heavily relied upon by the prosecution is the alleged recovery of the dead body of the deceased on showing of the accused and the accused pointed the place where the body of the deceased was lying.
For this again the prosecution relied on the evidence of lP.Ws 1 and 11.
Having carefully gone through the evidence of P.W. 1 we find that he has improved his version from stage to stage.
As already noted both the courts below were not prepared to place any reliance on his evidence regarding the extra judicial confession about which he made no mention at any earlier stage.
As far as the recovery of the body is concerned, P.W. 1 however deposed that he managed to catch hold of the accused and brought him to the village and that the police came in a jeep and took the accused into custody.
Then all of them went towards paddy field which had been pointed by the accused and on search they found the dead body.
P.W. 11 the Investigating Officer deposed at he went to village and found the accused to have been detained.
He therefor prepared the F.R.I. and sent the same for registration of the crime.
Then he arrested the accused and his evidence and his evidence thereafter to put in his own words reads as under: "The accused pointed out the place where the dead body of the deceased was lying and thereafter led me to the paddy field wherefrom I could recover the dead body of the deceased Disco.
As there were good number of persons present apprehending danger to the accused I sent him to the police station.
During course of investigation, I examined witnesses, seized the dhoti (M.O. iii),Shirt (M.O. iv) and this chadi marked M.O.VII from the accused under the seizure list already marked Ext.
The dead body of the deceased was lying in the paddy field where there were paddy plants which had been damaged and scattered.
I held inquest over the dead body of the deceased Disco in presence of witnesses under the inquest report already marked Ext.
I noticed INJURIES on the vagina and other parts of the body of the deceased.
After inquest I sent the dead body for P.M. examination through constables.
" 307 According to this evidence the accused is alleged to have taken P.W. 11 and others to the open paddy field where the dead body was lying.
It is only thereafter that the inquest report was drawn up.
However, P.W. 11 stated in his evidence that before going to the paddy field the F.I.R. exhibit P. 10 was drawn up by him.
Surprisingly we find a mention about the discovery of the body in the F.I.R. itself.
But the same is not found in the inquest.
There is not even a reference to the accused in the column No. 9 of the inquest report where the information of witness as to the cause of death has to be noticed.
We are aware that the purpose of inquest report is only to ascertain the cause of death but in a case of this nature there should have been atleast a mention in the inquest report as to how the body was discovered.
Apart from that usually a panchanama is prepared for such a discovery made under Section 27 of the Evidence Act but strangely in this case there is no such panchanama nor there is any other evidence of P.Ws 1 and 11.
P.W. 6 does not say anything about this aspect.
As a matter of fact the trial court has noted the discrepancies in the evidence of P.Ws 1 and 11 and it is observed as under: "The Investigating Officer, P.W. 11 has stated something more about the find of the dead body.
He speaks that the accused pointed out the place where the dead body of the deceased was lying and thereafter led him to the paddy field wherefrom the dead body of the deceased could be recovered.
Though this part of this evidence has not been supported by P.W. 1,but from the evidence of both P.Ws 1 and 11 coupled with the evidence of P.W.4 I am persuaded to hold that on the showing of the accused, the dead body of the deceased was recovered from a paddy field.
" We have perused the evidence of P.W. 4.
His evidence does not in any manner incriminate the accused.
P.W. 4 deposed that the dead body of the deceased was found lying in paddy field and that the police held inquest over the dead body in his presence and that the inquest report is P. 1 in which he put his signature as a witness.
Nothing more is stated by him.
He does not even refer to the presence of the accused at the place where the dead body was found or at the time of inquest, which was held also there.
P.W. 4 does not in any manner help the prosecution case so far as this circumstance is concerned.
If ready the body has been discovered at the instance of the accused there should have been discovered at the instance of the accused there should have been a panchanama and a mention about the same in the inquest report.
P.W. 11 categorically in his evidence has stated that after sending the F.I.R. the accused was questioned and the body was discovered there 308 after at the instance of the accused and the inquest was held over the dead body and P.W. 4 was a panch witness to the inquest and he also affixed his signature in the inquest report.
But as mentioned above P.W. 4 does not say anything about the accused being present anywhere near the place where the dead body was found nor there is a reference to the accused in the inquest report.
The only two remaining witnesses P.Ws 1 and 11 namely the father of the girl and the Investigating Officer respectively have contradicted each other.
That is the type of evidence regarding this crucial circumstance.
It is highly dangerous to accept the same and hold that the dead body was discovered at the instance of the accused.
Having given our careful consideration we are of the firm opinion that the prosecution has not established this circumstance conclusively.
On the other hand there is any amount of doubt and suspicion about the accused having shown the place of occurrence.
We may also point out at this stage that the circumstance that the deceased was last seen in the company of the accused was not mentioned in the inquest report.
Therefore the first circumstance also namely that the deceased was last seen in the company of the accused is not established beyond reasonable doubt.
However, when once it is held that the crucial circumstance namely the discovery of the body at the instance of the accused is not established, then the other circumstances are hardly sufficient to establish the guilt of the accused.
The courts below have also observed that the accused gave a false explanation.
According to the prosecution case the accused is supposed to have stated to P.Ws 1 and 6 that he sent away the deceased in a truck.
The courts below held that this explanation is false mainly on the surmise that a minor girl could not have come back on her own in a truck.
We are not convinced that on this surmise alone we can hold that the accused has given a false explanation.
It is not uncommon in villages for children to go about the field and walk short distances while coming back to the village.
In any event the accused had given an explanation that he sent the girl back to the village in a truck and the same cannot be held to be not plausible and therefore false.
Then the last circumstance relied upon by the courts below is the presence of some abrasions on the genital of the accused and presence of stains blood on the wearing apparels and nail clippings.
The prosecution wanted to show that because of the penetration the accused sustained the abrasions on his penis.
The Doctor, P.W. 8 who examined the accused has stated that he found only two pin head abrasion on the genital of the accused and on examination he opined that he could not find any recent sign of sexual intercourse and he also 309 added that there was no such sign of having intercourse within one hour of his examination.
However to a court question, P.W 8 stated that as a result of forcible sexual intercourse those abrasions can be possible.
We are unable to see as to how this evidence, in any manner, is helpful to the prosecution.
When P.W. 8 stated that he couldn 't find any sign of sexual intercourse atleast within one hour of his examination then it is only a mater of conjectures as to when the accused had any intercourse.
The accused is a man aged 57 years and it is not as if he was not used to sexual intercourse.
In any event the prosecution has not established that the accused had an intercourse on the day of the occurrence.
Then the presence of blood in the nail clippings and on the underpant does not also incriminate and do not connect the accused in any manner with the alleged offences.
The accused also had given an explanation namely that his gums were bleeding and in wiping out the same he got these blood stains.
Even otherwise having given our earnest consideration, we are not able to say that this last circumstance coupled with the circumstance of last seen in the company of the accused amount to legal proof of the guilt particularly when the crucial circumstance namely that the accused showed the dead body is held to be not established.
when such a main link goes, the chain gets snapped and the other circumstances cannot in any manner establish the guilt of the accused beyond all reasonable doubts.
It is at this juncture the Court has to be watchful and avoid the danger of allowing the suspicion to take the place of legal proof for sometimes unconsciously it may happen to be a short step between moral certainty and the legal proof.
At times it can be case of 'may be true '.
But there is a long mental distance between 'may be true ' and 'must be true ' and the same divides conjectures from sure conclusions.
The least that can be said in this case is that atleast there is a reasonable doubt about the guilt of the accused and the benefit of the same should go to him.
We are conscious that a grave and heinous crime has been committed but when there is ;no satisfactory proof of the guilt we have no other option but to give the benefit of doubt to the accused and we are constrained to do so in this case.
Accordingly, the appeal is allowed.
The conviction and sentence of the accused is set aside and he shall be set at liberty forthwith if not required in any other case.
T.N.A. Appeal allowed.
| The appellants, `the promotees ' from Class II service were promoted as Executive Engineers by relaxing five years length of service as Class II Engineers in officiating capacity on various dates between January 6, 1969 to May 29, 1971.
Only the appellant No. 1 and two other were confirmed as Executive Engineers w.e.f. July 11, 1973, December 11, 1974 and December 9, 1975 respectively.
The respondent No.1 was recruited and appointed directly as Asstt.
Executive Engineer w.e.f. October 25,1971.
he was also given relaxation of the length of service of five years as Asstt.
Executive Engineer and was promoted as Executive Engineer on October 8, 1973 and was confirmed w.e.f. December 22, 1976.
199 All the appellants except one M.R. Gupta were further promoted as Superintending Engineers on different dates between 1980 to 1984 whereas the respondent No. 1 was promoted as Superintending Engineer on March 4, 1987.
The applicant No. 1 was further promoted as Chief Engineer The validity of the promotion of respondent No. 1 to the post of Chief Engineer was challenged.
The respondent No. 1 who was shown junior to the appellants, field Writ Petition seeking a writ of mandamus directing the second respondent, State Government to consider his case for promotion as Superintending Engineer from the date on which the respondents were promoted assigning the seniority over the appellants and the consequential reliefs.
On reference, a Division Bench of the High Court held that respondent No. 1 was a member of the service from the date of his initial appointment as Asstt.
Executive Engineer and the appellants and the proforma respondents were not members of the service and directed the Single Judge to dispose of the matter on merit, against which, this appeal on leave was filed.
The appellants contended that the appellants being promoted as Executive Engineers against regular vacancies, which were neither a stop gap arrangement nor fortuitous, and being continued in service without any break from the respective dates o their promotion, they were members of the service in a substantive capacity as Executive Engineers from the respective dates of promotion; that since the respondent No. 1 was recruited as Asstt.
Executive Engineer w.e.f. August 30, 1971 long after the promotion of the appellants, the appellants were seniors to the respondent No. 1 as Executive Engineers, as Proviso to Rule (5)2 entitles them to remain in a substantive capacity as Executive Engineer since requisite number of qualified Asst.
Executive Engineers were not available for promotion; that in view of their continous officiation as Executive Engineers in terms of Rule 2(12)(a) of the rules, they must be deemed to be the members of the service from the dates of promotion and, therefore, they were seniors to the respondent no.1.
The respondents contended that unless the appellants were appointed substantively to the cadre posts they could not be members of the service.
The respondent No. 1 became a member of the service 200 from the date of his initial appointment as Asstt.
Executive Engineer, therefore, he was senior to the appellants and proforma respondents.
As agreed by the parties, this Court declare the law on the interpretation of the rules and leave the matter for the State Govt.
to decide the inter seniority on merits.
Disposing the appeal, it is.
HELD: 1.
Appointment to a post in accordance with the rules is a condition precedent and no one can claim appointment to a post or promotion, as of right, but has a right to be considered in accordance with the rules, Appointment by promotion or direct recruitment, therefore, must be in accordance with the rules so as to become a member of the service in a substantive capacity.
Seniority is to be fixed in accordance with the principle laid down in the rules.
[213G 214A] 2.
The promotee has right to confirmation in the cadre post as per Rule 11(4) if a post is available to him within his quota or at a later date under rule 5(2) read with rule 11(4) and gets appointment under rule 8(11).
His seniority would be reckoned only from the date of the availability of the post and the year of allotment, he shall be next below to his immediate senior promotee of that year or the junior most of the previous year of allotment whether officiating or permanent occupying the post within 50% quota.
[214G 215A] 3.
A direct recruit on promotion within his quota, though later to the promotee is interposed in between the periods and interject the promotee 's seniority; snaps the links in the chain of continuity and steals a march over the approved promotee probationer.[215B] 4.
Mere officiating appointment by promotion to a cadre post outside the quota; continuous efficiation therein and declaration of probation would not clothe the promotee with any right to claim seniority over the direct recruits.
The necessary conclusion would, therefore, be that the direct recruit shall get his seniority with effect from the date of the year of the allotment as Asstt.
Executive Engineer which is not alterable.
Where the promotee would get his seniority w.e.f.
the date of the availability of the posts within 50% quota of the promotees.
[215D] 5.
The seniority of the promotee from Class II service Executive Engineer shall be determined with effect from the date on which the cadre post was available to him and the seniority shall be determined accordingly.[215F] 201 6.
Under the Rules `determination of seniority would be made only after the promotee becomes a member of the service '.
Therefore the year of allotment must be determined having regard to (i) availability of the cadre post within quota; (ii) satisfactory completion of the probation, and (iii) appointment to the post in the substantive capacity in term of Rules 12(6) and (7) read with Rule 11(4) and Rule 8(12).
Any other construction would be contrary to the avowed object of the rules as a whole.[218B C] 7.
There is neither invidious discrimination nor arbitrariness in Rule 2(12)(a) offending articles 14 & 16.
The differentiation drawn between direct recruit and the promotee bears rational relation to the object of Rule 2(12).
[219H] 8.
The Government of Haryana to determine the cadre posts, if not already done, regularly from time to time including the post created due to exigencies of service in terms of Rule 3(2) read with appendix `A ' and allot the post in each year of allotment as contemplated under rule 12 read with Rule 5(2)(a) and issue orders appointing substantively to the respective posts within the quota and determine the inter se seniority between the appellants promotees and the direct recruit in the respective quota cadre posts of Executive Engineers etc.
within four months from the date of receipt of this judgment.
The inter se seniority of promotees and direct recruits shall be determined accordingly.
[220D E] M.S. Mighlani vs State of Haryana & Anr. ; J.C. Yadav vs State of Haryana, ; K.K. Khosla vs State of haryana, [1990] 2 SCC 199; V.B. Badami, etc.
vs Stat of Mysore [1976] 1 SCR 815; K.C. Joshi & Ors.
vs Union of India & Ors., to.
R.P. Khanna vs S.A.F. Abbas & Ors, at 557 C J; Baleshwar Dass & Ors.
vs State of U.P. & Ors.
, [1981] 1 SCR 449 at 463; B.S. Yadav vs State of Haryana, ; The Direct Recruit, Clall II Engineering Officers ' Association vs State of Maharasthra & Ors., ; at 745 Distinguished. 9.
It is a cardinal rule of interpretation that a proviso to a particular provision of a stature only embraces the field which is covered by the main provision.
It carves out an exception to the main provision to which it has been enacted by the proviso and to no other.
The proper function of proviso is to except and deal with a case which would otherwise fall within the general language o the main enactment, 202 and its effect to confine to that case.
Where the language of the main enactment is explicit and unambiguous, the proviso can have no repercussion on the interpretation of the main enactment, so as to exclude from it, by implication what clearly falls within its express terms.
[211E F] 10.
The scope of the proviso is to carve out an exception to the main enactment and it excludes something which otherwise would have been within the rule.
It has to operate in the same field and if the language of the main enactment is clear, the proviso cannot be torn apart from the main enactment nor can it be used to nullify by implication what the enactment clearly says nor set a naught the real object of the main enactment, unless the words of the proviso are such that it is its necessary effect [211G H] 11.
In interpreting the rule, effect must be given to allow everyone drawn from the sources to have their due share in the service and chances of involvement to effectively discharge the duties of the posts honestly and efficiently with dedication.
Any wanton or deliberate deviation in the implementation of the rules should be curbed and snubbed and the rules must be strictly implemented to achieve the above purpose.
If wanton doviations are allowed to be repeated, it would breed indiscipline among the services and amounts to undue favour to some and denial of equity for many for reasons known or unknown subverting the purpose of the rules.{213F] 12.
Rules 2(1), 2(3), 2(7), 2(10), 2(12)(a) 5(2)(a) 8, 9(2) 11, 12(3) 12(5) to 12(7) to be construed harmoniously.
lest the legislative animation would be defeated and the rules would be rendered otiose and surpluses.
It would also adversely effect the morale and efficiency of the service.[215C] 13.
With a view to have efficient and dedicated services accountable to proper implementation of Govt.
policies, it is open and is constitutionally permissible for the State, to infuse into the services, both talented fresh blood imbued with constitutional commitments, enthusiasm,drive and initiative by direct recuritment, blended with matured wealth of experience from the subordinate services.[212G] 14.
It is permissible to constitute an integrated service of persons recruited from two or more sources, namely, direct recruitment, promotion from subordinate service or transfer from other services.
Promotee from subordinate service generally would get few chances of 203 promotion to higher echolans of services.
[212H] 15.
Avenues and facilities for promotion to the higher services to the less privileged member of the subordinate service would inculcate in them dedication to excel their latent capabilities to man to cadre posts {213A] 16.
Talent is not the privilege of few but equal avenues made available would explore common man 's capabilities overcoming environmental adversity and open up full opportunities to develop one 's capabilities to shoulder higher responsibilities without succumbing to despondence.
Equity talented young men/women of great promise would enter into service by direct recruitment when chances of promotions are attractive.
[213B] 17.
The chance of promotion would also enable a promotee to imbue involvement in the performance of the duties, obviate frustration and eliminate proclivity to corrupt practices, lest one would tend to become corrupt, sloven and mediocre and a dead wood.
In other words, equal opportunity would harness the human resources to augment the efficiency of the service and undue emphasis on either would upset the scale of equality germinating the seeds of degeneration. {213D]
|
minal Appeal No. 152 of 1967.
Appeal by special leave from the judgment and order dated November 19, 1966 of the Judicial Commissioner Court, Goa, Daman and Diu in Criminal Reference No. 103, of 1966.
R.N. Sachthey, for the appellant.
The respondent did not appear.
The Judgment of the Court was delivered by Grover, J.
The sole point for decision in this appeal by special leave is whether a complaint which had been filed against the appellant and four other persons by the respondent for various alleged offences could be entertained without necessary sanction being obtained for the prosecution of the appellant, who at the material time, was the Deputy Superintendent of Police, under section 197 of the Criminal Procedure Code.
The original complaint is not before us as it has not been included in the appeal record but the allegations contained therein are given in the judgment of the learned Judicial Commissioner.
The complainant alleged that on March 5, 1966 at about 4 p.m. accused Nos. 2 to 5 who were hawkers by profession and some other persons attempted to trespass on his land in Margao town with the intention of putting up stalls there.
The complainant having been threatened by them, sent his brother to the police station.
The police came and asked the hawkers to keep their handcarts at the place where they were kept before.
Later on at about 5 30 p.m. the appellant came to the spot and spoke to the complainant in a very arrogant tone.
The appellant informed the complainant that he was Deputy Superintendent of Police and that he had in his possession documents which proved that the land belonged to one Alma Ram.
The appellant asked the complainant to produce his documents of.
title but the complainant replied that those documents had been produced by him in some litigation in the civil courts.
The appellant is then alleged to have threatened the complainant that he would lock him up in case there was any interference with what the hawkers Wanted to do.
The appellant also beckoned accused Nos. 2 5 and other hawkers to enter upon the land.
When the complainant protested he was warned by the appellant that if he talked he would be slapped.
The appellant also assaulted him.
Thereafter the possession of the land was taken over by the hawkers.
The magistrate to whom the complaint was presented examined the complainant under section 200, Criminal Procedure Code 1015 and issued summons to answer the charges under sections 149, 341, 342, 352, 500, 503 and 504 read with section 34 against the appellant and other accused persons requiring them to appear on April 19, 1966.
The appellant filed a petition for revision under section 435 of the Code before the learned Sessions 'Judge in which the main point taken was that the previous sanction under section 197, Cr.
P.C., to prosecute the appellant was required which had not been obtained.
The learned Sessions Judge made an order recommending that the magistrate be directed to require the complainant to obtain the requisite sanction before prosecuting the appellant.
This matter was heard by a bench consisting of the Judicial Commissioner and the Additional Judicial Commissioner.
The Judicial Commissioner was of the view that there was no material on the record to come to the conclusion that the acts complained of would be protected by the provisions of section 197(1) of the Code.
The learned Additional Judicial Commissioner took a contrary view and held that sanction was necessary.
The order of the court was that there being no third Judge to resolve the difference of opinion, the order of the learned magistrate issuing the summons be confirmed in terms of proviso to section 7(2) of the Goa, Daman and Diu (Judicial Commissioner 's Court) Regulation, 1963.
It may be mentioned that in the statement recorded under section 200 of the Criminal Procedure Code, by the magistrate, the complainant made more or less the same allegations as were made in the complaint.
According to the learned Additional Judicial Commissioner in the statement made in court it was not affirmed that the complainant had been wrongly retrained or confined nor was it mentioned that he was actually assaulted in the sense that physical force was used against him.
The worst that could be said, according to the Additional Judicial Commissioner, was that the appellant had warned the respondent that he would be arrested if he interfered with the entry of the hawkers on the disputed land and that the appellant.
also made some gestures with the hand indicating threat of assault.
In our opinion it is not necessary to go into the allegations in the original complaint.
It would suffice to read the statement made by the complainant before the magistrate which is reproduced below: "I confirm the matter in my complaint.
On 5th instant, at about 4.00 p.m. the accused Nos. 2 to 5 attempted to trespass upon my plot situated near the market of this city with a view of setting upon thereon their mobile shops.
I, therefore, sent my brother to the Police, who came to the spot and sent the vendors away.
At about 5.30 p.m. on the same day Mr. Sinari, in civil dress turned up at that place.
At that time, I was sitting in the verandah of the shop of one Kharan 1016 gute situated at the same place.
He called me near him.
Thereafter he asked me whether I knew him, to this I replied in the affirmative.
After this, he identified himself as Dy.
Superintendent of Police and threatened me that if I interfered with vendors he would arrest me.
Subsequently, he directed the vendors to enter my plot and warned me that he should slap me on my face.
In case I oppose to this.
He told me further that he was dealing with the case, when I brought to his notice that my documents were lying with the Municipality and with the Court.
The same accused made some gestures of threats of assault with hands.
I kept myself mum in view of this unusual attitude and the vendors ' took possession of my pro The learned Judicial Commissioner as also the Additional Judicial Commissioner have discussed the case law on the subject exhaustively and have also summarised the principles deducible from the various pronouncements.
It seems to us that there is no difficulty in finding the true rule which has been laid down by numerous decisions including those of the Privy Council, Federal Court and this Court.
It is only in the application of the settled rule that certain amount of difficulty may be experienced owing to the peculiar facts of a particular case.
The language of section 197, Cr. P. Code clearly is that no court can take cognizance of an offence alleged to have been committed by any person belonging to the categories mentioned in the section which would include the appellant when he is accused of an offence alleged to have been committed by him while acting or purporting to act in the discharge of his official duty.
This Court observed in Ronald Wood Matham vs State of West Bengal(1) that the question whether sanction under section 197 was necessary for instituting proceedings on charges of conspiracy and of bribery stood concluded by the decisions of the Judicial Committee in H. H. B. Gill vs The King(2) and Phanindra Chandra Neogy vs The King(3) and must be answered in the negative.
so far as the appellant in that case was concerned.
After a full discussion of the case law the result was stated in Matajog Dubey vs
H.C. Bhari(4): thus: "There must be a reasonable connection between the act and the discharge of official duty; the act must bear such relation to the duty that the accused could lay a reasonable, but not a pretended or fanciful claim, that he did it in the course of the performance of his . . duty.
" 76 I.A. 10.
(4) ; , 934, 1017 At an earlier stage it had been observed that it did not matter if the acts exceeded were strictly necessary for the discharge the duty.
What had to be found out was whether the act and the official duty were so inter related that one could postulate reasonably that it was done by the accused in the performance of the official duty though possibly in excess of the needs and requirements of the situation.
In Amrik Singh vs State Pepsu(x), Venkatarama lyer J. speaking for the Court summed up the result of the various decisions on the subject and said that it was not every offence committed by a public servant which required sanction for prosecution under section 197(1) of the Code of Criminal Procedure nor even every act done by him while he was actually engaged in the performance of his official duties.
But if the act complained of was directly concerned with his official duties so that, if questioned, it could be claimed to have been done by virtue of the office, then sanction would be necessary and that would be so, irrespective of whether it was in fact, a proper discharge of his duties or not.
Reference may be made to Nagraj vs State of Mysore(2) in which the appellant, a Sub Inspector of Police, was committed to Sessions Court for trial on a complaint that he and another person had severely beaten one T and when he was forcibly taking him away and was requested by K to excuse T he wantonly fired on two persons.
Emphasis on the question of sanction has been laid on the rule that the jurisdiction of the court to proceed with the complaint emanates from the allegations made in the complaint and not from what is alleged by the accused or what is finally established in the case as a result of the evidence record We are unable to agree with the learned Additional judicial Commissioner that if the allegations of the complainant are taken to be correct it was established that the appellant held out threats to arrest the complainant or to give him a slap on his face in the discharge or purported discharge of his duties.
There are many matters on which there is complete absence of any material or information.
In the first place it is not clear in what capacity the appellant came to the spot.
According to the complainant he sent his brother to the police station because the hawkers were attempting to trespass on his land.
Normally it would be the officr in charge of the police station who would go to the spot to prevent any breach of peace or apprehended breach of peace.
Even if the appellant who was a superior officer could come to prevent any ugly situation arising between the complainant and the hawkers.
It is not established that the appellant came in the capacity of a police officer.
On the contrary the necessary implication in the statement of the complain [1955]:1 S.C.R.1302.
f2) 11964138.CR. 671.
1018 ant is that the appellant came in civil dress, wanted the hawkers to be put in possession of the disputed plot and actually directed them to enter the plot and warned the complainant that if he.
resisted he would be slapped in his face.
Until some more material is placed on the record it cannot be held that it was any part of the duty of the appellant to ensure that the hawkers were put_in possession of the disputed land.
It may be that the appellant was entitled to interfere and take proper steps if he apprehended any breach of peace but there is nothing whatsoever in the complainant 's statement which would show that any such situation existed which could justify interference by the appellant.
Ordinarily if a person is in possession of some property and other persons are threatening to dispossess him it is no part of the duty of a police officer to take sides and decide the dispute in favour of one party or the other or to force one party to give up possession to the other, even if he was satisfied that the party seeking to take possession was lawfully entitled to do so.
This the police officer could only do if there had been any direction by a competent court for rendering help in the matter of delivery of possession.
Whatever way the matter is looked at we are unable to hold on the basis of the allegations contained in the statement of the complainant that the acts alleged against the appellant were such as could be regarded to have been committed by him while acting or purporting to act in the discharge of his official duties.
It will be open to the appellant to establish during the course of further proceedings that the requisite sanction under section 197 must be obtained; but at this stage we concur in the view of the learned judicial Commissioner that no such sanction was necessary.
The appeal fails and it is dismissed.
G.C. Appeal.
dismissed.
| The appellant plaintiffs filed a suit in February 1956, for the eviction the respondent on the ground that the premises were required for their own use, that the defendant already owned a suitable house of his own, and that the respondent had defaulted in payment of rent, after the defendant had flied a written statement and issues had been framed a joint application was made by them that a compromise had been effected.
The trial court decreed the suit in the plaintiff 's favour in terms of the compromise which provided inter alia, for the ejectment of the defendant after 31st December 1958, and fixed the standard rent as agreed.
The defendant, however, did not vacate the premises in December 1958, and presented an application in February 1959 under section 47 C.P.C., challenging the validity of the decree alleging that it had been passed in contravention of the provision of Delhi and Ajmer Rent Control Act, 1952 and contending that the decree was, therefore, a nullity.
He 'failed before the Sub Judge and also in appeal before the Senior Sub Judge.
However, the High Court in revision held in his favour.
appeal to this Court, HELD: The High Court has rightly held that the decree was a nullity as the order passed on the basis of the compromise did not indicate that any of the statutory grounds mentioned in section 13 of the Act existed.
[1050 B] Bahadur Singh vs Muni Subrat Dass, , followed.
|
ivil Appeal No. 65 of 1956.
Appeal from the judgment and order dated August 31, 1954, of the Calcutta High Court in Income tax Ref.
No. 57 of 1953.
N. C. Chatterjee and B. P. Maheshwari, for the appellant.
K. N. Rajagopala Sastri, R. H. Dhebar and D. Gupta, for the respondent.
March 26.
The Judgment of the Court was delivered by HIDAYATULLAH, J.
Messrs.
Howrah Trading Company, Ltd., Calcutta (hereinafter called the assessee) obtained on April 28, 1955, a certificate under section 66A(2) of the Indian Income tax Act from the Calcutta High Court, to appeal to this Court against the judgment dated August 31, 1954, in Income tax Reference No. 57 of 1953.
The Divisional Bench (Chakravarti, C. J., and Lahiri, J.) in the judgment under appeal merely followed their earlier judgment delivered the same day in Income tax Reference No. 22 of 1953, since reported as Hindustan Investment Corporation vs Commissioner of Income tax (1).
It is the latter judgment which gives the reasons for the decision.
The facts of the case have been stated with sufficient fulness, yet briefly, in the statement of the case submitted by the Income tax Appellate Tribunal (Calcutta Bench) and may be conveniently set out in its own words: (1) 57 450 " The applicant had received sums of Rs. 3,831, Rs. 6,606, Rs. 7,954 and Rs. 8,304 in the four assessment years, 1944 45, 1945 46, 1946 47 and 1947 48 as income from dividends.
The shares in respect of which this dividend income was received were the property of the Applicant but in the books of the various companies these stood in the names of other persons.
It appears that these shares were purchased by the Applicant from other persons under a blank transfer but the transfers had not been registered with the various companies.
The Applicant 's claim in these income tax proceedings was that these shares although not registered in the name of the applicant were the property of the applicant.
It was further claimed that this dividend income should be grossed up under section 16(2) and credit for the tax deducted should be allowed to the Applicant under section 18(5).
" The Income tax Officer did not accept this claim, and the appeals of the assessee were rejected by the Appellate Assistant Commissioner of Income tax, Calcutta, " A " Range and by the Appellate Tribunal.
The Tribunal, however, on being moved, referred the following question to the High Court: " Whether in the facts and circumstances of this case, the Applicant (the assessee) was entitled to have this dividend income grossed up under section 16(2) and claim credit for tax deducted at source under section 18(5) of the Income tax Act? " The High Court answered the question in the negative, thus affirming the decisions of the Department and the Appellate Tribunal.
The assessee contends that the decision of the High Court is erroneous, and that it is entitled to have the dividend income I grossed up ' under section 16(2) and also to claim credit for tax deducted at source, under s.18(5) of the Income tax Act.
The relevant sections are as follows: " 16(2) : For the purposes of inclusion in the total income of an assessee any dividend shall be deemed to be income of the previous year in which it is paid, credited or distributed or deemed to have been 451 paid, credited or distributed to him, and shall be increased to such amount as would, if income tax (but not super tax) at the rate applicable to the total income of the company without taking into account any rebate allowed or additional income tax charged for the financial year in which the dividend is paid, credited or distributed or deemed to have been paid, credited or distributed, were deducted therefrom, be equal to the amount of the dividend: (proviso omitted).
18 (5): Any deduction made and paid to the account of the Central Government in accordance with the provisions of this section and any sum by which a dividend has been increased under sub section (2) of section 16 shall be treated as a payment of incometax or super tax on behalf. . of the shareholder and credit shall be given to him therefor on the production of the certificate furnished under. .section 20 . in the assessment, if any, made for the following year under this Act: (proviso omitted).
49B(1): Where any dividend has been paid, credited or distributed or is deemed to have been paid, credited or distributed to any of the persons specified in section 3 who is a shareholder of a company which is assessed to income tax in the taxable territories or elsewhere, such person shall, if the dividend is included in his total income, be deemed in respect of such dividend himself to have paid income tax (exclusive of super tax) of an amount equal to the sum by which the dividend has been increased under sub section (2) of section 16.
" It was contended in the High Court that inasmuch as section 16(2) referred to an I assessee, the assessee company was entitled to have the dividend 'grossed up ' by the addition of income tax paid by the various companies at source and consequently to have the benefit of the credit allowed under the two remaining sections.
In the opinion of the High Court, an assessee whose name was not in the register of members of the companies was not entitled to the benefit of these provisions.
The learned Judges of the High Court were of the opinion that the word " shareholder " in 452 s.18(5) had the same signification as the word " member " used in the Indian Companies Act; and that the assessee was not qualified to be considered as a shareholder, even though by a blank transfer it had ,purchased the relevant shares.
In our opinion, the High Court was right in its conclusion.
A company when it pays income tax, does not do so on behalf of the shareholders.
It is itself chargeable under the Act, In Cull vs Inland Revenue Commissioners (1), Lord Atkin stated the law (which in substance is also the law in our country) thus: My Lords, it is now clearly established that in the case of a limited company the company itself is chargeable to tax on its profits, and that it pays tax in discharge of its own liability and not as agent for its shareholders. .
At one time it was thought that the company, in paying tax, paid on behalf of the shareholder; but this theory is now exploded by decisions in this House, and the position of the shareholders as to tax is as I have stated it.
" When the company pays its own income tax and declares a dividend from the balance of its profits, it deducts from such dividend a proportionate part of the amount of the tax paid by it.
This principle is explained in another English case, and it is substantially also the law in this country.
In Inland Revenue Commissioners vs Blott (2), Viscount Cave stated the law in these words: " Plainly, a company paying income tax on its profits does not pay it as agent for its shareholders.
It pays as a tax payer, and if no dividend is declared, the shareholders have no direct concern in the payment.
If a dividend is declared, the company is entitled to deduct from such dividend a proportionate part of the amount of the tax previously paid by the company; and, in that case, the payment by the company operates in relief of the shareholder.
But no agency, properly so called, is involved.
" The share holders, however, get the benefit of the payment of the tax by the company.
Though under (1) , 56 ; , 636.
(2) , 201.
453 s.16(2) of the Act their dividend is increased by a proportionate amount of tax paid by the company, the payment of the tax by the company is deemed tinder sections 18(5) and 49B(1) to be payment by the shareholders.
The rates of income tax applicable to the company are, in most instances, higher than the rates applicable to the individual shareholders, and by this process of 'grossing up ', as it is commonly called, the recipient of the dividend gets some benefit.
The position of a shareholder who gets dividend when his name stands in the register of members of the company causes no difficulty whatever.
But transfers of shares are common, and they take place either by a fully executed document such as was contemplated by Regulation 18 of Table A of the Indian Companies Act 1913, or by what are known as blank transfers '.
In such blank transfers, the name of the transferor is entered, and the transfer deed signed by the transferor is handed over with the share scrip to the trans feree, who, if he so chooses, completes the transfer by entering his name and then applying to the company to register his name in place of the previous holder of the share.
The company recognises no person except one whose name is on the register of members, upon whom alone calls for unpaid capital can be made and to whom only the dividend declared by the company is legally payable.
Of course, between the transferor and the transferee, certain equities arise even on the execution and handing over of 'a blank transfer ', and among these equities is the right of the transferee to claim the dividend declared and paid to the transferor who is treated as a trustee on behalf of the transferee.
These equities, however, do not touch the company, and no claim by the transferee whose name is not in the register of members can be made against the company, if the tranferor retains the money in his own hands and fails to pay it to him.
A glance at the scheme of the Indian Companies Act, 1913, shows that the words " member ", " shareholder " and " holder of a share " have been used interchangeably in that Act.
Indeed, the opinion of most of the writers on the subject is also the same.
454 Buckley on the Companies Act, 12th Edition, page 803 has pointed out that the right of a transferee is only to call upon the company to register his name and no more.
No rights arise till such registration ,takes place.
Section 2(16) of the Indian Companies Act, 1913, defines " share " as " share in the share capital of the company Section 5 deals with the mode of forming incorporated companies, and in the case of companies limited by shares, the liability of the members is limited to the amounts, if any, unpaid on the shares respectively held by them.
By section 18, Table A is made applicable to companies, unless by the Articles of any company the terms of Table A have been excluded or modified.
Regulation 18 of Table A reads as follows: " The instrument of transfer of any share in the company shall be executed both by the transferor and transferee, and the transferor shall be deemed to remain holder of the share until the name of the transferee is entered in the register of members in respect thereof.
" The words " holder of a share " are really equal to the word shareholder and the expression " holder of a share denotes, in so far as the company is concerned, only a person who, as a shareholder, has his name entered on the register of members.
A similar view of the Companies Clauses Consolidation Act, 1845, was taken in Nanney vs Morgan(1).
The learned Lord Justices held that under section 15 of that Act, the transferee bad not the benefit of a legal title till certain things were done, which were indicated by Lopes, L.J., in the following passage: " Therefore the transferor, until the delivery of the deed of transfer to the secretary, is subject to all the liabilities and entitled to all the rights which belong to a shareholder or stockholder, and, in my opinion until the requisite formalities are complied with, he continues the legal proprietor of the stock or shares subject to that proprietorship being divested, which it may be at any moment, by a compliance with the requisite formalities.
(1) , 356.
455 The same position obtains in India, though the completion of the transaction by having the name entered in the register of members relates it back to the time when the transfer was first made.
See Nagabushanam vs Ramachandra Rao (1).
During the period that the transfer exists between the transferor and the transferee without emerging as a binding document upon the company, equities exist between them, but not between the transferee and the company.
The transferee can call upon the transferor to attend the meeting, vote according to his directions, sign documents in relation to the issuance of fresh capital, call for emergent meetings and inter alia, also compel the transferor to pay such dividend as he may have received.
See E. D. Sassoon & Co. Ltd. vs Patch (2) approved in Mathalone vs Bombay Life Assurance Co. Ltd. (3 ).
But these rights though they, no doubt, clothe the transferee with an equitable ownership , are not sufficient to make the transferee a full owner, since the legal interest vis a vis the company still outstands in the transferor; so much so, that the company credits the dividends only to the transferor and also calls upon him to make payment of any unpaid capital, which may be needed.
The cases in Black vs Homersham (4) or Wimbush, In re Richards vs Wimbush (5) hardly advance the matter further than this.
The position, therefore, under the Indian Com panies Act, 1913, is quite clear that the expression " shareholder " or " holder of a share " in so far as that Act is concerned, denotes no other person except a " member ".
The question that arises in the present case is whether by reason of sections 16(2) and 18(5) the assessee, who was a transferee on a blank transfer ' is entitled to the benefits of the grossing up of the dividend income.
Learned counsel for the assessee strenuously contends that the assessee being an owner in equity of the shares and thus also of the dividend is entitled to this benefit.
He refers to the use of the word I assessee in section 16(2).
The Department, on the (1) Mad. 537.
(3) ; (2) (4) (1878 79) L. R. (5) 456 other hand, says that the dividend can be increased under section 16(2) and credit allowed under section 18(5) if the assessee is a 'shareholder ', because the benefit of section 18(5) can go only to the shareholder, i. e., a person with his name on the register of members, and not to a person holding an equity against such shareholder.
The assessee contends that the word " shareholder " includes even a person who holds a share as a result of a blank transfer, and does not necessarily mean a member of the company, whose name is on the register of members.
Authorities on this point are not wanting, and indeed, in the judgment of the Calcutta High Court they have all been referred to.
They are all against the assessee.
See Shree Shakti Mills Ltd. vs Commissioner of Income tax (1), Jaluram Bhikulal vs Commissioner of Income tax (2), Arvind N. Mafatlal vs Incometax Officer (3) and Bikaner Trading Co. vs Commissioner of Income tax (4).
The question that falls for consideration is whether the meaning given to the expression "shareholder" used in section 18(5) of the Act by these cases is correct.
No valid reason exists why " shareholder " as used in section 18(5) should mean a person other than the one denoted by the same expression in the Indian Companies Act, 1913.
In In re Wala Wynaad Indian Gold Mining Company (5), Chitty, J., observed: " I use now myself the term which is common in the Courts, I a shareholder ', that means the holder of the shares.
It is the common term used, and only means the person who holds the shares by having his name on the register.
" Learned counsel for the assessee cited a number of authorities in which the ownership of the dividend was in question, and it was held that the transferee whose name was not registered, was entitled to the dividend after transfer had been made.
These cases are Commissioners of Inland Revenue vs Sir John Oakley (6), Spence vs Commissioners of Inland Revenue (7) (1) (3) (5) , 854.
(2) (4) (6) , (7) 457 and others cited at page 367 in Multipar Syndicate, Ltd. vs Devitt (1).
No one can doubt the correctness of the proposition in these cases, but from an equitable right to compel the transferor to give up the dividend to the transferee, to a claim to the dividend by him as a " shareholder " against the company is a wide jump.
In so far as the company is concerned, it does not even issue the certificate under section 20 of the Income tax Act in the name of an unregistered transferee but only in the name of the transferor whom it recognises, because his name is borne on its books.
Section 20 lays down: " The principal officer of every company shall, at the time of distribution of dividends, furnish to every person receiving a dividend a certificate to the effect that the company has paid or will pay income tax on the profits which are being distributed, and specifying such other particulars as may be prescribed.
" The meaning of section 20 as also of section 18(5) is clear if they are read with section 19A, under which information regarding dividends has to be supplied by the company when demanded by the Income tax Officer.
It lays down: " The principal officer of every company . shall, on or before the 15th day of June in each year, furnish to the prescribed officer a return in the prescribed form and verified in the prescribed manner of the names and of the addresses, as entered in the register of shareholders maintained by the company, of the shareholders to whom a dividend or aggregate dividends exceeding Such amount as may be prescribed in this behalf has or have been, distributed during the, preceding year and of the amount so distributed to each such shareholder. " (Italics supplied).
Section 19A makes it clear, if any doubt existed, that by the term " shareholder " is meant the person whose name and address are entered in the register of " shareholders " maintained by the company.
There is but one register maintained by the Company.
There (1) 58 458 is no separate register of " shareholders " such as the assessee claims to be but only a register of " members ".
This takes us immediately to the register of members, and demonstrates that even for the purpose of the Indian Income tax Act, the words ',member and " shareholder " can be read as synonymous.
The words of section 18(5) must accordingly be read in the light in which the word " shareholder " has been used in the subsequent sections, and read in that manner, the present assessee, notwithstanding the equitable right to the dividend, was not entitled to be regarded as a "shareholder" for the purpose of section 18(5) of the Act.
That benefit can only go to the person who, both in law and in equity, is to be regarded as the owner of the shares and between whom and the company exists the bond of membership and ownership of a share in the share capital of the company.
In view of this, we are satisfied that the answer given by the Calcutta High Court on the question posed by the Tribunal was correct.
The appeal fails, and is dismissed with costs.
Appeal dismissed.
| The respondent in C.A. No.182 of 1993 joined service as Section Officer under the appellant on 83.1971.
On 29.12.1976 he was promoted to the post of Sub Divisional Engineer and was confirmed on 13.8.1985.
With effect from 21.1.1986, the.
respondent was promoted as Executive Engineer (Civil).
The service particulars of the respondent in C.A. No.183 of 1993 were identical.
The respondents approached the Central Administrative Tribunal to determine their seniority in the cadre of Executive Engineers from the date of eligibility, ie.
1.1.1985 and not from 21.1.1986.
The Tribunal allowed the applications of the respondents, against which the present appeals were riled by the Administration.
Allowing the appeals, this Court, HELD:1.01.
The selection to the post of Executive Engineer was to be done by following the procedure laid down under Rule 8 of the Punjab Service of Engineers, Class I (Buildings and Roads Branch) Rules 1960.
Eligibility under Rule 6(b) of the Rules by itself does not give a right to a member of Class 11 service to be promoted to the post of Executive Engineer in Class I service.
The promotion has to be made in accordance with the procedure laid down under Rule 8 of the Rules.
No member of Class 11 service can claim 122 promotion to the post of Executive Engineer on the ground of eligibility alone.
Unless a Class II officer has been selected in accordance with Rule 8 of the Rules he cannot be promoted to the post of Executive Engineer.
[125C E] 1.02.
The question of assigning seniority in Class I service only arises after a Class 11 officer has been selected and appointed to the said service.
The seniority in class I is determined under Rule 12 of the Rules, keeping in view the date of appointment as a result of selection under Rule 8 of the Rules.
[125F] 1.03.
The respondents in these appeals were appointed to the post of Executive Engineer, as a result of selection held under Rule 8 of the Rules, with effect from January 21, 1986.
Their seniority has to be determined in Class I service keeping in view the date of their appointments as January 21, 1986.
[125F G] 1.04 The Tribunal grossly erred in directing the Chandigarh Administration to give seniority to the Respondents from the date of their eligibility.
The respondents can neither be given the date of appointment as January 1, 1985 nor their seniority fixed from that date.
The directions of the Tribunal in this respect are patently violative of the Rules.
[125G H]
|
iminal Appeal No. 28 of 1956.
Appeal by special leave from the judgment and order dated June 21, 1954, of the Calcutta High Court in Criminal Revision No. 811 of 1953.
1264 Ranadeb Chaudhury and P. K. Chatterjee, for the appellants.
B. Sen and P. K. Bose, for the respondents.
September 11.
The Judgment of the Court was delivered by KAPUR J.
This appeal by special leave raises a question of interpretation of section 237 of the Indian Companies Act.
Appellant No. 1 is One of the past directors of the Bank of Commerce Ltd., now in liquidation and appellant No. 2 was its Managing Director.
The Bank was ordered to be wound up by the High Court of Calcutta on August 7, 1950, and one G. K. Dutt, Bar at law was appointed its Official Liquidator but on September 7, 1950, the Official Receiver was appointed in place of Dutt.
On July 23, 1952, respondent No. 1 filed in Court of the Presidency Magistrate a complaint against the appellant under sections 120B, 406, 467, 477A, Indian Penal Code and 182A of the Indian Companies Act and stated that he was doing so under the authority of the official liquidator and the official liquidator had obtained the directions of the High Court to file the complaint.
On May 5, 1953, the appellant applied to the I residency Magistrate for dismissal of the complaint as being without the sanction of the Company Judge and therefore the official liquidator in his official capacity was incompetent to prefer the complaint, being the creation of the statute he could only act within the four corners of the statute.
He possessed only those powers which the statute conferred on him.
This application was dismissed by the Presidency Magistrate on June 13, 1953.
The appellant then applied to the High Court for quashing the criminal proceedings on the ground that the prosecution was ab initio void because of the absence of prior direction judicially given by the High Court under section 237(1) of the Indian Companies Act.
The High Court found against the appellants and discharged the rule.
The learned Chief Justice held that the provisions of section 237(1) are no bar to a prosecution by the liquidator; that under section 237(1) there is nothing in the nature of a judicial proceedings 1265 that it could not be said that the order was not a valid direction under section 237(1).
He said: " There can be no question in the present case that the relevant facts were all placed before the Company Judge, because they are all set out in the report of Adhikary and the affidavits annexed there to to which the order expressly refers and with reference to which the liberty to bring legal proceedings was expressly given.
In view of those circumstances, it is impossible to say that the Company Court had not before it all the facts on which the prosecution is based or that it did not apply its mind to the considerations relevant to section 237(1) ".
He also held that clause (a) of section 179 empowers the liquidator to institute or defend legal proceedings in the name of the company and that it was expressly concerned with the powers of ' the liquidator whereas section 237 dealt with the powers of the Court to give, directions.
P. B. Mukherji J. gave a concurring judgment.
After referring to the history of section 237, he held that under that section the Company Judge can act ex parte and it was not necessary for him to hear a director or an officer of the company com plained against and that direction given under that section was not a condition precedent to a prosecution by the official liquidator nor is it the intention of that section to impinge on the powers of a criminal court under the Code of Criminal Procedure.
Leave to appeal having been refused by the Calcutta High Court, the appellants have come to this Court in pursuance of special leave.
On the application of the official liquidator Bachawat J. an January 15, 1951, made an order which must be taken to be one under section 179.
In this order it was said: And it is further ordered that the said applicant be at liberty to institute or defend any suit or prosecution, or other legal proceedings, civil or criminal in the name and on behalf of the said Bank and to continue all pending suits and execution proceedings by or against the said Bank and for that purpose to engage advocates, Vakils and other.
lawyers and to 1266 pay out of the assets of the said Bank in his hands all costs of and incidental to such suits, prosecutions and/or legal proceedings ".
On July 22, 1952, the official liquidator obtained the order from Bannerji J. which the High Court has held, and in our opinion rightly, to be an order under section 237(1) of the Indian Companies Act.
This order said: " It is ordered that the said applicant be at liberty to take such civil or criminal proceedings as he may think necessary over the report of the said Jasoda Dulal Adhikary read with the affidavits of H. Sen Gupta and Nepal Chandra Adhikary read with the affidavits of H. Sen Gupta and Nepal Chandra Mitra as set out in the said Exhibit " A " ".
The passage already quoted from the judgment of the learned Chief Justice shows that all the relevant facts were before the Company Judge, as they were all set out in the affidavits placed before him.
The complaint was then filed on July 23, 1952.
During the pendency of the complaint the appellants took an appeal against the order of the Company Judge dated July 22, 1952, but it was dismissed on the objection taken by the liquidator that it was an administrative order and not a judicial order.
On August 5, 1953, the official liquidator took out misfeasance proceedings under section 235 of the Companies Act and the appellants then applied to the High Court for quashing the criminal proceedings already started on the ground of commencement of proceedings under section 235.
This application was also heard with the rule which was issued on June 29, 1953, and it was dismissed by the same judgment by which the rule was discharged, i. e., of June 21, 1954.
The general scheme of the Companies Act is that the Court should have complete control of all proceedings in winding up and it was therefore urged that the official liquidator was not authorised to do anything either without the sanction of the Court or without its directions.
Section 179 deals with the powers of official liquidator.
It provides: 1267 The official liquidator shall have power, with the sanction of the court, to do the following things: (a) to institute or defend any suit or prosecution or other legal proceeding, civil or criminal in the name and on behalf of the company;. . . " Under section 180 the Court may provide that the official liquidator may exercise any of the powers given under section 179 without the sanction or intervention of the Court.
Section 183 deals with the exercise and control of liquidator 's powers.
Sub section 3 authorises him to apply to the Court for directions in relation to any particular matter arising in the winding up.
Subsection 4 is a provision under which the official liquidator is entitled to use his own discretion in the administration of the assets of the company and in the distribution amongst the creditors.
Sub section 5 provides: " If any person is aggrieved by any act or decision of the official liquidator, that person may apply to the Court and the Court may confirm, reverse or modify the act or decision complained of, and make such order as it thinks just in the circumstances ".
These provisions show that section 179 deals with the powers of the liquidator.
Under section 235 the Court has the power to assess damages against delinquent directors and the Court may on the application of the liquidator or a creditor or a contributory examine into the conduct of a director and compel him to pay or restore money or property or to contribute such sum to the assets of the company by way of compensation in respect of any misfeasance on his part and this power may be exercised irrespective of the criminal liability of the director.
Section 237 deals with prosecution of delinquent director and the relevant portion of this section is: (1) " If it appears to the Court in the course of a winding up by, or subject to the supervision of, the Court, that any past or present director, manager or other officer, or any member, of the company has been guilty of any offence in relation to the company for which he is criminally liable, the Court may, either on 161 1268 the application of any person interested in the winding up or of its own motion, direct the liquidator either himself to prosecute the offender or to refer the matter to the registrar.
(2) If it appears to the liquidator in the course of a voluntary winding up that any past or present director, manager or other officer, or any member of the company has been guilty of any offence in relation to the company for which he is criminally liable, he shall forthwith report the matter to the registrar and shall furnish to him such information and give to him such access to and facilities for inspecting and taking copies of any documents, being information or documents in the possession or under the control of the liquidator relating to the matter in question, as he may require.
(3) Where any report is made under sub section (2) to the registrar, he may, if he thinks fit, refer the matter to the Central Government for further enquiry, and the Central Government shall thereupon investigate the matter and may, if they think it expedient, apply to the Court for an order conferring on any person designated by the Central Government for the purpose with respect to the company concerned all such powers of investigating the affairs of the company as are provided by this Act in the case of a winding up by the Court.
(4) If on any report to the registrar under sub section
2 it appears to him that the case is not one in which proceedings ought to be taken by him, he shall inform the liquidator accordingly, and thereupon, subject to the previous sanction of the Court, the liquidator may himself take proceedings against the offender.
(5) If it appears to the Court in the course of voluntary winding up that any past or present director, manager or other officer, or any member, of the company has been guilty as aforesaid, and that no report with respect to the matter has been made by the liquidator to the registrar, the Court may, on the application of any person interested in the winding up or of its own motion, direct the liquidator to make such a report, and on a report being made accordingly, 1269 the provisions of this section shall have effect as though,the report has been made in pursuance of the provisions of sub section (2).
(6) If, where any matter is reported or referred to the registrar under this section, he considers that the case is one in which a prosecution ought to be instituted, he shall place the papers before the Advocate General or the public prosecutor and if advised to do so institute proceedings : Provided that no prosecution shall be undertaken without first giving the accused person an opportunity of making a statement in writing to the registrar and of being heard thereon.
. . . . . . . . . . It was this section which the appellants pressed in support of the argument that without the order of the Court the official liquidator cannot lodge a criminal complaint against a past director and if he does so the proceedings will be ab initio void.
All that sub section
(1) requires is that if the Court finds in the course of winding up that any past or present director, etc., has been guilty of any offence in relation to the company the Court may either on the application of the person interested or of its own motion direct the liquidator to prosecute the offender or to refer the matter to the registrar.
In the latter case if the registrar finds that the prosecution ought to be instituted he can do so if advised by the Advocate General or the public prosecutor.
But emphasis was placed by counsel for the appellants on the proviso that no prosecution could be undertaken without first giving the accused person an opportunity of making a statement to the registrar or of being heard and it was urged that if the registrar cannot institute prosecution without first giving an opportunity to the person accused to file an explanation, no directions could be given by the judge unless the persons accused are first allowed an opportunity of giving an explanation.
But this contention must be repelled.
Under section 237 (1) the Court may direct the liquidator to himself prosecute the offender or to refer the matter to the registrar.
Giving an opportunity to the offender before such direction is given by 1270 the Court is not a prerequisite of the Judge making in order under sub section
Under sub section
(6) the registrar is required to give the offender an opportunity to show cause before a prosecution is undertaken.
That is a far step from saying that section 237(1) of the Companies Act requires a Judge to give the offender an opportunity before he gives a direction for prosecution by the liquidator or for reference to the registrar.
It was further urged that under sub s (4) in the case of voluntary liquidation, the liquidator has to proceed after obtaining the sanction of the Court and therefore it was urged that the liquidator cannot institute criminal proceedings without such sanction in the case of winding up by the Court.
Whatever may be the case of a liquidator under voluntary winding up sub section
(1) of section 237 makes no such provision in the case of compulsory liquidation.
Our attention was drawn to some passages from the Indian Companies Act by Sircar & Sen, 1937 Edition.
At page 624 it is stated that the object of the section is to provide against abuses and indiscriminate commencement of prosecutions and also for the first time a provision has been made under this section for prosecutions being conducted as crown prosecutions.
In a passage at page 628 it is stated: " But before the Court can exercise its jurisdiction it must come to the conclusion that in the course of winding up the person intended to be charged under this section has been guilty of an offence in relation to the company for which he is criminally liable.
But such a finding is not to prejudice the accused in any way in his trial.
Per Chitty J. in re Charles Denham & Co. Ltd. L.T. 570 at 571.
" The procedure under section 237(1) as stated in this book at the same page is as follows: " The application should be made on a petition verified by an affidavit in which materials must be set out sufficient to make out a prima facie case.
It is not quite settled as to whether the liquidator should make the application upon notice to any one.
Generally the application should be ex parte, but 1271 the Court may direct notice to be given to any person who is in its opinion entitled to be heard ".
These passages do not support the contention that before a prosecution can be validly instituted against a past director the sanction of the Court is necessary.
Mr. Choudhuri then relied on an observation of Buckley J.
In Re London and Globe Finance Corporation (1) also quoted in Sircar & Sen 's book at page 625.
There the principles guiding the Court in ordering prosecutions have been laid down as follows: " I have next to consider upon what principles I ought to exercise the power given me by section 167 of the Companies Act, 1862, to direct the official receiver to institute and conduct a prosecution at the expense of the assets.
It is obvious that no one legitimately can or ought to institute a criminal prosecution with a view to his personal profit.
Neither should a prosecution be instituted from motives of vengeance against the offender.
The motive of every prosecution ought, to be to inflict punishment upon the criminal for the proper enforcement of the law and for the advantage of the State and with a view to deter others from doing the like ".
This passage does not support the giving of an opportunity to the offender before the Judge can give direction nor do they affect the powers of the liquidator to start a prosecution or the, criminal court to entertain a complaint when filed by the liquidator.
The following passage from Buckley 's Company Law under the commentary under section 334 of the English Companies Act, 1948, which corresponds to section 237 of the Indian Companies Act was then referred to: " Proceedings will accordingly be taken by the Director of Public Prosecutions (or Lord Advocate) or not at all ".
But this is because of the peculiar and express language of section 334 tinder which the Judge can only direct the liquidator to refer the matter to the Director of Public Prosecutions or to Lord Advocate as the case may be.
In the English Act, special provision has been made for England saving the institution of (1) , 733. 1272 criminal proceedings by private prosecutors.
Merely because no such provision has been made in regard to scotland does not affect the argument.
Mr. Choudhuri then relied on certain English cases dealing with the mode of giving directions.
In re Northern Counties Bank Limited(1) the Judge had ordered the liquidator to ascertain by circular the wishes of the creditors and after they had appeared to oppose the starting of the prosecution, it was held (1) that it did not sufficiently appear that the offence had been committed and (2) that as 2/3 of the creditors opposed the application the prosecution should not be ordered as expenses will have to be paid from out of the money belonging to the creditors.
The main question for decision in that case was whether the prosecution should be at the cost and expense of the assets of the company but competency of the liquidator to file the complaint was not in dispute.
Reference 'was then made to Palmer 's Company Precedents, 1952 Edition, Vol.
II, again stating as to when leave to prosecute should be given but the law stated there does not support the case for the appellants.
At page 605 it is stated : " The summons will be ex parte, and should be supported by affidavit showing a strong case for prosecution, and also the extent of the assets and liabilities.
The court is not willing when the assets are small, to sanction proceedings which may swallow up or largely reduce those assets ".
The form at p. 607 does not show that under the English Companies Act when liberty is given to prosecute the person accused is heard.
All that is required is that the court will make its order upon affidavits etc.
filed before it and it can also order that the costs and charges incurred by the liquidator shall be paid out of the assets of the company.
It was next contended that although the language of section 237 was not in the negative form still the effect of the words was that no prosecution could be instituted without the sanction of the Court being obtained by the liquidator.
In support of the submission counsel (1) 1273 relied on The Queen vs Cubitt (1) which was a case under the Sea Fisheries Act which created certain offences and by section 11 provided: "The provisions of this Act. . . shall be enforced by sea fishery officers ", who are defined by that section and it was held that the effect of the words was that no one except the sea fishery officer could prosecute an offence under the Act.
But there are no such words of limitation in section 237.
In Taylor vs Taylor(2) the words of the statute were "entitled to the possession or the receipt of the rents and profits" and it was held that the order under the statute could only be made upon a petition which was within the words above quoted and if there was no such person no order could be made but that again was decided on the peculiar language of the statute.
Counsel also relied on Nazir Ahmad vs Crown (3) where it was held that if the statute authorises the doing of an act in one way then it had to be done in that way or not at all.
The argument of Mr. Choudhuri really comes to this that the complaint filed on behalf of the official liquidator was incompetent in the absence of a direction under section 237 or without complying with the procedure laid down in that section.
Section 237(1) does not lay down any procedure for the giving of directions and the provisions in regard to the action taken by the registrar do not have any relevancy to what the court should do before it gives directions.
English cases that have been cited do not go to the extent of saying that no prosecution can be instituted without the sanction of the court.
They deal with another subject and that is the circumstances in which the Judge would give directions for prosecution and would sanction the assets of the company to be expanded in prosecution.
Besides nowhere has it been stated that the court cannot give directions without first hearing the persons accused or that the directions of the Judge are a condition precedent to the lawful institution of criminal proceedings by the liquidator.
(1) (2) (3) (1936) L.R. 63 I.A. 372, 381. 1274 On the other hand it has been held that under section 179 of the Indian Companies Act no sanction is required for commencing a prosecution.
In Jaswantrai Manilal Akhaney vs The State of Bombay (1) at the instance of the official liquidator a report was lodged with the police against the Managing Director of a Bank and the police submitted a charge sheet to the Magistrate.
It was observed by Sinha J. at page 502: " In terms the section laws down the powers of the official liquidator.
Such a Liquidator has to function under the directions of the court which is in charge of the liquidation proceedings.
One of his powers is to institute prosecutions in the name and on behalf of the company under liquidation with the sanction of the court.
This section does not purport to impose any limitations on the powers of a criminal court to entertain a criminal prosecution launched in the ordinary course under the provisions of the Code of Criminal Procedure ".
It was also pointed out in this judgment that section 179 contains no words corresponding to the language of Drug Control Order, 1943, which was held to be a condition precedent for instituting prosecution in the case of Basdeo Aggarwalla vs King Emperor (2) nor are there any prohibitory words like those that are contained in sections 196 and 197 of the Criminal Procedure Code.
In the former case no prosecution could be instituted without the previous sanction of the Provincial Government and the latter provides that " no court shall take cognizance. . . .
There are two cases decided by two Indian High Courts which support the submission of the respondents ' counsel.
In Emperor vs Bishan Sahai (3) it was held that the Companies Act nowhere provides that without the directions of a Judge no criminal prosecution can be instituted.
In Mrityunjoy Chakravarti vs Provot Kumar Pal(4), it was held that neither section 179 nor section 237 indicates that if the liquidator takes action without a (1) ; (2) (3) I.L.R. (1937) All.
(4) A.I.R. 1953 Cal.
1275 direction of the Court this action would be illegal or invalid or it would invalidate a prosecution.
It would thus appear that both on the language of section 237(1) as well as on precedent the complaint made by the liquidator against the appellants suffers from no such infirmity as to make the proceedings null and void.
The section contains no such words which indicate that such a prosecution cannot be instituted by a liquidator without the sanction of the Judge or that the Court cannot take cognizance of a complaint without such sanction or direction.
Section 179 as the learned Chief Justice of Calcutta High Court has rightly pointed out, deals with the powers of liquidators to institute or defend proceedings with the sanction of the Court and section 237(1) deals with the powers of the Court to give directions for prosecution of delinquent directors, etc.
It was further urged on behalf of the respondents that in the case before us there was a proper direction under section 237(1).
The judgment of the High Court shows that before the learned Judge gave a direction on July 22, 1952, there were before him proper materials and, therefore, his sanction was perfectly valid, legal and proper.
Before this order made by Bannerji J. there was an order of Bachawat J. dated January 15, 1951, under section 179 and, therefore, when the liquidator authorised his Assistant, respondent No. 1 to institute the proceedings he was entitled to do so.
As we have said above even in the absence of such directions the legality of the criminal proceedings instituted would not be affected.
Nothing that we have said in this judgment must be taken to be an expression of opinion which in any way affects the control by the Judge of proceedings in winding up or over the liquidators.
We would, therefore, dismiss this appeal.
Appeal dismissed.
| The respondent 's predecessor in interest received notice under the East Punjab Utilisation of Lands Act, 1949 for bringing his uncultivated land under cultivation.
Thereafter he sold a portion of his land by executing two sale deeds in favour of two different vendees for the purpose of utilising the sale proceeds to reclaim the remaining land.
The re spondents fried suits for setting aside the sales, contend ing that the alienation was made without legal necessity, which were dismissed by the Trial Court.
The first appeals were dismissed by the Senior Subordinate Judge.
On second appeal a learned single judge of the High Court held that the sale in favour of the first vendee was for legal necessity only to the extent of Rs.1,O00 and the sale in favour of the second vendee was entirely without necessity.
On a further appeal the Division Bench reversed the decision of the single judge with regard to first vendee holding that the sale was for necessity but upheld the decision with regard to second vendee holding that the sale in his favour was without legal necessity.
Hence this appeal by the second vendee.
Allowing the appeal, this Court, HELD: 1.
The sale in favour of the second vendee was a valid sale and is not liable to be impugned by the represen tatives or the successors in interest of the vendor.
[774E] 770 2.
Under the provisions of the East Punjab Utilisation of Lands Act, 1949 a notice could be given requiring a land holder to bring uncultivated land under cultivation after reclamation within a period of 30 days from the date of issue of a notice in that regard.
Failing this, the area could be resumed by the Government and leased out to some other cultivators or society for cultivation for a period of at least 8 years.
[773B] 2.1 A land owner receiving a notice under the said Act has two options before him.
He can either own his helpless ness to reclaim the land and permit it to be leased out by the Government to other persons for cultivation for a sub stantial period.
Or he may decide that he should make an attempt to make atleast a part of the lands fertile by selling a portion of the land and reclaiming the rest with the help of the sale proceeds.
A bona fide decision taken by him to exercise the latter option cannot be said not to be an act of good management.
[773G H; 774A] 3.
If the sale in favour of the first vendee in the same circumstances was a valid sale, it is very difficult to say that the sale in favour of the second vendee was not.
The necessity for both the sales was the situation arising out of the receipt of the notice under the East Punjab Lands Utilisation Act.
In fact the findings of the Trial Court and the first appellate court on this issue were findings of fact which did not call for interference by the High Court.
[774A B]
|
N: Civil Appeal No. 130 of 1959.
Appeal by special leave from the Award dated September 5, 1958, of the Industrial Tribunal, Bombay, in Reference (I.T.) No. 187 of 1958.
C. K. Daphtary, Solicitor General of India, G. B. Pai and Sardar Bahadur, for the appellants.
H. R. Gokhale, section B. Naik and K. R. Chaudhury, for respondent No. 1. 1960.
April 6.
The Judgment of the Court was delivered by WANCHOO, J.
This is an appeal by special leave in an industrial matter.
The appellant is The Standard Vacuum Refining Company of India Limited (hereinafter called the company).
A dispute was raised by the workmen of the company (hereinafter called the respondents) with respect to contract labour employed by the company for cleaning maintenance of the refinery, (plant and premises) belonging to the company.
The system in force in the company is that this work is given to contractors for a period of one year from October 1 to September 30.
At the time when the reference was made the contract.
was with Ramji Gordhan and Company for the period from October 1, 1957, to September 30, 1958.
On April 27, 1957, the respondents made a demand for abolition of the contract system that prevailed in the company and for absorbing the workmen employed through the contractors into the regular service of the company with retrospective effect from the date of their employment in the company through the contractors.
The case of the respondents was that the contractor used to change sometimes from year to year with the 468 result that the workmen employed by the previous contractor were thrown out of employment.
As an instance, it was said that previous to October 1, 1957, the contract was with Gowri Construction Company.
That company employed 67 workmen to do the work.
But when the contract was given to Ramji Gordhan and Company, all these 67 workmen were thrown out of employment, though 40 of them were subsequently re employed as fresh employees by Ramji Gordhan and Company.
The result of the system therefore was that there was no security of service to the workmen who were in effect doing the work of the company.
Besides the contractors were paying much less to the workmen than the amount paid by the company to its unskilled regular workmen.
Further, the workmen of the contractors were not entitled to other benefits and amenities such as provident fund, gratuity, bonus, privilege leave, medical facilities and subsidised food and housing to which the regular workmen of the company were entitled.
The work was of a permanent nature, but the contract system was introduced to deny the workmen the rights and benefits which the company gave to its own workmen.
The dispute was taken to the conciliation officer.
When conciliation failed, the Government of Bombay made the following reference on May 13, 1958.
" The contract system for cleaning the premises and plant should be abolished and workers working in the refinery through the Ramji Gordhan and Company should be treated as workers of the Standard Vacuum Refining Company of India Limited, Bombay, and wage scales, conditions of service, etc., that are applicable to the workers of the refinery be made applicable to them.
Past service of these workers should be counted and they should be treated as continuously in the service of the Stanvac refinery from the date of their entertainment.
" The company resisted the claim and raised two main contentions.
In the first place it was contended that the reference under section 10 of the , No. 14 of 1947 (hereinafter called the Act), was incompetent.
In the second place it was contended 469 that the work done by the contractor 's workmen was not germane to the manufacturing process and was therefore entrusted to the contractor.
If the workmen of the contractor were not satisfied with the conditions of service, they could take up the, matter with the contractor and the company had nothing to do with it.
As to the difference between the wages and benefits and amenities of the regular workmen of the company and the contractor 's workmen, it was said that the work of the two sets of workmen was very different and that in any case this was a matter between the contractor and its workmen.
The contractor was an independent employer and it was incorrect to say that the real employer was the company.
It was for the company to decide what was the best method of carrying on its business and the industrial tribunal should not interfere with that function of the management.
The tribunal held that the reference was competent.
On the merits it was of opinion that the work which was being done through the contractor was necessary for the company and had to be done daily, though it was not a part of the manufacturing process.
It further held that doing of this work through annual contracts resulted in the deprivation of security of service and other benefits, privileges, leave, etc., for the workmen of the contractor.
Therefore considering the nature of the case it was of opinion that this was a proper case where a direction should be given to the company to abolish the contract system with respect to this work.
In the result the company was directed with effect from November 1, 1958, to discontinue the practice of getting this work done through contractors and to have it done through workmen engaged by itself.
The other part of the demand, namely, that all the workmen of the contractor should be taken over by the company and their past services should be counted and that they should be given the same wage scale and conditions of service, etc., which were applicable to the regular workmen of the company was rejected.
The company was further directed to engage regular workmen for this work and in so doing it was to give preference to the workmen employed by Ramji 60 470 Gordhan and Company.
Wage scale and other benefits to be given to these workmen were left to the company to be determined by it.
Learned.
Solicitor General appearing for the company raised two contentions before us, namely, (i) is this dispute an industrial dispute and therefore the reference was competent ? and (ii) is the tribunal justified in interfering with the management function as to how it should get its work done ? Re.
(i) : The contention under this head is that there is no dispute between the company and the respondents and that it was not open to the respondents to raise a dispute with respect to the workmen of some other employer (in this case, Ramji Gordhan and Company).
Reliance in this connection was placed on the definition of " industrial dispute " in section 2 (k) of the Act and the judgment of this Court in Workmen of Dimakuchi Tea Estate vs The Management of Dimakuchi Tea Estate (1).
The definition of " industrial dispute " in section 2 (k) requires three things (i) There should be a dispute or difference; (ii) The dispute or difference should be between employers and employers, or between employers and workmen or between workmen and workmen; (iii) The dispute or difference must be connected with the employment or non employment or the terms of employment or with the conditions of labour, of any person.
The first part thus refers to the factum of a real and substantial dispute, the second part to the parties to the dispute and the third to the subject matter of the dispute.
The contention of the learned Solicitor General is two fold in this connection, namely, (i) that there is no real or substantial dispute between the company and the respondents, and (ii) that the subject matter of the dispute is such that it cannot come within the terms of the definition in section 2 (k).
The first submission can be disposed of shortly.
There is undoubtedly a real and substantial dispute between the company and the respondents on the question of the employment of contract labour for the (1) ; 471 work of the company.
The fact that the respondents who have raised this dispute are not employed on contract basis will not make the dispute any the less a real or substantial dispute between them and the company as to the manner in which the work of the company should be carried on.
The dispute in this case is that the company should employ workmen directly and not through contractors in carrying on its work and this dispute is undoubtedly real and substan tial even though the regular workmen (i.e., the respondents) who have raised it are not employed on contract labour.
In Dimakuchi case (1) to which reference has been made, the dispute was relating to an employee of the tea estate who was not a workman.
It was nevertheless held that this was a real and substantial dispute between the workmen and the company.
How the work should be carried on is certainly a matter of some importance to the workmen and in the circumstances it cannot be said that this is not a real and substantial dispute between the company and its workmen.
Thus out of the three ingredients of section 2(k) the first is satisfied; the second also is ,satisfied because the dispute is between the company and the respondents ; it is the third ingredient which really calls for determination in the light of the decision in Dimakuchi case (1).
Section 2(k), as it is worded, would allow workmen of a particular employer to raise a dispute connected with the employment or non employment, or the terms of employment or with the conditions of labour of any person.
It was this aspect of the matter which was considered in Dimakuchi case (1) and it was held that the words " any person " used in section 2(k) would not justify the workmen of a particular employer to raise a dispute about any one in the world, though the words " any person " in that provision may not be equated with the words " any workman ".
The test therefore to be applied in determining the scope of the words " any person " in section 2(k) was stated in the following words at pp.
1174 75: " If, therefore, the dispute is a collective dispute, the party raising the dispute must have either a direct interest in the subject matter of dispute or a (1) ; 472 substantial interest therein in the sense that the class to which the aggrieved party belongs is substantially affected thereby.
It is the community of interest of the class as a whole class of employers or class of workmen which furnishes the real nexus between the dispute and the parties to the dispute.
We see no insuperable difficulty in the practical application of this test.
In a case where the party to a dispute is composed of aggrieved workmen themselves and the subject matter of the dispute relates to them or any of them, they clearly have a direct interest in the dispute.
Where, however, the party to the dispute also composed of workmen espouse the cause of another person whose employment or non employment, etc., may prejudicially affect their interest, the workmen have a substantial interest in the subject matter of dispute.
In both such cases the dispute is an industrial dispute.
" We have therefore to see whether the respondents who have raised this dispute have a direct interest in the subject matter of the dispute or a substantial interest therein in the sense that the class to which the respondents belong is substantially affected thereby and whether there is community of interest between the respondents and those whose cause they have espoused.
There can be no doubt that there is (community of interest in this case between the respondents and the workmen of Ramji Gordhan and Company.
They belong to the same class and they do the work of the same employer and it is possible for the company to give the relief which the respondents are claiming.
The respondents have in our opinion also a substantial interest in the subject matter of the dispute, namely, the abolition of the contract system in doing work of this kind.
The learned Solicitor General particularly emphasised that there was no question of the interest of the respondents being prejudicially affected by the employment or nonemployment or the terms of service or conditions of labour of the workmen of Ramji Gordhan and Company and placed reliance on the words " may prejudicially affect their interest " appearing in the observations quoted above.
We may, however, mention that 473 the test laid down is that the workmen espousing the cause should have a substantial interest in the subjectmatter of the dispute, and it was only when illustrating the practical application of the test that this Court used the words "may prejudicially affect their interest ".
Besides it is contended by Mr. Gokhale for the respondents that even if prejudicial effect on the interest of the workmen espousing the cause is necessary, this is a, case where the respondents ' interest may be prejudicially affected in future in case the contract system of work is allowed to prevail in this branch of the work of the company.
He submits that if the company can carry on this part of the work by contract system it may introduce the same system in other branches of its work which are now being done by its regular workmen.
We do not think it necessary to go into this aspect of the matter as we have already indicated that prejudicial effect is only one of the illustrations of the practical application of the test laid down in Dimakuchi case (1), viz., substantial interest in the sense that the class to which the aggrieved party belongs is substantially affected thereby.
It seems to us therefore that the respondents have a community of interest with the workmen of Ramji Gordhan and Company who are in effect working for the same employer.
They have also a substantial interest in the subject matter of the dispute in the sense that the class to which they belong (namely, workmen) is substantially affected thereby.
Finally the company can give relief in the matter.
We are therefore of opinion that all the ingredients of section 2(k) as interpreted in Dimakuchi case(1) are present in this case and the dispute between the parties is an industrial dispute and the reference was competent.
(ii) : We now come to the question whether the tribunal was justified in giving the direction for the abolition of the contract system in the manner in which it has done so.
In dealing with this question it may be relevant to bear in mind that industrial adjudication generally does not encourage the employment of contract labour in modern times.
As has been observed by the Royal Commission on Labour " whatever the merits of the system (1) ; 474 in primitive times, it is now desirable, if the management is to discharge completely the complex responsibility laid upon it by law and by equity, that the manager should have full control over the selection, hours of work and payment of the workers ".
The same opinion has been expressed by several Labour Enquiry Committees appointed in different States.
We agree that whenever a dispute is raised by workmen in regard to the employment of contract labour by any employer it would be necessary for the tribunal to examine the merits of the dispute apart from the general consideration that contract labour should not be encouraged, and that in a given case the decision should rest not merely on theoretical or abstract objections to contract labour but also on the terms and conditions on which contract labour is employed and the grievance made by the employees in respect thereof.
As in other matters of industrial adjudication so in the case of contract labour theoretical or academic considerations may be relevant but their importance should not be overestimated.
Let us then consider the contract labour system in the present case.
The contract in this case related to four matters.
But the reference is confined to one only, viz., cleaning maintenance work at the refinery including premises and plant and we shall deal with that only.
So far as ' this work is concerned, it is incidental to the manufacturing process and is necessary for it and of a perennial nature which must be done every day.
Such work is generally done by workmen in the regular employ of the employer and there should be no difficulty in having regular workmen for this kind of work.
The matter would be different if the work was of intermittent or temporary nature or was so little that it would not be possible to employ full time workmen for the purpose.
Under the circumstances the order of the tribunal appears to be just and there are no good reasons for interfering with it.
Our attention in this connection was drawn to D. Macropollo And Co. (P) Ltd. vs D. Macropollo And Co. (P) Ltd. Employees ' Union (1) and it was urged that the tribunal should not have interfered with the (1) A.I.R. 1958 S.C. 1012.
475 management 's manner of having its work done in the most economical and convenient way that it thought proper.
It was pointed out that this was not a case where the contract system was a camouflage and the workmen of the contractor were really the workmen of the company.
It may be accepted that the contractor in the present case is an independent person and the system is genuine and there is no question of the company carrying on this work itself and camouflaging it as if it was done through contractors in order to pay less to the workmen.
But the fact that the contract in this case is a bona fide contract would not necessarily mean that it should not be touched by the industrial tribunals.
If the contract had been mala fide and a cloak for suppressing the fact that the workmen were really the workmen of the company, the tribunal would have been justified in ordering the company to take over the entire body of workmen and treat it as its own workmen.
But because the contract in this case was bona fide the tribunal has not ordered the company to take over the entire body of workmen.
It has left to it to decide for itself how many workmen it should employ and on what terms and has merely directed that when selection is being made preference should be given to the workmen employed by the present contractor.
In Macropollo case (1), this Court held that the reorganisation had been adopted by the employer for reasons of economy and conveni ence and was bona fide.
In that case the main business of the concern was the selling agency of various cigarette manufacturing concerns.
Before 1946 the concern used to employ distributors for the purpose and these distributors used to employ salesmen.
In 1946 there were communal riots in Calcutta and therefore the concern took over the salesmen in its direct employment in order to reorganise them on communal basis in the then prevailing circumstances.
In 1954 the concern decided to close down its own outdoor sales department and revert to the distributor system.
It was in that context that certain workmen had to be retrenched, and this Court held that the reorganisation scheme adopted in 1954 for reasons of economy and convenience was bona fide (1) A.I.R. 1958 S.C. 1012.
476 and if it resulted in retrenchment that was inevitable.
These facts would show that in that case there was reorganisation of the business resulting in retrenchment.
In the present case no such thing arises and the only question for decision is whether the work which is perennial and must go on from day to day and which is incidental and necessary for the work of the refinery and which is sufficient to employ a considerable number of wholetime workmen and which is being done in most concerns through regular workmen should be allowed to be done by contractors.
Considering the nature of the work and the conditions of service in the present case we are of opinion that the tribunal 's decision is right and no interference is called for, except that the date ;should now be changed, for such a direction cannot be put into force with retrospective effect from November 1, 1958.
It appears that a few months remain before the present contract will come to an end.
We think that for these few months the present system may continue.
We therefore dismiss the appeal with this modification that the order of the tribunal will be carried into effect from such date on which the present contract in force in the company comes to an end.
The respondents will get their costs from the company.
Appeal dismissed subject to modification.
| The appellant 's manager was violently attacked by its workmen as a result of which he sustained serious injuries.
The workers in the lower division also threatened the appellant 's staff working in that division that they would murder them if they worked there.
The appellant was therefore compelled to notify that the division would be closed until further notice.
Subsequently as a result of conciliation before the labour officer, the division was opened again.
The workers made a claim for lay off compensation under section 25C of the , for the period during which the lower division was closed on the footing that the management for their own reasons did not choose to run the division during that period.
The appellant 's answer was, inter alia, that the closure of the division amounted to a lock out which under the circumstances was perfectly justified and as such the workers were not entitled to claim any lay off compensation: Held ; (1) that the concept of a lock out is essentially different from that of a lay off and where the closure of business amounts to a lock out under section 2(1) of the , 372 it would be impossible to bring it within the scope of a lay off under section 2 (kkk) of the Act.
(2)that the expression " any other reason " in section 2 (kkk) means any reason which is allied or analogous to reasons already specified in that section.
J. K. Hosiery Factory vs Labour Appellate Tribunal of India Anr, A.I.R. 1956 All. 498, approved.
(3) that the lock out which was justified on the facts of the case, was not a lay off and therefore the workmen were not entitled to claim any lay off compensation.
|
ivil Appeal Nos.4554 to 4556 of 1991.
From the Judgment and Order dated 18.2.91 of the Madhya Pradesh High Court in Misc.
Petition Nos.
1707, 1746 and 1797 of 1986.
D.D. Thakur, C.S.Chazed, V.Gambhir, Surinder Kamail, S.K.Gambhir and N.N.Bhatt for the Appellants.
K.K. Venugopal, P.P.Rao, G.L.Sanghi, K.K. Sharma, Ashok K. Mahajan, L.R. Singh, D.Mehta, A.Vachher, R.N.Mittal and S.K.Mehta for the Respondents.
The Judgment of the Court was delivered by 249 RANGANATH MISRA, CJ.
Special leave granted.
Ujjain Development Authority is in appeal challenging the judgment of the Madhya Predesh High Court, Indore Bench, rendered in an application under Article 226 of the Consti tution annulling the notification issued under section 4 of the Land Acquisition Act of 1894 (hereinafter referred to as 'the Act ') by holding that scheme No.23 flamed under Madhya Pradesh Nagar Tatha Gram Nivesh Adhiniyam, 1973 does not operate against certain specified lands of the respondents.
It would appear that there was a similar notification under section 4(1) of the Act for acquisition of the self same properties along with some 600 hectares for the purpose of development of Ujjain, a historical town of Kalidas fame within Madhya Pradesh.
On 17.9.80 for different reasons the notification had been quashed.
In 1985 the impugned notifi cation was issued afresh under section 4(1) of the Act.
The High Court found that the requirements of the stat ute for completing the scheme for the purpose of which the acquisition had been made had not been complied with and, therefore, no action for acquisition under the scheme could be taken.
We have heard learned counsel for both the sides and must state that the reasoning given by the High Court is difficult to find fault with.
There are, however certain features which lead us not to sustain the decision of the High Court.
Admittedly there has been a notification under section 50(2) of the Adhiniyam.
Gazette Notification in respect of Scheme No. 23 has also been produced.
Though there is a finding that the pre conditions had not been complied with strictly under the statutory provisions, the High Court has not found any mala fides.
The Development Authority in question consisted of only one person.
His own order was perhaps taken by him and the governmental authori ties as the requisite resolution.
The respondents did not take the ground that there was no valid authority behind the scheme.
In the earlier petition also such a ground had not been raised.
The High Court called for the record and dis covered for itself that the statutory pre condition had not been complied with for the said scheme to operate.
If this question had been raised when the earlier writ petition was filed about 12 years back, the defect could have then been rectified.
It is the admitted case before us that the undisputed huge patch of land has been substantially improved upon under the scheme.
Cancellation of the notification does not bring the matter to an end.
Obviously fresh proceedings would be taken after complying with the defect if the judg ment of the High Court is allowed to stand.
If the acquisi tion is not made the respondents should enjoy usual benefits of their land on account of the 250 development of the neighbouring area and if the re acquisi tion is made there would be claim for higher compensation.
Looking at the matter from these different angles, we have thought it appropriate to allow the appeal, vacate the judgment of the High Court and allow the acquisition to remain subject, however, to the condition that the notifica tion under section 4(1) of the Act issued in 1985 shall be deemed to be one dated 1.1.88 and the market value of the land for the acquisition shall be determined with reference to that date.
We would like to point out that the potential value of the land has substantially enhanced on account of the improvements made pursuant to the notification which had been assailed.
We have directed the deemed date of the notification under section 4(1) to be postponed by almost three years and during this period the appellant has brought about the bulk of the improvements in the neighbourhood.
We direct that 25 per cent of the potential value of the land relatable to the improvements made by the appellant would only be available to the respondents, but in fixing market value all other legitimate considerations shall be taken into account.
We make it clear that we have no intention to extend the benefit under section 28A of the Act to the owners of the lands already acquired under the notification of 1980 or 1985 on the basis of our direction that the respondents ' lands shall be deemed to have been notified under section 4(1) of the Act on 1.1.
In fact our order must be deemed to be a separate notification for acquisition and, therefore, it would not be a common notifi cation for the purpose of section 28 A of the Act.
The respondents should, therefore, be entitled to this benefit that instead of the notification under section 4(1) of the Act being of 1985, it shall be treated to be of 1.1.1988.
The appellate authority is now entitled to take position in accordance with law subject to the valuation of the compen sation in the manner indicated.
There will be no order as to costs.
V.P.R. Appeals dis posed of.
| The tenure holder of the land in dispute father of the appellants died on 20.8.1974, leaving behind, besides the four appellants, three other sons, three daughters and a widow as his legal heirs and representatives.
After his death a notice under section 10 of the Uttar Pradesh Imposition of Ceiling on Land Holdings Act, 1960, proposing to declare certain lands as surplus, addressed to him, was served on his son appellant No. 1 who filed objections.
The Prescribed Authority partly upheld the objections and by its judgment dated 29.4.1975 determined some land as surplus.
The appel lants filed an appeal before the Civil Judge.
Meanwhile the Ceiling Act was amended by the Uttar Pradesh Act 20 of 1976, section 31 (3) whereof provided for redetermination of surplus lands within two years from 10.10.1975 in cases where orders declaring lands as surplus had been made prior to that date, notwithstanding any appeal against the original order of determination of surplus land.
A fresh notice under section 10 (2) of the Act issued to appellant No. 1 proposing to declare certain lands as surplus.
After considering the appellant 's objection the Prescribed Authority by its order dated 22.12.1976 deter mined some land as surplus, holding that the said lands were surplus which were owned by the deceased as tenure holder on the appointed day.
The appeal against the said order was dismissed by the District Judge.
In the writ petition preferred by the appellants, the High Court held that previous determination of surplus lands by the Prescribed Authority did not operate as res judicata, and that the appellate 160 authority was justified in ignoring the sale deed dated 27.10.1971.
It, however, held that the determination about some plots of lands had not been properly made, and remanded the case to the appellate authority with the direction to it to issue notice to the other brothers of the appellants.
Aggrieved, the appellants filed the appeal by special leave to this Court.
It was contended on behalf of the appellants that the proceeding for re determination of ceiling land could not have been initiated by the Prescribed Authority until notice under section 9 (2) of the Act was issued to all the heirs of the deceased tenure holder; that since the redetermination proceedings were initiated after Act 20 of 1976 was en forced, the redetermination could only be made under the provisions of the Act as amended by Act 20 of 1976 and in view of the changes in the Ceiling Act there was no surplus land liable to be vested in the State; that as two years had elapsed from the enforcement of Act 20 of 1976, no redeter mination was permissible thereafter.
Disposing of the appeal and remanding the case to the Prescribed Authority, this Court, HELD: 1.
Section 31(3) of the Uttar Pradesh Imposition of Ceiling on Land (Amendment) Act, 1976 (Act 20 of 1976) authorised the Prescribed Authority to redetermine the surplus land in relation to the tenure holder if initiated within two years from October 10, 1975.
[p. 164 D E] In the instant case, the previous determination of ceiling was made before 10.10.1975.
Accordingly, under section 31(3) of U.P. Act 20 of 1976, the Prescribed Authority had jurisdiction to initiate the said proceedings and such jurisdiction did not depend on issuance of notice under section 9 (2) of the Act to the tenure holder and/or his successors in interest.
[p. 164 EF] Shantnu Kumar vs State of Uttar Pradesh & Ors, 1977 Allahabad Law Reports p. 564, referred to.
Although the Prescribed Authority had jurisdiction to initiate the proceeding for re determination of surplus land and he had in fact initiated such proceeding within two years as referred to in 31(3) of U.P. Act 20 of 1976, yet, such determination could not have been made without affording to the heirs and legal representatives of the tenure holder an opportunity of being heard and showing cause before the Prescribed Authori ty.
[p. 164 FG] The tenure holder had died in 1974 and the said fact was made known to the Prescribed Authority when the initial determination of surplus lands was made.
It was unfortunate that in spite of the said fact, the Prescribed Authority failed and neglected to ascertain the names of all the legal heirs and representatives of the deceased tenure holder and did not issue notice to them for redetermination of surplus land.
[pp. 164 GH; 165 A] 3.
While the High Court directed to issue notice to other brothers and remanded the case to the appellate au thority, it did not direct to issue notices to other heirs and legal representatives.
Morever, without giving other heirs and legal representatives an opportunity of being heard, adjudication of the case on merits by the concerned authorities or by the High Court was not warranted.
[p. 165 AB] 4.
The Prescribed Authority will decide the question of plus land in accordance with the existing provisions of the Ceiling Act applicable on the relevant date, after issuing notices to the heirs and legal representatives of the tenure holder and giving them a reasonable opportunity of being heard.
[P 165 DE]
|
ivil Appeal Nos.
204 226 of 1978.
Appeals by Special Leave from the order dated 29 11 1977 of the Commissioner, Pune Division, Pune in Passenger Tax Appeals Nos.
POI 1/56 AR 12, 24, 27, 32, 42, SO and 17 other appeals.
F. section Nariman Ravinder Narain and K. J. John for the Appellant.
V. section Desai M. C. Bhandare (In CA 209/78) and M. N. Shroff for the Respondents.
Ravinder Narain and K. J.
John for the Interveners Sandvik Asia Ltd. section K. F. Cooper Engineering Ltd. Bharat Forge Ltd. and Bajaj Auto Ltd. The Judgment of the Court was delivered by FAZAL ALI, J.
These appeals by special leave arc directed against an order of the Commissioner of Pune dated 29 11 1977 dismissing the appeals and holding that the challenge to the tax sought to be realised by the Revenue was not tenable and the appellants were liable to pay the tax as also the penalty.
The appellants are a company registered under the Companies Act, 1913 and have their factories at Pimpri and Chinchvad in the District of Pune (Maharashtra).
The appellants employ as many as 7.000 workmen in those factories.
In order to provide transport 359 facilities to their employees to come to the factories from their respective villages the appellants provided transport which would pick up passengers from Pune or Khed or Vadgaon or Alandi or places enroute to TELCO Factory at Pimpri or Chinchvad and back.
For this journey a nominal charge of Rs. 10 per month was realised by the appellants from the employees.
Similarly, for the transport facilities provided to the employees from Pimpri Railway Crossing and onwards to TELCO factory, they were charged at the rate of Rs. 5 per month.
A charge of Rs. 2 per month was levied for the transport of employees from Chinchvad Village to TELCo factory at Pimpri and back.
the appellants further averred that these amounts were realised by the appellants only from a particular category of employees and no charges were levied in respect of those employees who were in the supervisory grades.
In the course of the arguments, it was pointed out that when the company was prepared to grant free transport facilities to the supervisory staff there was no reason why the same amenities should not be extended to the other employees and Mr. Nariman, learned counsel for the appellants frankly conceded that in future no charges would be realised from the employees and they would he provided free transport as in the case of supervisory staff.
It is manifest that if the appellants had not levied any charge at all for the transport facilities granted to the employees they would not be exigible to passenger tax.
Mr. Nariman, however, argued that even if a nominal charge is realised from the employees that would not make the transport a public service vehicle carrying passenger;, so as to attract the provisions of section 3 which is the charging section of the Act.
In our opinion, the contention of the learned counsel is well founded and must prevail.
The Bombay Motor Vehicles (Taxation on Passengers) Act, 1958 hereinafter called the Act is a statute which authorises the levy of passenger tax.
This Act has been amended several times right from the year 1960 to 1975.
Before analysing the relevant provisions of the Act, it may be necessary to extract the Preamble to the Act which runs thus: .
Whereas it is expedient lo provide for the levy of a tax on passengers, carried in certain classes of public service.
vehicles in the State of Bombay.
It is hereby enacted in the Ninth Year of the Republic of India as follows.
" A perusal of the Preamble clearly reveals that the dominant object of the Act was to impose tax on certain classes of public service vehicles.
In other words, the Preamble indicates that vehicles which could not be termed as public service vehicles fell beyond the ambit of the taxing provisions of the Act.
360 Section 2(7) of the Act defines 'stage carriage ' thus: " 'stage carriage ' means a motor vehicle carrying or adapted to carry more than six persons excluding the driver, which carries passengers for hire or reward, at separate fares paid by or for individual passengers, either for the whole journey or for stages of the journey, and includes such a carriage or other omnibus when used as a contract carriage within the meaning of the ".
Section 3 which is the charging section runs thus: "3.
(1) There shall be levied and paid to the State Government a tax on all passengers carried by road in stage carriages at such rate to be filed by the State Government from time to time by order in the official Gazette as would yield an amount not exceeding twenty per cent of the inclusive amount of fares payable to the operator of a stage carriage.
(2) After calculating the total amount of tax payable under sub section (1) out of the total amount received by an operator during each month on account of inclusive fares in respect of the stage carriage or stage carriages held by him the total amount of the tax shall wherever necessary be rounded off to the nearest naya paisa, fractions of half a naya paisa and over being counted as one and less than half being disregarded".
Thus section 3 authorises the levy of tax on all passengers carriages by road in stage carriages.
This section contains two essential ingredients: (1) that the transport concerned must carry passengers by road, and (2) that such passengers must be carried in stage carriages.
that is to say, as defined in section 2(7) of the Act, passengers must be carried for hire or reward at separate fares paid by or for individual passengers, either for the whole journey or for stages of the journey.
Rule 2(i) of the Bombay Motor Vehicle Rules, 1940 framed under the Bombay defines 'passenger ' thus: " 'passenger ' for the purposes of the rules in Chapter IV means any person travelling in a public service vehicle other than the driver or the conductor or an employee of the permit holder while on duty".
361 A combined reading, therefore, of rule 2(i) and section 2(7) of the Act clearly indicates that the tax would be leviable only if the passengers are carried on a public service vehicle.
It is true that the term 'public service vehicle ' has not been defined either by the Act or by the Rules, but that however does not create any difficulty, because having regard to the Preamble of the Act we are of the opinion that the tax can be levied only on passengers who are carried by a stage carriage which is of the nature of a public service vehicle.
The word 'public ' has got a well known connotation and means a carriage to which any member of the public can have free access on payment of the usual charges.
It cannot by any process of reasoning or stretch of imagination be deemed to include employees of a private company who are given facilities not as members of the public but as holding a special status, namely, the employees of that company.
Thus, qua public the employees form a separate class and cannot be said to be public as contemplated by rule 2(i).
On the other hand, the Bombay Motor Vehicles Rules 1959 define 'private service vehicles ' as follows: "Private Service Vehicle ' means any omnibus constructed or adapted to carry more than nine persons excluding the driver and ordinarily used by or on behalf of the owner of such vehicle for the purpose of carrying persons for or in connection with his trade or business, or otherwise than for hire or reward; but does not include a motor vehicle used solely for Police purposes".
The transport service in the present case which was registered as private service vehicle falls squarely within the ambit of the aforesaid definition Moreover, in the instant case, it is not disputed that the transport provided to the employees of the company was reserved for them only and no other member of the public even if he wanted to pay full charges could be carried on the said vehicle.
In these circumstances, therefore, it cannot be said that the transport vehicle provided to the employees by the appellants could be a public service vehicle in any sense of the term.
Mr. Nariman drew our attention to a number of rules and forms in order to illustrate his point that private service vehicle was beyond the ambit of the charging section.
In view of what we have already said, it is not necessary for us to go into such meticulous details, because the legal position appears to be clear enough.
As counsel for the appellants has already undertaken not to charge any amount from the employees for providing transport facilities, the point has now become more or less academic.
The Commissioner appears to have dismissed the appeals of the appellants 5 978 SCI/78 362 as he felt bound by the judgment of the Bombay High Court which had held that the transport vehicle provided to the employees by the company would be a public service vehicle.
In view of our finding that such a transport vehicle is not a public service vehicle within the meaning of the provisions of the Bombay , the view taken by the Bombay High Court is clearly erroneous and must be overruled.
For these reasons, therefore, the appeals are allowed and the order of the Commissioner imposing the tax is set aside.
The appellants would he entitled to one set of costs.
S.R. Appeals allowed.
| The appellants are a Company registered under the Companies Act, 1913 and provide transport facilities to their employees at a nominal rate from certain pick up places to their factories at Pimpri and Chinchvad in district Pune (Maharashtra) in their transport vehicle registered as "private service vehicle" within the meaning of the Bombay Motor Vehicles Rules 1959.
The Bombay High Court held that the transport vehicle provided to the employees by the company would be a public service vehicle and therefore, the respondents sought to levy a tax on passengers under the charging section 3 of the Bombay Motor Vehicles Taxation on Passengers) Act, 1958.
A challenge to the said levy having been rejected by the Commissioner of Pune the appellant obtained special leave of this Court.
Allowing the appeals, the Court ^ HELD: 1.
The preamble to the Bombay Motor Vehicles (Taxation on Passengers) Act, 1958 clearly reveals that the dominant object of the Act was to impose tax on certain classes of public service vehicles.
In other words, the Preamble indicates that vehicles which could not be termed as public service vehicles fell beyond the ambit of the taxing provisions of the Act.
[359 G H] 2.
Though the Act and Rules made thereunder do not define the term "public service vehicle", it is clear that, from the Preamble of the Act that the tax can be levied only on passengers who are carried by a stage carriage which is of` the nature of Public Service Vehicle.
[361A B] 3.
Section 3 of the Act which authorises the levy of tax on all passengers carried by road in state carriages contains two essential ingredients (1) that the transport concerned must carry passengers by road, and (2) that each passengers must be carried in stage carriages, that is to say, as defined in Section 2(7) of the Act, passengers must be carried for hire or reward at separate fares paid by or for individual passengers, either for the whole journey or for stages of the journey.
[360F G] 4.
A combined reading of section 7 (1) which defines 'passenger ' and section 2(7) which defines 'stage carriage.
Of the Act clearly indicates that the tax would be leviable only if the passengers are carried on a public service vehicle.
[361A] 358 5.
The word 'Public ' has got a well known connotation and means a carriage to which any member of the public can have free access of payment of the usual charges.
It cannot by any process of reasoning or stretch of imagination be deemed to include employees of a private company who are given facilities not as members of the public but as holding a status namely, the employees of that company.
Thus, qua public the employees from a separate class and cannot be said to be public as contemplated by rule 2(i).
[361 C] 6.
In the present case: (a) The transport service which was registered as a private service vehicle falls squarely within the ambit of the definition of 'private vehicle service in the Bombay Motor Vehicles Rules, 1959.
[361E] (b) The transport provided to the employees of the company was reserved for them only and no other member of the public even if he wanted to pay full charges could be carried on the said vehicle.
In these circumstances, therefore, it cannot be said that the transport vehicle provided to the employees by the appellants could be a public service vehicle in any sense of the term.
Such a transport vehicle, being not a public service vehicle within the meaning of the provisions of the Bombay Motor Vehicles Act, the view taken by the Bombay High Court is clearly erroneous.
[361F G, 362B]
|
Civil Appeal No. 897 of 1968.
Appeal by Special Leave from the Judgment & order dated the 24th July, 1967 of the Delhi High Court in L.P.A. No. 54 of 1967.
G. L. Sanghi and Girish Chandra for the Appellants.
section section Javali (Amicas Cariae) for the Respondent.
The Judgment of the Court was delivered by KRISHNA IYER, J.
The respondent imported Auto Cycle Pedals under the guise of motor vehicle parts for which he had secured the relevant licence.
These two articles are different from the point of view or the law controlling imports.
As laid down in Ganga Setty 's case(1) by the Court, it is primarily for the Import Control Authority to determine the head or entry under which any particular commodity falls.
Or course, if a construction adopted by the authority regarding the concerned entry were perverse, or grossly irrational, then the court could and would undoubtedly interfere.
In the present case the High Court has held that the view of the Customs officials could not be considered perverse and has declined to set aside the impugned order on that score.
Even at this stage it is appropriate to quote the order under challenge which runs: "M/s. The Security and Finance Ltd., Delhi imported from U.K. the above mentioned goods for which they did not possess a valid Import licence issued under Serial No. 301/Pt.
IV of Import Trade Control Schedule.
The importation was therefore considered as unauthorised.
The importers were therefore in this Custom Memo No. S24C 1276/55A dated 30 9 55 called upon to show cause why the goods should not be confiscated and penal action take under section 167(8) Sea Customs Act read with Section 3(2) of the Import & Exports (Control) Act.
In reply to the said show cause Memo, the Clearing Agents of the importers produced a licence for Motor Vehicles parts, and claimed release of the goods against the said licence.
They further stated that similar consignment has been released in the past against similar licence.
Furthermore, no public Notice has been issued to the effect that Auto Cycle Pedals will not be allowed clearance against Motor Vehicle Parts licence.
The arguments so advanced are not accept able.
The importers did no, avail of the personal hearing offered to them in the said show cause memo.
ORDER The importation of the above goods without proper licence is prohibited under sections 3(2) and 4 of the Import & Export (Control) Act of 1947 and Notification issued thereunder.
I accordingly confiscate the goods (1) A.I.R. 1863 S.C. 1319 89 under section 167(8) Sea Customs Act.
In lieu of confiscation I gave an option under section 183 ibid to the importers to clear the goods on payment of a fine of Rs. 22,600/ (rupees twenty two thousand six hundred only).
Customs duty and other charges as leviable on the goods will have to be paid in addition before these could be cleared out of customs control.
Dated 14 11 55.
Sd/ Dy.
Collector of Customs" Even so, the Court quashed the latter limit of the order under challenge which had imposed penalty in lieu of confiscation and, on top or it, directed payment of the import duty ordinarily leviable for the auto cycle pedals imported.
The only ground which led to this fatal consequence was that the authorities, acting under s 183 of the (Act VIII of 1878) (for short, the Act), had no further power to direct the importer petitioner i.e., the respondent, to pay excess duty which represents the difference between what is leviable for motor vehicles spares and auto cycle pedals Aggrieved by this view of the limitation on the powers of the Collector of Customs the appellant i.e, the Union of India, has come up this Court, after securing special leave to appeal.
The respondent was not represented by counsel and since the point involved was one of law and the amount involved not inconsiderable, we requested Shri Javali, Advocate, to serve as amicus curiae.
He has argued the case with ability and we record our appreciation of his services to the Court.
Indeed, but for his close scrutiny of the order of the Deputy Collector of Customs we would not have perceived the mix up and other defects he highlighted in his submissions.
We have already stated that a fine, in lieu of confiscation, had been imposed by the Collector of Customs.
This he did, under section 183 of the Act, but not content with that imposition he also directed the payment of the full duty on the goods imported as condition precedent to the clearing of the goods out of the 'customs control '.
Does the order under section 183 preclude him from levying duty under section 20? This is the short issue before us.
A close study of the scheme of the relevant provisions, powers and levies discloses a clear dichotomy which has escaped the attention of the High Court.
Import/export duty is an obligation cast by section 20 of the Act.
It is a tax, not a penalty; it is an innocent levy once the exigible event occurs.
it is not a punitive impost for a contravention of the law.
Confiscation.
penalty and fine provided for under sections 167 (item 8) and 183 are of the species of punishment for violation of the scheme of prohibition and control.
Once this distinction and duality are remembered, the interpretative process simplifies itself.
Admittedly, the respondent imported pedals uncovered by any licence.
Two legal consequences followed.
The importation attracted duty which any importer, licit or illicit, had to pay the moment 90 customs barrier was crossed.
Secondly, the commission of the offence of importing pedals without a licence caught the offender in the coils of section 167, entry 8, inviting the jurisdiction of the authority prescribed under section 182 to confiscate the goods or, alternatively, to impose a fine in lieu of confiscation, under section 183, of course, if confiscation is resorted to, the title vests in the State, as provided in section 184.
Import duty has to be paid inevitably in these cases, by the importer.
Confiscation or fine in lieu thereof is an infliction on the offender or circle of offenders falling within section 167, Entry 8.
Some times, the burden in both the cases, falls on the same person.
At other times, they may fall on different persons.
In some cases the importer as well as the confiscate may be identified and so the duty and the penalty may be imposed validly.
In other cases it may be difficult to get at the actual person who imported or was concerned in the offence of importation contrary to the prohibition or restriction clamped down by the law.
In that event, only confiscation and, alternatively, fine, may be imposed.
Viewed in this perspective, the answer to the question that arises for decision is simple.
In the present case, as held by the High Court, the respondent did import auto cycle pedals outside the permit or licence.
He is therefore liable to pay import duty normally leviable from pedal importers.
He his admittedly transgressed the provisions of Entry 8 of section 167 by importing goods not covered by the licence and therefore comes within the penal complex set out in sections 182, 183 ; and 184.
In the present case, the Deputy Collector, the competent authority, has chosen to give the owner of the goods, the respondent, option to pay, in lieu of confiscation, a fine.
He has not confiscated the goods and, therefore, section 184 is not operational in this context.
In short, the obligation under section 20 is independent of the liability under section 183.
The order, dual in character, although clubbed together in a single document, is therefore valid in entirety.
Even so, the confusion has been caused by the Deputy Collector failing to keep distinct the two powers and the two liabilities and thereby leading to avoidable jumbling.
Shri Javali rightly exposed the order impugned to the actinic light of criticism by pointing out that this rolled up order suffers from several infirmities, apart from its unspeaking brevity.
The Deputy Collector does not state that he is levying duty on the importer qua importer under section 20.
He does grievously err in the first breath confiscating the goods (in which case the title vests in Government under section 184) and in the very next directing payment of fine in lieu of confiscation.
Both cannot co exist.
Moreover, he forgets that section 167, entry 8, empowers, apart from confiscation of the offending goods, a penalty also which is independent of the fine in section 183, in lieu of confiscation.
This confused and laconic order only highlights the need for some orientation course in law for officers who are called upon to exercise judicial powers and write reasoned orders.
91 However, we are prepared to gather from the order under attack two levies imposed in exercise of two distinct powers, as earlier explained.
The import duty has been made a condition for the clearance of the goods.
This is right and it is impossible to say that the said payment is not justified by section 20.
Likewise, the authority, when it imposed a fine, was exercising its power under section 183.
We can readily see that he did not mean to confiscate the goods.
He only proposed to confiscate and proceeded to fix a fine in lieu thereof.
Non felicitous and inept expressions used in the order are perhaps apt lo mislead, but the intendment is clear that what was done was not confiscation but giving an option to pay a quantified fine in place of confiscation.
The order was a composite one, when read in the sense we have explained, and is quite legal.
Therefore we reach the conclusion that the appellant is entitled to win and the High Court was in error.
The line of reasoning which has appealed to us is echoed in a decision of the Madras High Court reported as Collector of Customs vs section Mehra(1).
Ramachandra Iyer, C.J., speaking for the Bench, has explained the legal position clearly and we agree with it.
Two decisions of this Court were referred to before the High Court and, indeed, the decision of the High Court proceeded on the footing that those two decisions concluded the matter.
The Madras decision distinguishes and for right reasons, if we may say so with respect those two rulings of this Court.
They do not apply to the facts of the situation before us.
On the other hand, both those cases deal with quantities of gold seized from persons as smuggled goods.
How they were imported, who were involved in the import, and who could, therefore, be made liable for import duty, were left blank in those two cases.
Therefore, the conditions imposed by the customs authorities for payment of import duty could not be supported.
We will go into a little more detail to explain those two decisions and their non applicability to the point we are discussing.
We may state that neither of them decides that once a find in lieu of confiscation is imposed, the power to levy duty under section 20 is deprived if.
It is not as if the authorities could not exercise both`the powers, where the facts attracted both section 20 and sections 182 to 184.
In Shewpujanrai Indrasanrai Ltd. vs The Collector of Customs(2) this Court had to consider an order passed by the Collector under the in respect of smuggled gold.
An option to pay a fine of Rs. 10,00,000/ was ordered but the Collector tied it up with ` two conditions for the release of the 'confiscated gold '.
One was the production of a permit from the Reserve Bank of India in respect of the gold and the other was the payment of proper customs duties in respect of the gold.
Both the conditions were held to be illegal by this Court.
It was conceded in that case by the learned Solicitor General that there was no provision in the Foreign Exchange Regulation Act or the under which the Reserve Bank could give permission in respect of smuggled gold with retrospective effect.
What (1) A.I.R. 1964 Mad, 504.
(2) ; 92 is more, if it could, there would be no offence under section 167, entry 8, and the order of confiscation itself would be bad.
As to the second condition of payment of customs duty, there was no finding by what.
means the gold was smuggled by sea or by land and therefore ii was difficult to see how section 88 which was sought to be pressed into service could be of any help.
Indeed, the decision of the Bombay High Court in Hormasji Elavia vs The Union of India(1) had been brought to the notice of the learned Judges, where customs duty was held payable under section 88 of the , but it was distinguished on the score that in that case the goods had been tracked down as smuggled through the port of Kantiajal without payment of any duty and, in those circumstances, it was held that section 88 applied.
the manner of import, once identified the power to levy duty could be exercised under the appropriate Act.
Therefore, Shewpujanrai (supra) is no authority for the proposition that import duty cannot be levied once fine in lieu of confiscation is imposed.
The later decision in Amba Lal vs Union of India(1) also is of No. assistance.
That also related to smuggled gold.
The Collector of Customs imposed conditions for the release, in that case, of the confiscated gold.
Though the order was struck down on a concession by the learned Additional Solicitor General, on the facts as disclosed in that case, the contraband goods.
were recovered by search from the appellant 's house, but the authorities could not establish by any evidence that the seized articles were imported into India after the customs barrier was put up for the first time between India and Pakistan.
It is obvious, therefore, that import duty could not be levied from tale person from whom the seizure was effected.
The case before us stands clearly on a different footing and the order imposing fine in lieu of confiscation and also levying import duly is good.
We allow the appeal but.
in the circumstances of the case.
there will be no order as to costs S.R. Appeal allowed.
(1) Cr.
1296 of 1953 decided on 18 8 1953.
| The appellant, a member of the United Provinces Civil (Executive) Service, was suspended from service with effect from the 24th August, 1944, pending an enquiry into his conduct.
As a result of enquiry and report by the Commissioner, the Government passed an order on the 25th November, 1944, dismissing the appellant from service, which order was served on the appellant on the 1st December, 1944.
The appellant instituted a suit for a declaration that the order of dismissal passed against him was wrongful, illegal and inoperative, and that he continued to be in service and 'was entitled to a decree for recovery of arrears of his salary.
The plaint included an alternative prayer for a declaration that the order of dismissal was 50 392 wrongful and for a decree for Rs. 1,20,000/ by way of damages being passed in his favour.
The requisite court fee on the valuation of Rs. 1,20,000/ was paid.
The claim for damages was later on abandoned in view of the decision of the Privy Council in High Commissioner for India and High Commissioner for Pakistan vs I.M. Lal(1) and consequential amendments were made in the plaint.
The Civil Judge granted a declaration that the order of dismissal was illegal and that the appellant continued to be in service in spite of that order.
But he declined to grant a decree for arrears of salary on the ground that a suit therefor was not maintainable.
A prayer for the refund of the additional court fee paid in respect of the claim for damages was also refused.
The respondent did not appeal against the decision that the order of dismissal was illegal.
But the appellant took the matter in appeal to the High Court which, affirming the decision of the Civil Judge, negatived his claim for arrears of salary and also refused refund of court fee.
Leave was, however, granted to appeal to the Supreme Court.
In view of the decision of the Supreme Court in the case of The State of Bihar vs Abdul Majid(2), the respondent did not dispute the right of the appellant to recover arrears of pay.
But he sought to support the decision on the ground that the order of dismissal dated the 25th November, 1944, having been declared to be illegal and void, the order of suspension dated the 24th August, 1944, became revived and that that would bar the claim for arrears of salary.
Held that the order of suspension made against the appellant being one pending an enquiry, it lapsed with the order of dismissal and the subsequent declaration by the Civil Court that the order of dismissal was illegal could not revive an order which had ceased to exist.
The question whether the order of suspension dated the 24th August, 1944, was valid and whether it was passed after due enquiry, would be material only with reference to the claim for salary for the period between the 24th August, 1944 and the 1st December, 1944, and as the appellant did not press the claim for that period there was no need to direct an enquiry on that point.
Held further that the claim for refund of extra court fee could not be granted inasmuch as the decision of the Privy Council clarifying the position could not be a ground for the refund of excess court fee when at the time it was paid it was in accordance with the law as it then stood.
The State of Bihar vs Abdul Majid ([1954] S.C.R. 786), Shenton vs Smith ([1896] A.C. 229), B. Venkata Rao vs Secretary of State for India in Council (L.R. 64 I.A. 55), M. Gopal Krishna Naidu vs State of Madhya Pradesh (A.I.R. , Provincial Government, Central Provinces and Berar through Collector, Amraoti vs Shamshul Hussain Siraj Hussain (I.L.R. , referred to.
(1) [1948] L.R. 75 I.A. 225.
(2) 393
|
o. 119 of 1955 with Petition for Special Leave to Appeal No. 140 of 1955.
Petition under Article 32 of the Constitution for the enforcement of fundamental rights and petition under Article 136 of the Constitution for `special leave to appeal from the judgment and order dated March 29, 1955, of the Bombay High Court in appeal No. 63 of 1954.
Hardayal Hardy and R.Jethmalani, for the petitioner.
C. K. Daphtary, Solicitor General of India, Porus A. Mehta and R. H. Dhebar, for the respondent.; 1957.
March 5.
The Judgment of the Court was delivered by SINHA J.
By this petition under article 32 of the Constitution and Petition No. 140 of 1955 for special leave to appeal from the judgment of the Bombay High Court dated March 29, 1955, in Appeal No. 63 of 1954 confirming that of a single Judge of that Court dated April 21, 1954, the petitioner challenges the constitutionality of the Bombay Land Requisition Act (Act XXXIII), 1948, hereinafter referred to as "The Act", and the enforceability 'of the order dated January 27, 1954, made by the Governor of Bombay in pursuance of section 6(4)(a) of the Act.
The petitioner is the widow of one Dharamdas Chellaram, who was a tenant of the premises in question.
The said Dharamdas Chellaram died in November 1953, leaving him surviving his widow and a daughter.
The petitioner alleged that she had been occupying the premises in question as a member of her husband 's family since 1938 and that the tenant aforesaid had at no material date ceased to occupy the premises.
She also alleged that one Narottam Das Dharamsey Patel was a mere lodger who war, occupying a portion of the premises by leave and licence of her husband.
The said Narottamdas had no interest 724 in the premises in question and had, as a matter of fact, vacated the portion in his occupation some time in the year 1953.
On behalf of the State of Bombay, the respondent, it has been stated on affidavit by the Accommodation Officer that it is not a fact that the petitioner resided in the premises in question and that the facts were that the said Dharamdas, the tenant, had vacated the premises in October 1952 and had handed over possession of the premises to the said Narottamdas Dharamsey Patel.
Hence it is alleged that it was not a fact that at the time of her husband 's death in November 1953 the petitioner was residing in the premises in question.
These facts had been stated before the High Court also on an affidavit made in opposition to the petitioner 's case in the High Court.
The petitioner 's grievance is that towards the end of January 1954 she found pasted on the outer door of the premises an order dated January 27, 1954, said to have been made by the Governor of Bombay and which is said to be the occasion for her moving the High Court of Bombay for a writ of mandamus against the State of Bombay to refrain from giving effect to the aforesaid Order.
The Order impugned is in these terms: "No. RA (1) M 13067 Office of the Controller of Accommodation, Jehangir Building, Mahatma Gandhi Road, Bombay, January 27, 1954.
Order Whereas, on inquiry it is found that the premises specified below had become vacant in the month of October 1952 ; Now, therefore, in exercise of the powers conferred by clause (a) of sub section (4) of section 6 of the Bombay Land Requisition Act, 1948 (Bombay Act XXXIII of 1948) the Government of Bombay is pleased to requisition the said premises for a public purpose, namely, for housing a Bombay State Government servant.
Premise,s Flat No. 3 on the 1st floor of the Building known as Hem Prabha situated at 68, Marine Drive, Bombay.
By order and in the name of Governor of Bombay.
" This Order was meant to be served on (1) Shri Hirabhai H. Patel, admittedly the landlord of the premises,(2) Shri Narottam Dharamsey Patel aforesaid, and (3) Shri Dharamdas Chellaram, who, as already indicated, was dead at the date the Order was made.
The petitioner challenged the validity of the Order of requisition set out above.
Her petition was heard by Tendolkar J. who by his judgment dated April 21, 1954, dismissed the same.
The petitioner moved this Court for an appropriate writ, direction or order under article 32 of the Constitution, challenging the vires of the Act, as also the legal efficacy of the Order impugned.
She also filed a petition praying for special leave to appeal from the judgment aforesaid of the Bombay High Court.
Both the matters have been heard together and will be governed by this judgment.
Before dealing with the contentions raised on behalf of the petitioner, it is convenient first to set out, in so far as it is necessary, the legislative history of the law impugned and its certain salient features which are relevant for purposes of this case.
This Act was passed by the Provincial Legislature of Bombay on April 11, 1948, on being empowered by the Governor General in exercise of powers conferred on him by section 104 of the Government of India Act, 1935.
Initially it was to remain in force until March 31, 1950.
But by the amending Act, Bombay Land Requisition (Amendment) Act, 1950 (Bombay Act No. 11 of 1950) published on March 28, 1950, its life was extended up to the end of March 1952.
By the amending Act, sections 8 A, 8 B and 9 A were added making substantial changes which need not be set out here, as they do not enter into the controversy.
The life of the Act was subsequently extended further, up to the end of December 1958.
By the Bombay Land Requisition (Second Amendment) Act, 1950 (Act XXXIX of 1950), the Act was further amended so as to substitute the words "the purpose of the State or any other public purpose" for the word,, "any purpose" in section 5 of the Act.
This was obviously done to satisfy the requirements of article 31 of the 726 Constitution.
Consequential changes were also made in sections 6 and 7 of the Act.
By section 6 of the amending Act it was provided that "The amendments made by this Act shall.
be deemed to have been and always to have been made with effect from the 26th January 1950. . . .
Thus the amendment was given retrospective operation.
The provisions of sections 5, 6 and 13 after the amendments aforesaid (omitting the portions not necessary for our purpose) are in these terms : "5.
(1) If in the opinion of the State Government it is necessary or expedient so to do, the State Government may by order in writing requisition any land for purpose, of the State or any other public purpose: Provided that no building or part thereof wherein the owner, the landlord or the tenant, as the case may be, has actually resided for a continuous period of six months immediately preceding the date of the order shall be requisitioned under this section.
(2)Where any building or part thereof is to be requisitioned under sub section (1), the State Government shall make such enquiry as it deems fit and make a declaration in the order of requisition that the owner, the landlord or the tenant, as the case may be, has not actually resided therein for a continuous period of six months immediately preceding the date of the order and such declaration shall be conclusive evidence that the owner, landlord or tenant has not so resided.
6.(1) If any premises situate in ail area specified by the State Government by notification in the Official Gazette, are vacant on the date of such notification and wherever any such premises are vacant or become vacant after such date by reason of the landlord, the tenant or the sub tenant, as the case may be, ceasing to occupy the premises or by reason of the release of the premises from requisition or by reason of the premises being newly erected or reconstructed or for any other reason the landlord of such premises shall give intimation thereof in the prescribed form to an officer authorised in this behalf by the State Government.
727 (4) Whether or not an intimation under sub section (1)is given and notwithstanding anything contained in section 5, the State Government may by order in writing (a) requisition the premises for the purpose of the State or any other public purpose and may use or deal with the premises for any such purpose in such manner as may appear to it to be expedient, or Provided that where an order is to be made under clause (a) requisitioning the premises in respect of which no intimation is given by the landlord, the State Government shall make such inquirv as it deems fit and make a declaration in the order that the promises were vacant or had become vacant, on or after the date referred to in sub section (1) and such declaration shall be conclusive evidence that the premises were or had so become vacant: Explanation For the purposes of this section, (a) premises which are in the occupation of the landlord, the tenant or the sub tenant, as the case may be, shall be deemed to be or become vacant when such landlord ceases to be in occupation or when such tenant or sub tenant ceases to be in occupation upon termination of his tenancy, eviction, assignment or transfer in any other manner of his interest in the premises or otherwise, notwithstanding any instrument or occupation by any other person prior to the date when such landlord, tenant or sub tenant so ceases to be in occupation; 13.(1) Every order made under sections 5, 6, 7, 8 A or 8 B or sub section (7) of section 9 or section 12 shall (a)if it is an order of a general nature or affecting a class of persons, be published in the mariner prescribed by rules made in this behalf (b)if it is an order affecting an individual, corporation, or firm, be served in the manner provided for the service of a summons in Rule 2 of Order XXIX or Rule 3 of Order XXX, as the case may be, in the First Schedule of the Code of Civil Procedure, 1908 ; 728 (c)if it is an order affecting an individual person other than a corporation or firm, be served on the person (i)personally, by delivering or tendering to him the order, or (ii) by post, or (iii) where the person cannot be found, by leaving an authentic copy of the order with some adult male member of his family or by affixing such copy to some conspicuous part of the premises in which he is known to have last resided or carried on business or worked for gain.
(2) Where a question arises whether a person was duly informed of an order made in pursuance of sections 5, 6, 7, 8 A or 8 B or, sub section (7) of section 9 or section 12 compliance with the requirements of subsection (1) shall be conclusive Proof that he was so informed; but failure to comply with the said requirements shall not preclude proof by other means that he was so informed, or affect the validity of the order.(Underlining ours). . . . . . .
At the outset it is necessary to state that the main grounds of attack against the constitutionality of the Act based on such fundamental rights as are recognised by articles 19(1)(f) and 31(2) of the Constitution must be overruled in view of the decision of the Constitution Bench of this Court in State of Bombau vs Bhanji Munji (1).
In that case this Court upheld the validity of the Act with reference to the provisions of the articles aforesaid of the constitution.
But the learned counsel for the petitioner contended that he attacked the vires of the Act on grounds other than those which had been specifically dealt with by this Court in the decision just referred to.
We now proceed to deal with those fresh grounds on their merits.
It was contended that the Act became invalid on January 26, 1950, inasmuch as it was in conflict with article 31(2) of the Constitution.
The Act was, therefore, as good as dead by the time Act 11 of 1950 extending the life of the Act was enacted as aforesaid.
The Act being void, its extension by Act II of 1950 was equally void, (1) [1955] 1 S.C.R. 777.
729 Similarly, it was further argued that the amendments effected by the amending Act II of 1950 and Act XXXIX of 1950 required the assent of the President and that as admittedly no such assent had been given, they had no effect as provided in article 31(3) of the Constitution.
This chain of submissions is founded on the admitted non compliance with the requirements of article 31(3).
It has not been contended that the Act when passed on April 11, 1948, was not good law.
It is also clear that the Act is not covered by the provisions of el.
(6) of article 31.
The Act is thus covered by the saving clause, el. 5(a), being an existing law other than a law to which the provisions of cl.
(6) apply.
The Act, therefore, would be valid even if the provisions of el.
(2) of article 31 are not in terms fully satisfied, in so far as the Act did not before its amendment by Act XXXIX of 1950 contain the expression "for a public purpose".
As already pointed out, this Court in the case of The State of Bombay vs Bhanji Munji (1) has laid it down that the Act was not invalid even after the commencement of the Constitution simply because it is not provided in express terms that the acquisition or requisition had to be for a public purpose, provided that from the whole tenor and intendment of the Act it could be gathered that the requisition was for a public purpose, and for the benefit of the community at large.
The amending Act only made explicit what had been left to be gathered from the whole tenor of the Act, as pointed out by this Court in the case cited above.
, The 'argument that the amending Acts, II of 1950 and XXXIX of 1950, required the assent of the President under el.
(3) of article 31 has, therefore, no force.
Act 11 of 1950, in so far as it affects the present controversy, only extended the life of the Act by two years and Act XXXIX of 1950 only made explicit what was not so in the Act as originally passed, and are not such laws as come within the purview of cl.
(3) of article 31 inasmuch as those Acts are merely an extension or explanatory of the substantive Act which is an existing ,law within the meaning of the Constitution.
Clause (3) (1) [1955] 1 S.C.R. 777.
91 730 of article 31 in terms applies to a law made by the legislature of a State, after the commencement of the Constitution; whereas the Act had been passed in its substantive form in April 1948.
Hence, there is no difficulty in holding that the Act which was good law before the commencement of the Constitution did not become void under article 13 of the Constitution, because there was nothing in the Act which was inconsistent with the provisions of Part III of the Constitution.
If the Act was good law after the commencement of the Constitution, it follows that the amendments aforesaid made in 1950, were equally good law, even though the assent of the President had not been obtained.
Secondly, the decision of this Court in The State of Bombay vs Bhanji Munji (1) (supra) itself has ruled to the contrary with reference to the provisions of article 31 (2).
We cannot, therefore, go back upon our decision in the case aforesaid.
On these considerations the petition under article
32 of the Constitution must fail on the ground that no fundamental rights of the petitioner as would entitle her to seek redress from this Court, have been contravened.
It remains to consider the other arguments advanced on behalf of the petitioner which have a bearing on the petition for special leave to appeal from the judgment of the Bombay High Court.
It has been contended that sections 5 and 6 of the Act quoted above and underlined by us have made certain matters conclusive, so that the High Court or even this Court could not go behind the order of the State Government holding that the tenant had not resided in the premises for a continuous period of six months immediately preceding the date of the order (section 5), or that the premises had become vacant in the month of October 1952, as stated in the Order impugned in this case.
It is contended that the legislature had, by making those provisions rendering those matters conclusively proved, impaired the powers of the High Court under article 226 and of this Court under article 32 of the Constitution.
Another branch of the argument is that the declaration of vacancy is dependent upon a collateral fact which has (1) [1955] 1 S.C.R. 777. 731 to be found by the Government on such enquiry as it may deem fit and proper and its conclusion on such a collateral fact could not be placed by the Act beyond scrutiny by the High Court or by this Court.
In this connection it was also argued that on the question of vacancy the finding of the State Government may be conclusive on the "factual aspect" but not on the "legal aspect" of the matter.
In other words, it was contended that it was still open to the courts to find whether the facts found constituted in law "vacancy" as defined in the Act.
In this connection strong reliance was placed on the following observations of the Judicial Committee of the Privy Council in the case of Hubli Electricity Co. Ltd. vs Province of Bombay(1) at pages 65 and 66: " The question what obligations are imposed on licensees by or under the Act is a question of law.
Their Lordships do not read the section as making the government the arbiter on the construction of the Act or as to the obligations it imposes.
Doubtless the government must, in expressing an opinion for the purpose of the section, also entertain a view as to the question of law.
But its view on law is not decisive.
If in arriving at a conclusion it appeared that the government had given effect to a wrong apprehension of the obligations imposed on the licensee by or under the Act the result would be that the Government had not expressed such an opinion as is referred to in the section.
" There are several answers to this contention.
In the first place, it is well settled that observations made with reference to the construction of one statute cannot be applied with reference to the provisions of another statute which is not in pari materia with the statute which forms the subject matter of the previous decision.
The Judicial Committee was dealing with the provisions of section 4(1) of the , which did not contain the words "conclusive evidence" or any words to that effect.
That decision of the Judicial Committee, if it can at all be applied to the Act now before us, is against the petitioner in so far as (1) [1948] L.R. 76 I.A. 57.
732 it has construed the words "opinion of the Provincial Government".
Those words or words of similar import appear in the beginning of section 5.
In the words of the Judicial Committee, those words signify the subjective opinion of the Government and not an opinion subject to objective tests.
The observations quoted above only show that on a proper construction of the provisions of the statute then before the Judicial Committee, the opinion of the Government, if it was made nonjusticiable, was confined to the question of whether there had been a willful and unreasonably prolonged default, but did not cover the question of the opinion of Government relating to the obligations imposed by the statute on the licensee, by or under the Act.
Hence those observations are absolutely of no assistance to the petitioner on the question of the full implication of the rule making certain matters "conclusive evidence" under the provisions of sections 5 and 6 of the Act.
This question appears to have been canvassed in a number of cases in the High Court of Bombay.
In the case of Jagatchandra vs Bombay Province( ') Tendolkar J. had ruled that the declaration made by the Government shall be conclusive evidence with regard to all facts involved in the determination of vacancy but that it was not conclusive with regard to the inferences to be drawn from or the legal consequences of such facts.
The correctness of that proposition was questioned in another case before another learned, Judge of that Court, Shah J., who referred it to be determined by a larger Bench.
Chagla C.J. and Gajendragadkar J. (now one of us) examined that question in some detail and overruled the decision of Tendolkar J. (Vide Mohsinali Mohomed Ali vs The State of Bombay(2).
The Bombay High Court in the last mentioned case held that on a declaration being made by the State Government that there was a vacancy, it was conclusive both as to the facts and the constituent elements of "vacancy", as understood under the Act.
The High Court relied in this connection on the observations of the Judicial (1) A.I.R. 1950 Bom.
(2) [1951] 53 Bom.
L.R. 94; A.I.R. 1951 Bom, 303.
733 Committee of the Privy Council in Moosa Goolam Ari vs Ebrahim Goolam Ariff(1) and of Lord Cairns in Peel 's case(2), and of Lord Parker of Waddington in Bowan vs Secular Society Ltd.(3).
In this connection the learned counsel for the petitioner also pressed in aid of his argument the well known distinction between the jurisdiction of a court or authority to decide a certain fact as one of the issues in the controversy and certain collateral facts on which the jurisdiction to determine the controversy could arise.
It was argued that the finding on the question of vacancy by the State Government was a "jurisdictional fact" in the sense that unless it was found that there was a vacancy, the jurisdiction of the State Government to make the declaration and to requisition the permises could not arise.
This aspect of the matter has been considered by this Court in the case of Rai Brij Raj Krishna vs section K. Shau & Brothers(4).
That case concerned the construction of the provisions of the Bihar Buildings (Lease, Rent and Eviction) Control Act (Bihar Act 111) of 1947.
This Court held that, the Controller had been vested with the jurisdiction to determine all questions including the question whether or not there was non payment of rent and on finding that there was default in the payment of rent, with the jurisdiction to order eviction of the tenant.
The finding of the question of default was not a jurisdictional finding in the sense in which learned counsel for the petitioner asks us to hold with reference to the finding of the State Government in this case that there has been a vacancy.
In the reported case this Court held further that even if the Controller had wrongly decided the question of default in the payment of rent, his effective order oil the question of eviction could not be challenged in a court of law.
Mr. Justice Fazl Ali delivering the judgment of the court made reference to the well known observations of Lord Esher, M.R. in the case of Queen vs Commisssioners for Special Purposes of the Income tax(") and to (1) [1912] L.R 39 I.A. 237.
(2) (3) (4) ; (5) , 319.
734 the observations of the Privy Council in the case of the Colonial Bank of Australasia vs Willan(1).
After referring to those observations and to the provisions of the statute then before the Court, this Court held that the Act empowered the Controller alone to decide whether or not there was 'non payment of rent and that decision was essential to his order for eviction of the tenant under section 11.
That decision of the Controller, the Court further held, could not be challenged in a court of law.
The decision of this Court just referred to is an apt illustration of the rule which applies with equal force to the provisions of the Act now before us.
The Act has made a specific provision to the effect that the determination on the questions referred to in sections 5 and 6 of the Act by the State Government shall be conclusive evidence of the declaration so made.
But that does not mean that the jurisdiction of the High Court under article 226 or of this Court under article 32 or on appeal has been impaired.
In a proper case the High Court or this Court in the exercise of its special jurisdiction under the Constitution has the power to determine how far the provisions of the statute have or have not been complied with.
But the special powers aforesaid of this Court or of the High Court cannot extend to reopening a finding by the State Government under section 5 of the Act that the tenant has not actually resided in the premises for a continuous period of six months immediately preceding the date of the order or under section 6 that the premises bad become vacant at about the time indicated in the order impugned.
Those are not collateral matters which could on proper evidence be reopened by the courts.
of law.
The legislature in its wisdom has made those declarations conclusive and it is not for this Court to question that wisdom.
As an offshoot of the argument that we have just been examining it was contended on behalf of the petitioner that Explanation (a) to section 6 quoted above contemplates a vacancy when a tenant omitting other words not necessary) " ceases to be in occupation upon (1) [1874]5 P.C. 417,443.
735 termination of his tenancy, eviction, or assignment or transfer in any other manner of his interest in the premises or otherwise ".
The argument proceeds further to the effect that in the instant case admittedly there was no termination, eviction, assignment or transfer and that the words " or otherwise " must be construed as ejusdem generis with the, words immediately preceding them: and that therefore on the facts as admitted even in the affidavit filed on behalf of the Government there was in law no vacancy.
In the first place, as already indicated, we cannot go behind the declaration made by the Government that there was a vacancy.
In the second place, the rule of ejusdem generis sought to be pressed in aid of the petitioner can possibly have no application.
The legislature has been cautious and thorough going enough to bar all avenues of escape by using the words " or otherwise ".
Those words are not words of limitation but of extension so as to cover all possible ways in which a vacancy may occur.
Generally speaking, a tenant 's occupation of his premises ceases when his tenancy is terminated by acts of parties or by operation of law or by eviction by the landlord or by assignment or transfer of the tenant 's interest.
But the legislature, when it used the words " or otherwise ", apparently intended to cover other cases which may not come within the.
meaning of the preceding clauses, for example, a case where the tenant 's occupation has ceased as a result of trespass by a third party.
The legislature, in our opinion, intended to cover all possible cases of vacancy occurring due to any reasons whatsoever.
Hence, far from using those words ejusdem generis with the preceding clauses of the explanation, the legislature used those words in an all inclusive sense.
No decided case of any court, holding that the words "or otherwise" have ever been used in the sense contended for on behalf of the petitioner, has been brought to our notice.
On the other hand, by way of illustration of decisions to the contrary may be cited the case of Skinner & Co. vs Shew & Co. (1).
In that case the Court of Appeal (1) [1893] 1 Ch.
D 4I3, 736 had to consider the words of section 32 of the Patents Designs & Trade Marks Act, 1883 (46 & 47 Vict.
c. 57), to the following effect: "Where any person claiming to be the patentee of any invention, by circulars, advertisements or otherwise threatens any other person With any legal proceedings. .
Their Lordships repelled the contention that the words "or otherwise" occurring in that section had to be read ejusdem generis with "circulars", and "advertisements".
They observed that by so doing they will be cutting down the intendment of the provisions of the statute when clearly the word,,; "or otherwise" had been used with a contrary intention.
The rule of ejusdem generis is intended to be applied where general words have been used following particular and specific words of the same nature on the established rule of construction that the legislature presumed to use the general words in a restricted sense; that is to say, as belonging to the same genus as the particular and specific words.
Such a restricted meaning has to be given to words of general import only where the context of the whole scheme of legislation requires it.
But where the context and the object and mischief of the enactment do not require such restricted meaning to be attached to words of general import, it becomes the duty of the courts to give those words their plain and ordinary meaning.
In our opinion, in the context of the object and mischief of the enactment there is no room for the application of the rule of ejusdem generis.
Hence it follows that the vacancy as declared by the order impugned in this case, even though it may not be covered by the specific words used, is certainly covered by the legal import of the words "or otherwise".
The only other contention which remains to be dealt with is that the order impugned in this case is not enforceable because it was directed against the petitioner 's husband, who was dead at the date of the order, besides the other two persons indicated in it who were not concerned with the premises.
In our opinion, there is no substance in this contention either.
An order like the one passed under section 6(4)(a) of the Act 737 is not in the nature of an order in judicial proceedings between the Government on the one hand and other parties named.
If the proceedings were intended by the Act in the sense of judicial or quasi judicial proceedings between named parties, it may have been legitimately argued that an order passed against a dead man is a complete nullity.
But the order proceeds on the basis that the tenant had ceased to be in occupation of the premises in October 1952, apparently by reason of the fact that he had handed over possession of the premises to the so called "lodger" or "paying guest".
Admittedly the petitioner 's husband died after October 1952.
The occupation by the said Narottamdas Dharamsey Patel was in the nature of an unauthorised occupation.
The fact that the petitioner 's husband was dead on the date of the order impugned has only this effect that in so far as it mentions his name as one of the persons to be served under section 13 of the Act should be erased from the order But even so, it does not affect the enforceability of the same.
section 13 lays down the different modes of service of an order passed under the Act according as the order is of a general nature or affecting a class of persons or an individual, corporation or firm.
We are here concerned with the case of an individual and the section lays down that it can be served either personally by delivering or tendering the order to him or by post or where he cannot be found, by affixing a copy of the order to some conspicuous part of the premises in which he is known to have last resided.
As the petitioner 's husband had died before the date of the order impugned, it could affect only the so called "lodger" who had been, on the findings, left in occupation of the premises after October 1952.
He has not made any complaint about non service.
The only other person who could be affected by the order, if at all, is the petitioner herself.
She has admitted that she came to know of the order in question at about the time it had been made, because she found a copy of the order affixed at the outer door of the premises.
Thus admittedly, the petitioner had timely notice of 95 738 the order impugned.
Hence in the instant case there is no need to apply the rule of conclusive proof as laid down in sub section
(2) of section 13.
In any event, as the concluding words of the section have provided, any irregularity or failure to comply with the requirements of the section cannot "affect the validity of the order".
As all the grounds urged in support of the petitions fail, they are dismissed with costs, one set.
Petitions dismiss`ed.
| On October 11, 1973, the Central Government in exercise of power under cl.
(3) of the Fertilizers (Control) order, 1957 promulgated under s.3 of the , issued a notification fixing the maximum retail selling price of certain fertilizer which dealers could charge from consumers leaving with the dealers a very low margin of profit.
Some time later in order to compensate the manufactures for the higher cost of inputs, the Central Government issued another notification on June 1, 1974 fixing a very high retail selling price of the fertilizer to be charged by the dealers from the consumers.
The dealers started charging the higher price fixed by notification dated June 1, 1974 at the lower rate thus earning fabulous profit.
On June 14, 1974 the State of Uttar Pradesh issued a notification (Uttar Pradesh Fertilizer Price (Supplementary) Order, 1974) in exercise of power under rule 114 of the Defence of India Rules, 1971 promulgated under the Defence of India Act, 1971.
This notification stated that the stocks of fertilizer acquired upto May 31,1974 by the dealers and which remained unsold with them should be sold only at the price fixed by the Central Government 's notification dated October 11, 1973 and not by notification of June 1,1974.
The appellants (dealers) challenged before the High Court the legality and validity of the State Government 's notification dated June 14, 1974 on the grounds: (1) that the fertilizer in question having been declared an essential commodity under the , an Act specially enacted inter alia for regulating prices of essential commodities, its price could be regulated only under that Act and not under the Defence of India Rules: (2) that the notification being inconsistent with the Central Government 's notification dated dated June 1, 1974 was invalid : and (3) that the notification being discriminatory was violative of article 14 of the Constitution.
The High Court upheld the 349 validity of the impugned notification and dismissed the writ petitions.
Hence these appeals.
Dismissing the appeals by majority.
^ HELD: (Per Murtaza Fazal Ali and Thakkar, JJ.) Both the , as also the Defence of India Rules of 1971, are Central legislations enacted by the Parliament.
There is no constitutional or jurisprudential limitation on the competence of the Parliament to create two avenues or sources of power for the regulation of prices of articles.
Since Parliament can constitutionally and validly enact two statutes creating two sources of power, and since, under both the statutes prices of fertilizers can be regulated, there is no illegality in acting under either or both.[357 D E] Under the DIR power has been conferred, inter alia, to regulate the price of any article.
The expression `any article ' is wide enough in its amplitude to envelope `fertilizers '.
The fact that `fertilizers ' have been declared as an essential commodity under the and its price can be regulated under the powers conferred by that Act, is altogether immaterial.
[357 H; 358 A] The Centre and the State both cannot speak on the same channel and create disharmony.
If both speak, the voice of the Centre will drown the voice of the State.
The State has to remain `silent ' or it will be `silenced '.
But the State has the right to `speak ' and can `speak ' (with unquestionable authority) where the Centre is `silent ', without introducing disharmony.
If the Centre sits only on a portion of the Chair, the state can sit on the rest of the portion with arms thrown on the shoulders of each other.
While the State cannot sit on the lap or on the shoulders of the Centre, both can certainly walk hand in hand, lending support to each other, in a friendly manner, towards the same destination.
If the Centre. has built a wall, had has left a gap from which intruders can infiltrate, the state can fill the gap in the wall, and thus make its own contribution to the common cause.
What is more, each in theory and principle.
must be presumed to be conscious of the need for accord and need for accommodating each other in the interest of `NATIONAL HARMONY '.
[360C F] A general statute applies to all persons and localities within its jurisdictional scope, prescribing the governing law upon the subject it encompasses, unless a special statute exists to treat a refinement of the subject with particularity or to prescribe a different law for a particular locality.
Where, however, the later special or local statute is not irreconcilable with the general statute to the degree that both statutes cannot have a conterminous operation, the general statute will not be repealed, but the special or local statute will exist as an exception to its terms.
[361 B C] sutherland 's Statutory Construction, 3rd Edition.
Vol, 1.
page 488, referred to One of the tests for ascertaining whether the inconsistency is an irreconcilable or intolerable one, is to pose this question: Can the State law be obeyed or 350 respected without flouting or violating the Central law in letter and spirit? If the answer is in the affirmative, the State law cannot be invalidated.
Not at any rate when the State law merely `promotes ' the real object of both the laws, and is in the real sense `supplementary ' or complementary ' to the Central law.
In the present case, the Central notification is altogether silent on the ramification regarding sales from out of existing stocks acquired by the dealers at lower rates.
The impugned State notification, on the other hand, deals exclusively with this aspect.
The State notification speaks on a refinement of the subject about which the Central notifications is blissfully.
unaware and on which it is altogether silent.
Both notifications can therefore safely be construed as supplementary and friendly rather than inconsistent or hostile.
[360 B C] In the instant case, assuming that there is inconsistency between the Central Government 's notification and that of the State Government, it does not appear to be an irreconcilable or intolerable one, so as to invalidate the State Government 's notification.
In the present case the test answers in favour of the validity of the impugned State notification.
The Central notification is not violated if the dealers sell the fertilizers from out of the existing stocks acquired at the lower rates, for both the notifications fix the minimum selling price and the maximum selling price fixed under the State notification is not higher than that fixed under the Central notification.
What is more, the state notification `promotes and serves ' the object and purpose of both the Centre and the State.
`Promotes and serves ' in the sense, that the manifest object of fixing maximum ceiling price is to make available to the cultivators who grow the food for the NATION to obtain the inputs at reasonable prices and to protect them from exploitation so that the food production is not retarded.
[362 A C] article 254(2) does not envision Presidential assent to `notifications ' issued under an Act (as distinguished from `laws made by legislature).
[363 F] Kerala State Electricity Board vs Indian Aluminium Co. ; at p. 478, referred to.
The impugned notification is not violative of article 14 of the Constitution since the very basis of the challenge on the score of hostile discrimination is found to be non existent.[364 D] (Per Vardarajan J. dissenting) It cannot be assumed that Parliament which had already legislated in the , a permanent measure, in respect of fertilizer intended to legislate once again and could have felt the need to legislate once again in the temporary Defence of India Act, 1971 in respect of the same article especially because what could be done under the Defence of India Act and the Rules which may be framed thereunder could as well be done with equal force under the and orders which may be passed thereunder.
[377 B C] Section 3(2) of the lays down that the Central Government may, having regard to the local conditions of any area and other relevant circumstances, fix different prices or rates in respect of different areas 351 and for different classes of consumers.
The State Government could have requested the Central Government to act under s.3(2) of the and fix a different price or rate for the sale by dealers in that State of fertilizer carried over from the stock held on 31.5.1974.
Section 5(b) of the provides for delegation of powers and says that the Central Government may, by notified order, direct that the power to make or issue notifications under s.3 of that Act shall, in relation to such matters and subject to such conditions, if any, as may be specified in the direction be exercisable also by such State or such officer or authority subordinate to a State Government as may be specified in the direction.
The Central Government has not issued any direction under section 5(b) of the delegating its power to issue notification under s.3 of that Act to the State Government or any officer or authority of that Government.
The State Government has thus not resorted to the provisions contained in s.3(2) or s.5(b) of the , but the proceeded of fix the price of fertilizer on its own under the Defence of India Rules, 1971 which it cannot do under those Rules and the Defence of India Act, 1971 in respect of the essential commodity.
[377 H; 378 A D] The Defence of India Act, 1971, which was a general and temporary Act, and the Rules framed thereunder cannot apply to fertilizer which is an essential commodity government by the and the Fertilizer (Control) Order, 1957 made under the provisions of that Act.
Therefore the State Government cannot without delegation issue any notification under the Defence of India Act and Rules, 1971 in regard to the price of fertilizer, an essential commodity governed by the and the Fertilizer (Control) order, 1957.
[378 H; 379 A B] There does not appear to be any provision in article 254(2) of the Constitution for placing any notification made by a State Government under the Defence of India Rules, 1971 for consideration by the President.
[380 C] If the State Government 's impugned notification is assumed to be a law enacted by that State 's Legislature on Entry 26 of List II, since the Act of Parliament passed on Entry 33 of List III and the Fertilizer (Control) order, 1957 passed under that Act were already in force, the assent of the President had to be received in order that the State Government 's notification assumed to be a law enacted by the State 's Legislature may prevail in the State as required by Article 254(2) of the Constitution.
There is nothing on record to show that the impugned notification of the State Government was placed before the President for his assent and that his assent has been received.
Therefore, the State Government 's impugned notification even as a law cannot prevail over the earlier notification of the Central Government.
[389 F G; 380 C] Zaverbhai Amaidas vs State of Bombay.
[1955] 1 SCR 799, referred to.
There is a clear conflict between the two notifications is respect of the same essential commodity, fertilizer, for under the Central Government 's notification dated 1.6.1974 the price at which a dealer can sell fertilizer of the concerned variety is Rs. 2000 per ton while under the State Government 's notification dated 14.6.1974 is only Rs. 1050 per ton though no doubt it is restricted to the stock carried over from 31.5.1974 which is immaterial in judging the power of the State Government to fix the price of an essential commodity by a notification 352 made under the Defence of India Rules, 1971 in respect of which the Central Government had already fixed the price under the Fertilizer (Control) order, 1957.
Once the Central enactment and the Central Government 's notification govern the price of an essential commodity the State Government 's notification issued in exercise of the delegated authority under the Defence of India Act and the Rules framed thereunder cannot prevail.
[380 F H] The two enactments have to be read in such a way that there is no conflict between them while giving effect to them in their respective fields.
of operation.
If the and the Fertilizer (Control) order, 1957 are considered to apply exclusively to fertilizer, an essential commodity, and the Defence of India Act, 1971 and the Defence of India Rules, 1971 are considered to apply to other commodities excluding essential commodities there would be no conflict whatsoever between the and the Defence of India Act and between the notification issued under Fertilizer (Control) order, 1957 and the Defence of India Rules, 1971.
[381 A; 383 D E] The author of the two enactments, and Defence of India Act, 1971 is the same, namely, Parliament, and Parliament must be held to have not intended to contradict itself while dealing with distinct matters or situations under those enactments.
If the State Governments are free to fix their own prices in notifications issued by them under the Defence of India Rules, 1971 when the Central Government 's notification fixing a single price for the whole country in respect of an essential commodity is in force that notification of the Central Government will become otiose.
The question whether Parliament would have intended such a consequence.
The answer can only be an emphatic No. [382 D E] Craies on Statute Law (seventh edition) at Page 222 and Maxwell on the Interpretation of Statutes, referred to.
What has been done by the State Government under the impugned notification is utterly lacking in power and cannot be allowed to stand merely because it relates only to a comparatively small quantity of fertilizer carried over from the stock of 31.5.1974 and was intended to benefit and protect agricultural consumers and prevent dealers from making undue profits.[384 F]
|
.A. Nos.
4,5,6 and 7 in Civil Appeal Nos.
1401 & 1402 of 1990.
From the Judgment and Order dated 22.5.1987 of the Delhi High Court in C.W.P No. 2687 of 1986.
Kapil Sibal, V.B. Saharya and R.K. Khanna for the Appellant.
Rajiv Sawhney, Sanjay Anand, Deepak Kumar Thakur, Mrs. Ameeta Rathore, Kapil Chandra for J.B. Dadachanji & Co. and R.K. Maheshwari for the Respondents.
The following Order of the Court was delivered: PUNCHHI, J. These are applications for directions in Civil Appeal Nos. 1401 and 1402 of 1990 decided by us on March 13, 1990.
For facility of fact situation resort be had to our judgment dated March 13, 1990.
Direction given by to the D.D.A was meaningful and clear that it shall grant to the Delhi Cloth Mills conditional approval subject to the removal of the objections enumerated and extracted in the judgment, as raised, or such of them as were valid and tenable in law, after the Delhi Cloth Mills is heard by the Municipal Corporation of Delhi, the author of the objections, and which the D.D.A. had adopted, and the matter to be formalised forthwith by the D.D.A. and the authorities connected therewith within a time frame.
This has reportedly met with hurdles necessitating these applications.
The objections may broadly be divided in three parts: (i) objections which are within the exclusive domain of the Municipal Corporation of Delhi 593 (ii) objections which are exclusively within the domain of the D.D.A.; and (iii) objections which are lendingly common to both, the D.D.A. and the Municipal Corporation of Delhi overseeing and safeguarding the interests of each other.
And these objections can also be divided as surmountable and insurmountable.
The objections, to begin with, as raised by the Municipal Corporation of Delhi and later adopted by the D.D.A., presently requiring smoothening before us relate to those which are within the exclusive domain of the D.D.A. for it is asserted by the applicant Delhi Cloth Mills that the objections relating to the Municipal Corporation of Delhi are not insurmountable and those can for the present, be left alone to be tackled by the applicant without the intervention of the Court.
For this reason neither any direction is asked at this stage nor is one necessary to the Municipal Corporation of Delhi.
The D.D.A. has broadly three objections: (i) To further the resolution of the D.D.A., dated February 1, 1983, the Delhi Cloth Mills should file an amended or modified plan so as to conform to the Master Plan of the year 2001; (ii) Since the matter before the Delhi High Court, as also in this Court, had proceeded on the assumption that the entire 63 acres of land involved in the re development for flatted factories and residential complex was owned by the Delhi Cloth Mills, which assumption was wrong, the Delhi Cloth Mills should confine its plan to about 52 acres of land as owned by it as the balance about 11 acres of land is owned by the D.D.A. which is either on varied termed leases or in trespass with the Delhi Cloth Mills.
The plan would require rectification accordingly; and (iii) The fact of grant of permission vide resolution of 1 2 1983 did not ipso facto mean that the D.D.A. had given up its rights on lease hold lands in accordance with the terms thereof or the tittle to it or to regularize possession of the trespassed upon land with the Delhi Cloth Mills.
594 On that basis it is required of the Delhi Cloth Mills to confine its plans within those 52 acres as owned by it and by a process of reasoning it is hinted that after providing for recreational and other necessary facilities, as required by law, there hardly would remain any land to further the project.
It has been maintained on behalf of the Delhi Cloth Mills that the posture of the D.D.A. is obstructive in nature and a step to flout or undermine the orders of this Court.
It has on the other hand been maintained on behalf of the retrenched workers that since the settlement arrived at by them with the Delhi Cloth Mills was beneficial to them in nature, as a price for closure of the Mill, the posture of the D.D.A. was indirectly against their interests.
They have prayed for suitable directions so that the benefits accruing to them by lapse of time may not go dry.
At the outset, we put it beyond any doubt and re affirm that the D.D.A. stands directed by this Court to grant to the D.C.M. approval, even though conditional, and the D.C.M. stands impliedly directed and is duty bound to remove the objections as were valid and tenable in law as raised by the D.D.A. within its domain.
Having gone thus far there is no retreat of it contemplated.
It is further to be understood that this Court had endorsed by means of this directive the already known views of the Delhi High Court towards restoring resolution of the D.D.A. dated February 1, 1983, whereby the scheme as given by the Delhi Cloth Mills was approved in terms thereof.
And obviously the approval came from the D.D.A. at a time when the Master Plan of the year 1962 was operative and the one of the year 2001 was not existant, and if at all existant in an embryonic stage.
The law governing the object and the rules and regulations then in vogue and applicable were deemingly kept in view and applied by the D.D.A. in the approval of the scheme.
To whittle down the effect of that resolution on the emergence of the new Master Plan of the year 2001, made applicable after the orders of this Court would, at the present stage, if insisted upon be spelled out as a step to undermine the orders of this Court.
Such an objection by the D.D.A. when raised before March 13, 1990, the day when we passed judgment, was untenable in law and the D.D.A. should have known it before putting such an objection to use.
For this reason, we repel the first objection of the D.D.A. and require of it to stick to the position as per Master Plan as existing on February 1, 1983.
This objection is thus surmounted.
The second objection of the D.D.A. with regard to the wrong 595 impression of the ownership of the land appears to us to be valid substantially.
It is the admitted case of the parties that the scheme pertains to 63 acres of land which the Delhi Cloth Mills while applying for sanction claimed to own and one of the considerations in passing the resolution dated February 1, 1983 ex facie was the D.D.A. being impressed by a private entrepreneur coming forward with a scheme with such a large chunk of land.
It is significant that nowhere at that stage, even remotely, or at any stage during the litigation before the Delhi High Court or this Court, was the Delhi Cloth Mill 's claim of owning 63 acres of land been given a serious thought or refuted or put to proof or testing.
One way of looking at it now can be that the Delhi Cloth Mills misled the D.D.A. in that regard and had the D.D.A. known that the Delhi Cloth Mills owned only about 52 acres of land the D.D.A. might have resolved differently.
The other view as suggested by the Delhi Cloth Mills is that the D.D.A. of its own should have counter checked the extent of the ownership of the land of the Delhi Cloth Mills at the time of granting sanction.
Learned counsel on both sides have dwelt upon this matter a great deal.
We cannot assume that by upholding resolution dated February 1,1983, the Delhi High Court, or for that matter this Court, had made or acknowledged Delhi Cloth Mills as the owner of 63 acres of land involved in the scheme or that the right of ownership of the D.D.A. over about 11 acres of land stood extinguished by such exercise.
The D.D.A. when engaged in examining and sanctioning the proposal was justified on proceedings on the supposition of facts given by the Delhi Cloth Mills as true, and in processing the same cannot be said to have surrendered its ownership rights qua land measuring 11 acres.
Thus we are clear in arriving at the view that the said resolution cannot trample the right of D.D.A. as owner over about 11 acres of land when the respective leases reserve to the D.D.A. the right of resumption, and in leases expiring by efflux of time the option not to renew.
The scheme approved must thus of necessity be dented to that effect as the objection of the D.D.A. in that regard and to that extent is valid and tenable.
Reservation in that regard appears also to have been made by the Delhi High Court in its judgment in C.W.P. No. 1281 of 1985 decided on July 22,1988.
While dealing with possibility of a law and order problem, the court relied on the Delhi Cloth Mill 's management 's affidavit towards granting statutory compensation to the workers as well as its undertaking to pay, in some event, additional compensation.
The Delhi Cloth Mills had in the affidavit stated that the additional compensation shall be payable on expiry of two years from the date the Delhi Cloth Mills is allowed by all the concerned authorities 596 including the D.D.A. and Municipal Corporation of Delhi to redevelop its entire 63 acres of land at Bara Hindu Rao and Krishan Ganj, in accordance with the user stipulated therefore under the Master Plan for Delhi dated September 1962.
The High Court in judging the stand taken by the delhi Cloth Mills made the following significant observations: "No assurance is extended by any competent authority to the workmen that the authorities shall not enforce the Master Plan or shall not insist for due compliance of the provisions of the Act and the regulations in the matter of the Mill.
It is also doubtful if any one could opt out of the statutory provisions.
" These observations make it clear that the D.D.A. cannot be said to have abandoned its right either as a statutory body or that of the lessor of land on leases held by the Delhi Cloth Mills by mere passing of the resolution afore mentioned, or correspondingly to have given any right to the workers.
We have been given the break up of those leases numbering 10.
One of them pertains to 36425 sq.
yards(about 7 acres) which is perpetual in nature and is not required to be renewed except that the rent is revisable after every 25 years.
The remaining leases are in comparison short durated, some of which have expired and others are expiring in the year 2001.
The unexpired period of leases is not long enough in the context of the project.
besides there is an area which is said to be trespassed upon by the Delhi Cloth Mills.
this area under durated leases and trespass totals about 4 acres.
the Delhi Cloth Mills cannot be permitted to lay hands on this area as of right to further the scheme.
there a common term in each respective lease reserving right to the lessor to determine the lease at any time if the land is required for public purpose in consideration of the land having been demised free of any premium.
To involve this four acres of land in the scheme the D.C.M may have to work it out under a different shade and premise and not from this Court.
The objection is thus insurmountable on this plain.
So far as the perpetual lease is concerned, its purpose covenants for residential, cultural and recreational purposes of staff and workers of the lessee and purposes ancillary thereto, in accordance with the rules and regulations in force in Delhi under the Municipality Act or any bye laws framed by the lessor.
It is further covenanted that for 597 purposes of construction of building the approval of the lessor in writing is a pre condition before the start of the construction, and further no alteration or addition in the building as approved by the lessor either externally or internally can be made without first obtaining the permission of the lessor in writing.
Besides that if during the period of lease, it is certified by the Central Government that the premises are required for the purposes of the Central Government or any other public purpose, the lessor shall be entitled to take possession of the land together with all building structures etc.
with certain consequences.
It is thus plain and evident that even in the case of perpetual lease enormous residual control is left with the lessor who alone can accord permission to construct building for the specified purpose for residential, cultural and recreational purpose of the staff and workers of the Mill and purposes ancillary thereto, and on frustration of such purpose has the further right to treat the lease to have become void if the land is used for any purpose other than for which the lease was granted, not being the purpose subsequently approved by the lessor.
Thus unless the D.D.A. grants approval to the change of user as asked and reconstruction, the Delhi Cloth Mills has no such deemed right or privilege ignoring the covenants and the terms of the lease.
Thus it cannot be suggested that the resolution afore mentioned has the automatic effect of the D.D.A. having granted change of user, consciously or impliedly, or vesting any right in that regard to the Delhi Cloth Mills.
Here as well the D.C.M. would have to work out its plans with the D.D.A. under the terms of the lease without any further mandate from this Court in this regard.
This objection also is insurmountable in the presence of the void clause.
Yet all is not lost for the Delhi Cloth Mills.
It can still steer through its project in its owned 52 acres, even though in a truncated from and submit an amended plan.
On the other hand its relationship with the D.D.A. being that of a lessee and lessor permits a meaningful dialogue seeking extensions of lease periods, and change of permissive user in respect of 11 acres of land.
It can make attractive suggestions to the D.D.A. for setting up cultural, educational, recreational and other facilities etc.
at the expense of the Delhi Cloth Mills, if the project is to remain of the 63 acre size.
It is the case of Delhi Cloth Mills that if it is allowed to involve the said 11 acres of land, the project would be better and it is prepared to pay any charges as are known to law to keep it as part of the project of the original size.
Be that as it may we are no experts to opine whether a 52 acre project would be more viable or better or a 63 acre one.
But since the project has in terms of our order dated March 13, 1990 to go on, the D.D.A. 598 may if asked examine the suggestions.
That is their field and not ours to decide.
Before concluding this Order, we cannot help remarking that both parties, i.e., the D.C.M. and the D.D.A. have to share mutually the blame for the present situation.
The D.C.M. for its cavalier away in having asserted to own 63 acres of land and the D.D.A. in casually, without consulting its records, passing its Resolution No. 26 dated February 1, 1983 and communicating the same to the D.C.M. on 31 3 1983.
Should the D.C.M. now confine its scheme and project to its owned 52 acres of land, abandoning any effort to have included the remaining D.D.A. owned 11 acres of land by negotiations, and the D.D.A. in not offering on its own, or otherwise, the said land to the D.C.M., the project as originally conceived would have to be spruced.
It is evident from the proceedings of the Resolution that as per Master Plan, 23.14 acres have been earmarked for flatted factories and 43.39 acres as residential, though the sum total goes to more than 63 acres.
Both these areas include areas set apart for facilities and amenities enumerated therein.
The respective areas in that event would have to be reduced keeping in view the ground realities of ownership and the earmarking in the Master plan.
Cuts inevitably may have to be employed in either area or both.
Be that as it may, the scheme in the modified from would have to be brought in, not a new but as a substitute for the original scheme and that scheme would register its birth, legitimacy and binding force as of the original scheme.
The mandate in this regard should be clearly understood by the parties concerned for they are under obligation to responsibly carry out the directions of this Court dated March 13, 1990, in all events, and share the burden of it, indeed as doing the blame.
With these observations, these applications are disposed of.
No Costs.
T.N.A. Applications disposed of.
| By an order dated 13.3.1990 the Supreme Court directed the Delhi Development Authority (D.D.A.) to grant conditional approval to the respondent Company 's (D.C.M.) scheme pertaining to the development of mills land measuring 63 acres for construction of flatted factories and residential complex subject to removal of objections raised by Municipal Corporation of Delhi and Delhi Development Authority.
The matter could not be finalised by the parties since the DDA took certain objections to the scheme:(a) that the Delhi Cloth Mills should file a modified plan so as to conform to the Master Plan of the year 2001; (b) the legal proceedings before the High Court and the Supreme Court proceeded on the wrong assumption that the entire 63 acres of land was owned by the Delhi Cloth Mills whereas the DCM owns only 52 acres of land while the balance 11 acres was owned by the DDA which is partly on lease and partly in trespass with the Delhi Cloth Mills; and (c) the grant of permission by the DDA vide its resolution No. 26 dated 1.2.83 does not ipso facto mean that it had given up its rights or title to the lease hold lands or that it had regularised the possession of the trespassed upon land with the Delhi Cloth Mills.
The respondent Company filed applications for direction in this Court.
Disposing the applications, this Court, HELD: 1.
The D.D.A. stands directed by this Court to grant to the D.C.M. approval, even though conditional, and the D.C.M. stands impliedly directed and is duty bound to remove the objections raised by the D.D.A.
This Court had endorsed by means of this directive the already known views of the Delhi High Court towards restoring resolu 591 tion of the D.D.A. dated February 1, 1983, whereby the scheme as given by the Delhi Cloth Mills was approved in terms thereof.
The approval came from the D.D.A. at a time when the Master Plan of the year 1962 was operative and the one of the year 2001 was not existent, and if at all existent in an embryonic stage.
The law governing the subject and the rules and regulations then in vogue and applicable were deemingly kept in view and applied by the D.D.A. in the approval of the scheme.
To whittle down the effect of that resolution on the emergence of the new Master Plan of the year 2001, made applicable after the orders of this Court would, at the present stage, if insisted upon be spelled out as a step to undermine the orders of this Court.
Such an objection by the D.D.A. when raised before March 13, 1990, the day when the Supreme Court passed its judgment, was untenable in law and the D.D.A. should have known it before putting such on objection to use.
Therefore, the first objection of the D.D.A. is repelled and it is directed to stick to the position as per Master Plan as existing on February 1. 1983.
[594 D G] 2.
The objection of the D.D.A. with regard to the wrong impression of the ownership of the land is valid substantially.
It is the admitted case of the parties that the scheme pertains to 63 acres of land which the Delhi Cloth Mills while applying for sanction claimed to own and one of the considerations in passing the resolution dated February 1,1983 ex facie was the D.D.A. being impressed by a private entrepreneur coming forward with a scheme with such a large chunk of land.
The D.D.A. when engaged in examining and sanctioning the proposal was justified on proceeding on the supposition of facts given by the Delhi Cloth Mills as true, and in processing the same cannot be said to have surrendered its ownership rights qua land measuring 11 acres.
It cannot be assumed that by upholding the resolution dated February 1, 1983, the Delhi High Court, or Supreme Court, had acknowledged Delhi Cloth Mills as the owner of 63 acress of land involved in the scheme or that the right of ownership of the D.D.A. over about 11 acres of land stood extinguished by such exercise.
Therefore, the said resolution cannot trample the rights of D.D.A. as owner over 11 acres of land when the respective leases reserve to the D.D.A. the right of resumption, and in lease expiring by efflux of time the option not to renew.
The scheme approved must thus of necessity be denoted to that effect as the objection of the D.D.A. in that regard and to that extent is valid and tenable.
But the Delhi Cloth Mills can still steer through its project in its owned 52 acres, even though in a truncated form and submit an amended plan.
The scheme in the modified form would have to be brought in, not a new but as a substitute for the original scheme and that scheme would register its birth, legitimacy and binding force as of the original 592 scheme.[594H, 595 A D, E F, D] 3.
Respondent Company 's relationship with the D.D.A. is that of a lessee and lessor.
Out of 10 leases one is perpetual in nature and the remaining leases are short durated.
Under the terms of the perpetual lease unless the D.D.A. grants approval to the change of user as asked and reconstruction, the Delhi Cloth Mills has no such deemed right or privilege ignoring the covenants and the terms of the lease.
Therefore, it cannot be said that the resolution has the automatic effect of the D.D.A. having granted change of user, consciously or impliedly, or vesting any right in that regard to the Delhi Cloth Mills.
[597 D F, 596 E]
|
ivil Appeal No. 1284 of 1973.
From the Judgment and Order dated 18.1.
1973 of the Kerala High Court in transfer petition No. 45 of 1972.
G. Vishwanath Iyer and N. Sudhakaran for the Appellant.
P.K. Pillai and Miss Lily Thomas for the Respondents.
The Judgment of the Court was delivered by KHALID, J.
This appeal by special leave is directed against the Judgment dated 18 1 1973, passed by the High Court of Kerala in Writ Appeal No. 45 of 1972.
This appeal involves the correct interpretation and the scope and effect of Rule 51(A) of Chapter XIV A of the Kerala Education Rules.
The Rule reads as follows: "51 A. Qualified teachers who are relieved as per Rules 49 or 52 or on account of termina tion of vacancies shall have preference for appointment to future vacancies in schools under the same Education Agency, provided they have not been appointed in permanent vacancies in schools under any other Educational Agency.
" This Rule gives a teacher, discharged for want of vacancy or relieved as per Rule 49 or 52, a right to reappointment when a future vacancy comes into existence.
It is usual for managers of schools to appoint teachers to leave vacancies.
Sometimes more than one teacher get so appointed when there are more than one vacancies.
When such vacancies cease to exist by the permanent incumbent coming back, the temporary appointees go out.
When thereafter a permanent vacancy arises, those who had temporarily worked in leave vacancies get pre 439 ference to be appointed to that vacancy.
The question in this appeal is whether the Manager who has to appoint a teacher to a permanent vacancy has to go by the rule of "last come first go", to use the usual industrial jargon, in reverse, or whether the Manager has a right to choose between the temporary teachers, ignoring the principle usually accepted that a person who gets a right to a post by virtue of earlier appointment should not be ignored in preference to a person who gets such title later.
Before dealing with this case it will be useful to take note of a Note to Rule 51(A) which reads as follows: "If there are more than one claimant under this rule the order of preference shall be according to the date of first appointment.
If the date of first appointment is the same, then preference shall be decided with refer ence to age, the older being given the first preference.
In making such appointment, due regard should be given to requirement of subjects and to the instructions issued by the Director under sub rule (4) of Rule 1 as far as High Schools are concerned.
" This note gives the correct guideline based on justice and fair play.
Now, we will briefly state the facts.
The appellant is a B.A., B .Ed.
degree holder.
She is fully qualified to be appointed as a teacher in any Government or aided school in the State of Kerala.
She was appointed in a temporary vacan cy in the school of the first respondent, from 13 1 1970 to 16 3 1970, in the academic year 1969 70.
The appointment has to be approved by the District Educational Officer, the second respondent herein, which was duly done.
Since the vacancy in which the petitioner was working ceased to exist.
She went out of the job on 16 3 1970.
A further vacancy arose on 22 8 1970 and it continued till 17 12 1970.
She worked in this vacancy also.
She went out of service when this vacancy ceased.
Respondent No. 4 is another teacher who worked in the same school in another leave vacancy, from 1 91970 to 26 11 1970.
The appellant thus had a total service of six months and one day while the 4th respondent had 2 months and 25 days of service, under the 1st respondent.
A permanent vacancy arose in the school for the academic year 1971 72, for Social Studies when the Head Master in that school retired.
The appellant made a representation to the Manager for being appointed against that vacancy.
The 1st respondent appointed the 4th respondent.
The appellant is a Social Studies teacher.
She thereupon 440 complained to the second respondent.
The second respondent found the appointment of the 4th respondent irregular and held that the legitimate claimant for the permanent post was the appellant.
On this finding he did not approve the ap pointment of the 4th respondent.
The management took the matter in appeal before the Regional Deputy Director of Public Instruction, respondent No. 3, who by his order dated 9 11 1971, allowed the appeal.
Aggrieved by this order the appellant moved the High Court of Kerala by filing Original Petition No. 5064 of 1971, challenging the validity of the order passed by the 3rd respondent, inter alia, contending that as per Rule 51(A), of Chapter XIV(A) of the Kerala Education Rules, she had a preferential claim and that the appointment of the 4th respondent was illegal.
The learned Single Judge dismissed the original petition by his Judgment dated 1 2 1972, on the short ground that Rule 51(A) conferred a right on the appellant for appoint ment in the future vacancies in the school and it did not restrict the right of the management to make his own choice among the thrown out teachers.
The appellant pursued the matter by filing Writ Appeal 45 of 1972.
The Division Bench dismissed the appeal agreeing with the learned Single Judge that the management had a discretion to choose among the thrown out teachers.
Hence this appeal by special leave.
Though long years have passed by since this dispute arose wherefore we would have normally declined interference with the Judgment under appeal, we think it necessary to lay down the law correctly to avoid injustice in cases like this and to prevent abuse of power of those in whom right is conferred under Rule 51(A).
Now, both the appellant and the 4th respondent are working in the same school.
Though the subject to be taught by the appellant and the 4th respondent figured at one stage as an additional plea before the learned Single Judge, it is inconsequential for this Judg ment, though the learned Single Judge held in favour of the appellant on the question of the subject.
Let us read the rule in question.
This rule speaks of qualified teachers.
Both the appellant and the 4th respond ent satisfy this requirement.
It speaks of teachers being relieved as per Rule 49 or Rule 52 or on account of termina tion of vacancies.
Rule 49 speaks of termination of teachers after vacation, when the vacancy in which they work extend over summer vacation and Rule 52 speaks of teachers relieved on account of reduction in the number of posts under orders of the department.
We are not concerned with these rules.
Here, both the teachers were relieved on account of termina tion of vacancies.
The 441 Rule states, that such teachers shall have preference for appointment to future vacancies in schools under the same Educational Agency.
A future vacancy has arisen.
The school where appointment is sought is under the same Educational Agency.
The proviso is not material in this case.
All the conditions for application of this Rule are satisfied.
The only question that has to be answered is whether a teacher who had worked in a vacancy earlier has a preferential right over a teacher who worked later in the same school.
It is true that the rule does not in terms, mandate that the one who worked earlier should be preferred to the one who worked later.
But would it be in accord with justice and fair play, to prefer the one who worked later to the one who worked earlier? In the absence of anything in the Rule giving to the management a right to choose between the two, on the ground of suitability, merit or effeciency.
The Judgment of the Division Bench under appeal was delivered on 18 1 1973.
The note quoted above was inserted on 4 7 1972.
This note leaves no doubt as to how Rule 51(A) has to be construed.
The Rule states that preference will be given with reference to the date of appointment.
When the date of appointment is the same, age should prevail; the eider being given the first preference.
Of course, it contains a rider that due regards should be given to the requirements of subject as far as High Schools are concerned.
The Division Bench did not choose to accept the clarification contained in the note.
The learned Judges held against the appellant, on the wording of the Rule that, in terms, it did not provide for any preference between two or more persons and did not consider it proper to read more into this Rule by consider ing the note to Rule 5 in the same chapter.
Although we do not say that a note to a Rule has any binding effect, it does indeed have a persuasive force.
It cannot be ignored that this note has come as an appendage to Rule 51(A) for clarificatory purposes though it does not form a part of the Rule.
The learned Judges held that propriety and fairness required a decision in favour of the appellant, when they observed: "It would be proper no doubt to give an earlier appointee preference.
But seeing the rule as we ought to see every rule and every section in the Kerala Education Rules and the Kerala Education Act as restrictions or regulations in the matter of the free right of the manager to choose and appoint, it is impossible to read more into the rule.
" With respect, we feel that the learned Judges were influenced more by the words in the abstract contained in the rule and not with the fairness behind the rule.
The learned Judges of the Division Bench had before them 442 another Division Bench Judgment where the identical rule fell for consideration.
The relevant portion of that Judg ment was extracted by learned Judges.
We also find it useful to extract it here: "5.
Very recently, in Writ Appeal No. 44 of 1970, we had occasion to construe Rule 51 A.
And we then observed that despite its unhappy wording, in particular, the use of the words, "preference for appointment" to mean "right to appointment," we had little doubt that what the rule meant was that a person discharged for want of vacancy had a right to be appointed in future vacancies, provided, of course, he had not by word or deed given up that right or, we might now add, disqualified himself meanwhile.
And we added that the present tense of the words, "are relieved" appearing in the rule was the present tense of logic, not of time, so that, in effect, the rule should be read as if it said "qualified teachers who stand relieved" shall have pref erence.
In that view, it is, no doubt.
true that the petitioner 's appointment 's between 1957 and 1961 furnished here with a title to re appointment notwithstanding that they were made before the rule came into force, and it is at least arguable that where no priority in preference is prescribed by the rule, priority should be determined by priority of title.
The question, then, is whether the plea of aban donment to donment taken by the 3rd respondent is well founded.
" The above observation was got over by the Division Bench with the observation that "it was obiter and are certainly not intended to be conclusive observations in the matter.
If so, we would have referred this case to a Full Bench.
" We would have been happy if the appellate Bench had referred this question to a full Bench and resolved the controversy since the High Court felt that the appellant 's contention carried with it the element of fair play and justice and was at least, to put it mildly, in some measure supported by another Division Bench of the same Court.
We agree that the preference in Rule 51 A should be based on priority of title.
In this case, we do not have a plea of abandonment or other disqualification.
The learned counsel for the appellant brought to our notice how this Rule was understood by the Manager of the same school when another vacancy arose earlier.
At that time also the present appellant applied to the Manager, seeking appointment in the vacancy conse 443 quent on the retirement of a Head Master.
The Manager de clined the request and sent a reply to the appellant, the relevant portion of which, eloquent in favour of the appel lant, reads as follows: "Rule 51(A) Chapter XIV A K.E.R. lays down that qualified teachers who are relieved on account of termination of vacancies shall have preference for appointments to future vacancies.
When two persons apply for a post by virtue of the concession laid down in Rule 51 A, it is the natural justice to select the persons who has earlier and longer period of previous service.
Hence considering all the aspects of the question, the management has appointed Smt.
P.E. Sosamma in the said vacan cy.
" The Manager then understood the rule correctly, but later incorrectly.
That is why we said earlier in our Judg ment that the interpretation given by the High Court to this Rule can result in abuse of this discretionary power with the Manager.
If the Government wanted to clothe the Manager the power to choose among rival contenders to a future vacancy, the rule should be suitably amended.
The rule as it stands clearly confers priority to the earlier appointee.
The appellant, therefore, is entitled to succeed.
We set aside the order of the Division Bench under appeal and allow this appeal.
The appellant will be entitled to all the benefits as though she was appointed when the vacancy in question arose.
We would like to make it clear that this direction of ours will not enable her to draw salary for the period she had not worked but only other benefits such as seniority, increments etc.
The first respondent will pay costs of the appellant.
A.P.J. Appeal allowed.
| The assessee was an unregistered firm carrying on busi ness of manufacture and sale of Katechu.
The firm carried on the work of extraction of Katechu in Nepal and sales were affected in Kanpur.
It had first taken a jungle on lease and Katechu were extracted from October 1940 to September, 1941.
Sales were effected from 30th May, 1941 to 29th September, 1941.
Thereafter, another jungle was taken on lease and Katechu were extracted from 23rd November, 1942 to 6th November, 1944.
The sales were effected between 26th July, 1943 to 4th April, 1944.
The assessee claimed set off of deficiency of profit for the periods 20th October, 1940 to 17th October, 1941 and 23rd November, 1942 to 31st March, 1943 on the ground that the business carried on during the chargeable accounting period 1 4 1943 to 31 3 1944 was not separate to and dis tinct from the business carried on in 1940 41.
The Excess Profit Tax Officer did not set off the defi ciency of profits that accrued in respect of the period 1940 41 out of the profits for the chargeable accounting period from 1 4 1943 to 31 3 1944, and held that the busi ness carried on during October, 1940 to October, 1941 was completely different from the business carried on during the aforesaid chargeable accounting period.
So far as the deficiency pertaining to the period Novem ber, 1942 to 31st March, 1943 was concerned, the manufactur ing operations started on or about 23rd November, 1942 and the sales started on 26th July, 1943.
Katechu produced from 23rd November, 1942 to 31st March, 1943 remained in stock till the last date of the chargeable accounting period.
namely, 31st March, 1943.
As the assessee did not, maintain any books of account, the provisions of section 13 of the Income Tax were applicable.
The Revenue, therefore, valued the stock intrade at cost and held that there could be no profit or loss during the chargeable accounting period.
In appeal, the assessee urge that deficiency in profits pertaining to the chargeable accounting periods from Octo ber, 1940 to 31st March, 1941, and 23rd November, 1942 to 31st March, 1943 should be allowed a set off in computing the excess profits and as there were no profits during the said chargeable accounting period, the standard profits became the deficiency of the said two years which should have been allowed set off and that as manufacturing opera tions were carried on during the said periods, it could not be said that the assessee did not carry on any business.
The Appellate Assistant Commissioner found that the constitution of the firm during the chargeable accounting period was the same as in 1940 41, that the accounts were maintained in the same fashion and the same business was carried on, that the assessee had effected sales only during 30th May, 1941 to 29th September, 1941 and held that the assessee was entitled to set off in respect of the deficien cy of profits.
He, therefore, confirmed that there were no profits and losses during the chargeable accounting period ending on 31st March, 1941 and as such there could be no deficiency of profits.
The assessee was, therefore, held to be entitled to a set off of the deficiency only for the chargeable accounting period ending on 31st March, 1942 which consisted of the period 1st April.
1941 to 29th Sep tember.
The Tribunal, however, held that no profits accrued unless sale was effected and accepting the contention of the Revenue that no part of profits, which accrued during the said two chargeable accounting periods could be charged and were in fact not so charged to income tax, as no sales were effected, the Act itself did not apply and confirmed the order of the Appellate Assistant Commissioner.
The High Court divided the entire period of manufacture and sales to determine the question whether there was manu facturing activity and sale; (1) October 28, 1940 to March 31, 1941, failing in the financial year ending March 31, 1941, Katechu was manufactured but there was no sale; (2) April 1, 1941 to September 29, 1941, failing in the finan cial year ending March 31, 1942; sales took place from May 30, 1941 to September 29, 1941; (3) November 23, 1942 to March 31, 1943 failing in the financial year ending March 31, 1943; Katechu was manufactured but there was no sale; (4) April 1, 1943 to March 31, 603 1944, failing in the financial year ending March 31,.
1944; sale took place from July 26, 1943 to March 31, 1944; (5) April 1, 1944 to April 4, 1944, failing in the financial year ending March 31, 1945; sales were effected from April 1, 1944 to April 4, 1944 when the business was discontinued.
It held that while there was manufacturing activity there was no sale during the financial years ending March 31, 1941 to March 31, 1943, that the profits earned upon sales ef fected during the chargeable accounting period ending 31st March, 1944 must be apportioned between the manufacturing activity during the chargeable accounting period ending 31st March, 1943 and the sales during the chargeable accounting period ending 31st March, 1944 and that the deficiency of profits must be set off in computing the excess profits for the chargeable accounting period ending 31st March, 1944.
The High Court, therefore, did not accept the opinion of the Tribunal and held that the assessee was entitled to a set off of deficiency of profits relating to the periods 28 10 1940 to 31 3 1941 and 23 11 1942 to 31 3 1943 from the profits of the chargeable accounting period 1 4 1943 to 31 3 1944.
Allowing the Appeal, HELD: 1.
The scheme contained in the Excess Profits Tax Act is a legislation intended to tax the profits of certain business in excess of a certain limit as provided in that Act.
It is, therefore, complementary to the Income Tax Act by its very nature.
[610D] Commissioner of Income Tax, Bombay vs Raipur Manufactur ing Co., Ltd., at 733, followed.
In order to work out the scheme of the Act, there must be proper dovetailing of the concept of 'accounting period '. 'chargeable accounting period ' and basic scheme of the Income Tax Act bearing in mind that excess profits are excess of profits which were intended to be mopped up during the war period, to be taxed separately and differently.
[612H; 613A B] 3.
If the right to receive those profits had accrued or arisen subsequently then even though they had accrued or arisen by reason of work done during the chargeable account ing period, these were not liable to be treated as the profits of that chargeable accounting period.
[613C] 4.Whether the profits in the one case could be identi fied with the profits in the other would be determined by reference to the period in which those accrued or arose.
The profits during the chargeable 604 accounting period must be computed under the Excess Profits Tax on the same basis as are profits for an income tax assessment.
[613D E] Haji Rahmat Ullah and Co. vs Commissioner of Income tax, U.P., , relied upon.
It has to be clearly borne in mind that the Act is not an entirely different Act in the sense that it proceeds upon the concept completely different from the notions of Income Tax and has its source in an entirely different tax concept.
More profits which were likely to have been earned due to profits, these were made subject to excess profits.
[613E F] 6.
Though profit in a composite transaction could be apportioned as between manufacture and sale in the same accounting year, such an apportionment is not permissible when one part of the transaction, i.e. manufacture, falls in one chargeable accounting period and falls in another part of the accounting period i.e. the trading operations i.e. falls in another accounting period, then set off deficiency in profits under section 7 of the Act is permitted but a necessary precondition was that profit must be made in the accounting period to which the deficiency relates.
[613G H; 614A] 7.
The excess profit under the Act is profit determined under the Income Tax Act subject to prescribed adjustments.
If the income tax assessment discloses nil profits, no separate profit can be determined independently under the Act.
[614A B] 8.
It is a general principle, in the computation of the manual profits of a trade or business under the Income Tax Acts, that those elements of profits or gain, and those only, enter into the computation which are earned or ascer tained in the year to which the enquiry refers; and in like manner, only those elements of loss or expense enter into the computation which are suffered or incurred during that year.
[614C D] Edward Collins & Sons Ltd. vs The Commissioners of Inland Revenue, at 780, followed and Commission er of Incometax, Bombay vs Ahmedbhai Umarbhai & Co., Bombay, 18 I.T.R. 472, distinguished.
|
ivil Appeal No. 3091 of 1985.
From the Judgment and Order dated 30.11.84 of the Alla habad High Court in S.A. No. 1137 of 1984.
Kapil Sibal, (N.P.), Mr. Rajiv Dhawan, R.K. Gupta, H. Sharma and Ms. Indu Sharma for the Appellant.
Satish Chandra, M.C. Goel, K.P. Singh and N.N. Sharma for the Respondents.
The Judgment of the Court was delivered by SHARMA, J.
The main question before us is whether a Regional Rural Bank established by a notification under section 3 of the is "State" for the purposes of of the Constitution of India.
This appeal by special leave arises out of a suit by the respond ent No. 1, an employee of the appellant Bank, challenging the validity of a disciplinary proceeding against him and order of his dismissal from service passed therein.
The trial court decreed the suit and the decree was confirmed by the Additional District Judge in appeal and by the High Court in second appeal.
The facts briefly stated, omitting the details which are not relevant for the purpose of this judgment, are in a short compass.
The respondent No. 1 was, in 1981, served with a lengthy charge sheet containing many accusations, some of them being serious, and he was called upon to file his show cause.
A large number of documents were mentioned in the charge sheet and the respondent demanded copies thereof for the purpose of filing his reply.
According to the appellant several opportunities were given to the re spondent to inspect the documents (excepting a few in re spect of which privilege was claimed), but the respondent did not avail of them with the object of protracting and 938 frustrating the inquiry.
According to the High Court, the opportunity given by the appellant was not adequate.
Due to certain circumstances the inquiry could not make any progress for sometime.
A new inquiry officer entrusted with the proceeding took up the matter on 5.7.
1983, when the respondent No. 1 contended that he must be given an adequate opportunity of examining the relevant documents for facili tating him to file his written statement.
There is serious controversy between the parties as to the interpretation of the conduct of the delinquent servant and the approach adopted by the inquiry officer on the 5th of July and the subsequent dates, but we do not consider it necessary to deal with this aspect in detail as we agree with the view of the High Court that as the respondent was not given adequate opportunity to examine the documents, he was handicapped in filing his show cause and defending himself effectively.
The suit was filed by the respondent immediately after the order dated 5th July, 1983 was passed.
The disci plinary proceeding, however, proceeded ex parte and ulti mately the respondent was dismissed from service.
By an amendment of the plaint, the respondent was allowed to challenge the dismissal order also.
The respondent has asserted that it was the vindic tive attitude of the Bank authorities which led to the initiation of the disciplinary proceeding against him and the order of his suspension, and the inquiry have been vitiated by serious violation of principles of natural justice.
Besides denying these allegations, the appellant Bank contended that having regard to the nature of relation ship of master and servant between the parties, the decree for re instatement of the respondent was illegal and the suit as framed was not maintainable.
Even assuming that the respondent proves his case on merits, his remedy would be a suit for damages.
Alternatively, if the respondent is held to be a public servant so as to enable him to ask for re instatement in the service, the suit must be dismissed as not maintainable in view of the provisions of the U.P. Public Services (Tribunal) Act, 1976.
There has also been a stout denial of the allegations relating to violation of principles of natural justice.
Both the learned advocates representing the parties invited us to go deeply into the facts, but we have declined to do so, as all the three courts below have considered the matter in great detail and we agree with the High Court that the inquiry officer should have given adequate opportunity to the respondent to examine the relevant documents for the purpose of preparing his reply.
Not having done so, the 939 further orders in the proceeding must be held to be vitiat ed.
We, however, do not agree with the contention of Mr. Satish Chandra, the learned counsel for the respondent, that the entire proceeding from its very inception is fit to be quashed as illegal.
Now remains the issue relating to the maintainability of the suit.
So far the provisions of the U.P. Public Serv ices (Tribunal) Act, 1976 are concerned, they are wholly in applicable.
Section 6 of the Act bars the jurisdiction of the civil court to entertain a suit against the State of Uttar Pradesh and certain other authorities by a person who is or has been a "public servant" as defined in section 2(b) of the Act in the following words: "2. Definitions.
In this Act (a) . . . (b) "public servant" means every person in the service or pay of (i) the State Government; or (ii) a local authority not being a Cantonment Board; or (iii) any other corporation owned or controlled by the State Government (including any company as defined in Section 3 of the in which not less than fifty per cent of paid up share capital is held by the State Government) but does not include (1) a person in the pay or service of any other company; or (2) (a) a member of the All India Services or other Central Services;" The appellant Prathama Bank is not covered by the above definition.
It was constituted in exercise of power con ferred by section 3 of the .
It has been sponsored by the Syndicate Bank, a nationalised bank.
Although fifteen per cent of the total capital of the Bank has been contributed by the State of Uttar Pradesh, it has no controlling power, and none of the conditions mentioned in section 2(b) of the U.P. Act is satisfied.
The plaintiff respondent is, therefore, not a "public servant" within the limited meaning of the expression 940 used in the U.P. Act and the courts below are right in overruling the defence plea of the bar by the U.P. Act.
The main point pressed on behalf of the appellant is that the Bank cannot be deemed to be 'State ' for the pur poses of Part III of the Constitution, and so the decree for re instatement of the respondent is illegal.
The learned counsel cited several decisions in support of his argument, but we do not consider it necessary to refer to all of them in view of the authoritative pronouncements of this Court on this aspect.
In Ajay Hasia and others vs Khalid Mujib Shera vardi and others; , , it was held by a Consti tution Bench that the test for determining if an authority falls within the definition of State in Article 12 of the Constitution is whether it is an instrumentality or agency of the Government.
The enquiry has to be not as to how the juristic person is born but why it has been brought into existence.
It is, therefore, immaterial whether the authori ty is created by a statute or under a statute.
The Court after examining the Memorandum of Association and the Rules in that case held the Society which was registered under the Jammu & Kashmir Registration of Societies Act to be an 'authority ' within the meaning of Article 12.
It was pointed out that the composition of the Society was dominated by the representatives appointed by the Central Government and the Governments of several States with the approval of the Central Government; the cost of meeting the expenses came from the Central Government and the Government of Jammu & Kashmir; the rules to be made by the Society were required to have the prior approval of the two Governments; the accounts had to be submitted to the two Governments for their scrutiny; the Society was to comply with the direc tions of the State Government with the approval of the Central Government; and the control of the State and the Central Government was thus deep and pervasive.
Reference was also made to the provisions in regard to the appointment and removal of the members of the Society and to the consti tution and powers of the Board of Governors.
An examination of the relevant circumstances in regard to the appellant Bank in the light of this decision leads to the irresistible conclusion that it is an instrumentality of the Central Government.
As has been stated earlier, the Bank was estab lished under the provisions of the Regional Rural Banks act, 1976.
The preamble of the Act which is mentioned below clearly indicates that the Regional Rural Banks are estab lished to discharge the duties which are basically the responsibility of a welfare State. "An Act to provide for the incorporation, regulation and 941 winding up of Regional Rural Banks with a view to developing the rural economy by providing, for the purpose of development of agriculture, trade, commerce, industry and other productive activities in the rural areas, credit and other facilities, particularly to the small and marginal farmers, agricultural labourers, artisans and small enterpreneurs, and for matters connected therewith and incidental thereto.
" Section 3 says that if requested by a Sponsor Bank, the Central Government may establish a Regional Rural Bank in the manner provided therein.
The Sponsor Bank in the present case was a nationalised bank, which has been held to be under the control of the Central Government and, therefore, covered by the definition in Article 12 of the Constitution.
The share capital of a Rural Bank is to be subscribed by the Sponsor Bank which has the further duty of training the personnel of the Rural Bank and providing managerial and financial assistance during the initial stage.
The duration of such period can be extended by the Central Government.
The Central Government is also vested with power to increase or reduce the authorised capital in consultation with the Reserve Bank and the Sponsor Bank.
The burden to subscribe to the capital issued by the Rural Bank is divided amongst the Central Government, Sponsor Bank and the State Govern ment, their respective shares being fifty per cent, thirty five per cent and fifteen percent.
The general superintend ence, direction and management of the affairs of the Rural Bank vest in a Board of Directors which is constituted of two Directions to be nominated by the Central Government, one Director to be nominated by the Reserve Bank from amongst one of its Officers, one Director to be nominated by the National Bank from amongst one of its Officers, two Directors to be nominated by the Sponsor Bank from amongst its Officers and the remaining two Directors to be nominated by the State Government from its Officers.
In view of the relationship with and control of the Central Government on the Reserve Bank, National Bank and the Sponsor Bank, the Central Government gets an effective control over the Rural Bank.
The head office of the Rural Bank is to be located according to the directions of the Central Government.
The remunerations of the Officers and other employees of the Rural Bank are to be fixed by the Central Government as indicated in section 17.
Without attempting to exhaustively deal with the functions of a Rural Bank, section 18(2) mentions the following types of business within its duty: "18.(1). . (2). . 942 (a) the granting of loans and ad vances, particularly to small and marginal farmers and agricultural labourers, whether individually or in groups, and to co operative societies, including agricultural marketing societies, agricultural processing societies, co operative farming societies, primary agri cultural credit societies or farmers ' service societies, for agricultural purposes or agri cultural operations or for other purposes connected therewith; (b) the granting of loans and ad vances, particularly to artisans, small enter preneurs and persons of small means engaged in trade, commerce or industry or other produc tive activities, within the notified area in relation to the Regional Rural Bank.
" It is manifest that by establishing the Rural Banks the Central Government acts in discharge of its obligations under Articles 38 and 48 of Part IV of the Constitution through them.
To ensure that the object of establishing Rural Banks is fully achieved, sub section (2) of section 20 of the Act has brought both the houses of the Parliament also in the picture in the following words: "(2) The Central Government shall cause every auditor 's report and report on the working and activities of each Regional Rural Bank to be laid, as soon as may be after they are re ceived, before each House of Parliament." By section 24 A the Sponsor Bank is required to periodically monitor the progress of the Rural Banks and to take connect ed steps, and to cause inspection, internal audit et cetra made.
The rule making power dealt with in section 29 is vested in the Central Government and the power of the Central Govern ment to give directions is mentioned in section 24, quoted below: "24(1) A Regional Rural Bank shall, in the discharge of its functions, be guided by such directions in regard to matters of policy involving public interest as the Central Government may, after consultation with the Reserve Bank, give.
(2) If any question arises as to whether any such direction relates to a matter of policy involving public interest, the decision of the Central Government thereon shall be final.
" 943 The provisions of the Act do not leave any room for doubt that the Regional Rural Banks are under deep and pervasive control of the Central Government and have been established as its instrumentality and, are, therefore, 'State ' within Article 12 of the Constitution.
The learned counsel contended that even if the appel lant Bank is considered to be State, the courts cannot force the services of the respondent on it by passing a decree for his re instatement in service.
All that can be done is to grant a relief of way of compensation in a properly consti tuted suit.
We do not find any merit in the argument.
The learned counsel relied on the following observations in paragraph 103 of the judgment in Central Inland Water Trans port Corporation Ltd. and another vs Brojo Nath Ganguly and another reported in, [1986] 3 SCC at page 156: "The contesting respondents could, therefore, have filed a civil suit for a declaration that the termination of their service was contrary to law on the ground that the said Rule 9(i) was void.
In such a suit, however, they would have got a declaration and possibly damages for wrongful termination of service but the civil court could not have ordered reinstatement as it would have amount ed to granting specific performance of a contract of personal service.
As the Corpora tion is "the State", they, therefore, adopted the far more efficacious remedy of filing a writ petition under Article 226 of the Consti tution".
Far from helping the appellant, the observations clarify the correct position which is just contrary to the argument of the learned counsel.
In the result, the departmental proceeding against the respondent from 5.7.1983 onwards is quashed and the decree for the plaintiffs reinstatement in service with consequential benefits is confirmed.
If the Bank authorities be of the view that in spite of the delay of several years the inquiry ought to be completed, it will be open to them to proceed with it and to take further steps in the proceed ing from the stage where it stood on 5.7.
1983, but they should indicate their intention to do so to the respondent and also serve copies of the relevant document on him.
If they are of the view that any particular document is confi dential in nature and a copy thereof cannot be handed over to the respondent they may so indicate in writing to the respondent and it will be open to the inquiry officer to examine whether the denial of such a copy would amount to violation of principles of 944 natural justice.
The Bank shall also permit the respondent to join his post and receive his other benefits before he is called upon to file a show cause.
Subject to the modifica tions as indicated the decree under appeal is affirmed.
The parties are directed to bear their own costs of this Court.
| The petitioners in these special leave petitions and writ petitions claim the right to engage in trading business on the pavements of roads of the city of Delhi.
The special leave petitions are against the judgments of the Delhi High Court dismissing their claim.
It is contended on behalf of the petitioners that (i) they were allowed by the respondents to transact their business by occupying a particular area on the pavements on payment of certain charges described as Tehbazari and the refusal by the municipal authorities to permit them to continue with their trade is violative of their fundamental right guaranteed under Article 19(1)(g) of the Constitution; and (ii) the petitioners are poor people and depend on their business for their livelihood and if they are not allowed to occupy some specific places demarcated on the pavements on a permanent basis for conducting their business they may starve which will lead to violation of their fundamental right under Article 21 of the Constitution.
The respondents, on the other hand, contend that nobody has got a legal right to occupy exclusively a particular area on the road pavement for pursuing a trading business and nobody can claim any fundamental right in this regard whatsoever.
1039 Disposing of the petitions and remitting the cases to the appropriate Division Bench for final disposal in accord ance with this judgment, this Court, HELD: E.S. Venkataramiah, C J, section Natarajan, L.M. Sharma and N.D. Ojha ,JJ.] Per L.M. Sharma, J. (1) A member of the public is entitled to legitimate user of the road other than actually passing or re passing through it, provided that he does not create an unreasonable obstruction which may inconvenience other persons having similar right to pass and does not make excessive use of the road to the prejudice of the others.
Liberty of an individu al comes to an end where the liberty of another commences.
[1050C, A B] (2) What will constitute public nuisance and what can be included in the legitimate user can be ascertained only by taking into account all the relevant circumstances including the size of the road, the amount of traffic and the nature of the additional use one wants to make of the public streets.
This has to be judged objectively and here comes the role of public authorities.
[1051E] (3) The right to carry on trade or business mentioned in Article 19(1)(g) of the Constitution, on street pavements, if properly regulated, cannot be denied on the ground that the streets are meant exclusively for passing or re passing and for no other use.
Proper regulation is, however, a necessary condition as otherwise the very object of laying out roads to facilitate traffic may be defeated.
Allowing the right to trade without appropriate control is likely to lead to unhealthy competition and quarrel between traders and traveling public and sometimes amongst the traders themselves resulting in chaos.
The right is subject to reasonable restrictions under clause (6) of Article 19.
[1052C D] (4) The proposition that all public streets and roads in India vest in the State but that the State holds them as trustee on behalf of the public and the members of the public are entitled as beneficiaries to use them as a matter of right, and that this right is limited only by the similar rights possessed by every other citizens to use the pathways and further that the State as trustee is entitled to impose all necessary limitations on the character and extent of the user, should be treated as of universal application.
The provisions of the Municipal Acts should be 1040 construed in the light of the above proposition and they should receive a beneficent interpretation.
[1052E G] M.A. Pal Mohd. vs R.K. Sadarangani, A.I.R. (1985) Mad 23; C.S.S. Motor Service vs Madras State, A.I.R. 1953 Mad. 279; Saghir Ahmad vs The State of U.P. & Ors., ; ; liarper vs G.N. Haden & Sons Ltd., ; Bombay Hawkers Union & Ors.
vs Bombay Municipal Corporation (5) The petitioners do have the fundamental right to carry on a trade or business of their choice, but not to do so on a particular place, as circumstances are likely to change from time to time.
But that does not mean that the licence has to be granted on a daily basis; that arrangement cannot be convenient to anybody, except in special circum stances.
[1053F, 1057F] Fertilizer Corporation Kamgar Union vs Union of India, ; ; K. Rajendran vs State of Tamil Nadu, ; , referred to.
(6) Article 21 is not attracted in the case of trade or business either big or small.
The right to carry on any trade or business and the concept of life and personal liberty within Article 21 are too remote to be connected together.
[1054G] Olga Tellis & Ors.v.
Bombay Municipal Corporation & Ors., ; , distinguished.
(7) The provisions of the Delhi Municipal Corporation Act, 1957, are clear and the Municipal Corporation of Delhi has full authority to permit hawkers and squatters on the side walks where they consider it practical and convenient.
[1052G H] (8) The provisions of the Punjab Municipal Act, 1911, as applicable to New Delhi area, should receive a liberal construction so that the New Delhi Municipal Committee may be in a position to exercise full authority to permit hawk ers and squatters on pavements in certain areas.
[1053A C] Pyarelal vs N.D.M.C., ; overruled.
(9) A scheme should be drawn up as soon as possible contain ing 1041 detailed necessary provisions dealing with all relevant aspects, and capable of solving the problems arising in the situation in a fair and equitable manner.
[1057B C] (10) The demand of the petitioners that hawkers must be permitted on every road in the city cannot be allowed.
If a road is not wide enough to conveniently manage the traffic on it, no hawking may be permitted at all, or may be sanc tioned only once a week, say on Sundays when the rush con siderably thins out.
Hawking may also be justifiably prohib ited near hospitals or where necessity of security measures so demands.
There may still be other circumstances justify ing refusal to permit any kind of business on a particular road.
[1057E] (11) Some of the hawkers in big cities are selling very costly luxury articles including sophisticated electronic goods, sometimes imported or smuggled.
The authorities will be fully justified to deny to such hawkers any facility.
They may frame rules in such manner that it may benefit only the poor hawkers incapable of investing a substantial amount for starting the business.
Attempt should be made to make the scheme comprehensive, dealing with every relevant as pect, for example, the charges to be levied, the procedure for grant and revocation of the licences, etc.
[1057H 1058B] Per Kuldip Singh, J. (1) The guarantee under Article 19(1)(g) extends to practice any profession, or to carry on any occupation, trade or business.
The object of using four analogous and overlapping words in Article 19(1)(g) is to make the guaran teed right as comprehensive as possible to include all the avenues and modes through which a man may earn his liveli hood.
In a nut shell the guarantee takes into its fold any activity carried on by a citizen of India to earn his liv ing.
The activity must of course be legitimate and no anti social like gambling, trafficking in women and the like.
[1058H 1059C] (2) Once street trading is accepted as legitimate trade, business or occupation it automatically comes within the protection guaranteed under Article 19(1)(g) of the Consti tution of India.
[1062E] (3) Street trading is an age old vocation adopted by human beings to earn living.
It is one of the traditionally recognised business or trade in England.
This is so in spite of the fact that there is a complete social security in that country and as such no compulsion on the citizens to be 1042 driven to street trading out of poverty or unemployment.
On the other hand, abysmal poverty in India warrants outright rejection of the argument that nobody has a right to engage himself in 'street trading '.
[1059D,1062A B] (4) There is no justification to deny the citizens of their right to earn livelihood by using the public streets for the purpose of trade and business.
[1063B] Saghir Ahmad vs The State of U.P. & Ors., ; ; Manjur Hasan vs Mohammed Zaman, 52 I.A. 61; Himat Lal K. Shah vs Commissioner of Police Ahmedabad & Anr.
, ; , referred to.
(5) Street trading being a fundamental right has to be made available to the citizens subject to Article 19(6) of the constitution.
It is within the domain of the State to make any law imposing reasonable restrictions in the inter est of general public.
This can be done by an enactment on the same lines as in England or by any other law permissible under Article 19(6) of the Constitution.
[1064B] Bombay Hawkers Union & Ors.
vs Bombay Municipal Corpora tion & Ors., ; Municipal Corporation of Delhi vs Gurnam Kaur, ; , referred to.
(6) The skeletal provisions in the Delhi Municipal Corporation Act, 1957 and the Punjab Municipal Act, 1911 can hardly provide any regulatory measures to the enormous and complicated problems of street trading in these areas.
|
Criminal Appeal No. 532 of 1976.
From the Judgment and Order dated 9.2.
1976 of the Punjab and Haryana High Court in Crl.
Writ No. 13 1 of 1975.
Baldev Atrey, K.B. Rohtagi, R.A. Gupta, V.K. Jain, S.K. Gupta and C.S. Vaidyanathan for the Appellant.
M.S. Rao, R.S. Sodhi, B. Parthasarathi and Ms. A. Subha shini for the Respondents.
The Judgment of the Court was delivered by BALAKRISHNA ERADI, J.
These four appeals have been filed against judgments of the High Court of Punjab and Haryana rejecting the claims of the appellants who have been con victed by the General Court Martial for offences under the and are undergoing their sentences of varying terms of imprisonment for the grant of benefit to them of the provision for set off contained in Section 428 of the Code of Criminal Procedure.
The High Court has granted certifi cates of fitness under Article 134A of the Constitution and it is on the strength of those certificates that these appeals have been preferred to this Court.
The common question of law that arises in these appeals concerns the applicability of Section 428 of the Code of Criminal Procedure to persons sentenced to undergo imprison ment by General Court Martial under the .
The posi tion under the will equally govern persons sen tenced to undergo imprisonment by Court Martial under the Navy Act and the Air Force Act.
In the judgments under appeal, the High Court has fol lowed an earlier ruling of a Division Bench of the same High Court in Ram 87 Labhaya Sharma vs Union of India and Others, in Criminal Writ No. 40 of 1975 decided on December 12, 1975 wherein it was held that the benefit under Section 428 of the Code of Criminal Procedure is not available to convicts, who are tried, convicted and sentenced by Court Martial.
There is a divergence of views between different High Courts on this question.
The High Court of Madras in P.P. Chandrasekaran vs Government of India and Ors., [1977] Cri.
L.J. 677 (a case of courtmartial under the Navy Act) and in T.S. Ramani vs The Superintendent of Prisons, [1982] Cri.
L.J. 892 (court martial under the ) has taken the view that the benefit of Section 428 of the Code of Criminal Procedure cannot be claimed by persons convicted by Court Martial.
The same view has been taken by the High Court of Delhi in F.R. Jesuratnam vs Chief of Air Staff, [1976] Cri.
L.J. 65 dealing with a case of court martial under the Air Force Act.
A Single Judge of the High Court of Kerala has however, taken a contrary view in Subramanian vs Officer Commanding Armoured Static Workshop, and the said decision was referred to and followed by a Division Bench of the Calcutta High Court in the case of Anand Singh Bishit vs Union of India and Ors., An examination of the relevant provisions of the Code of Criminal Procedure and the (as well as the corre sponding provisions in the Navy Act and the Air Force Act) makes it abundantly clear that Section 428 of the Criminal Procedure can have no applicability whatever in respect of persons convicted and sentenced by Court Martial.
Section 5 of the Code of Criminal Procedure lays down that nothing contained in the said Code shall, in the ab sence of a specific provision to the contrary, affect any special or local law for the time being in force, or any special jurisdiction or power conferred, or any special form of procedure prescribed, by any other law for the time being in force.
The relevant Chapters of the , the Navy Act and the Air Force Act embody a completely self contained comprehensive Code specifying the various offences under those Acts and prescribing the procedure for detention and custody of offenders, investigation and trial of the offend ers by Court Martial, the punishments to be awarded for the various offences, confirmation and revision of the sentences imposed by Court Martial, the execution of such 88 sentences and the grant of pardons, remissions and suspen sions in respect of such sentences.
These enactments, there fore, constitute a special law in force conferring special jurisdiction and powers on Courts Martial and prescribing a special form of procedure for the trial of the offences under those Acts.
The effect of Section 5 of the Code of Criminal Procedure is to render the provisions of the Code of Criminal Procedure inapplicable in respect of all matters covered by such special law.
Since in the four cases before us we are concerned with convictions by General Court Mar tial under the provisions of the , we shall refer specifically to the relevant provisions contained in the (hereinafter called the 'Act ').
Sections 34 to 68 contained in Chapter VI of the Act specify the different categories of offences under the Act including abetment of offences under the Act.
Chapter VII of the Act which comprises Sections 71 to 89 of the Act deals with the punishments awardable by Court Martial in respect of the different offences.
Sections 10 1 to 107 contained in Chapter IX of the Act deal with the arrest and custody of offenders and the proceedings prior to the trial.
Chapter X of the Act describes in Sections 108 to 118, the different kinds of court martial, the authorities competent to convene them, their composition, and respective powers.
In Chapter XI consisting of Sections 128 to 152, we find detailed provisions laying down the procedure to be followed by Court Martial in conducting the trial of offenders.
Chapter XII contains provisions relating to confirmation and revi sion of the findings entered and sentences imposed by the different categories of courtmartial.
Sections 166 to 176 contained in Chapter XIII deal with the execution of sen tences and the establishment and regulation of military prisons etc.
The subject of granting pardons, remissions and suspensions of sentences is dealt with in Sections 179 to 190 comprised in Chapter XIV of the Act.
Thus we find that the Act contains elaborate and comprehensive provisions dealing with all the stages commencing from the investiga tion of offences and the apprehension and detention of offenders and terminating with the execution of sentences and the grant of remissions.
suspensions etc.
Section 167 of the Act specifically lays down that whenever a person is sentenced by a Court Martial under the Act to imprisonment, the term of his sentence shall, whether it has been revised or not, be reckoned to commence on the day on which the original proceedings were signed by the Presiding Officer or, in the case of a summary Court Mar tial, by the Court.
In the face of this categorical provi sion laying down that the sentence of imprisonment shall be 89 deemed to have commenced only on the day when the court martial proceeding was signed by the Presiding Officer or by the Court as the case may be, it is in our opinion futile to contend that the is silent with respect to the topic as to the date with effect from which the period of imprisonment covered by the sentence is to be reckoned.
We state this only for the reason that an ingenious argument was advanced before us by Counsel for the appellant that Section 5 of the Code of Criminal Procedure only lays down that nothing in the Code shall "affect" any special or local law and hence in the absence of any specific provision in the special or local law covering the particular subject matter, the provisions of the Code would get attracted.
Even if this argument is to be assumed to be correct (which assumption we shall presently show iS wholly unwarranted), inasmuch as Section 176 of the Act specifically deals with the topic of the date of commencement of the sentence of imprisonment, there is absolutely no scope for invoking the aid of Section 428 of the Code of Criminal Procedure in respect of prisoners convicted by Court Martial under the Act.
As we have already indicated, we are unable to accept as correct the narrow and restricted interpretation sought to be placed on Section 5 of the Code by the Counsel appearing on behalf of the appellants.
In our opinion the effect of Section 5 of the Code is clearly to exclude the applicabili ty of the Code in respect of proceedings under any special or local law or any special jurisdiction or form of proce dure prescribed by any other law.
Whatever doubt might otherwise have existed on this point is totally set at rest by Section 475 of the Code of Criminal Procedure which furnishes a conclusive indication that the provisions of the Code are not intended to apply in respect of proceeding before the Court Martial.
That Section is in the following terms: "475.
Delivery to commanding officers of persons liable to be tried by Court martial (1) The Central Government may make rules consistent with this Code and the (46 of 1950), the (62 of 1957), and the (45 of 1950) and any other law, relating to the Armed Forces of the Union, for the time being in force, as to cases in which persons subject to military, naval or air force law, or such other law, shall be tried by a Court to which this Code applies or by a Courtmar tial; and when any person is brought before a Magistrate and charged with an offence for which he is liable to be tried either by a Court 'to which this Code applies or by a Court martial, such Magistrate shall have regard to such 90 rules, and shall in proper cases deliver him, together with a statement of the offence of which he is accused, to the commanding officer of the unit to which he belongs, or to the commanding officer of the nearest military, navel or air force station, as the case may be, for the purpose of being tried by a Court martial.
Explanation In this section (a) "unit" includes a regiment, corps, ship, detachment, group, battalion or company, (b) "Court martial" includes any tribu nal with the powers similar to those of a Court martial constituted under the relevant law applicable to the Armed Forces of the Union.
(2) Every Magistrate shall, on receiving a written application for that purpose by the commanding officer of any unit or body of soldiers, sailors or airmen stationed or employed at any such place, use his utmost endeavors to apprehend and secure any person accused of such offence.
(3) A High Court may, if it thinks fit, direct that a prisoner detained in any jail situated within the State be brought before a Court martial for trial or to be examined touching any matter pending before the Court martial.
" The distinction made in the Section between "trial by a Court to which this Code applies" and by a Court Martial conclusively indicates that Parliament intended to treat the Court Martial as a forum to the proceedings before which the provisions of the Code will have no application.
Further, there is also intrinsic indication contained in the very wording of Section 428 of the Code of Criminal Procedure that the section cannot have any application in respect of persons tried and sentenced by Court Martial.
Section 428 of the Code reads "428.
Period of detention undergone by the accused to be set off against the sentence of imprisonment Where an accused person has, on conviction, been sentenced to imprisonment for a term, not being imprison ment in 91 default of payment of fine, the period of detention, if any, undergone by him during the investigation, inquiry or trial of the same case and before the date of such conviction, shall be set off against the term of imprison ment, imposed on him on such conviction, and the liability of such person to undergo im prisonment on such conviction shall be re stricted to the remainder, if any, of the term of imprisonment imposed on him.
" The section provides for set off of the period of deten tion undergone by an accused person during "the investiga tion, inquiry or trial" of the same case before the date of conviction.
The expression "investigation" has been defined in Section 2(h) of the Code as follows: "2.(h) "investigation" includes all the pro ceedings under this Code for the collection of evidence conducted by a police officer or by any person (other than a Magistrate) who is authorised by a Magistrate in this behalf." In the case of persons tried by Court Martial there is no investigation conducted by any police officer under the Code or by any person authorised by Magistrate in that behalf.
Similarly, the expression "inquiry" has been defined in Section 2(g) of the Code as meaning "every inquiry, other than a trial, conducted under this Code by a Magistrate or Court." No inquiry is conducted under the Code by any Magis trate or Court in respect of the offences committed by persons which are tried by the Court Martial.
The trial is also not conducted by the Court Martial under the Code but only in accordance with the special procedure prescribed by the Act.
Such being the position, the provision for set off contained in Section 428 of the Code of Criminal Procedure can never be attracted in the case of persons convicted and sentenced by Court Martial to undergo imprisonment.
In the light of the foregoing discussion we uphold as correct the view taken by the High Court of Punjab and Haryana in the judgments under appeal.
We also approve of the decisions of the High Courts of Madras and Delhi cited above wherein the view has been taken that the benefit of Section 428 of the Code of Criminal Procedure cannot be claimed by persons tried and sentenced by the Court Martial.
The decision in Subramanian vs Officer Commanding Armoured 92 Static Workshop (supra) rendered by a learned Single Judge of the High Court of Kerala does not contain any discussion of the relevant provisions of the two concerned statutes and what little reasoning is found in the judgment does not appeal to us as correct or sound.
The Division Bench of the Calcutta High Court in its decision in Anand Singh Bishit vs Union of India and Ors.
(supra) has merely followed the aforesaid ruling of the Single Judge of the High Court of Kerala.
We hold that these two decisions do not lay down the correct law.
It follows from the foregoing discussion that these appeals are devoid of merits and they will accordingly stand dismissed.
P.S.S. Appeals dismissed.
| Sub section (1) of section 4 of the requires every establishment in public sector to notify vacancy in any employment to the employment exchange.
Sub section (2) lays down similar requirement in respect of every establish ment in private sector, while sub section
(4) lays down that nothing in sub sections
(1) and (2) shall be deemed to impose any obligation upon any employer to recruit any person through the employment exchanges to fill any vacancy merely because that vacancy has been notified.
An 'establishment ' is de fined in section 2(e) of the Act to mean any office or any place where any industry, trade, business or occupation is carried on, an 'establishment in public sector 'in section 2(f) as an establishment owned, controlled or managed by the Government or a Department of the Government, and an 'establishment in private sector ' in section 2(g) as an establishment which is not an establishment in public sector.
Instructions issued by the Government of India from time to time enjoined upon employers Central Government offices, quasiGovernment institutions and statutory organi sations and establishments in the private sector to restrict their field of choice for vacancies to which the Act applied in the first instance, to candidates sponsored by employment exchanges.
A question arose as to whether an 'establishment in the public sector ', or an 'establishment in the private sector ', as defined in the Act, could make appointments to posts to which the Act applies, of 911 persons not sponsored by the employment exchanges, and whether the Act covers Government establishments also.
The High Court held that the Act had no application to Government establishments, that it casts no obligation either on the public sector establishments or on the private sector establishments to make the appointment from among candidates sponsored by the employment exchange only, and that any insistence that candidates sponsored by the employ ment exchanges alone should be appointed would be contrary to the right guaranteed by articles 14 and 16 of the Constitu tion.
Disposing of the Appeal of the Union of India, the Court, HELD: 1.
The High Court was wrong in holding that the Act was not applicable to Government establishments.
If the definition of 'establishment ' in section 2(e).
which includes an 'office ', is read alongside the section 2(1 '), it will be clear that Government offices are also included in the expression 'establishment in public sector '.
[914E] 2.1 There is no provision in the Act which obliges an employer to employ those persons only who have been spon sored by the employment exchanges.
Section 4(4) of the Act makes it explicitly clear that the employer is under no obligation to recruit any person through the employment exchanges to fill in a vacancy merely because that vacancy has been notified under sections 4(1) and 4(2).
The compulsion extends only to notification of vacancies that may occur in the establishment before filling them up.
[915G H; 916G] 2.2 The object of the Act is not to restrict, but to enlarge the field of choice so that the employer may choose the best and the most efficient and to provide an opportuni ty to the worker to have his claim for appointment consid ered without having to knock at every door for employment.
[918B C] 3.
The Government is at perfect liberty to issue in structions to its own departments and organisations to adhere to the rule that not merely vacancies should be notified to the employment exchanges but the vacancies should also be filled by candidates sponsored by the employ ment exchanges, provided the instructions do not contravene any constitutional provision or any statute.
But these instructions cannot bind other bodies which are created by statute and which function under the authority of statute.
In the absence of any statutory presumption, the statutory authority may adopt and follow such instructions if it thinks 912 fit.
Otherwise, the Government may not compel statutory bodies appointment of persons from among candidates spon sored by employment exchanges only.
Private employers cannot be so compelled by any instructions issued by the Govern ment.
[921C E] 4.
Any restriction that employment in Government Depart ments should be through the medium of employment exchanges does not offend articles 14 and 16 of the Constitution.
In public employment, it is necessary to eliminate arbitrari ness and favouritism and introduce uniformity of standards and orderliness.
There has to be an element of procedural fairness in the recruitment.
A public employer cannot choose to receive applications for employment where and when he pleases and to make appointments as he likes.
The insistence on recruitment through employment exchanges therefore, advances rather than restricts the rights guaranteed by articles 14 and 16.
[922E; B D]
|
ivil Appeal No. 1449 of 1966.
Appeal by special leave from the judgment and decree dated April 28, 1966 of the AIIahabad High Court in Second Appeal No. 289 of 1965.
M.K. Ramatnurthi, Shyamala Pappu and Vineet Kumar, for the appellant.
B.C. Misra, O. Prakash, R.K. Mathur and M.V. Goswami, for the respondent.
577 The Judgment of the Court was delivered by Bachawat, J.
The appellant is the tenant and the respondent is the landlord of House No. 5B, Old 122 Maya Mirganj, Allahabad.
The appeal arises out of a suit for ejectment by the landlord against the tenant from the house.
On October 11, 1961, the landlord obtained permission to institute the suit from the Rent Control and Eviction Officer under section 3 (1) of the U.P. (Temp.) Control of Rent and Eviction Act, 1947.
On October 14, 1961 the landlord instituted the present suit for eviction against the tenant.
On March 27, 1962 the Commissioner Allahabad Division acting under section 3 (3) revoked the permission to institute the suit.
On March 30, 1963 the State Government acting under section 7F set aside the Commissioner 's order and gave leave to the landlord to file the suit with effect from July 30, 1963.
On July 11, 1963 the Trial Court decreed the suit.
The tenant filed an appeal against the decree.
On November 4, 1963 the appellate court set aside the decree and remanded the suit for fresh trial.
After the suit went back on remand the Trial Court decreed the suit on March 2, 1964.
The Trial Court held that the permission granted by the State Government became effective from July 30, 1963 and as the suit was still pending a decree could be passed in the suit.
An appeal against the decree was dismissed on November 28, 1964.
A second appeal was dismissed by the High Court on April 28, 1966.
The present appeal has been filed by the tenant after obtaining special leave.
The sole question in the appeal is whether in the circumstances there was a valid permission to institute the suit under section 3 (1 ).
In Bhagwan Das vs Paras Nath(1) this Court held that a suit validly instituted after obtaining permission of the Commissioner under section 3(3) did not become incompetent if the State Government acting under section 7F revoked the permission after the institution of the suit.
In that case the District Magistrate refused to give permission under section 3 (1) to.
institute the suit.
The Commissioner acting under section 3 (3) set aside the order and granted permission to institute the suit.
The suit was decreed by the Trial Court on November 2, 1960.
The tenant filed an appeal against the decree.
During the pendency of the appeal the State Government acting under section 7F revoked the permission granted by the Commissioner.
The Court held that though the order under section 3(3) was subject to an order under section 7F the Government 's power under section 7F to revoke the permission granted by the Commissioner became exhausted once the suit was validly instituted.
In support of his contention that the present suit is not maintainable, the appellant relies on the following observations of Hegde, J. : ; 578 "When the Commissioner sets aside the order passed by the District Magistrate granting permission to file a suit for ejecting a tenant, the order of the Commissioner prevails.
If he cancels the permission granted by the District Magistrate there is no effective permission left and the suit instituted by the plaintiff without a waiting his decision must be treated as one filed without any valid permission by the District Magistrate.
" Having regard to these observations the present suit though validly instituted after obtaining the permission under section 3 (1) became incompetent when the permission was revoked by the Commissioner under section 3 (3).
But the order under section 3 (3) itself was set aside by the State Government under section 7F during the pendency of the suit.
The question is what is the effect of this order under section 7F.
Now, section 3(4) provides that the order of the Commissioner under section 3(3) subject to an order passed by the State Government under section 7F.
If the State Government acting under section 7F sets aside the order of the Commissioner revoking the permission, the order under section 3 (1) granting permission is revived.
The result is that there is an effective permission to institute the suit under section 3 (1) and the suit is validly instituted.
In Bhagwan Das 's Case (1) the suit was validly instituted after obtaining permission from the Commissioner under section 3 (3).
The State Government could not render such a suit incompetent by any order under section 7F.
In the present case the suit was validly instituted after obtaining permission from the Rent Control and Eviction Officer under section 3 (1).
The effect of the order of the Commissioner revoking the permission was that the suit became incompetent.
The State Government acting under section 7F had power to revise and set aside the Commissioner 's order and restore the permission granted under section 3 (1) so as to make the suit competent.
The order of the State Government after stating that in the interest of justice the house should be available to the landlord for his use, set aside the Commissioner 's order under section 3(3).
The result was that the order of the Rent Control and Eviction Officer passed .under section 3 (1) stood restored.
The further direction in the order that the landlord "is advised to file a suit for eviction from the house in dispute against the opposite party in a civil court under section 3 of the Act, which will be applicable four months after the date of the order" really means that the permission under section 3(1) would become effective on the expiry of 4 months.
The landlord had thus an effective permission to institute the suit under section 3(1) on the expiry of four months from March 30, 1963, that is to say, as from July 30, 1963.
The (1) ; 579 decree in the suit was passed on March 2, 1964.
On that date the landlord had a valid permission to institute the suit.
The suit was therefore maintainable.
In the result, the appeal is dismissed.
There will no order as to costs.
Y.P. Appeal dismissed.
| On a complaint filed by 'the Registrar of Companies, and after an investigation by the Police ordered by the Chief Presidency Magistrate, Calcutta, proceedings were instituted against the appellants for conspiring to commit criminal breach of trust in respect of a company 's funds.
After a large number of witnesses were examined and several documents were tendered in evidence, the Magistrate committed the accused to stand trial for offences under section 120B read with Sections 409, 477A I.P.C. before the Court of Sessions.
A revision application against the order of committal was rejected in limine by the High Court.
In appeal to this Court it was contended on behalf of the appellants that there was no evidence on which the order of commitment could be made and that under section 209 (1) Cr.
P.C., the charge may be framed only if in the view of the committing Magistrate the evidence on record is sufficient to justify conviction of the accused.
HELD: Dismissing the appeal: On the facts, it could not by said that there was no evidence on which a charge could be framed against the appellants or that the evidence was so totally unworthy of credit that are order recording the conviction against the accused could not be made.
Although in terms section 209 'applies to cases which are instituted otherwise than on a .police report, the principle underlying that section also applies to cases which are instituted on a police report.
A Magistrate holding an inquiry has to see whether there is sufficient evidence for commitment, and not whether there is sufficient evidence for conviction.
If there is no prima facie evidence or the evidence is totally unworthy of credit, it is his duty to discharge the accused: if there is some evidence on which a conviction may reasonably be based, he must commit the ' case.
[525 A C] Normally the High Court in a revision application flied against the order of commitment under section 207A will not enter upon a reappraisal of the evidence on which the order of commitment is made.
The High Court would be justified in exercising its revisional jurisdiction where a substantial question of law arises on which the correctness of the order of commitment may be effectively challenged.
But in other cases the trial before the Court of Session should be allowed to run its course.
[522 G 523 B]
|
Appeal No. 104 of 1970.
(From the Judgment and Order dated 23 10 1967 of the Patna High Court in Civil Writ Jurisdiction Case No. 299/66).
L.M. Singhvi, U.P. Singh and S.N. Jha, for the Appellant.
Sarjoo Prasad and U.S. Prasad, for the Respondent.
The Judgment of the Court was delivered by KHANNA, J.
The short question which arises for determi nation in this appeal on certificate by Damodar Valley Corporation against the judgment of Patna High Court dis missing the writ petition filed by the appellant is whether the appellant is liable to pay electricity duty under Bihar Electricity Duty Act,, 1948 as amended by Bihar Electricity Duty (Amendment) Act, 1963.
The High Court answered the question in the affirmative against the appellant.
The appellant is a corporation established under the for the development of the Damodar Valley in the States of Bihar and West Bengal.
One of the functions of the appellant is the promotion and operation of schemes for the generation, transmission and distribution of hydroelectric and thermal electrical energy.
Bihar Electricity Duty Act, 1948 (Bihar Act 36 of 1948) (hereinafter referred to as the principal Act) was published in the Bihar gazette; on October 1, 1948.
It was an Act for the levy of duty on the sales and consumption of electrical energy in the province of Bihar.
Material part of sec tions.
3 and 4,.
as they stood before the amendment made in 1963, read as under: "3. Incidence of duty. (1) There shall be levied and paid to the: State Government on the units of energy consumed or sold, excluding losses of energy in the transmission and transformation, a duty at the rates specified in the First Schedule: Provided that no duty shall be leviable on units of energy : (i) . . (ii) . (iii) . (iv) . . 120 (v) consumed by, or in respect of, or sold for consumption in any (a) mine, as defined in the Indian Mines Act, 1923: (b) industrial undertaking; except to the extent specified in the Second Schedule: (vi). (2) . 4.
Payment of duty. ( I ) Every licensee shall pay every month to the State Government at the time and in the manner prescribed the proper duty payable under section 3 on the units of energy consumed by him or sold by him to the con sumer.
(2) Every licensee may recover from the amount which falls to be paid by the licensee as duty in respect of energy sold to the consumer.
(3). . (4) . (4a) . (5) .
The principal Act was amended by Bihar Electricity Duty (Amendment) Act, 1963 (Bihar Act 20.
of 1963) (hereafter referred to as the amending Act).
The amending Act received the assent of the President on December 4, 1963 and was published on December 17, 1963.
By section 2 of the amending Act, new section 3 was substituted for the old section 3.
Material part of new section 3 read as under: "3.
Incidence of duty.(1) Subject to the provision of sub section (2), there shall be levied and paid to the State Government on the units of energy consumed or sold, excluding losses of energy in transmission and transformation, a duty at the rate or rates specified in the Schedule.
(2) No duty shall be leviable on units of energy (a) . (b) . (c) . (d) . (e) consumed by the Damodar Valley Corporation for the generation, transmission or distribution of electricity by that Corporation; (f) . (3) . 121 Amendment was also made in the First Schedule of the principal Act.
The relevant part of the sched ule read as 'under : THE SCHEDULE (See section 3.) RATES OF DUTY A. For a mine or an industrial under Such rateor rates taking, save in respect of its not exceeding 2 naya premises used for residential or paisa per unit of office purpose energy as may, from time to time, be fixed by the State Govern ment with the previ ous consent of the President, by order in this behalf".
In the writ petition the appellant prayed for quashing three notices dated February 10, 1965 issued by the Superintendent of Commercial Taxes Giridih as also his orders dated March 24 and 29, 1966.
By the impugned notices the Superintendent of Commercial Taxes called upon the appellant to show cause as to why penal action under the princi pal Act as amended,, should not be taken against the appellant for having failed to get itself registered under that Act.
The appellant was also called upon to apply for registration.
By the impugned orders the Superintendent of Commercial Taxes directed.
the appellant to pay electricity duty under the: Act as amended.
The case of the appellant was that it enjoyed immunity from payment of tax under clause (1) of article 288 of the Constitution.
No law satisfying the requirement of clause (2) of article 288, it was contended, had been made warranting the levy of such a duty.
The High Court repelled this contention, and we find no sufficient ground to take a different view.
Article 288 of the Constitution reads as under: "288(1) Save in so far as the President may by order otherwise provide, no law of a State in force immediately before the comencement of this Constitution shall impose, or authorise the imposi tion of, a tax in respect of any water or electric ity stored, generated, consumed, distributed or sold by any authority established by any existing law made by Parliament for regulating or develop ing any inter State river or river valley.
Explanation.
The expression 'law of a State in force ' in this clause shall include a law of a State passed or made before the commencement of this Constitution and not previously repealed,, notwithstanding that it or parts of it may not be, then in operation either at all or in particular areas.
(2) The Legislature of a State may by law impose or authorise the imposition of, any such tax as is mentioned in clause ( 1 ), but no such law shall have any effect unless it has, after having been reserved for the consideration of the President, received his assent; and if any such law provides for the fixation of the rates and other incidents of such tax by means of rules or orders to be made under the law by any authority, the law shall provide for the previous consent of the President being obtained to the making of any such rule or order.
" 10 1003 SCI/76 122 Article 288 grants exemption from tax under any law of a State in respect of any water or electricity stored, gener ated, consumed, distributed or sold by any authority estab lished by any existing law or any law made by Parliament for regulating or developing any inter State river or river valley, except in certain cases.
According to clause (1) of the article, this exemption would not be available in respect of such tax imposed under any law of a State in force immediately before the commencement of the Constitu tion if the: President by order so provides.
Although the principal Act is a pre Constitution law, being an Act of 1948, no order was admittedly made by the President with drawing the exemption in respect of the appellant from levy of such, tax under the principal Act.
Indeed, there was no question of issue of any such order because the principal Act did not provide for the imposition of electricity duty upon a corporation like the appellant.
Clause (v) of the proviso.
to sub section (1 ) of section 3 of the principal Act expressly stated that no duty shall be leviable on units of energy consumed by, or in respect of, or.
sold for con sumption in any mine, as defined in the Indian Mines Act, or industrial undertakings, except to the extent specified in the Second Schedule.
The appellant is admittedly an industrial undertaking, and as such, was not liable.
to pay electricity duty under the principal Act.
The case of the respondentS is that the bar to the levy of the said duty was removed and the levy of the duty on the appellant was, put on a sound legal basis as a result of the amendment made.
in the principal Act by the amending Act of 1963.
The amending Act, we find, satisfies the require ments of clause (2) of article 288.
According to that clause, the legislature of a State may by law impose, or authorise the imposition of, any tax mentioned in clause (1) of that article, but no such law shall have any effect unless it has, after having been reserved for the consider ation of the President, received his assent; and if any such law provides for the fixation of the rates and other inci dents of such tax by means of rules or orders to.
be made under the law by any authority,, the law shall provide for the previous consent of the President being obtained to the making of any such rule or order.
The amending Act of 1963, as already mentioned, received the assent of the President before its publication.
The exemption which was granted to mines and industrial undertakings from payment of elec tricity duty under the principal Act was withdrawn under the amending Act, except to some extent with which we are not concerned.
The new schedule, substituted for the old sched ule by the amending Act, prescribed the rates of duty for mines and industrial undertakings, and it was provided that the rate of duty shall be such rate or rates not exceeding 2 naya paise per unit of energy as may, from time to time, be fixed by the State Government with the previous consent of the President, by order in this behalf.
It has been argued by Dr. Singhvi on behalf of the appellant that the scheme of article 288 is to grant general exemption from the levy of tax in respect of any water or electricity stored, generated, consumed, distributed or sold ' by any authority established by any, existing 123 law or any law made by Parliament for regulating or develop ing any inter State river or river valley.
If any law made by a State legislature, according to the submission, seeks the imposition of any such tax, such law should contain clear indication to that effect before it receives the assent of the President.
The amending Act of 1963, :ac cording to the learned counsel, did not contain any such indication.
This contention, in our opinion, is wholly devoid of force.
Under proviso (v) to section 3(1) of the principal Act, mines and industrial undertakings were exempt from levy of duty.
This exemption stood withdrawn as a result of, substitution of new section 3 for the old sec tion by the amending Act.
The new charging section 3 (1 ) roped in all industrial undertakings, including the Damodar Valley Corporation, for the purpose of levy of duty.
Clause (e) of sub section (2) of new section 3 which was introduced by the amending Act of 1963.
expressly granted exemption from levy of electricity duty on units of energy consumed by the appellant corporation for the generation, transmission or distribution of electricity by that corporation.
This provision.
containing express reference to the appellant corporation, clearly warrants the inference that in respect of units of energy not covered by clause (e) of sub section (2) of section 3 the exemption would not be available to the appellant.
The contention advanced on behalf of the appel lant that the amending Act did not contemplate or contain indication regarding the imposition of electricity duty upon the appellant is plainly untenable, for it would have the effect of Tendering clause (e) of sub section (2) of sec tion 3 to be wholly redundant.
The courts, it is well settled, should be loath to accept an argument which would have the effect of rendering redundant the provision of a statute.
Lastly, it has been argued that though there has been an amendment of section 3 of the principal Act by its substitu tion by a new section under the amending Act of 196.3, there has been no amendment of section 4 with the assent of the President.
As such, no liability to pay electricity duty can be fastened upon the appellant.
This submission too is bereft of force.
Section 3, as inserted by the 'amending Act of 19 '63, is the charging section.
According to clause (1) of that section, subject to the provision of sub section (2), there shall be: levied and paid to the State Government on the: 'units of energy consumed or sold, excluding losses of energy in transmission and transformation, a duty at the rate or rates specified in the Schedule.
The section thus deals with the incidence of duty, and makes it clear that such duty h.as.
to be paid on the units of energy consumed or sold and at the rate or rates specified in the schedule.
It is further made clear by the section that the duty is to be levied and paid to the State Government.
As the duty is to.
be levied on the units of energy consumed or sold, it would follow that the duty would have to be paid by the consumer or seller,, as the case may be.
Section 4 of the principal Act merely provides for the manner and mode of payment of the duty, and we find no substance in the conten tion that unless section 4 of the principal Act was also re enacted with the assent of the President, the liability for payment of duty cannot be fastened upon the appellant.
124 What is required by clause (2) of article 288 is that the law made by the State legislature for imposing or authorising the imposition of tax mentioned in clause (1) shall have effect only if after having been reserved for the consideration of the President, it receives his assent.
Another requirement of that clause is that if such law provides for the fixation of the rates and other incidents of such tax by means of rules or orders to be made under the law by any authority, the law shall. provide for the previ ous consent of the President being obtained to the making of any such rule or order.
It is, however, not the effect of that Clause that even if the above mentioned two require ments are satisfied, the provisions which merely deal with the mode and manner of the payment of the aforesaid tax should also receive the assent of the President and that in the absence of such assent, the provisions.
dealing with the incidence of tax, which have received the assent of the President, would remain unenforceable.
Some other aspects were also dealt with by the High Court, but in the light of the view we have taken in the matter, it is not necessary to deal with those aspects.
The appeal consequently fails and is dismissed but in the circumstances without costs.
P.B.R. Appeal dis missed.
| The respondent rice millers obtained permits under clause (3) of the Southern States (Regulation of Export of Rice) Order, 1964, for exporting "broken rice" from Andhra Pradesh to Kerala but were intercepted for allegedly transporting "whole rice" for "broken rice".
The rice was seized, and samples analysed in the presence of the District Revenue Officer who ordered confiscation of the estimated quantity of the "whole rice".
On appeal, the District Judge remanded the matter for giving fuller opportunity to the respondents for objecting to the sample analysis which was to be carried out afresh in their presence.
The State 's revision application against the remand order dismissed by the High Court, The Revenue Officer then ordered a release of 12%, and the confiscation of the remaining quantity seized, as no sample from the bags contained a minimum percentage of 60% of "broken" grains satisfying the test laid down in the Hand book on Grading Foodgrains and Oilseed.
The District & Sessions Judge partially allowed the respondents ' appals.
Both sides filed revision applications.
The High Court decided in favour of the respondent, holding that "broken rice" included "whole rice".
Allowing the appeals, the Court, ^ HELD: (1) Ordinarily, this Court does not interfere with findings of fact.
But, where the errors of logic as well as law appear to be gross and to have occasioned a miscarriage of justice, the court is constrained to interfere.
[609 D] (2) The Revenue Officer 's order releasing the seized rice to the extent of about 12% having become final, it should not be interfered with except to the extent that the learned Sessions Judge added 2% more for foreign matter thereby releasing slightly more in favour of the respondent.
[610 D]
|
Appeal Nos.
474 477 966.
Appeals by special leave from the judgment and order dated September 5, 1963 of the Gujarat High Court in Income tax Reference No. 19 of 1962.
S.T. Desai, A. N. Kirpal, R.N. Sachthey and S.P. Nayyar for the appellant (in all the appeals).
R.J. Kolah, M.L. Bhakta and O.C. Mathur, for the respondents (in all the appeals).
The Judgment of the Court was delivered by Sikri, J.
These four appeals by special leave are ' directed against the judgment of the Gujarat High Court in Income Tax Reference No. 19 of 1962, whereby the High Court answered the questions referred to it by the Income tax Appellate Tribunal against the Commissioner of Income tax, who is the appellant before us.
The reference was in respect of assessment years 1955 56 and 1956 57 in the case of Shri Jayantilal Amratlai (Individual) and in respect of assessments years 1958 59 and 1959 60 in the case of Jayantilal Amratlal Charitable Trust Ahamedabad.
The questions referred are: (1 ) Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that the income of Jayantilal Amratlal Charitable Trust was not assessable in the hands of the settlor Jayantilal Amratlal under the first proviso to Sec.
16(1)(c) of the Income tax Act for the assessment years 1955 56 and 1956 57 ? (2) Whether on 1he facts and in the circumstances of the case, the Tribunal was right in holding that the income of the Trust should be considered in the assessment of the trustees and that they were entitled to the benefits of the refunds attached to the dividends from the Trust properties for 'the assessment years 1958 59 and 1959 60 ? The answer to these quest.ions depends on the true interpretation of section 16(1)(c) of the Indian Income tax Act, 1922, and the interpretation of the Trust Deed dated June 19, 1947, and 948 to appreciate the points fully it is necessary to give a few facts which are stated in the statement of the case.
Jayantilal Amratlal, individual, hereinafter referred to as the settlor, executed a trust deed whereby he settled 80 ordinary shares of M/s Jayantilal Amratlal Ltd., on trust and created a trust known as "Jayantilal Amratlal Charitable Trust" to carry out the following various objects set out in the Trust Deed : "For the relief of poor, for education, for medical relief, for advancement of religion, knowledge, commerce, health, safety or any other objects beneficial to mankind." This Trust Deed was registered with the Charity Commissioner under the Bombay Public Trust Act, 1950.
The Department accepted this trust as a valid charitable trust and gave the necessary relief to the trustees in respect of the income of the Trust.
till the assessment year 1957 58.
The Income tax Officer, while dealing with the assessment of Jayantilal Amratlal Charitable Trust for the year 1958 59, wrote A letter to the Trust to show cause why the income of the Trust should not be included in that of the settlor and why the case of the Trust should not be decided accordingly.
The Managing Trustee submitted his reply.
The Income tax Officer wrote lengthy order holding that on the facts the case was covered by the first proviso to section 16 ( 1 ) (c).
He was impressed both by the wide powers given to the settlor and the way in which the settlor had been utilising his powers under the various clauses of the Trust Deed.
He held : "It is not necessary that there should be diversion of income or assets from char table purposes to noncharitable purposes to constitute "retransfer of assets to or re assumption of power over" the income or assets of the settlor.
It is not even necessary for the purpose of 1st proviso to section 16(1)(c), especially its later part i.e. "give the settlor a right to reassume power directly or indirectly over the income or assets" that income or assets should be used for personal ends.
For diversion of such assets or income from one charitable purpose to another in accordance with the wishes of the settlor and the utilisation of income and investment of income or assets not in full conformity with the desires of the trustees would be enough to drag the Trust property in the ambit of section 16 (I) (c).
In the instant case, the settlor is all in all, he is the managing trustee and in the event of a conflict of opinion amongst the trustees the settlor would exercise predominating 949 influence both as managing trustee as also in his capacity of an arbitrator and his decision would be binding on all.
The most important point which needs consideration is that all the inherent powers and discretion for the income and corpus of the Trust property remain with The settlor, in his capacity as settlor and not by way of his capacity of a trustee.
" The Income tax Officer accordingly held that the income of the Trust would not be computed in the hands of the trustees but would be computed in the hands of the settlor under section 16(1) (c).
For the assessment year 1959 60 he passed a similar order on the same date.
On the same day he also dealt with the assessments of Jayantilal Amratlal, individual, for the years 1955 56 and 1956 57.
Following his reasoning he included the relevant income of the Trust in the hands of Jayantilal Amratlal.
Four appeals were taken to the Appellate Assistant Commis sioner who, by his two orders dated November 8, 1960, dismissed the appeals.
Before him the settlor relied on section 35 of the Bombay Public Trust Act, 1950, but the Appellate Assistant Commissioner held that this did not assist the settlor because the Income tax law did take into consideration income derived directly or indirectly by illegal means.
He felt that the settlor "could not be precluded from utilising funds of the trust directly or indirectly to his benefit since he had a right under the settlement to do so and the Bombay Public Trust Act did not hold any fear for him as the penalties leviable were not of a deterrent nature, compared to the advantages that he could gain directly or indirectly by re assuming control over the investments or its income".
On appeal, Income tax Appellate Tribunal, however, reversed these orders and held that the income from the Trust was not hit by the first proviso to section 16(1)(c).
The Tribunal ignored the factual position relied on by the Income tax Officer and the Appellate Assistant Commissioner and confined itself only to the Trust Deed.
Regarding the offending clauses 4, 10 and 21 of the Trust Deed, which we will presently refer to, the Appellate Tribunal held: "We see nothing in these clauses which confer on the assessee the right to retransfer to the assessee directly or indirectly the income or the assets or to reassume power over them.
He has always to exercise these powers within the framework of the Trust.
There is no doubt power in clause (10) to invest in any manner and thereby in the assessee 's own companies, but this is overridden by clause 35 of the Bombay Trust 9 5 0 Act under which it is registered.
If the Charity Commissioner has chosen not to take action, it may also be that he has considered the matter and approved the action.
It is purely his responsibility.
The. fact that the investment itself has not been made illegal under the Trust Act and that the assessee can offend the provisions with impunity as the penalty is light are all matters extraneous to this consideration which has to be confined only to the provisions in the deed.
" At the instance of the Commissioner of Income tax the Appellate Tribunal stated the case and referred the questions which we have already reproduced above.
The High Court held : "When a statute talks about a right to reassume, it must mean a lawful right which can be lawfully exercised.
a right to reassume must be given to the settlor independently of any third party and dependent upon his own volition.
It is true that the Charity Commissioner may grant leave to the settlor, but he may or may not grant it.
A right to reassume cannot rest dependent upon whether the Charity Commissioner may or may not grant sanction.
" Shelat, C.J., observed "Surely, it must be presumed that the Charity Commissioner would not grant his sanction to an investment which is bound to result in a conflict of duty and interest on the part of the settlor who is also a trustee.
Therefore, such a right, if it can be called a right, is not one of any substance and cannot, therefore, be construed as a right to reassume power over the trust assets or the income thereof, as contemplated by proviso I to section 16(1)(c)." "A loan, by the very nature of it, cannot be said to amount to an exercise of dominion or control over its subject matter.
It is repayable and is given on conditions as to the time of repayment and interest, if any.
By taking a loan a settlor does not exercise over its subject matter power.or dominion which, but for the trust or the settlement, he would have been able to exercise." Section 16(1) (c) reads as follows "16.
Exemptions and exclusions in determining the total income. .
(1) In Computing the total income of an assessee.
(a) . 951 (b). (c) all income arising to any person by virtue of a settlement or disposition whether revocable or not, and whether effected before or after the commencement of the Indian Income tax (Amendment) Act, 1939 (VII of 1939), from assets remaining the property of the settlor or disponer, shall be deemed to be income of the settlor or disponer, and all income arising to any person by virtue of a revocable transfer of assets shall be deemed to be income of the transferor : Provided that for the purposes of this clause a settlement, disposition or transfer shall be deemed to be revocable if it contains any provision for the retransfer directly or indirectly of the income or assets to the settlor, disponer or transferor, or in any way gives the settlor, disponer or transferor a right to reassume power directly or indirectly over the income or assets; Provided further that the expression "settlement or disposition" shall for the purposes of this clause include any disposition, trust, covenant, agreement, or arrangement, and the expression "settlor or dispone r" in relation to a settlement or disposition shall include any person by whom the settlement or disposition was made : Provided further that this clause shall not apply to any income arising to any person by virtue of a settlement or disposition which is not revocable for a period exceeding six years or during the life time of the person and from which income the settlor or disponer derives no direct or indirect benefit but that the settlor shall be liable to be assessed on the said income as and when the power to revoke arises to him." The learned counsel for the appellant, Mr. section T. Desai, has submitted three propositions before us (1) The operation of the first proviso to section 16(1) (c) depends only on the settlement and its terms and not on any provision of the Bombay Public Trusts Act, which may or may not be observed; (2) The absolute powers reserved over the income and corpus of the trust property remain vested in the settlor in his capacity as the settlor and not as trustee, and further they fall within the purview of the first pro.
viso to section 16(l.) (c); and (3) It is a relevant consideration that, as found by the authorities, the settlor has been deriving direct and indirect benefits from the trust properties.
He relies on clauses 4, 6, 8, 10, 11 and 21 of the Trust Deed to show that the Trust Deed gives the settlor right to re assume power directly 9 Sup.
CI/67 17 952 or indirectly over the income or assets of the Trust within the first proviso to section 16(1)(c).
Let us now examine the Trust Deed.
This indenture was made between Jayantilal Amratlal, hereinafter called the settlor, and Jayantilal Amratlal, Padmavati wife of the said Jayantilal Amratlal, Ramanlal Amratlal, Hariprasad Amratlal, Kasturlal Chandulal Parikh and Bhagubhai Chandulal, hereinafter called the Trustees.
Clause, 1 vests the shares and the other trust properties and income in the trustees.
Clause 2 gives the name of the trust Clause 3 obliges the trustees to get and collect income ,of the trust properties and pay expenses, etc.
Clause 4 creates the trust for the relief of poor, and for education, medical relief, etc.
It further provides : "The Trustees shall at the direction of the Settlor during, his lifetime and after his death at their discretion set aside any portion of the income of the Trust Premises to provide cash, food and clothes for any temple or temples of the Pushti Marg Sampradaya.
In applying.
the income of the Trust Premises for all or any of the objects hereinbefore specified the Trustees may consider the claims of any needy or poor person belonging to the Visa Porwad Community.
" Clause 5 enables the settlor to give direction to the trustees to accept contributions ,or donations to the Trust from other persons.
Clause 6 provides as follows : "The Setflor may at any time or times by writing direct that any specific funds or investments or property forming part of the Trust Premises and/or the income thereof shall be utilised and applied exclusively for any one more of the aforesaid ,charitable objects and the Settlor may by writing at any time or times vary or revoke any such directions previously given by him and Trustees shall be bound to carry into effect all such directions given by the Settlor.
" Clause 7 enables the Trustees to utilise the whole or any portion of the Trust Premises for all or any of the charitable object ,,, if the Settlor so directs.
Clause 8 may be set out in full : "8.
The Trustees shall from time to time at the direction of the settlor during his life time and after his death may at any time at their discretion deliver or hand over the income of the Trust Premises or any part of such income to any institution, association or society to be applied for all or any of the purposes of these presents without being bound to see to the application thereof or being liable for the loss or misapplication thereof.
" Clause 9 enables the Trustees to invest the residue, etc., and to accumulate the same and apply towards the objects of the Trust.
Clause 10 inter alia empowers the Settlor to give directions regardin the investment of moneys "as are authorised by law for invest 953 ment of trust premises or in ordinary or preference shares of joint stock companies, whether partly or fully paid, or in debentures or in giving loans to any public company or firm of good standing and reputation or in the purchase or mortgage of any movable or immovable property with power to the Trustees with the like direction to vary or transpose the said investments into or for others of the same or of a like nature.
" Clause II inter alia enables the Settlor to direct the Trustees to vary the investments.
Out of the other clauses we need only mention clause 21 which reads as follows : "All questions arising in the management and administration of the trusts or powers hereof and all differences of opinion amongst the Trustees shall be disposed of in accordance with the opinion of the Settlor during his lifetime and on and after the death of the settlor in accordance with the opinion of the majority of the Trustees in the case of their being equally divided the trustee senior most in age shall have a casting vote.
" The learned counsel for the appellant says that these clauses read fairly would enable the Settlor to direct the Trustees to give a loan to him and he could give directions to the Trustees in 'such a way as to re assume control over the assets.
He says that as a matter of fact the Income tax Officer did find that the Settlor has been utilising these powers for his own benefit.
There is no doubt that under the Trust Deed the Settlor has very wide powers and the Settlor could direct the Trustees to grant loan to him.
The Trustees could even grant loan to a firm in which be was interested.
But this would be contrary to the provisions of the Bombay Public Trust Act.
Section 35 (I) of the Bombay Public Trust Act provides : "35(1) : Investment of Public Trust Money Where the trust property consists of money and cannot be applied immediately or at an early date for the purposes of the public trusts the trustee shall be bound (notwithstanding any direction contained in the Instrument of the Trust) to deposit the money in any scheduled bank as defined in the , in the Postal Savings Bank or in a Cooperative Bank approved by the State Government for the purpose or to invest it in Public security; Provided.
Provided further that the Charity Commissioner may by general or special order permit the Trustee of any public trust or classes of such trusts to invest the money in any other manner.
" 9 54 Mr. section T. Desai submits that we cannot take into consideration the provisions of the Bombay Public Trust Act.
We are unable to accept this submission.
The Bombay Public Trust Act must, to the extent it operates, override any provisions in the Trust Deed.
As Shelat, J., observed, "when proviso 1 talks about a right to reassume power, prima facie, that must mean that there, is such power lawfully given under the deed of trust.
" It seems to us that the Legislature, in proviso I to section 16(1)(c) is thinking of powers lawfully given and powers lawfully exercised.
Any person can commit breach of trust and assume power over the income or assets but for that reason the income of the trust cannot be treated as the Income of the settlor under the proviso.
The Calcutta High Court in Commissioner of Income tax, West Bengal vs Sir section M. Bose(1) observed "The first proviso to Section 16(1)(c) only contemplates cases where the settlor can lawfully reassume power over the income or the assets.
Unless that was so, the proviso would cover every trust where a settlor has made himself trustee because a trustee acting dis honestly could always assume control over the income.
" We agree with these observations.
Similarly, in an unreported judgment (Commissioner of Income tax, Bombay North vs Mathuradas Mangaldas Parekh ( 2 ) the Bombay High Court repelled a similar argument by observing : "The first answer to this contention is that them trustees would be committing a breach of the law if they were to advance moneys to themselves.
There is a clear prohibition under Section 54 of the Trusts Act.
" If we do not ignore the provisions of the Bombay Public Trust Act and the general principles applicable to public trusts, the question arises whether on a true interpretation of the first proviso to section 16 ( 1 ) (c) the powers reserved to the settlor under the Trust Deed come within its mischief.
The learned counsel says that the words of the proviso are very wide.
I He points out the reasons why Parliament has inserted this proviso.
He draws our atten tion to the following observations of Lord Macmillan in Chamberlain vs Inland Revenue Commissioners(1), quoted in.
Tulsidas Kilachand vs Commissioner of Income tax(1) (1) at p. 141.
(2) I.T. Ref.
No. 4 of 1954, judgment dated August 26, 1954, reported in "unreported Income tax Judgmenis of the Bombay High Court, Book One, Published by Western India Regional Council of the Institute of Chartered Accountants of India, Bombay" p. 314 at p. 316.
(3) 329.
(4) , 4. 955 .lm15 "This legislation. (is) designed to overtake and circumvent a growing tendency on the part of taxpayers to endeavour to avoid or reduce tax liability.
by means of settlements.
Stated quite generally, the method consisted in the disposal by the taxpayer of part of his property in such a way that the income should no longer be receivable by him, while at the same time he retained certain powers over, or interests in, the property or its income.
The Legislature 's counter was to declare that the income of which the taxpayer had thus sought to disembarrass himself should, notwithstanding, be treated as still his income and taxed in his hands accordingly.
" This Court held in that case, that these observations applied also to the section under consideration, and the Indian provision is enacted with the, same intent and for the same purpose.
But even so, Lord Simonds observed while construing a similar provision in Wolfson vs Commissioners of Inland Revenue(1) : "It was urged that the construction that I favour leaves an easy loophole through which the evasive taxpayer may find escape.
That may be so; but I will repeat what has been said before.
It is not the function of a court of law to give to words a strained and unnatural meaning because only thus will a taxing section apply to a transaction which, had the Legislature thought, of it, would have been covered by appropriate words." Viscount Simonds observed again in Saunders vs Commissioners of Inland Revenue(1) in construing a similar provision occurring in the English Act : "I am assuredly not going to depart from the fair meaning of words in a taxing Section in order that tax may be exacted.
" What then is the fair meaning of section 16(1)(c) proviso.1 ? It seems to us that the words "reassume power ' give indication to the correct meaning of the proviso.
The latter part of the proviso contemplated that the settlor should be able by virtue of something contained in the Trust Deed, to take back the power he had over the assets or income previous to the execution of the Trust Deed.
A provision enabling the settlor to give directions to trustees to employ the assets or funds of the trust in a particular manner or for a particular charitable object contemplated by the trust cannot be said to confer a right to reassume power within the first proviso.
Otherwise a settlor could never name himself a sole trustee.
It seems to us that the latter part of the proviso contemplates a provision which would enable the settlor (1) , 169.
(2) ,431, 956 to take the income or assets outside the provisions of the Trust Deed.
Mr. Desai says that if a settlor can derive some direct or indirect benefit under a trust deed the trust would fall within first proviso.
But the first proviso does not use these words.
The words "direct or indirect benefit" occur only in the third proviso.
This Court held in Commissioner of Income tax, Punjab vs section Raghbir Singh(1) that although the settlor in that case obtained a benefit from the trust payment of his debts the first proviso was not attracted.
Coming to the various clauses of the Trust Deed there is no doubt that the settlor has retained power to see that his wishes are carried out while he is alive.
But he can only direct the carrying out of his wishes within the terms of the Trust Deed.
What he can direct under clause 4 is the application of income to a particular charitable purpose.
Similarly under clause 6 he can nominate the charitable object and the fund or investment which should be utilised for that object.
This is in no sense a power to reassume control.
Clause 8 enables the settlor to delegate the carrying out of a particular charitable object.
For instance, he could direct some contributions to be made to a hospital or a school without obliging the trustees to see that the hospital or the school does not misapply the funds.
Clauses 10 and It which enable the settlor to give directions regarding the investment must be read subject to the provisions of the Bombay Public Trust Act and the general principles of law relating to trusts.
We have already said that he could not legally direct a loan to be made to himself.
Further it is difficult to subscribe to the,, proposition that a loan to a company in which the settlor is interested would give power to the settlor over the assets within the meaning of the first proviso.
Clause 21 only shows the wide powers which the settlor has reserved to himself.
None of these clauses comes within the purview of Proviso 1.
In the result we agree with the conclusions of the High Court.
The appeals accordingly fail and are dismissed with costs.
One hearing fee.
G.C. Appleas dismissed.
| The petitioners were owners of certain land in Greater Bom bay in respect of which a declaration of intention under s.4(1) of the Bombay Town Planning Act, 1954, to prepare a development plan, had been made by the respondent Bombay Municipal Corporation.
They applied to the Municipal Commissioner, in January 1962, for permission to change the existing user of their land and for a commencement certificate under section 12 to construct factory sheds on a part of the land, but their application was rejected by the Executive Engineer, Development Plan.
A tentative develop ment plan for the area which included the petitioner 's land was published on January 9, 1964, in which their land was shown as partly reserved for public roads, partly for industrial purposes and the rest was marked green.
After a large number of objections and suggestions on the tentative plan had been received and considered in accordance with the provisions of section 9 of the Act, the Municipal Corporation finally approved the plan on July 2, 1964 and forwarded it to the State Government for its sanction under section 10.
The State Government sanctioned the final development plan for the ward in which the petitioners ' lands were located on September 14, 1966 after consulting its special Consulting Surveyor, who scrutinised all the objections received by the Municipal Corporation and heard the objectors.
The final plan showed that a major portion of the petitioner 's land was earmarked for a recreation centre.
Although a writ petition filed by the petitioners before the publication of the tentative development plan against the rejection of their application for a commencement certificate was allowed by the High Court on the ground that powers of the Municipal Corporation under section 12 had not been exercised by an officer prescribed under section 86, two subsequent petitions filed by them after the approval of the final plan by the Municipal Corporation to obtain redesi gnation of their land were dismissed.
In the present petition under article 32 of the Constitution, the petitioners claimed that after the reservation of their land as shown in the tentative plan published on January 9, 1964, its redesignation in the final plan for a recreation centre was without authority of law and violative of their rights under articles 14 and 19.
It was contended, inter alia, (i) that sections 9 and 10 of the Act were invalid and unconstitutional in that they empowered the local authority and the State Government to modify, as a result of objections received from other persons, a development plan, against which a particular person may not have objected, without giving an opportunity to that person to represent against a subsequent modification by which his interest may be adversely affected; (ii) that under section 12 the final 275 and only authority who had the power to grant or withhold permission to carry on any development work after a declaration of intention under section 4(1) was the Municipal Commissioner; he could, under section 13, grant or refuse a commencement certificate at will, there being nothing to guide him in such a matter before the preparation of a development plan; even after the preparation of such a plan, a commencement certificate could be refused arbitrarily and there was no provision for any appeal from or revision of the order containing the refusal; and (iii) that by the combined operation of sections 4 and 11 (3), the local authority could easily delay the acquisition of any land designated for a public purpose under section 7 of the Act for 14 years and this constituted an unreasonable restriction on the right to hold property.
Held: The objections raised as to the invalidity of sections 9, 10, 11, 12 and 13 could not be upheld.
(i) The contention that a person was given no opportunity of meeting the objections raised by others with regard to the development plan has no force in the light of the facts disclosed as to the enormity of the task of finalising the development plan.
If the authorities were to hear all the parties with regard to all the suggestions made, give them separate and independent hearings, no development plan could ever be prepared.
The authority was not concerned with considering the advantages or disadvantages which might accrue to a particular person or a group of persons owning lands in different parts of the area concerned, but it had to go by the larger interest of the population at large and the generations to come.
The affidavits show that nothing was done haphazardly.
Suggestions and objections at all stages were carefully considered, the assistance of committees of experts was taken and the plan emerged only after an immense amount of labour had been bestowed in its preparation.
[297B D] (ii) There was enough guidance in the Town Planning Act to enable the Municipal Commissioner to come to a conclusion as to whether a particular commencement certificate should be granted or not and the power exercisable under sections 12 and 13 was neither uncanalised nor arbitrary.
section 13 prescribes that the local authority should make an inquiry before granting or refusing a commencement certificate.
The Authority must therefore look into all material available to it including the tentative plans and the final development plan and then make up its mind as to whether a commencement certificate should be granted or not.
If the provisions of the Act are borne in mind and the rules framed thereunder complied with, there was little or no scope for the local authority acting arbitrarily under section 13 of the Act.
[298A C] The fact that no appeal from the decision under section 13 was provided for is a matter of no moment for the authority under section 13 is no less than the Municipal Commissioner himself or the Chief Officer of the Municipal Borough or a person exercising the power of an Executive Officer of any local authority.
when the ' power had to be exercised by one of the highest officers of the local authority intimately connected with the preparation of the development plan in all its stages, it is difficult to envisage what other authority could be entrusted with the work of appeal or revision.
[297F H] (iii) In view of the immensity of the task of the local authorities to find funds for the acquisition of lands for public purposes, a period ' of ten years fixed by section 11 (3) was not too long.
In the present case the authority had to deal with an area measuring about 169 sq.
miles which was larger than most of the big cities in India.
276 The preparation of a development plan for such an area must take a considerable period of time.
Furthermore, it is not beyond the range of possibility that the final development plan may require modifications.
It could not therefore be held that the limit of time fixed under section 14 read with section 11(3) formed an unreasonable restriction on the right to hold property.
[298G 229A] Joyti Pershad vs Administration for The Union Territory of Delhi, ; Manecklal Chhotalal & Ors.
vs M. G. Makwana and Ors; W.P. 64/1966, cases, relied upon.
|
Civil Appeal No. 691 of 1970.
Appeal by Special Leave from the Judgment and Order dated 12 8 1969 of the Mysore High Court in Civil Revision Petition No. 1322 of 1967.
section section Javali, M. Veerappa and J. R. Das for the Appellant.
section C. Javali, P. G. Gokhale and B. R. Agarwala for the Respondents.
The Judgment of the Court was delivered by GUPTA J.
The only question that arises for decision in this appeal by special leave is whether the respondents before us are entitled to relief under section 25(ii) of the Bombay Agricultural Debtors Relief Act, 1947.
The question arises on the following facts.
On June 1, 1927 the predecessors in interest of the appellants transferred to one Krishnaji two plots of land bearing survey numbers 125/1 and 136 measuring respectively 14.5 and 21.31 acres in village Murnal, Bagalkot Taluk in Bijapur District.
The document by which the transfer was effected, described as a sale deed, shows that the two items of property were sold "absolutely" for a total sum of Rs. 2000/ .
In 1932 Krishnaji sold the plot bearing survey No. 136 to one Ramanna, predecessor in interest of respondent Nos. 2(a) to 2(e).
for Rs. 400/ .
In 1935, Krishnaji sold the other plot, survey No. 125/1, for Rs. 1000/ to Utalsab Dogrisab.
Walikar, predecessor in interest of respondents 1(a) to 1(c).
After the Bombay Agricultural Debtors Relief Act, 1947 came into force, the appellants applied under section 4 of the Act for adjustment of debts claiming that the transaction in 1927 was really not a sale but a mortgage.
The trial court held that the transaction was a mortgage and not a sale but dismissed the application on the view that the respondents were entitled to protection under section 25(ii) of the Act.
The District Judge reversed the decision and allowed the application under section 4.
The matter was taken to the High Court in revision and the High Court recorded a consent order that the tran 125 saction was not a sale but a mortgage and remitted the case to the trial court for a decision on the question whether the purchasers, Ramanna and Walikar, were transferees for value without notice of the real nature of the transaction between the appellants ' predecessors and Krishnaji and as such entitled to the protection of section 25(ii).
This order of the High Court was made on January 25, 1963.
At this stage we may mention that our attention was drawn to an order made in the same matter by the High Court on January 31, 1962, which is reported in , that shows that the same learned Judge had set aside the order of the appellate court and restored that of the trial court.
Counsel for both sides appeared to think that the order made by the High Court in 1962 must have been set aside later on review though neither of them was able to produce the order by which the 1962 order had been set aside.
However both learned counsel agreed that for the purpose of this appeal it is the order of the High Court made on January 25, 1963 that need be considered.
That the 1963 order held the field would be apparent from the fact that the case was reconsidered by the trial court as directed by the aforesaid order.
The trial court on hearing the matter after remand dismissed the application under section 4 on the finding that the purchasers were bona fide transferees for value without notice of the real nature of the original transaction.
The lower appellate court reversed this decision.
The purchasers then moved the High Court in revision from the order passed by the appellate court.
The High Court by the impugned order set aside the order of the appellate court and restored that of the trial court agreeing with the trial court that the purchasers had no notice of the real nature of the transaction of 1927.
Section 24 of the Bombay Agricultural Debtors Relief Act, 1947 empowers the court to declare any transfer of land by a person whose debts are being adjusted under this Act purporting to be a sale, to be a mortgage if the court was satisfied that the circumstances connected with the transfer showed it to be in the nature of a mortgage.
Section 25(ii) provides that nothing in section 24 shall apply to "any bona fide transferee for value without notice of the real nature of such transfer or his representative where such transferee or representative holds under a registered deed executed on or before the 15th day of February, 1939".
The document evidencing the transfer of the plots to Krishnaji in 1927 is discribed as a "sale deed" and contains a statement that the vendors "have absolutely sold both the said lands to Krishnaji" and that the "entire ownership" was Krishnaji 's "alone".
It is also said that possession of the lands has also been given to Krishnaji.
The High Court found that the purchasers from Krishnaji had no "actual knowledge or notice" of the real nature of the transaction in 1927.
But the High Court also held that the notice contemplated in section 126 25(ii) was "actual notice" and that "constructive notice was clearly beyond the contemplation of section 25(ii)".
It seems to us that construing the notice referred to in section 25(ii) as actual notice only is likely to defeat the purpose of the statute which was enacted to provide for the relief of agricultural debtors in the province of Bombay.
We are of the view that section 25(ii) does not exclude constructive notice.
However on the facts of the case it appears that the transferees had no notice, actual or constructive, of the real nature of the transaction of 1927.
It has been found that they had no actual notice; the High Court appears to have also found that they had no constructive notice.
Referring to the provision of section 25(ii) requiring that the transferee must hold under a registered deed executed on or before February 15, 1939 the High Court says: "It will be seen that the reference is to a period anterior to the coming into force of the Act, a period therefore during which the special provisions of the Act could not have been within the contemplation of anybody.
If those provisions were not in contemplation it is impossible to postulate a situation where any given circumstance could be regarded as sufficient to excite suspicion that the transaction might be hit by the statute and therefore persuade people to start and pursue further enquiries." Mr. section section Javali appearing for the appellants contends that the fact that the lands in question were transferred for a smaller amount in 1932 and 1935 than the price Krishnaji had paid for them in 1927 was a circumstance that should have put the transferees on enquiry and that if reasonable enquiries had been made they would have had knowledge of the real nature of the transaction of 1927.
The fact that the lands were sold to the respondents for a price lower than what they fetched in 1927 might have been due to various reasons and it cannot be said that this ground alone was sufficient to raise a suspicion that the transaction of 1927 was really a mortgage.
As pointed out by the High Court, the Act of 1947 could not have been within the contemplation of anyone in 1932 or 1935.
Ramappa in his deposition said that he paid Rs.400/ for the land as it was "fallow", and that if there were no weeds the price would have been Rs. 600/ .
As for the land sold to Utalsab, he was dead when the matter came up for hearing before the trial court.
The record of rights also does not contain 127 any indication that the transaction of 1927 was in the nature of a mortgage.
The evidence discloses that Krishnappa put the transferees in possession of the lands in question.
There was therefore, no such occasion or circumstance to impel the transferees to start an enquiry as to the real nature of the transaction between Krishnaji and the predecessors in interest of the appellants in 1927.
The appeal is dismissed but in the circumstances of the case without any order as to costs.
N.K.A. Appeal dismissed.
| Under rule 3(b) of the U. P. Service of Engineers (Junior and Senior Scales) irrigation Branch Rules a member of the service means a government servant appointed in a substantive capacity under the provisions of the rules to a post in the cadre of the service.
Rule 4 empowers the State Government to increase the cadre by creating permanent or temporary posts from time to time according to the exigencies.
Rules S and 6 contemplate recruitment (i) by direct appointment from amongst engineer students of the Thomson Civil Engineering College, Roorkee, (ii) by direct appointment, (iii) by appointment of officers in the temporary service of the United Provinces, Public Works Department (Irrigation Branch), (the selection in all these three categories was to be after consulting a permanent Board of Selection) and (iv) by promotion of members of the Subordinate Engineering Service, who have, in the opinion of the Government, shown exceptional merit.
The proviso to rule S states that it would not be necessary to consult the Commission in the case of appointment of a temporary officer to a permanent vacancy, if he has already been appointed to a temporary post in the cadre of service after consultation with the Commission.
In 1950 recruitment through Thomson College was stopped and in 1961 direct recruitment was made through the Public Service Commission.
Rule 6 empowers the Government to fill quotas for members of the Subordinate Engineering Service.
Rule 17 stipulates a period of probation in regard to all candidates who were not in the permanent employment of the Irrigation Branch.
Rule 19 provides the mode of confirmation of a probationer in his appointment.
Rule 23 regulating the inter se seniority of the officers states that seniority in the ser ice shall be determined according to the date of the order of appointment to it.
In 1948 by combining class I and class II officers into one service the Government constituted the U. P. Service of Engineers (Junior and Senior Scales) but since the rules regulating their recruitment, conditions and classifications could not be made, the Government followed the 1936 Rules which were modified from time to time by Government orders.
The High Court struck down the seniority list of engineers prepared by the State Government in 1965 and gave directions to the Government to re determine the seniority in accordance with Rules 23 of the Rules.
Purporting to act on these directions a fresh seniority list was drawn up by the Government in May, 1969 but that too was struck down by the High Court.
450 In appeal to this Court it was contended that it was not correct to say that the temporary Assistant Engineers were not members of the service on the ground that their appointment was not in a substantive capacity in permanent posts since they had fulfilled all the requirements of the rules for being appointed on a regular basis viz. possessing the requisite qualifications, selection by the State Service Commission etc.
irrespective of whether their appointments were to temporary posts or not, the long service they had put in must weigh in reckoning the seniority.
Allowing the appeal in part ^ HELD: The G. O. Of December 1961 in so far as it fixes the proportion of permanent vacancies to be filled from the various sources had statutory force being under rule 6.
So much so, the various groups can claim permanency only in terms of that proportion, although not being holder of a permanent post neither debars membership of the Service nor earning the benefit of officiating service for purposes of seniority.
[470B C] While temporary and permanent posts have great relevancy in regard to the career of the government servants, keeping posts temporary for long, sometimes by annual renewals for several years and denying the claims of the incumbents on the score that their posts are temporary, makes no sense and is arbitrary especially when both temporary and permanent appointees are functionally identified.
If, in the normal course, a post is temporary in the real sense and the appointee knows that his tenure cannot exceed the post in longevity, there cannot be anything unfair or capricious in clothing him with no right.
Not so, if the post is, for certain departmental or like purposes, declared temporary, but it is within the ken of both the government and the appointee that the temporary posts are virtually long lived.
It is irrational to reject the claim of the temporary appointee on the nominal score of the terminology of tho post.
[462 D] Officiating service in a post is for all practical purposes of seniority as good as service on a regular basis.
It may be permissible, within limits, for government to ignore officiating service and count only regular service when claims of seniority come before it, provided the rules in that regard are clear and categoric and do not admit of any ambiguity and an arbitrary cut off of long years of service does not take place.
While rules regulating conditions of service are within the executive power of the State or its legislative power under proviso to Article 309, such rules have to be reasonable, fair and not grossly unjust if they are to survive the test of articles 14 and 16.
[462 G H] For purposes of seniority, one has to go by the order of appointment to the Service in a substantive capacity.
But no fixed connotations can be attributed to expressions like 'substantive capacity ', 'service ', 'cadre ' and the like because probation even for temporary appointees is provided for in the rules which means that even temporary appointments can be substantive.
For there cannot be probation for a government servant who is not to be absolved substantively in the Ser ice on completion thereof.
Permanency carries with it other rights than mere seniority and promotion.
Permanent posts and temporary posts are in official terminology sharply different but in the historical context of the U.P. service of Engineers there is no difference because recruitment of even temporary engineers requires consultation with the Public Service Commission, undergoing physical fitness tests, probation and 451 departmental tests.
The temporary appointees, whose appointments have received the approval of the Public Service Commission and who have run out the two years of probation must be deemed to be appointed in a substantive capacity.
[465 D E] It is not correct to say that when Engineers are appointed to temporary posts but after fulfilling all the tests for regular appointment they are not appointed in a substantive capacity.
It was concluded by the State in its counter affidavit that all the persons appointed to the service who are not already in the permanent employment of the Irrigation Department shall be placed on probation for four years (since reduced to two years), which means that persons who were not permanently appointed but only temporarily appointed are also placed on probation and officer are not put on probation unless they arc on their way to membership in the Service on completion of probation.
That is to say although they are temporary appointees, if their probation was completed and other formalities fulfilled, they become members of the service.
Merely because the person is a temporary appointee it cannot be said that he is not substantively appointed if he fulfils the necessary conditions for regular appointment such as probation and consultation with the Public Service Commission.
[466 A D] Rule 23 is the relevant rule when a question of seniority arises.
The order of appointment in a substantive capacity is the significant starting point for reckoning seniority.
The appointment in a substantive capacity need not necessarily be to a permanent post.
It is sufficient even if it is to a temporary post of long duration.
[467 E G] An appointee to a permanent post acquires certain rights which one who fills a temporary post cannot claim.
Nevertheless, when the post is not purely temporary or ad hoc or of short duration or of an adventitious nature, the holder of such temporary post cannot be degraded to the position of one, who, by accident of circumstance or for a fugitive tenure occupies the temporary post for a fleeting term.
[468 F] A person is said to hold a post in a substantive capacity when he holds it for an indefinite period, especially of long duration in contradistinction to a person who holds it for a definite or a temporary period or holds it on probation subject to confirmation.
If the appointment is to a post and the capacity in which the appointment is made is of indefinite duration, if the Public Service Commission has been consulted and has approved, if the tests prescribed have been taken and passed, if probation has been prescribed and has been approved, one may well say that the post was held by the incumbent in a substantive capacity.
[469 D E]
|
Civil Appeal No. 92 of 1957.
Appeal by special leave from the judgment and order dated May 11, 1956, of the Labour Appellate Tribunal of India, Calcutta, in Misc.
Case No. C 152 of 1955.
B. Sen, section N. Mukherjee and B. N. Ghosh, for the appel lants.
D. L. Sen Gupta (with him Dipak Dutta Choudhri), for the respondent.
September 20.
The following Judgment of the Court was delivered by BHAGWATI J.
This appeal with special leave against the decision of the Labour Appellate Tribunal of India, Calcut ta, arises out of an application made by the appellant under section 22 of the Industrial Disputes 66 516 (Appellate Tribunal) Act, 1950, (hereinafter referred to as "the Act") for permission to discharge the respondent.
The respondent had been appointed as a pay clerk in the appellant 's cash department on April 30.
1945, and had been con and had been confirmed in service with effect from August 1, 1945.
Since the beginning of 1949, the respondent was found to have become negligent and careless in his work and he was also disobedient and slow in the performance of the duties that were allotted to him.
Repeated verbal and written I warnings were given to him but they had no effect whatever.
Consequently the Chief Cashier by his letter dated October 24, 1949, addressed to the Manager of the appellant, complained that he was very negligent and care less in his work, and habitually showed sulkiness, that he was also disobedient, and shirked the duties that were allotted to him an that recently, he was careless enough to keep the Company 's money in an open drawer of a safe, and go home, without locking the same.
The Management thereupon asked for his written explanation which he submitted on October 28, 1949, stating that if there was anything wrong on his part that was due to his ill health, hard work and mental anxiety.
He, therefore, asked to be excused and stated that he would take much more care in future about his work.
On November 17, 1949, the Chief Cashier again com plained against the respondent stating that he had not only registered no improvement but was grossly negligent in his duties, in spite of repeated warnings, and was in the habit of absenting himself on flimsy grounds, and always tried to avoid duties that were entrusted to him and was very inso lent in his behaviour and conduct.
A charge sheet was submitted to him on November 18, 1949, and he was suspended till the final disposal of the enquiry.
On November 19, 1949, the respondent wrote a letter to the Managing Director of the appellant pleading not guilty to the charges framed against him and asking for an interview so that he may have a chance to represent his grievances personally.
The re spondent was granted an interview with the Manager of 517 the appellant who investigated the case of the respondent and found him guilty of the charges framed against him.
The respondent had admitted having been rude to his superior officer in a fit of temper but appeared to be repentant of his conduct and had tendered an apology to the Chief Cash ier.
He also submitted on November 29, 1949, a letter asking to be excused.
Under the circumstances, the manager of the appellant recommended in his report dated November 29, 1949, that the respondent be given one more opportunity to prove himself of good behaviour but having regard to the request made by the respondent in that behalf suggested that he be transferred to the Mechanical Engineering Department.
The Manager also stated at the end of the said report that he had warned the respondent that if he got any further adverse report about his work or conduct, his services would be terminated forthwith.
Following upon that report a letter was addressed by the appellant to the respondent on the same day intimating that the appellant had decided to give him one more chance of working in the organization on the distinct understanding that should there be any further adverse report about his work or conduct his services would be terminated forthwith.
He was directed on that under standing to report to Mr. Hooper of the M. E. Department, where he was being transferred with effect from the next day.
In spite of these chances being given to him the respondent did not improve and he was again found seriously neglecting his work.
There were also complaints from the typists to the effect that the respondent 's chatter interfered with their work.
Mr. Hooper after giving him verbal warnings on several occasions without any effect ultimately gave him a written warning on February 9, 1951, recording the above facts and asking that the respondent should show immediate improvement in his conduct failing which he would take the matter further.
The respondent replied by his letter dated February 16, 195 1, denying the allegations contained in the said letter of Mr. Hooper: He Pleaded that he was not negli gent in his duty inasmuch 518 as he had to discharge the arrears of work which were out standing at the time when he took over the work of writing parcel challans and he was also asked to do other work of the clerks who were absent on leave.
He however admitted that he had occasionally talked with his co workers though he contended that that was not in such a way as would prompt his coworkers to complain against him.
He further asked to be excused for the faults, if any, and gave an assurance that he was trying and would try his level best to improve further.
The respondent however did not show any improvement and again there were complaints against him that his work had not been done properly and also that he had been noisy, causing disturbance to the other clerks ' work and that he had been twice found by his superior officer Mr. Girling with his head on his arms apparently sleeping.
On September 3, 1952, Mr. Girling on behalf of the appellant gave the respondent a warning to which he replied on September 8, 1952, denying all the allegations except that of his being found with his head on his arms but excused himself by stating that he was ill and it was under the advice of Mr. Girhng himself that he consulted the office doctor who had advised him rest.
He however promised to endeavour his utmost to give every satisfaction in the discharge of his duties.
In spite of these warnings the respondent showed no improve ment in his work and conduct and continued neglecting his duties and indulging in insubordination with the result that by its letter dated February 9, 1953, the Management of the appellant wrote to him that the only course left to it was to dispense with his services but as a measure of leniency it had decided to give him another chance to show satisfac tory improvement and in doing so it had also decided to stop his annual increment.
The respondent protested against the stopping of his annual increment by his letter dated Febru ary 17, 1953, and contended that the charges levelled against him were absolutely groundless and asked the Manage ment to re consider his case.
The Labour Directorate of the Government of West 519 Bengal was approached on his behalf but that body also refused to intervene.
The Management asked Mr. Hooper to report upon the respondent 's work and conduct by May 31, 1953, and intimated to the respondent that unless definite improvement was reported by that date his services with the appellant would be terminated as from June 30, 1953.
Mr. Hooper observed the respondent 's work and conduct and not finding them satisfactory, by his memo dated August 19, 1953, reported on the same to the Management of the appel lant.
No action was however taken immediately against the respondent and on May 4, 1954, Mr. Hooper made his final report to the Management on the strength of which the appel lant wrote to the respondent its letter dated May 10, 1954, in which it stated that on receipt of the complaint from Mr. Hooper it had made a thorough enquiry into his record of service, had found that he was unsuitable to be retained in its service and had, therefore, decided to terminate his service on payment of full retrenchment compensation.
It asked the respondent to choose one of the two alternatives, viz., that it may forthwith terminate his services if he was agreeable to accept payment of retrenchment compensation or in case he refused to accept the same to make an application before the Fifth Industrial Tribunal for permission to terminate his service.
The respondent failed and neglected to send any reply with the result that by its letter dated June 21, 1954, the appellant intimated to the respondent that it was approaching the Tribunal for permission to terminate his service as per its letter dated May 28, 1954.
The appellant thereafter filed on September 21, 1954, an application before the Fifth Industrial Tribunal, West Bengal.
under section 33 of the , for permission to discharge the respondent.
The Fifth Industrial Tribunal however became functus officio on the expiry of thirty days from the publication of its Award in the dispute which was then pending before it with the result that the said application could not be disposed of and was accordingly struck off.
520 The appellant eventually filed an application under section 22 of the Act before the Labour Appellate Tribunal of India at Calcutta for permission to discharge the respondent from its service.
This step became necessary as there was an appeal being No. Cal. 152 pending before the Labour Appellate Tribunal to which the appellant and the respondent were parties.
The Labour Appellate Tribunal consisting of Shri M.N. Gan (President) and Shri P. R. Mukherji (Member) heard the appellant ex parte and by its order dated October 14, 1955, allowed the said application and granted the permis sion to discharge the respondent holding inter alia that a prima facie case had been made out for permission to dismiss the respondent.
The appellant accordingly on November 11, 1955, wrote a letter to the respondent stating that the necessary permission had been granted by the Labour Appel late Tribunal to discharge him from the appellant 's service and that the decision of the Management of the appellant dated May 28, 1954, to terminate his services was therefore given effect to on the terms communicated to him in that letter.
On December 6, 1955, the respondent filed an affidavit before the Labour Appellate Tribunal, Calcutta, praying for a review of the order dated October 14, 1955, for setting it aside and for restoration of the application under section 22 of the Act.
The Labour Appellate Tribunal presided over by Mr. M. N. Gan and Mr. V. N. Dikshitulu heard the parties concerned and by its order dated March 6, 1956, allowed the respondent 's application and restored the appellant 's case to its file.
On a further hearing of that application the parties adduced evidence and after hearing both the parties the Labour Appellate Tribunal presided over this time by Mr. V. N. Dikshitulu rejected the application under section 22 of the Act by its order dated May 11, 1956, and refused to the appel lant permission to discharge the respondent from its serv ice.
The appellant being aggrieved by the said decision of the Labour Appellate Tribunal of India, Calcutta ' 521 applied for and obtained special leave to appeal to this Court.
Mr. Sen on behalf of the appellant raised two contentions: (i) that the Labour Appellate Tribunal had no jurisdiction to review its own order which it had passed on October 14, 1955, and (ii) that the Labour Appellate Tribunal had ex ceeded its jurisdiction under section 22 of the Act in coming to the conclusion that the appellant had failed to make out a prima facie case to discharge the respondent from its serv ice.
Re:(i) It was contended that once the Labour Appellate Tribunal pronounced its order on October 14, 1955, it had become functus officio and thereafter it had no jurisdiction to review its own order.
The circumstances, moreover, did not bring the application which was made by the respondent on December 6, 1955, strictly within the provisions of 0.
47, r. I of the Code of Civil Procedure and no application for review could therefore be maintained.
It is significant, however, to remember that the application made by the respondent on December 6, 1955, was an omnibus one and was intituled as one under 0.
47, r. I of the Code of Civil Procedure for review under 0.
41, r. 21 of the Civil Procedure Code for restoration and under 0. 9, r. 13 of the Code of Civil Procedure for setting aside the permis sion granted ex parte and to restore the respondent in his original position.
The respondent evidently sought to rely upon one or the other of the provisions above set out in order to obtain the relief which he sought in that.
applica tion.
Whether one or more of these provisions of the Code of Civil Procedure could be availed of by the respondent depends upon what are the powers which are vested in the Labour Appellate Tribunal when hearing the matters which come before it.
The Labour Appellate Tribunal is the creature of the statute and all its powers must be found within the four corners of the statute.
The constitution and functions of the Labour Appellate Tribunal are to be found in Chapter 11 of the Act.
Sections 4 to 6 of the Act lay down the 522 constitution and functions of the Labour Appellate Tribunal and section 7 prescribes its jurisdiction in appeal from awards or decisions of the Industrial Tribunals.
Section 9 lays down the powers and procedure of the Labour Appellate Tribu nal.
The provisions of section 9 so far as they are relevant for the purpose of this appeal may be set out here : Section 9.
Powers and procedure of the Appellate Tribunal.
(1)The Appellate Tribunal shall have the same powers as are vested in a civil court, when hearing an appeal, under the Code of Civil Procedure, 1908 (Act V of 1908).
(10)The Appellate Tribunal shall follow such procedure as may be prescribed, and subject thereto, it may, by order, regulate its practice and procedure and the provisions of the Code of Civil Procedure, 1908 (Act V of 1908), shall, so far as they are not inconsistent with this Act, or the rules or orders made thereunder, apply to all proceedings before the Appellate Tribunal.
It may be noted that the Labour Appellate Tribunal not only exercises appellate jurisdiction by way of hearing appeals from the awards or decisions of the Industrial Tribunals but also exercises original jurisdiction when applications are made to it under section 22 of the Act to obtain its permission in writing to alter the conditions of service applicable to the workman or to discharge or punish whether by dismissal or otherwise any workman concerned in appeals pending before it.
If an employer contravenes the provisions of section 22 during the pendency of the proceedings, before the Labour Appellate Tribunal, it also entertains complaints in writing at the instance of the employees aggrieved by such contra vention and the Labour Appellate Tribunal decides these complaints as if they are appeals pending before it in accordance with the provisions of the Act.
This is also an exercise of original jurisdiction though under the express terms of the section the exercise of that jurisdiction is assimilated to the 523 exercise of appellate jurisdiction by the Labour Appellate Tribunal.
Whatever be the nature of the jurisdiction thus exercised by the Labour Appellate Tribunal whether original or appellate that jurisdiction is exercised by it by virtue of the provisions of the Act: And section 9 of the Act has refer ence to the exercise of the whole of that jurisdiction when it talks of the powers and procedure of the Labour Appellate Tribunal.
In regard to such powers and procedure no dis tinction is made between the exercise of original jurisdic tion and the exercise of appellate jurisdiction by the Labour Appellate Tribunal and these provisions apply equally to the jurisdiction exercised by it whether under sections 7, 22, or section 23 of the Act.
Section 9(1) of the Act invests the Labour Appellate Tribu nal with the same powers as are vested in a civil court, when hearing an appeal, under the Code of Civil Procedure, 1908 (Act V of 1908).
A question was mooted before us whether the words " when hearing an appeal" were to be read with the words "Appellate Tribunal" or with the words "a civil court".
It was argued that these words went with the words "Appellate Tribunal" and, therefore, the powers of a civil court under the Code of Civil Procedure were to be exercised by the Labour Appellate Tribunal only when it was exercising its appellate jurisdiction and hearing matters which fall within the purview of section 7 or section 23 of the Act and not when it was exercising original jurisdiction and hearing applications under section 22 of the Act.
This construc tion of the provisions of section 9(1) of the Act however suf fers from this disability that it takes no count of the fact that the Labour Appellate Tribunal under the provisions of the Act itself exercises both original as well as appellate jurisdiction and if such a construction was put on these provisions the result would be that there would be no provi sion as regards the powers of the Labour Appellate Tribunal when it is exercising original jurisdiction.
The powers of the Labour Appellate Tribunal which are sought to be provid ed in section 9(1) of the Act are not limited only to the exer cise 67 524 of appellate jurisdiction by it but have reference to the whole of the jurisdiction which is vested in the Labour Appellate Tribunal under the provisions of the Act.
The words " when hearing an appeal" have, moreover, been used between the words "a civil court" and "under the Code of Civil Procedure, 1908" which in the context in which they have been used could only have been meant to refer to a civil court.
Whatever the jurisdiction the Labour Appellate Tribunal is exercising whether original or appellate it is vested with the powers as are vested in a civil court under the Code of Civil Procedure, 1908, when it is hearing an appeal.
The very juxtaposition of the words " when hearing an appeal " with the words " a civil court ", is sufficient, in our opinion, to invest the Labour Appellate Tribunal while exercising its jurisdiction whether original or appel late with the same powers as are vested in a civil court Under the Code of Civil Procedure when it is exercising its appellate jurisdiction, and hearing appeals.
(See Burmah Shell Oil Storage Case(,) and the New Union Mills Ltd. Case (2).
If this is the true construction to be put on the provisions of section 9(1) of the Act, the provisions of 0.
41 r. 21 of the Code of Civil Procedure are attracted forthwith.
Order 41 r. 21 provides: Where an appeal is heard ex parte and judgment is pronounced against the respondent, he may apply to the appellate court to rehear the appeal; and, if he satisfies the Court that the notice was not duly served or that he was prevented by sufficient cause from appearing when the appeal was called on for hearing, the Court shall rehear the appeal on such terms as to costs or otherwise as it thinks fit to impose upon him.
When the Labour Appellate Tribunal heard the application under section 22 of the Act ex parte on October 14, 1955, the summons had not been served on the respondent owing to its being addressed to hi in at a wrong place.
There was suffi cient cause therefore for the respondent not appearing when the application was called on for hearing and on this (1) (2) 525 circumstance being established he was entitled to a re hearing of the application and setting aside of the ex parte order made against him.
The Labour Appellate Tribunal was, therefore, right in making the order which it did on March 6, 1956.
There is also another aspect of the question which may be dealt with at this stage and it is that under the provisions of section 9, sub section
(10) of the Act the Labour Appellate Tribu nal is enjoined to follow such procedure as may be pre scribed, and subject thereto it may, by order, regulate its practice and procedure and the provisions of the Code of Civil Procedure, 1908 (Act V of 1908), shall, so far as they are not inconsistent with the Act or the rules or orders made thereunder, apply to all proceedings before it.
Pursu ant to the powers conferred upon it by this sub section the Labour Appellate Tribunal has made orders to regulate its practice and procedure and 0.
3 r. 4 provides : " Nothing in these rules shall be deemed to limit or other wise affect the inherent power of the Tribunal to make such orders as may be necessary for the ends of justice or to prevent abuse of the process of the Court.
" This provision is analogous to that which is contained in section 151 of the Code of Civil Procedure which relates to the inherent powers of the Court and even apart from the ap plicability of 0.
41 r. 21 of the Code of Civil Procedure as hereinbefore set out it was open to the Labour Appellate Tribunal to pass the order which it did on March 6, 1956, as it was evidently necessary for the ends of justice or to prevent the abuse of the process of the Court.
We are, therefore, of opinion that the Labour Appellate Tribunal had jurisdiction to set aside the ex parte order dated October 14, 1955, and restore the appellant 's applica tion under section 22 of the Act to its file.
This contention of the appellant therefore is without any substance and must be negatived.
Re:(ii) It was next contended that even though the Labour Appellate Tribunal had jurisdiction to hear an application under section 22 of the Act it misconceived 526 its jurisdiction and in the exercise of it, launched into an inquiry which it was not competent to do and erroneously came to the conclusion that the appellant had failed to make out a prima facie case for terminating the service of the respondent.
The nature and scope of the enquiry before the Labour Appel late Tribunal under section 22 of the Act has been the subject matter of decisions of this Court in Atherton West & Co. Ltd. vs Suti Mill Mazdoor Union and others (1), The Automo bile Products of India Ltd. vs Rukmaji Bala & others(2) and Lakshmi Devi Sugar Mills Limited vs Pt.
Ram Sarup(3).
In the last mentioned case this Court succinctly laid down the principles governing such enquiry and observed at p. 935: " The Tribunal before whom an application is made under that section has not to adjudicate upon any industrial dispute arising between the employer and the workman but has only got to consider whether the ban which is imposed on the employer in the matter of altering the condition of employ ment to the prejudice of the workman or his discharge or punishment whether by dismissal or otherwise during the pendency of the proceedings therein referred to should be lifted.
A prima facie case has to be made out by the em ployer for the lifting of such ban and the only jurisdiction which the Tribunl has is either to give such permission or to refuse it provided the employer is not acting mala fide or is not resorting to any unfair practice or victimization.
" We have, therefore, got to consider whether in the instant case a prima facie case was made out by the appellant for terminating the service of the respondent and whether in giving the notice dated November 1 1, 1955, terminating the respondent 's service the appellant was motivated by any unfair labour practice or victimisation.
The facts as they appear from the narration of events in the earlier part of this judgment go to establish that the respondent was grossly negligent in (1) ; (3) ; (2) [1955] i S.C.R. 1241.
527 the performance of his duties, was in the habit of absenting himself on flimsy grounds, was also insolent in his beha viour and conduct and in spite of repeated warnings, oral as well as written, addressed to him by the Management of the appellant did not show any signs of improvement.
The inci dents of 1949, 195 1, and 1952 culminating in the stoppage of his annual increment in February, 1953, were sufficient to demonstrate that the Management of the appellant dealt with the respondent very leniently in spite of his work and conduct not being at all satisfactory.
The appellant would have been well within its rights if it had taken action against the respondent on each of the several occasions above referred to, but out of sheer compassion went on giving him one opportunity after the other so that he would register an improvement in his work and conduct.
The re spondent however, presisted in his behaviour and the two reports made by Mr. Hooper One on August 19, 1953, and the other on May 4, 1954, were considered by the Management and it came to the conclusion that the respondent was unsuitable to be retained in the appellant 's service and even then instead of deciding to dismiss him without anything more, it offered him the choice of one of the two alternatives, viz., that it may forthwith terminate his service if he was agree able to accept the term of full retrenchment compensation or if he refused to accept the same to make an application before the Fifth Industrial Tribunal for permission to terminate his service.
The whole of the correspondence ending with the respondent 's letter dated February 17, 1953, was sufficient to prove with.
out anything more the unsatis factory nature of his work and conduct and the, appellant was evidently of the opinion that the records of the re spondent taken along with the reports made by Mr. Hooper afforded sufficient material to justify it in taking the step which it ultimately decided to do.
It was under these circumstances that the appellant did not consider it neces sary to furnish to the respondent a chargesheet and to hold a formal enquiry into the work and conduct of the respond ent.
528 This circumstance was considered by the Labour Appellate Tribunal as sufficient to entitle it to determine for itself whether a prima facie case for the termination of the respondent 's service was made out by the appellant.
It was open to the appellant to submit a charge sheet to the re spondent and institute a formal inquiry into his work and conduct.
If that had been done and the appellant had, after holding such formal enquiry, come to the conclusion that the respondent was guilty of the charges which were levelled against him and had then decided to terminate his service, the Tribunal could not have intervened and on its coming to the conclusion that a prima facie case for the termination of the service of the respondent was thus made out, it would.
have granted the appellant the permission asked for.
Unfortunately for the appellant, in spite of the work and conduct of the respondent being demonstrably unsatisfactory and, therefore, justifying the conclusion that he was un suitable to be retained in its service, the appellant did not hold any formal enquiry of the nature indicated above and did not afford to the respondent an opportunity to have his say in the matter of the charges levelled against him.
The Labour Appellate Tribunal therefore rightly took upon itself the burden of determining whether on the material submitted before it by the appellant a prima facie case for the termination of the respondent 's service was made out by the appellant.
The evidence led by the parties before the Labour Appellate Tribunal consisting as it did of the affidavit and oral evidence was not such as would enable it to come to the conclusion that a prima facie case for the termination of the respondent 's service was made out by the appellant.
In paragraphs 8 and 9 of the application the appellant had pointed out that after receipt of Mr. Hooper 's report dated May 4, 1954, to the effect that there will be no improvement of work in the department unless the respondent was removed from the same, the matter was further investigated and the old records of the respondent were carefully considered and the appellant found that enough consideration 529 had been shown to the respondent but without any effect and in the interest of discipline and good work it was necessary that he should be discharged from service.
These allega tions were denied by the respondent in his affidavit in reply and he contended that on no occasion whatever the warnings, letters, suspension or stoppage of increment resorted to by the appellant were done after establishing his guilt or by following the usual methods, viz., by issu ing a charge sheet with specific allegations and on enquiry based on such a charge sheet and explanations rendered by him.
He contended that the whole thing was arbitrary, without any basis and in violation of the principles of natural justice and was by way of unfair labour practice or victimization.
An affidavit in rejoinder was filed on behalf of the appellant by Shri Ramani Ranjan Dhar, a Senior Assistant of the appellant.
He denied these allegations of the respondent and affirmed that the application of the appellant sufficiently disclosed the offences for which it sought the permission of the Labour Appellate Tribunal to dismiss the respondent.
He stated that the appellant was thoroughly satisfied, after full enquiry and investigation and after the respondent was given more than ample opportu nity to explain the charges levelled against him, and after he was given more than one chance at his own prayer to improve his conduct on various occasions that the respondent was guilty of the charges brought against him.
This affida vit evidence was followed by the oral evidence of Mr. Hooper led on behalf of the appellant.
Mr. Hooper, however, did not carry the case of the appellant any further.
Even though the appellant had an opportunity when Mr. Hooper was in the witness box to produce his reports dated August 19, 1953, and May 4, 1954, and have them proved through him, or, in any event, if the absence or loss of those reports was satisfactorily accounted for to lead oral evidence as to their contents the appellant did not do so and beyond a bare reference to his report of May 4, 1954, without disclosing.
the contents thereof there was nothing in the deposition of Mr. Hooper which would 530 even go to show that the contents of that report were preju dicial to the respondent.
In cross examination also he admitted that before reporting on May 4, 1954, against the respondent he did not draw up a chargesheet as it was for the appellant to do so.
The Labour Appellate Tribunal bad to determine on these materials whether a prima facie case had been made out by the appellant for the termination of the respondent 's serv ice.
A prima facie case does not mean a case proved to the hilt but a case which can be said to be established if the evidence which is led in support of the same were believed.
While determining whether a prima facie case had been made out the relevant consideration is whether on the evidence led it was possible to arrive at the conclusion in question and not whether that was the only conclusion which could be arrived at on that evidence.
It may be that the Tribunal considering this question may itself have arrived at a different conclusion.
It has, however, not to substitute its own judgment for the judgment in question.
It has only got to consider whether the view taken is a possible view on the evidence on the record.
(See Buckingham and Carnatic Co., Ltd. Case (1).
The Labour Appellate Tribunal in the instant case discussed the evidence led before it in meticulous detail and came to the conclusion that no prima facie case was made out by the appellant for the termination of the service of the respond ent.
It applied a standard of proof which having regard to the observations made above was not strictly justifiable.
If the matter had rested there it may have been possible to upset the finding of the Labour Appellate Tribunal.
But if regard be had to the evidence which was actually led before it, there is such a lacuna in that evidence that it is impossible to come to the conclusion that even if the evi dence was taken at its face value a prima, ' facie case was made out by the appellant.
Mr. Hooper 's evidence did not go to show what were the contents of his report dated May 4, 1954, and it contained only a bare reference to that report (1) 531 without anything more.
This was not enough to prove the contents of that report, much less to give the respondent an opportunity of controverting the ' allegations made against him.
If, therefore, these essential ingredients were want ing, it cannot be said that the evidence led by the appel lant before the Labour Appellate Tribunal was sufficient to establish a prima facie case for the termination of the respondent 's service.
This contention also does not there fore avail the appellant.
Mr. Sen endeavoured to draw a distinction between discharge on the one hand and punishment by way of dismissal or other wise on the other, in clause (b) of section 22 of the Act.
He contended that no prima facie case need be made out when an employee was sought to be discharged simpliciter by the employer.
A charge sheet was required to be submitted to the workman and an enquiry thereon required to be made in conformity with the principles of natural justice only in those cases where the workman was sought to be punished by dismissal or otherwise.
That was not the case when the workman was sought to be discharged without assigning any reason whatever and such a case did not fall within the category of punishment at all.
For the purpose of the present case we need not dilate upon this; it is sufficient to point out that Shri Raniani Ranjan Dhar in his affidavit in rejoinder filed on behalf of the appellant categorically stated that the respondent was sought to be " dismissed " by reason of his having been found guilty of the various charges which had been levelled against him.
Even at the exparte hearing of the application under section 22 of the Act before the Labour Appellate Tribunal the case of the appel lant was that it had made out a prima facie case for permis sion to " dismiss " the respondent.
This distinction sought to be drawn by Mr. Sen is therefore of no consequence what ever and need not detain us any further.
Mr. Sen also relied upon the circumstance that after the Labour Appellate Tribunal had on the exparte hearing of the application under section 22 of the Act granted to the appellant permission to terminate the 68 532 service of the respondent on October 14, 1955, the appellant had implemented the same and by its notice 'dated November, 11, 1955, actually terminated the service of the respondent offering him full retrenchment compensation.
In so far as the appellant had acted upon such permission and implemented the same, it was contended, that the respondent 's service was irrevocably terminated and nothing more was to be done thereafter, except the possible raising of an industrial dispute by the respondent on the score of his service having been wrongfully terminated.
It was submitted that after such an irrevocable step had been taken by the appellant terminating the respondent 's service, the Labour Appellate Tribunal ought not to have reconsidered its decision and restored the application under section 22 of the Act to its file and that the further decision of the Labour Appellate Tribu nal had no effect so far as the actual termination of the service of the respondent was concerned.
We do not propose to go into these interesting questions for the simple reason that the only question which arises for our consideration in this appeal is whether on the evidence led before it the decision of the Labour Appellate Tribunal dated May 11, 1956, dismissing the appellant 's application under section 22 of the Act was correct.
As a matter of fact no such contention had been urged by the appellant before the Labour Appellate Tribunal when it finally heard the application under section 22 of the Act and the only point to which the attention of the Labour Appellate Tribunal was invited was whether the appel lant had made out a prima facie case for the termination of the respondent 's service.
Whatever rights and remedies are available to the appellant by reason of these circumstances may just as well be asserted by the appellant in appropriate proceedings which may be taken hereafter either at the instance of the appellant or the respondent.
We are not at present concerned with the same.
Under the circumstances, we are of opinion that the decision arrived at by the Labour Appellate Tribunal 533 which is the subject matter of appeal before us was correct.
It is no doubt true that the Labour Appellate Tribunal recorded a finding in favour of the appellant that in termi nating the service of the respondent as it did, the appel lant was not, guilty of any unfair labour practice nor was it actuated by any motive of victimisation against the respondent.
That finding, however, cannot help the appel lant in so far as the Labour Appellate Tribunal held that the appellant had failed to make out a prima facie case for terminating the service of the respondent.
We, therefore, hold that the decision of the Labour Appel late Tribunal refusing permission to the appellant under section 22 of the Act was correct and this appeal is liable to be dismissed.
It will accordingly be dismissed with costs.
Appeal dismissed.
| Section 17 of the Andhra Pradesh Excise Act 1968, as it stood at the relevant time, provided for the grant of lease for the manufacture or sale of an intoxicant.
It also pro vided that a lease shall not take effect until a licence under the Act was also issued.
Section 23 provided that the sum accepted in consideration for the grant of any lease under s.17 was to be the excise duty payable in respect of that excisable article.
Rule 3 of the Andhra Pradesh (Lease of Right to Sell Liquor in Retail) Rules, 1969 prescribes that every lease of right to sell liquor in retail shall be granted by auction.
Rule 7 of the Andhra Pradesh (Arrack Retail Vend Special Conditions of Licences) Rules, 1969 requires the licences to purchase arrack from the distillery, warehouse or depot allotted by the Government and to pay 'issue price ' as notified.
Rule 15 provides for the purchase of a specified minimum guaranteed quantity of arrack every month and for the adjustment of the issue price in case of any short fail in the purchase of the minimum guaranteed quantity of liq uor.
A question arose as to whether under the Excise Law prevailing in the State, the Government was entitled to claim from the excise contractors, who failed to lift the minimum guaranteed quantity of liquor, the amount said to represent the excise duty component in the issue price of liquor relating to such unlifted quantity of liquor.
A Full Bench of three Judges of the High Court in V. Narasimha Rao vs Superintendent of Excise, (AIR held in favour of the Government.
It took the view that three items, namely, duty, cost 514 and sales tax constituted the issue price.
This view, howev er, was overruled by the Full Bench of Five Judges of the same High Court in Atluri Brahmanandam vs Tahsildar of Gannavaram, (AIR wherein it was held that the Government could not do so.
It treated the excise duty as a severable element of issue price.
That judgment was assailed in the appeals and petitions filed by the Government.
To nullify the effect of that judgment and to validate the demands raised by the Government the State Legislature enacted the Andhra Pradesh Excise (Amendment) Act X of 1984.
The amended s.17 provides for grant of lease or licence for exclusive privilege of manufacture, supply by wholesale or sale of any liquor or other intoxicants.
The new s.23 empow ers the competent officer to accept payment of a sum in consideration of the grant of lease or licence or both for the exclusive privilege in respect of the liquor or any other intoxicant under s.17.
Section 4 of the Amending Act, provides for the validation of earlier demands made in respect of issue price of short drawn minimum guaranteed quantity of liquor.
Demands raised pursuant to the Amending Act were upheld by the High Court by a later judgment.
The aggrieved excise contractors filed appeals to this court.
Some of the contractors who had originally succeeded because of the decision of Five Judges Bench and were again called upon to make good the deficit after the Amending Act was passed, having failed in the High Court filed special leave petitions to this Court.
It was contended for the aggrieved contractors that what was sought to be recovered from them was excise duty on unlifted quantity of liquor which was not authorised by the provisions of the Act, as the excise duty being a part of the issue price it could only ;elate to liquor drawn by them and not pertain to undrawn liquor, that without amending ss.21 and 22 of the Excise Act the amendment of s.23 affect ed by the Legislature led nowhere towards achieving the result aimed at by the Legislature and that the Legislature could not validate the demands earlier made and struck down by the Courts, merely by enacting that the demands were to be deemed to be valid without removing the vices and the defects.
Disposing of the appeals and the special leave petitions, the Court, HELD: 1.1 Once 'issue price ' is determined its compo nents, such as excise duty, cost price, transport charges etc.
cease to retain their individual character.
They cannot then be severed from the issue 515 price and dealt with separately.
The Five Judges Bench of the High Court was, therefore, wrong in holding that excise duty was a severable element of issue price.
[526H; 527A B] 1.2 Issue price is the sum total of whatever has gone into the price of liquor at the time it is issued and it is a single pre determined definite sum per bulk litre and not the total of separate sums representing to many specified components.
The 'issue price ' is that which is notified as issued price and not its components, if any.
These compo nents which have come together to become 'issue price ' are rendered incapable of being separated again.
Excise duty loses its identity, as it were, and becomes an inseparable part of 'issue price '.
[525H; 526A] A lessee licensee, therefore, was not entitled to claim deduction from the issue price payable by him in respect of short drawn quantity of arrack the amount attributable to the excise duty.
[528F] V. Narasimha Rao vs Superintendent of Excise, AIR 1974 AP 157, distinguished.
Atluri Brahamanandam vs Tahsildar of Gannavaram, AIR 1977 AP 196, overruled.
2.1 The issue price is no more and no less than the price which the contractor agrees to pay for the grant of the privilege to sell liquor, drawn or undrawn.
The minimum guaranteed quantity of liquor as well as the issue price are both fixed well in advance of the auction in regard to each shop and it is with full knowledge of the issue price and the minimum guaranteed quantity that every bidder partici pates in the auction.
1527D; 526C D] 2.2 There can be no question that issue price must generally relate to liquor which is drawn by the contractor but it does not follow therefrom that issue price cannot be adopted by agreement between the parties as a measure of compensation to be paid in the case of undrawn liquor.
[527C D] Panna Lal vs State of Rajasthan, , referred to.
3.1 Even prior to the 1984 amendment, the amount which each of the contractors was required to pay or to have adjusted was not excise duty on undrawn liquor, but was part of the price which he had agreed to pay for the grant of the privilege to sell liquor.
[527D] 516 3.2 All rights in regard to manufacture and sale of intoxicants vest in the State.
It is open to the State to part with those rights for a consideration.
The considera tion for parting with the privilege of the State is neither excise duty nor licence fee but it is the price of the privilege.
[S27E F] 3.3 Reading sections 17 and 23 of the Andhra Pradesh Excise Act 1968 together with the Andhra Pradesh Excise (Lease of Right to Sell Liquor in Retail) Rules 1969 and Andhra Pradesh (Arrack Retail Vend Special Conditions of Licences) Rules 1969, makes it evident that the privilege of selling liquor, which includes the lease of the shop for an area and the licence to sell liquor therein may be granted by the State by public auction subject to: (1) payment of rental being the highest bid at the auction, (2) the re quirement that the licensee shall purchase arrack at the issue price, and (3) the further requirement that the licen see shah purchase a minimum guaranteed quantity of arrack, which he has to make good in case of short fail.
The consid eration for the grant of the privilege to sell liquor is not merely the rental to be paid by the lessee but also the issue price of the arrack supplied or treated as supplied in case of short fail, which is also to be paid by the lessee licensee.
There is no question of the lessee licensee having to pay the excise duty though it may be that the issue price is arrived at after taking into account the excise duty payable.
[S28B E] Panna Lal vs State of Rajasthan, ; ; State of Haryana vs Jage Ram, ; and Har Shankar & Ors.
vs The Dy.
Excise & Taxation Commr.
& Ors.
, ; , referred to.
Bimal Chandra Banerjee vs State of Madhya Pradesh, ; ; Madhya Pradesh vs Firm Cappulal etc.
; , and Excise Commissioner, Uttar Pradesh vs Ram Kumar, 1976 (Suppl) SCR 532, distinguished.
The new s.17 of the Excise Act makes it clear that what is proposed to be granted is the exclusive previlege to manufacture or sell liquor in the shape of a lease or li cence or both.
The explanation makes it clear that the lease shall not take effect unless a licence is issued.
Having regard to the vital amendment of section 17, no further amendment of s.21 and 22 was necessary.
In the new s.23 it is now specified that the payment in consideration of the grant of lease or licence or both for the exclusive privilege is to be instead of or in addition to any excise duty or fees leviable in ss.21 and 22.
The amendments effected to ss.17 and 23, 517 therefore, have fulfilled the object of removing the vices or defects in the Act if indeed there were any.
[533C F]
|
l Appeal Nos.
1952 and 1953 of 1966.
Appeals from the judgment and order dated February 25, 1965 of the Punjab High Court, Circuit Bench at Delhi in Letters Patent Appeals Nos.
38 D and 42 D, and 39 D and 43 D of 1963.
section T. Desai and Naunit Lal, for the appellants (in both the appeals).
C. B. Agarwala, K. P. Gupta and R. C. Chadha, for respondent No. 1 (in both the appeals).
The Judgment of the Court was delivered by Shelat, J.
These two appeals, under certificate, are directed against the common judgment and order of the High Court of Punjab, dated February 25, 1965, passed in four Letters Patent appeals filed by the two appellant companies and the respondent company against the judgment and order of a learned Single Judge of the High Court.
The said appeals were the outcome of two applications filed in the High Court under section 111 of the ; XLIII of 1958 (referred to hereinafter as the Act) for rectification of the register in respect of two registered Trade Marks, Nos. 161543 and 161544, registered on November 20, 1953 in respect of cycle bells manufactured by the respondent company.
Registered Trade Mark No. 161543 was the numeral '50 ' and Trade Mark No. 161544 was the figure 'Fifty '.
The two appellant companies carry on business in Kapurthala in Punjab, one of them the National Bell Co. Ltd. claimed to be manufacturing bells with numerals '33 ', '50 ', '51 ' and '40 ' inscribed on them since 1957, and the other M/s Gupta Industrial Corporation since 1947 with numerals, '20 ', '50 ' and '60 ' inscribed on cycle bells manufactured by it.
The two applications for rectification arose out of suits filed in the District Court, Lucknow by the respondent company against the two appellant companies on the ground of infringement of its said registered trade marks, the numeral '50 ' and the figure 'Fifty '.
On April 24, 1961 the District Court stayed the said suits at the instance of the appellant companies giving them time for filing the said rectification applications in the High Court.
The grounds alleged in the applications were (1) that the numeral '50 ' and the word 'Fifty ' were common to the trade at the time of the original registration and were therefore not distinctive of the bells manufactured by the respondent company, Sup.
CI 6 74 (2)that many other manufacturers in the market were using the numeral '50 ' and the word 'Fifty ' on or in relation to cycle bells, and therefore, the distinctiveness of the said marks in relation to the bells manufactured by the respondent company, if any, had been lost, (3) that the respondent company did not get the registration of these marks with any bona fide intention of using them in relation to their cycle bells and that in fact there had been no bona fide use of the said trade marks in relation to their goods before the date of the applications.
They also alleged that the respondent company had fraudulently declared at the time of registration that they were the originators or proprietors of the said two marks '50 ' and 'Fifty '.
Both sides led evidence, oral and documentary, the latter including several price lists from the possession of some of the dealers in cycle spare parts.
The learned Single Judge, who in the first instance tried the applications, found on a consideration of the evidence that cycle bells with different numerals and in particular the numeral '50 ' were being sold in the market before the respondent company put its cycle bells with the numeral '50 ' and the figure 'Fifty ' inscribed on them in the market and continued to be sold right upto 1952 when import of foreign manufactured cycle bells was prohibited, and that despite such prohibition those cycle bells were being sold in the market as late as 1958, presumably from old stocks still lingering in the market, though not from any new imported stock.
The learned Single Judge also found that there was no evidence of the original registration having been fraudulently obtained by the respondent company, that there was no averment by the appellant companies that Lucas or any other concern had obtained registration of any mark either of the numeral '50 ' or the figure 'Fifty ', and that therefore, cl.
(a) of section 32 did not apply.
He further found that cl.
(b) of section 32 also did not apply.
He held, however, that the trade mark, namely, the numeral '50 ' was not at the commencement of the proceedings distinctive of the goods of the respondent company as (a) numerals are prima facie not distinctive except in the case of textile goods as recognised by Part HI of the Trade and Merchandise Marks Rules, 1959, and (b) that the numeral '50 ' was being commonly used by several dealers and manufacturers subsequent to the registration thereof by the respondent company, and that therefore, the registered trade mark, the numeral '50 ', was hit by cl.
(c) of section 32.
So far as the trade mark of the figure 'Fifty was concerned, he held that there was no evidence that it was used by other parties either prior to or after the registration thereof by the respondent company and in that view declined to rectify or expunge the trade mark 'Fifty ' as seven years had already elapsed by the time the rectification proceedings were launched and could not, therefore, be challenged on the ground of absence of distinctiveness as laid down in section 32.
75 The learned Single Judge, on the basis of his aforesaid conclusions, cancelled the trade mark No. 161543, i.e., of the numeral '50 '.
In the appeals filed against the said judgment the Division Bench of the High Court held (1) that though the use of the numeral '50 ' in relation to cycle bells dated back at least 30 years as in the case of Lucas and certain other foreign concerns, the imports of such goods stopped from ;about 1952, though some bells were being sold till 1958 presumably from the remaining previous stock, (2) that the numeral '50 ' in connection with those foreign made bells was never intended as a trade mark but was used only as an indication of the type or quality, and (3) that statements Exs.
R 2, R 3 and R 4 produced by the respondent company showed that sales of its bells with the trade marks '50 ' and 'Fifty ' inscribed on them had risen from the value of Rs. 19,644 in 1949 50 to Rs. 14.83 lacs in 1961 62.
The Division Bench agreed with the Trial Judge that cl.
(a) of section 32 did not apply as there was no question of the original registration having been fraudulently procured in 1953.
It also held that the trade marks in question could not be cancelled merely on the ground that if their registration had been opposed they would not have been registered, and that therefore, the question for determination was whether it was liable to cancellation in view of section 32(c), which lays down that the section would not apply in cases where the trade mark in question was not distinctive at the commencement of the proceedings.
According to the Division Bench, the word "commencement of proceedings" in cl.
(c) of section 32 meant the commencement of the infringement suits filed by the respondent company as the proceedings for cancellation were the off shoots arising from those suits, that therefore, the situation in respect of section 32(c) had to be assessed in the light of the state of affairs existing in 1959.
According to the Division Bench, the earliest use of the mark '50 ' by any concern other than Lucas and other foreign manufacturers was in 1953 by M/s Indian Union Manufacturers Ltd. The respondent company, however, had filed a suit against that company in 1954 which resulted in a compromise dated February 5, 1955 whereunder the said company recognised the exclusive right of the respondent company to the use of the word% 'Fifty ', 'Thirty ' and the numerals '50 ' and '30 ', while the respondent company recognised the right of the said company to the exclusive use of the words and numerals 'Thirty one ', 'Forty one ' and 'Fifty one ' and '31 ', '41 ' and '51 ', that the respondent company had also in 1956 similarly taken action against K. R. Berry & Co. of Jullundur for use by that company of the mark 'Five 50 '.
The suit, however, had to be withdrawn in 1958 on account of lack of jurisdiction of the Banaras court where it was filed that though no fresh suit was 76 filed against that company, the respondent company had opposed an application by that company for registration of the mark 'Five Fifty ' before the Registrar and that application was then pending in 1962, and lastly, that the respondent company had filed in 1959 the two suits against the appellant companies out of which these rectification proceedings arose.
The Division Bench held that though there was some evidence of the use of the numeral '50 ' by certain other concerns after 1953, no importance could be attached to such breaches as there, was hardly any evidence as to when the infringers started manufacturing and the extent of their manufacture and sales, and that the correct principle applicable in such cases was that a few unchallenged, scattered infringements by a number of traders did not render a registered trade mark common.
As regards the earlier use of the word 'Fifty ' and the numeral '50 ' by Lucas and other foreign concerns, the Division Bench held that they were not the registered trade marks of those companies and that those concerns had used those marks as merely type marks.
Though the idea of using '50 ' and 'Fifty ' was not the original idea of the respondent company when it obtained registration in 1953, the foreign concerns had ceased importing the goods and though sales of those bells continued until 1958, such sales were from the stock still remaining unsold.
Such sales could not he in any appreciable bulk.
Even if the idea of using, the two marks might have been conceived by the respondent company from the marks used by Lucas and other foreign concerns, there was no question of any piracy or infringement of those marks as the respondent company was the first to convert what were originally type marks into registered trade marks.
Lastly, it held that the statements of sales produced by the respondent company demonstrated that its sales had been steadily increasing and that some concerns, finding the use by the respondent company of its marks '50 ' and 'Fifty ' highly successful, had sought in recent years to take advantage of am popularity of the cycle bells of respondent company by imitating its marks.
This fact, however,, could not mean that either in 1959 when the respondent company filed the suits or in 1961 when rectification proceedings commenced, the marks had ceased to be .distinctive in relation to the goods of the respondent company or were, therefore, liable to cancellation under section 56 by reason of cl.
(c) of section 32.
Accordingly, the Division Bench allowed the. respondent company 's appeals and set aside the order of the learned Single Judge cancelling the registration of its trade mark No. 161543 in respect of the numeral '50 ' and dismissed the appeals of the appellant companies.
Mr. section T. Desai for the appellant companies contended that the two trade marks in question were liable to cancellation on the grounds that (1) they were common and not distinctive at the 77 date of their registration, and therefore, ought never to have been registered, (2) that in any event, the numeral '50 ' is prima facie not distinctive unless shown to be of such extensive use as to make it distinctive, (3) that there was clear evidence that the respondent company had imitated the use of these marks by Lucas and other manufacturers, and that therefore, these marks would be disentitled to protection in a court of law, and (4) that the said marks were not, at the commencement of the proceedings distinctive, that is, adapted to distinguish the goods of the respondent company.
Mr. Agarwala, on the other hand,, argued that, (1) the two marks having been registered in 1953 and seven years since then having elapsed at the commencement of these proceedings, the question whether they were distinctive at the time of registration was not open to dispute, (2) that that being so, there was no question of any alleged piracy by the respondent company of the marks of Lucas and other concerns, and therefore, the marks could not be said to be disentitled to protection by a court, (3) that the marks had not lost their distinctiveness at the date of these proceedings under section 56, and (4) that the Letter Patent Bench was, therefore, justified in dismissing these proceedings by the appellant companies.
A mark under section 2(j) includes a word, letter or numeral or any combination there of.
A trade mark, as difined in section 2(v) means in relation to Chapter X (i.e. for offences and penalties provided in that chapter) a registered trade mark or a mark used in relation to the 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 in relation to the other provisions of the Act a mark used or proposed to be used in relation to the 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 and includes a certification trade mark registered as such under the provisions of Chapter VIII.
Under section 9, a trade mark is not registerable in Part A of the register unless it contains or consists of at least one ,of the essential particulars mentioned therein.
One of these particulars in "any other distinctive mark".
(3) of section 9 defines the expression "distinctive" in relation to the goods in respect of which a trade mark is proposed to be registered, as meaning "adapted to distinguish goods with which the proprietor of the trade mark is or may be connected in the course of trade from goods in the case of which no such connection subsists either generally or, where the trade mark is proposed to be registered subject to limitations, in relation to use within the "tent of the registration.
" In determining whether a trade mark is distinctive, regard is to be had whether it is inherently distinctive or is 78 inherently capable of distinguishing and by reason of its use or any other circumstances it is in fact adapted to distinguish or is capable of distinguishing the goods.
section 1 1 prohibits certain trade marks from being registered.
These are marks the use of which would be likely to deceive or cause confusion, or the use of which would be contrary to any law or which comprises or contains scandalous or obscene matters or any matter likely to hurt the religious susceptibilities of any class or section of the citizens, or "(e) which would otherwise be disentitled to protection in a court".
On registration of a trade mark, the registered proprietor gets under section 28 the exclusive right to the use of such trade marks in relation to the goods in respect of which the trade mark is registered and to obtain relief in respect of any infringement of such trade mark.
Under section 31, registration is prima facie evidence of its validity.
The object of the section is obviously to facilitate proof of title by a plaintiff suing for infringement of his trade mark.
He has only to produce the certificate of registra tion of his trade mark and that would be prima facie evidence of his title.
Such registration is prima facie evidence also in rectification applications under section 56, which means that the onus of proof is on the person making such application.
Being prima facie evidence, the evidence afforded by the registration may be rebutted, but in view of section 32 that can be done if seven years have not elapsed since the original registration.
Even where such rebuttal is possible, i.e., where seven years have not elapsed, and it is shown that the mark in question was not registerable under section 9 as no evidence of distinctiveness was submitted to the Registrar, the registration would not be invalid if it is proved that the trade mark had been so used by the registered proprietor or his predecessor in interest as to have become distinctive at the date of registration.
Sec. 32, with which we are immediately concerned, reads as follows : "Subject to the provisions of section 35 and section 46, in all legal proceedings relating to a trade mark registered in Part A of the register (including applications under section 56), the original registration of the trade mark shall, after the expiration of seven years from the date of such registration, be taken to be valid in all respects unless it is proved (a) that the original registration was obtained by fraud; or (b) that the trade mark was registered in contravention of the provisions of section 11 or offends 79 against the provisions of that section on the date of commencement of the proceedings; or (c) that the trade mark was not, at the commencement of the proceedings, distinctive of the goods of the registered proprietor.
" We are not concerned with cl.
(a) as no such case was even averred in the applications as pointed out both by the Trial Judge and the Division Bench.
As regards cl.
(b), it will be at once noticed that the clause relates to facts existing both at the time of and after registration.
If a mark at the time of registration was such that it was likely to deceive or cause confusion or its use would be contrary to any law or contained or consisted of scandalous or obscene matters or matter likely to hurt religious susceptibilities or which would otherwise be disentitled to protection of a court, and therefore, was under section 1 1 prohibited from being registered, cl.
(b) would apply, and the rule as to conclusiveness of the validity of the registration cannot be invoked.
That would also be so, if the trade mark at the date of the rectification proceedings was such as to offend against the provisions of section 11.
But, unlike cl.
(b), cl.
(c) relates to facts which are post registration facts, existing at the date of the commencement of the proceedings.
If the trade mark at such date is not distinctive in relation to the goods of the registered proprietor, the rule as to conclusiveness enunciated in section 32 again would not apply.
It would seem that the word 'distinctive ' in cl.
(c) is presumably used in the same sense in which it is defined in section 9(3), as the definition of that expression therein commences with the words "for the purposes of this Act" and not the words "for the purposes of this section," the intention of the legislature, thus, being to give uniform meaning to that expression all throughout the Act.
section 56 deals with the power to cancel or vary registration and to rectify the register.
Sub section 2 thereof confers a right to any person "aggrieved" by an entry made in the register without sufficient cause or by an entry wrongly remaining in the register to apply to the tribunal for expunging or varying such an entry.
The expression "aggrieved person" has received liberal construction from the courts and includes a person who has, before registration, used the trade mark in question as also a person against whom an infringement action is taken or threatened by the registered proprietor of such a trade mark.
The words "without sufficient cause" in the section have clearly relation to the time of the original registration.
Therefore, a person can apply for cancellation on the ground that the trade mark in question was not at the date of the commencement of the proceedings distinctive in the sense of section 9(3).
The burden of proof, however, in such a case is, as aforesaid, on the applicant applying under section 5 6. 80 The contention was that numerals, such as '50 ', are prima facie not considered distinctive and to be, registerable there must be evidence of extensive use.
The contention was sought to be fortified by showing that contrary to the practice in England, rules 139 and 140 of the Rules of 1959 permit numerals to be registered as trade marks only in the case of textile goods.
But that is permitted on account of a long standing practice in that particular trade of using numerals with a view to distinguish goods of a particular manufacturer or a particular type or quality.
It will, however, be noticed that although in the 8th edition of Kerly on Trade Marks, page 135, it was stated that numerals are considered to be prima facie not distinctive and registerable only upon proof of their extensive use, the 9th edition of the same work does not reproduce that passage.
On the contrary, at p. 284, the learned editor states that numerals are capable of registration and that such marks exist.
For this change the learned editor relies, on the registered trade mark, "4711" for eau de Cologne, which was the subject matter of dispute in Reuter vs Mutblens(1).
In that case, however, no contention was raised as to whether the trade mark consisting of a numeral could be distinctive or not and the court, therefore, was not called upon to decide such a point.
But the parties appear to have proceeded on the assumption that the numeral "471 1 " was validly registered as a trade mark for that particular brand of eau de Cologne by reason of its having gained distinctiveness by extensive use.
It is, therefore, not an inflexible rule and that was also conceded by Mr. Desai, that a mark consisting of a numeral is necessarily not distinctive and is not registerable, except only in the case of textile goods, in spite of proof of extensive use.
section 32 in clear terms provides that the original registration of a trade mark, after expiry of seven years from the date of its registration shall be taken to be valid in all respects in all legal proceedings including those under section 56, except in the three categories of cases mentioned therein.
It follows, therefore, that no objection that the trade mark in question was not distinctive and therefore was not registerable under section 9 can be entertained if such an objection is raised after seven years have lapsed since the date of its registration as in the present came, nor can an objection be entertained that no proof of distinctiveness was adduced or insisted upon at the time of the original registration.
This is clear also from the fact that the three exceptions set out in section 32 against conclusiveness as to the validity of the registration relate to, (1) fraud, (2) contravention of section 11, and (3) absence of distinctiveness at the commencement of the proceedings in question and not at the time of registration.
No contention, therefore, (1) 81 can be raised that the trade marks, '50 ' and 'Fifty ', were not distinctive, i.e., adapted to distinguish the cycle bells of the respondent company at the date of the registration, and therefore, were not registerable as provided by section 9 (cf.
Paine & Co. vs Daniells & Sons ' Breweries Ltd.(1).
But the argument was that the appellant companies were en titled to show under cls.
(b) and (c) in section 32, (1) that these marks were registered in contravention of section 11, or that they offended against the provisions of that section on the date of the commencement of these proceedings, and (2) that they were not distinctive at the date of the commencement of these proceedings.
S.11, as already noticed,, does not, as section 9 does, lay down the requisites for registration, but lays down prohibition against certain marks from being registered.
(b), (c) and (d) of section 1 1 obviously do not apply in the present case but reliance was placed on cls.
(a) and (e), i.e., that the use of these trade marks would be likely to deceive or cause confusion and that they were such that they were otherwise disentitled to protection in a court.
The burden of proof being on the appellant companies, the question is : has that burden been satisfactorily discharged ? The evidence relied on by them was that of dealers in cycle spare parts including bells, certain price lists produced through them and the two representatives of the two appellant companies.
That evidence, no doubt, shows, (1) that for a number of years prior to 1952 bells manufactured by Lucas and certain other foreign concerns with various numerals such as '30 ', '50 ' and 61 ' inscribed either on the belts or on their cartons were in the market, (2) that even after 1952 bells with inscriptions thereon, such as "Berry 50", "National 50", manufactured by one of the appellant companies, "Five 50", "Padam 50", "Balco 50" etc.
were sold in the market, (3) that Gupta Industrial Corporation, one of the appellant companies, claimed to have started the manufacture of bells since 1947, calling them "Gupta 50" and the National Bell Company likewise began to produce bells, calling them "National 50" since 1957.
But both the learned Single Judge and the Division Bench clearly found, (1) that there was no evidence of any fraud having been committed by the respondent company at the time of the registration; (2) that there was no averment by the appellant companies, much less any evidence, that Lucas or any other foreign concerns had obtained registration of trade, marks either of the numeral '50 ' or the word 'Fifty ', that the indication, on the contrary, was that those concerns used the different nume rals, '30 ', '61 ', '50 ' etc.
for distinguishing one type of bell from the other manufactured by them; and (3) that about a year prior (1) , 232. 82 to the registration of the trade marks in question in 1953 foreign bells were prohibited from being imported.
Obviously, therefore, the evidence as to purchases and sales by the dealers examined by the appellant companies related to bells which had remained unsold from out of the stock earlier imported.
As regards the bells called "Gupta 50" said to have been manufactured by one of the appellant companies since 1947, no evidence was led to show either the extent of manufacture or sale between 1947 and 1953 or thereafter from which the High Court could be asked to draw any inference as to the likelihood of deception or confusion.
Though there was some evidence that foreign made bells Such as Lucas "30", "50" and "61" were being sold as late as 1958, such sales must have been few and far between as they could only be from the remaining stock out of the earlier imports.
Such sales could hardly be considered as evidence showing a,likelihood of confusion or deception as contemplated by section 1 1 (a).
In fact, the evidence was that purchasers used to call those bells not by their numerals but simply as Lucas ' bells and those manufactured by the respondent company, as "Asia bells", and in some cases "Asia 50".
As against the voluminous sales by the respondent company shown by the statements filed by it for the years 1949 50 to 1961 62, there was no such corresponding evidence, indicating the sales of other bells with numerals, such as "50" inscribed on them from which any likelihood of confusion or deception could be deduced.
Regarding deception, there was indeed no evidence whatsoever in that regard.
There was no question of piracy also on the part of the respondent company as argued by counsel as there was nothing to show that Lucas or any other foreign concerns used this numeral except for distinguishing one type of bell from another manufactured by them.
In our view, cl.
(a) of section 11, therefore, is clearly not attracted.
The next question is whether the trade mark "50" or "Fifty" is one which would otherwise be disentitled to protection in a court as laid down in cl.
(e) of section 1 1 so as to attract cl.
(b) of section 32.
While construing cl.
(e) of section II, it is necessary to repeat that it deals with prohibition and not with requisites of registration.
Therefore, although a mark cannot be registered, for instance, because it is not distinctive, as provided by section 9, such a mark is not for that reason only one the registration of which is prohibited by section 1 1.
The section lays down positive objection to registration and not to mere lack of qualification.
This is clear from cl.
(e) of section 11, which uses the expression "disentitled to protection", and not the expression "not entitled to protection".
The former contemplates some illegal or other disentitlement inherent in the mark itself.
(see Kerly, 9th ed. 344).
83 In Imperial Tobacco Co. Ltd. vs De Pasqualil & Co.(1) the appellant company was the proprietor of two trade marks con sisting of "Regimental Cigarettes" and "Regimental Tobacco".
The company brought an action for infringement of its trade marks and for passing off against the respondent who sold cigarettes under the name of "Pasquali 's the Regiment" in packets and boxes decorated with regimental crests.
The respondent moved to have the trade marks expunged contending that the word "Regimental" was only a laudatory adjective in on use.
It was proved that for many years it had been the practice of regiments to have their crests stamped on their mess cigrettes which were known as "Regimental Cigarettes".
The appellant company, on the other hand, contended that under section 41 of the Trade Marks Act, 1905 (equivalent to section 32 of our Act) their trade mark could not be expunged and that section 1 1 (equivalent also to our section 11 ) read in conjunction with section 41 was not relevant to the question whether or not a trade mark was registerable.
The Trial Court held against the appellant company stating that if the appellant company 's contention was correct, the combined effect of sections 1 1 and 41 would be to perpetuate as distinctive a trade mark that was incapable of being distinctive and that such a contention was erroneous.
On appeal, the Court of Appeal reversed the judgment and held that section 11 was a qualification of section 9, that sections 1 1 and 41 must be construed together, that the more fact that a mark did not comply with the requisites of section 9 (i.e. not being distinctive and therefore not registerable) did not bring it within section II, that the marks did not offend against section 11 and that under section 41 their registration was valid.
At page 203 of the Report,Swinfen Eady, M.R. observed that section 11 contained a prohibition as to what it shall not be lawful to register and it followed upon section 9 which provided for the essentials of a trade mark.
section 9 laid down what a registerable trade mark must contain and unless it contained one or the other requisites there set out, it was not re gisterable and it was only registerable trade marks which were entitled to registration.
But even if a mark were to fall within, section 9, that alone was not necessarily sufficient to entitle it to registration because it might offend against section 11.
section 11, being a qualification of section 9 and being a provision laying down a prohibition ', it did not contemplate any enquiry on the question whether the, trade mark complied with one or the other requisites enumerated in section 9, e.g., whether it had the quality of being distinctive or not.
Dealing with section 41, he observed that it formed a new departure in dealing with trade marks and differed widely from the earlier Acts.
The present section expressly enacted that the original registration shall, after a lapse of seven years, be taken to 'be valid in all respects, that is to say, whether the mark originally consisted of or (1) 84 contained one or the other essential proofs or not, that cannot be enquired into after the lapse of seven years.
It had to be taken to be valid in all respects and what had to be taken to be valid in all respects was the registration of the trade mark unless it offended against the provisions of section 1 1.
That section was a prohibitive section as to a matter which was disentitled to protection in a court, that is, it was intended to exclude from registration what would, otherwise be included or covered under section 9.
It did not extend to a mark disentitled to protection because originally not containing one of the essential particulars.
It applied to a different set of circumstances such as that its use was likely to deceive or confuse etc.
The words "disentitled to protection", he further observed, were not equivalent to "not entitled to protection", which was the expression used in the earlier Acts.
In other words, they did not mean that a trade mark was not entitled to protection because it ought not originally to have been registered as a valid trade mark falling within section 9.
The construction of cl.
(e) of section 11 contended for on behalf of the appellant companies is, therefore, not correct.
The true construction of cl.
(e) is that even assuming that the trade marks in question were not distinctive and for that reason not registerable as not falling within section 9, that fact by itself would not mean that they became disentitled to the protection in a court.
That being the true import of section 1 1 (e), the rule as to conclusiveness of the validity of registration embodied in section 32 applies even to those cases where if full facts had been ascertained at the time of the registration that registration would not have been allowed provided of course that it does not offend against the provisions of s.11, i.e., by there being a likelihood of deception or confusion or its bring contrary to any law or containing obscene matter etc.
or which would otherwise, i.e., in addition to the matters in cls.(a) to (d) in section 1 1 be disentitled to protection in a court.
Conse quently, the appellant companies cannot bring their case for cancellation of the trade marks in question under cl.
(b) of section 32.
There then remains the question whether cl.
(c) of section 32 applies, i.e., that the trade marks were not at the commencement of the proceedings distinctive of the goods of the respondent company.
The distinctiveness of the trade mark in relation to the goods of a registered proprietor of such a trade mark may be lost in a variety of ways, e.g., by the goods not being capable of being distinguished as the goods of such a proprietor or by extensive piracy so that the marks become publici juris.
The principle underlying cl.
(c) of section 32 is that the property in a trade mark exists so long as it continues to be distinctive of the goods of the registered proprietor in the eyes of the public or a section of the public.
If the proprietor is not in a position to use the mark to 85 distinguish his goods from those of others or has abandoned it or the mark has become so common in the market that it has ceased to connect him with his goods, there would hardly be any justification in retaining it on the register.
The progressive increase in the sales of 'Asia Fifty ' and 'Asia 50 ' bells from 1949 50 and onwards together with the evidence of witnesses examined by the respondent company shows that the said trade marks distinguished the goods of the respondent company from those of other manufacturers in the field.
Under section 32 (c) the marks have to be distinctive at the commencement of the proceedings.
Prima facie, the expression "commencement of the proceedings" would mean the commencement of proceedings in which the question as to the conclusive character of the registration, as laid down in section 32, arises.
Such a question may arise in a suit for infringement of the trade mark in which the registered proprietor may rely on section 32 to prove his title to the registered trade mark as also in rectification proceedings filed as a result of such a suit or otherwise, and the period of seven years would have to be calculated according to the particular proceedings in which the conclusive nature of the validity of registration is relied on.
In the prevent case, whether the crucial date for the purpose of section 32(c) is taken to be 1959 when the suits were filed or 1961 when the appellant companies took out the.
rectification proceedings it makes no difference as it is not possible from the evidence on record to say that the trade marks in question were not or had ceased to be distinctive.
The indication, on the contrary, is that they were distinctive.
That is to be found from the zeal with.
which the respondent company tried to maintain its right in them.
The evidence shows that when the respondent company found in 1954 that M/s Indian Union Manufacturers Ltd., Calcutta had been inscribing the word 'Fifty ' on its bells, it at once filed an infringement action.
The action ended in a compromise by which the said company acknowledged the respondent company 's rights in its trade marks of 'Fifty ' and '50 '.
Again, when the attention of the respondent company was drawn to an advertisement "Five 50", it addressed a notice to the manufacturers of those bells.
The case of the respondent company was that Gupta Industrial Corporation started using the word 'Fifty ' on its bells in 1958 and not in 1948 as contended by Mr. Desai.
In the absence of any evidence as to the extent of manufacture and sale of those bells it would not be possible to say with any certainty that the respondent company did not come to know about it till 1958, and therefore, presumed that Gupta Corporation had started using the word 'Fifty ' on its bells in that year.
According To the appellant National Bell Co., it went into production only in 1957 and in 1959 the respondent company commenced action against it.
A similar notice of infringement followed by a suit was also given to M/s Berry & Co., but the suit became infructuous on account 86 of lack of the jurisdiction of the Court of Banaras where it was filed.
This evidence negatives any abandonment of trade marks or letting infringements go unchallenged or misleading the other manufacturers that the respondent company would not interfere it they were to use the same marks.
Rights in a mark can, of course, be abandoned by its owner but so long as he remains the registered proprietor of the mark and carried on the business to which the mark is attached, a plea of abandonment is difficult to sustain.
It would, however, be a different matter if it is shown that there, were repeated, undisturbed infringements.
The evider in the present case does not show that there were repeated breaches which went unchallenged though known to the proprietor.
Mere neglect to proceed does not necessarily constitute abandonment if it is in respect of infringements which are not sufficient to affect the distinctiveness of the mark even if the proprietor is aware of them.
(see Re. Farina(1) Where neglect to challenge infringements is alleged, the character and extent of the trade of the infringers and their position have to be reckoned in considering whether the registered proprietor is barred by such neglect.
[see Rowland vs Mitchell(2) ].
The plea of common use must fail, for, to establish it the use by other persons should be substantial.
Though evidence was produced by the appellant companies to show that there were other bells in the market with 'Fifty ' or '50 ' inscribed on them, no evidence was led to show that the use of the word 'Fifty ' or the numeral '50 ' was substantial.
In these circumstances, it is impossible to sustain the contention founded on cl.
(c) of section 32.
Under section 56, the power to rectify is undoubtedly discretionary.
Where such discretion has been properly exercised, a court of, appeal would refuse to interfere.
In the present case, however, the Trial Court did not appreciate the principle embodied in sections 32 and 1 1, with the result that the Division Bench was justified in interfering with the discretion exercised by the Trial Court.
In our view, the contentions urged on behalf of the appellant companies cannot be sustained and consequently the two appeals fail and are dismissed with costs.
There will be one hearing fee.
V.P.S. Appeals dismissed.
| For a number of years prior to 1952 cycle bells manufactured by Lucas And other foreign concerns bearing the numbers '50 ' and other numerals were in the Indian market.
After 1952, the import of foreign bells was prohibited, and though foreign made bells with the numerals '50 ' were being sold as late as 1958, the sales were from the stock remaining out of the earlier imports and were few and far between.
In 1953, the respondent company got registered two trade marks in respect of cycle bells being the numeral '50 ' and the figure 'Fifty '.
The appellant companies were manufacturers and also dealers in cycle bells and were selling their cycle bells with the numeral '50 ' inscribed on them.
The respondent therefore, filed suits in 1959, against the appellants, alleging infringement of its trade marks.
In 1961, the appellants applied for stay of trial of the suits and filed applications in the High Court for rectification of the register by cancelling the trade marks of the respondent under section 56 of the .
A single Judge of the High Court, refused to expunge the trade mark 'Fifty ' but ordered the cancellation of the trade mark '50 '.
In appeals to the Division Bench of the High Court, the order cancelling the trade mark '50 ' was set aside.
In appeals to this Court, it was contended that : (1) the trade marks in question were common and not distinctive at the date of their registration as required by section 9(3), and therefore, ought never to have been registered; (2) that the numeral '50 ' is not distinctive; (3) that the use of the trade mark was likely to deceive or cause confusion and hence the registration should be cancelled under section 32(b) and section II (a); (4) that the respondent had imitated the use of the marks by Lucas and other foreign concerns that therefore they would be disentitled to protection under section 11(e) and hence the registration should be cancelled under section 32(h); and (5) that the trade marks were not, at the commencement of the proceedings, distinctive 'and hence liable to be cancelled under section 32(c).
HELD : (1) Under section 32(b) and (c) the original registration of the trade mark has, after the expiration of 7 years from the date of registration to be taken to be valid in all respects including in rectification applications under section 56 unless it is proved : (1) the trade mark was registered in contravention of the provisions of section 11 or offends against the provisions of that section on the date of the commencement of the proceeding or (2) that the trade mark was not, at the commencement of the proceedings distinctive of the goods of the registered proprietor.
Section 11(a) prohibits the registration of trade mark which would be likely to deceive or cause confusion, and section 11(e) prohibits the registration of trade marks if they were such that they were otherwise disentitled to protection in a court.
Section 71 56(2) confers a right on any person aggrieved by an entry made in the register without sufficient cause or by an entry wrongly remaining in the register, to apply for expunging or varying such an entry.
Since 'an aggrieved person ' includes a person who has, before registration, used the trade mark, and a person against whom an infringement action is taken, and the words 'without sufficient cause ' relate to the time of original registration,.
the appellant could apply for cancellation on the ground that the trade mark in question was not distinctive within the meaning of section 9(3).
But in view of the language of section 32, no contention could be raised in the present case, that the trade mark '50 ' and 'Fifty ' were not distinctive under section 9(3), that is, adapted to distinguish the cycle bells of the respondent, at the date of registration, as, seven years had elapsed since the date of the Registration.
[78 D F; 79 B H] Paine & Co. vs Doniells & Sons" Breweries Ltd. (1893) R.P.C. 217, 232, referred to.
(2) It is not an inflexible rule that except in the case of textile goods.
a mark consisting of a numeral is necessarily not distinctive and is not registerable.
[80 E] Kerly on Trade Marks, 9th End.
p. 284, and Reuiter vs Hublens, , referred to.
(3) Section 32(b) relates to facts existing both at the time of and after registration.
If the mark at the time of registration was likely to deceive or cause confusion or would otherwise be disentitled to protection of a court, and therefore, was, under section 11 (a) and (e) prohibited from being registered, the rule as to conclusiveness of the validity of the registration in section 32 cannot be invoked and that would also be so, if the trade mark at the date of commencement of rectification proceedings was such as to offend against the provisions of section 11.
[80F H] The sales of foreign bells with numeral '50 ' after 1953 were 'so few that they could hardly be considered as evidence for showing a likelihood of confusion or deception.
In fact the purchasers used to call those bells, not by the numerals, but by the manufacturers ' names.
As regards bells said to have been manufactured by one of the appellant companies since 1947 and bearing the numeral '50 ', no evidence was led to show either the extent of manufacture or sale between 1947 1953 or thereafter from which the High Court could be asked to draw any inference as to the likelihood of deception or confusion.
As against the voluminous sales of the respondent for the years 1949 1962, there was no corresponding evidence on behalf of the appellants indicating sales of their bells with number '50 ' from which any likelihood of confusion or deception could be deduced.
Therefore, section 11(a) was not attracted.[816 C, G H; 82 D F] (4) The true construction of section 11(e) is that even assuming that the trade marks in question were not distinctive and for that reason not registerable as not falling within section 9, that fact, by itself, would not mean that they became disentitled to protection in a court.
That is, although a mark cannot be registered because it is not distinctive as provided by section 9, such a mark is not for that reason only one, the registration of which is prohibited by section 11, because, the section lays down positive objection to registration, and not mere lack of qualification, by using the words disentitled to protection.
Therefore, unless the trade 'mark offends the provisions of section II, that is, offends any of the matters in cls.
(a) to (d) of section 11, or is disentitled to protection in a court under section 11(e), the rule 72 as to conclusiveness of the validity of registration embodied in section 32 applies.
In the present case, in fact, there was no evidence of any, fraud having been committed by the respondent at the time of the registration.
There was neither averment by the appellants nor evidence, that Lucas or any ,other foreign concern had obtained registration of trade marks of '50 ' or 'Fifty '. 'nose concerns merely used various numerals for distinguishing one type of bell from another manufactured by them and there was no question of any piracy by the respondent.
The trade mark had also be,come distinctive with respective to the respondent.
[82 F H; 84 D F] Imperial Tobacco Co. Ltd. vs De Pasquali & Co. 35 R.P.C. 186, referred to.
(5) The principle underlying section 32(c) is that property in a trade mark exists so long as it continues to be distinctive of the goods of the registered proprietor in the eyes of the public or a section of the public.
If the proprietor is not in a position to use the mark to distinguish his goods from those of others or has abandoned it or the mark has become so common in the market that it has ceased to connect him with his goods then there would be no justification for retaining the mark on the register.
Under section 32(c) the marks have to be distinctive at the 'commencement of the proceedings ', that is the proceedings in which the conclusive character of the ' Registration arises.
Therefore, it may be the date when a suit for infringement is filed by the proprietor of the trade mark or the date on which the rectification proceedings ;ire filed as a result of the suit.
Rights in a trade mark could be abandoned by the owner, but when such abandonment is sought to be inferred from the proprietors neglect to challenge infringement the character and extent of the trade of the infringers and their position would have to be reckoned in considering .whether the registered proprietor was barred by such neglect [84 F H; 85 A C, D E] In the present case, the progressive increase of the sales of the respondent 's bells from 1949 together with the evidence of witnesses of the respondent shows that the said trade marks distinguished the goods of the respondent from those of other manufacturers.
Also, whether the crucial date is taken as 1959 or 1961, the date of suit or the date of rectification proceedings, the evidence on record indicates that the trade marks were distinctive.
The respondent has all along been zealously trying to maintain its right, against all infringements.
There were no repeated breaches which went unchallenged by the respondent when known to the respondent.
Mere neglect in a few cases to proceed did not necessarily constitute abandonment, because, it was in respect of infringements which were not sufficient to affect the distinctiveness of the mark.
There was no .evidence to show that the use by others of the word 'Fifty ' or the numeral '50 ' was substantial and the plea that there was common use of the trade marks must fail.
Therefore, it is impossible to sustain the contention founded on section 32(c).
[86 A E] Re.
Farina, and Rowland vs Mitchell, , applied.
(6) The power to rectify under section 56 is discretionary and when such .discretion was properly exercised, a court of appeal would refuse to interfere.
But, in the present case, the single Judge did not appreciate the principles of sections, 11 and 32, and hence, the Division Bench was justified in setting aside his order.
|
iminal Appeal No. 8 of 1966.
Appeal by special leave from the judgment and order dated April 29, 1965 of the Punjab High Court, Circuit Bench at Delhi in Criminal Appeal No. 164 D of 1962.
Bishan Narain, K. K. Raizada and A. G. Ratnaparkhi, for the appellant.
Sardar Bahadur and Yougindra Khushalani, for respondent No. 1.
R. N. Sachthey, for respondent No. 2.
The Judgment of the Court was delivered by Ramaswami, J.
On August 29, 1960 Shri Sham Sundar Mathur, Municipal Prosecutor of the Delhi Municipal Corporation filed a complaint in the court of Magistrate First Class against the respondent, Jagdishlal under section 7 read with section 16 of the (37 of 1954).
In the said complain Shri Sham Sundar Mathur said that lie was competent to file the complaint under section 20 of the aforesaid Act in accordance with a resolution passed by the Corporation in its meeting held on December 23, 1968.
By his order dated April 30, 1962 the learned Magistrate acquitted the respondent.
The Delhi Municipal Corporation made an application to the High Court asking for special leave under section 417 of the Code of Criminal Procedure to appeal against the order of acquittal.
The application was ranted on September 3, 1962.
When the appeal came up for hearing a preliminary objection was raised on of the respondent that the only person competent to file the appeal was the complainant, Shri Sham Sundar Mathur.
But the leave application was not filed by him and, therefore, the Municipal Corporation was not competent to prosecute the appeal.
It was contended that only the complainant was competent to present an application for special leave under section 417(3) of the Code of Criminal Procedure.
As the complainant in this case was Shri Sham Sundar Mathur the appeal could not be filed by the Delhi Municipal Corporation.
The High Court upheld the preliminary objec tion of the respondent and dismissed the appeal by its order dated April 29, 1965.
This appeal is brought by special leave on behalf of the Delhi Municipal Corporation against the judgment of the High Court dated April 29, 1965 in Cr.
No. 163 D of 1962.
Section 20 of the states : 581 " (1) No prosecution for an offence under this Act shall be instituted except by, or with the written consent of, the Central Government or the State Government or a local authority or a person authorised in this behalf, by general or special order, by the Central Government or the State Government or a local authority : Provided that a prosecution for an offence under this Act may be instituted by a purchaser referred to in section 12, if he produces in court a copy of the report of the public analyst along with the complaint.
Section 417, sub sections
(1), (2) and (3) of the Code of Criminal Procedure after its amendment by Act 26 of 1955 provide : " (1) Subject to the provisions of sub section (5), the State Government may, in any case, direct the Public Prosecutor to present an appeal to the High Court from an original or appellate order of acquittal passed by any Court other than a High Court.
(2)If such an order of acquittal is passed in any case in which the offence has been investigated by the Delhi Special Police Establishment constituted under the (XXXV of 1946), the Central Government may also direct the Public Prosecutor to present an appeal to the High Court from the order of acquittal.
(3)If such an order of acquittal is passed in any case instituted upon complaint and the High Court, on an application made to it by the complainant in this behalf, grants special leave to appeal from the order of acquittal, the complainant may present such an appeal to the High Court.
The principal question to be determined is whether the com plaint dated August 29, 1960 was instituted by the Delhi Municipal Corporation.
It is argued on behalf of the respondent that the complaint petition was not made and signed by the person competent under the Delhi Municipal Corporation Act, 1957 to exercise powers of the, Corporation in the matter of institution of legal proceedings.
In our opinion there is substance in this contention.
The only provision under the Delhi Municipal Corporation Act, 1965 which confers power to institute legal proceedings is section 476(1) (h) which states 582 "(1) The Commissioner may (h)institute and prosecute any suit or other legal proceeding, or with the approval of the Standing Committee withdraw from or compromise any suit or any claim for any sum not exceeding five hundred rupees which has been instituted or made in the name of the Corporation or of the Commissioner; It is clear that the phrase "other legal proceedings" includes the power to institute a complaint before a Magistrate and hence it is the Commissioner alone who could exercise the power as there is no other provision in the Act which confers such power on anyone else.
This view is supported by the decision of this Court in Bailavdas Agarwala vs J. C. Chakravarty(1) in which it was pointed out that a complaint under The Calcutta Municipal Act, 1923 as applied to the Municipality of Howrah, would only be filed by the au thorities mentioned therein and not by an ordinary citizen.
Section 537 of that Act provided that the Commissioners may institute, defend or withdraw from legal proceedings under the Act; under section 12 the Commissioners can delegate their functions to the Chairman, and the Chairman may in his turn delegate the same to the Vice Chairman or to any municipal officer.
It was observed in that case that the machinery provided in the Act must be followed in enforcing its provisions, and it was against the tenor and scheme of the Act to hold that section 537 was merely enabling in nature.
The principle invoked in that case was that adopted by the Privy Council in Nazir Ahmad vs King Emperor (2) viz. : that where a power is given to do a certain thing in a certain way, the thing must be done in that way or not at all.
It was, therefore, held that if a legal proceeding was instituted under the Municipal Act in question, it must be done in accordance with the provisions of the Act and not otherwise.
But the question presented for determination in the present appeal is somewhat different.
Under section 20 of Act 37 of 1954 the prosecution for the offence may be instituted either (a) by the Central Government or the State Government or a local authority or (b) a person authorised in that behalf by general or special order by the Central Government or the State Government or a local authority.
Section 2(vii) of Act 37 of 1954 defines a "local authority" to mean "in the case of a local area which is a (1) ; (2) 63 I.A. 372 at 381.
583 pality, the municipal board or municipal corporation.
" A complaint under section 20 of the Act may, therefore, be instituted either by the Municipal Corporation or by a person authorised in its behalf by general or special order by the Municipal Corporation.
The Resolution of the Delhi Municipal Corporation dated December 23, 1958 reads as follows "Subject : Authorising the Municipal Prosecutor and the Assistant Municipal Prosecutor to launch Prosecutions under section 20 of the .
The area under the jurisdiction of the Delhi Municipal Corporation has been declared a "local area" under section 2(vii) of the vide Chief Commissioner 's Notification No, F.32(30) 58 M and PH(i) dated 13th June, 1958 published in the Delhi Gazette (Part IV) dated 26th June, 1959 and consequently the Municipal Corporation of Delhi is the Local Authority for that area within the meaning of section 2(vii) of the said Act.
Section 20 of the contemplates the appointment of persons who shall be authorised to institute prosecutions under this Act by the Local Authority concerned.
Shri Sham Sundar Mathur, M.A., LL.B., Municipal Prosecutor and Shri Bankey Behari Tawkley, Assistant Municipal Prosecutor were authorised by the erstwhile Delhi Municipal Committee tinder the above section." "Shri Vijay Kumar Malhotra moved the following resolution, which was seconded by Shri Prem Sagar Gupta Resolved that the recommendations of the Commissioner vide letter No. 139/Legal/58 dated 1 12 58 regarding authorising the Municipal prosecutor and the Assistant Municipal Prosecutor to launch prosecutions under section 20 of the be approved.
The resolution was carried.
" In the present case Shri Sham Sundar Mathur, Municipal Prosecutor filed the complaint under section 20 of Act 37 of 1954 under L14Sup.
C.I/69 8 584 the authority given to him by the resolution of the Municipal Corporation.
Since the Municipal Corporation, Delhi, is a local authority within the meaning of section 20 of Act 37 of 1954 and since it conferred authority on the Municipal Prosecutor the complaint was properly filed by Sham Sundar Mathur.
The question is whether the Delhi Municipal Corporation or Shri Mathur was the complainant within the meaning of section 417(3) of the Code of Criminal Procedure.
It was argued on behalf of the respondent that the complainant was Shri Sham Sundar Mathur, the Municipal Prosecutor and the Delhi Municipal Corporation was not competent to make an application for special leave under section 417(3), Cr.
P.C. We are unable to accept this argument as correct.
It is true that Shri Sham Sundar Mathur filed the complaint petition on August 29, 1960.
But in filing the complaint Shri Mathur was not acting on his own personal behalf but was acting as an agent authorised by the Delhi Municipal Corporation to file the complaint.
It must, therefore, be deemed in the contemplation of law that the Delhi Municipal Corporation was the complainant in the case.
The maxim qui per alium facit per seipsum facere videtur (he who does an act through another is Jeemed in law to do it himself) illustrates the general doctrine on which the law relating to the rights and liabilities of principal and agent depends.
We are, therefore, of opinion that Shri Mathur was only acting in a representative capacity and that the Delhi Municipal Corporation was the complainant within the meaning of section 417(3) of the Code of Criminal Procedure and the petition for special leave and the appeal petition were properly instituted by the Delhi Municipal Corporation.
For these reasons we allow the appeal, set aside the judgment of the High Court dated April 9, 1965 and direct that the appeal should be remanded to the High Court for being heard afresh and disposed of according to law.
G.C. Appeal allowed.
| Between the years 1954 and 1959 the appellant company was erecting its factory buildings and other ancillary constructions through buildings contractors.
The appellant arranged for the manufacture of bricks and sold those bricks to the building contractors for the purpose of the appellant 's constructions.
The appellant also supplied for the same purpose steel, cement and other materials which it procured and stored.
The difference between the sale price and the appellant 's cost price was a flat percentage of the cost price varying with the material.
The sale price was agreed to be adjusted against the dues under the contract between the appellant and the building contractors.
Treating the appellant as a dealer in the building materials the sales tax authorities under the Orissa Sales Tax Act.
1947, directed the appellant to pay sales tax for ten quarters ending with December 31, 1958, and a penalty.
in addition to the tax, for failure to register itself as a dealer.
The Tribunal agreed on the liability to pay tax, reduced the penalty, and the High Court, on reference, confirmed the Tribunal 's order.
In appeal to this Court on the questions: (1) Whether the appellant sold building materials to the building contractors; (2) Whether the imposition of penalty for failure to register as a 'dealer ' was justified; and (3) Whether the appellant was a 'dealer ' in respect of the building material supplied by it, HELD: (1) The supply of building material belonging to the appellant for 'an agreed price constituted a 'sale ' as defined in section 2(g) of the Act as the definition stood at the relevant time.
[756 E] (2) Under sections 9(1) and 25(1)(a) of the Act a penalty may be imposed for failure to register as a dealer.
But the discretion to impose a penalty must be exercised judicially.
A penalty will ordinarily be imposed in cases where the party acts deliberately in defiance of law, or is guilty of contumacious or dishonest conduct, or acts in conscious disregard of its obligation; but not, in cases where there is a technical o; venial breach of the provisions of the Act or where the breach flows from a bona fide belief that the offender is not liable to act in the manner prescribed by the statute.
[756 E H] In the present case, those in charge of the affairs of the appellant, in failing to.
register it as a dealer, acted in the honest and genuine belief that the company was not a dealer; and therefore, assuming the appellant to be a 'dealer ' no case for imposing penalty was made out.
[757 A] (3) Under the terms of the tender submitted by the building contractors and the schedule annexed thereto, the appellant was to charge 754 certain rates for the materials supplied by it.
The excess percentage over the specified rate in the case of building materials other than bricks was agreed to be paid by the contracto:rs as storage charges.
There was nothing to show that the excess price charged by the appellant to its contractors for bricks was also for storage charges.
But neither the Tribunal nor the High Court had referred to this aspect of the sale price namely whether the excess price was for storage or for profit with respect to any of the building materials.
Therefore, merely because the price charged to the contractors exceeded the price paid by the appellant for procuring the building materials it cannot be inferred that the motive of the appellant was to carry on business in building materials for profit.
[761 B E]
|
s Nos. 109 to 114, 117, 118, 120, 121, 128 to 133, 142, 143, 186, 190 and 191 of 1967.
Petitions under article 32 of the Constitution of India for the enforcement of the fundamental rights.
M.K. Ramamurthi, for the petitioners (in W. Ps.
109, 142 and 143 of 1967).
section Shaukat Hussain, for the petitioners (in W. Ps.
Nos. 110114 and 118 of 1967).
Janardan Sharma, for the petitioners (in W. Ps.
Nos. 117, 120, and 121 of 1967).
R.C. Prasad, for the petitioners (in W. Ps.
128 133 of 1967) M.K. Ramamurthi and Vineet Kumar, for the petitioners (in W. Ps.
Nos. 186, 190 and 191 of 1967).
C.K. Daphtary, Attorney General, R.H. Dhebar and S.P. Nayar, for the respondent (in W. Ps.
109, 142 and 143 of 1967).
G.R. Rajagopal, R.H. Dhebar and section P. Nayar, for the respondent (in W.P. No. 110 of 1967).
R. Gopalakrishnan and section P. Nayar, for the respondent (in W. Ps.
111 to 114, 117, 118, 120, 121.
128 to 133, 186, 190 and 191 of 1967).
The Judgment of WANCHOO, C.J., SHAH, BACHAWAT, MITTER and HEGDE, JJ. was delivered by WANCHOO, C.J., HIDAYATULLAH, J. delivered a separate Opinion.
Wanchoo, C.J.
These twenty one petitions under article 32 of the Constitution for a writ of habeas corpus raise common questions of law and will be dealt with together.
It is enough to set out the facts in one of the petitions (No. 142 of 1967), for the facts in other petitions are almost similar.
The petitioner was arrested on November 11, 1966 and detained under an order passed under r. 30(1)(b) of the Defence of India Rules, 1962 (hereinafter referred to as the Rules).
It appears that though the order was reviewed after the period of six months, no opportunity was given to the petitioner to represent his case before the reviewing authority.
In consequence the detention of the petitioner be came illegal after the first period of six months in view of the judgment of this Court in P.L. Lakhanpal vs Union of India(1).
The State Government realising this defect, cancelled the order dated November 11, 1966 on August 3, 196 '7, and on the same day a fresh order of detention was passed and it is this order which (1) ; L 1O Sup CI/67 17 230 is being challenged before us.
It is not in dispute that in view of the judgment of this Court in Jadev Singh vs State of Jammu and Kashmir(1), it was open to the State Government, in view of the formal defect in making the review, to pass a fresh order of detention after revoking the earlier order, which in any case became ineffective after the first six months, if the circumstances which led to the detention originally still continued.
The main attack of the petitioners is on the order of the President passed on November 3, 1962, as amended on November 11, 1962, under article 359(1) of the Constitution.
By this order the President declared that the right to move any court for 'the enforcement of the fundamental rights conferred by articles 14, 21 and 22 of the Constitution would remain suspended for the period during which the Proclamation of Emergency issued under article 352(1), was in force, if any person was deprived of such right under the Defence of India Ordinance (No. 4 of 1962) or any rule or order made thereunder.
The argument in support is put this way.
The President is an "authority" within the meaning of article 12 and therefore is comprised within the definition of the word "State" and the order passed under article 359 is a law within the meaning of article 13(2) of the Constitution.
Consequently an order passed by the President under article 359 is liable to be tested on the anvil of the fundamental rights enshrined in Part Ill of the Constitution: Secondly, it is urged that an order passed under article 359 is made in the context of the Emergency and therefore enforcement of only such fundamental rights can be suspended which have nexus with the reasons which led to the Proclamation of Emergency.
In consequence, the President can only suspend the enforcement of fundamental rights under article 22 and article 31 (2) under an order passed under article 359 and no others.
Thirdly, it is urged that even if the President can suspend the enforcement of any fundamental right, the order passed can still be tested under the very fundamental right enforcement of which has been suspended.
Fourthly, it is urged that an order passed under article 359 can in any case be challenged under article 14, and if so the order passed in the present case is violative of article 14 because some persons can be detained under the Defence of India Act, 51 of 1962 (hereinafter referred to as the Act) and the Rules while others can be detained under the Preventive Detention Act.
As the Act and the Rules give more drastic powers for detention as compared to the powers conferred by the Preventive Detention Act, there is discrimination, for there is no indication as to when detention should be made under the Act and the Rules and when under the prevention law, and the matter is left to the arbitrary discretion of the executive.
Fifthly, it is urged that in view of the language of the order under article 359, there should have been an ; 231 express provision in the Act and the Rules to the effect that enforcement of fundamental rights under articles 14, 21 and 22 was suspended and in the absence of such an express provision, the Presidential order under article 359 cannot stand in the way of the detention order being tested under Part III of the Constitution.
Sixthly, it is urged that article 22 (5 ) provides that grounds of detention should be furnished to a detenu and the order of the President did not do away with the necessity of furnishing the grounds.
Besides these main contentions, three subsidiary contentions have also been raised in one petition or another and they are (1) that the fresh order had not been communicated to the detenues and was therefore of no avail; (ii) that the order was not in the form as required by article 166 of the Constitution and it is therefore for the State Government to prove that it was passed by the authority which had the power to do so; and (iii) that the fresh order was mala fide.
The petitions have been opposed on behalf of the State Government.
It is unnecessary to set out in detail the contentions in reply to the main points raised on behalf of the petitioners.
It is enough to say that the contention on behalf of the State is that once the President has passed an order under article 359 suspending the enforcement of any fundamental right, it is not open to rely on that fundamental right for any purpose, so long as the order under article 359 stands and such an order cannot be tested in any manner by the very fundamental right the enforcement of which it has suspended.
Further as to the subsidiary points, the State contends that the fresh order of detention was communicated to each detenu and that the order was in the form required by the Constitution of Jammu and Kashmir and that article 166 has no application to the State of Jammu and Kashmir.
It was finally denied that the order was mala fide in any of the cases.
Part XVIII deals with Emergency Provisions and begins with article 352 which provides for making a declaration that "a grave emergency exists whereby the security of India or of any part of the territory thereof is threatened, whether by war or external aggression or internal disturbance", if the President is so satisfied.
articles 353 and 354 provide for the effect of the Proclamation of Emergency; but it is unnecessary to refer to them for present purposes.
Article 358 lays down that during the period that a Proclamation of Emergency is in operation, Article 19 shall remain suspended, Article 359 with which we are particularly concerned lays down that where a Proclamation of Emergency is in operation, the President may by order declare that the right to move any court for the enforcement of such of the rights conferred by Part III as may be mentioned in the order and all proceedings pending in any court for the enforcement of the rights so mentioned shall remain L10Sup.
C1/67 18 232 suspended for the period during which the Proclamation is in force or for such shorter period as may be specified in the order.
" The order made under article 359 may extend to whole or any part of the territory of India and has to be laid, as soon as may be after it is made, before each House of Parliament.
It will be seen from the terms or article 359 that it gives categorical powers to the President during the period when a Proclamation of Emergency is in operation to suspend the enforcement of any of the fundamental rights conferred by Part III.
It is for the President to decide the enforcement of which of the fundamental rights should be suspended during the operation of the Proclamation of Emergency.
There is nothing in article 359 which in any way limits the power of the President to suspend.
the enforcement of any of the fundamental rights conferred by Part III.It is to our mind quite clear that the President has the power to suspend the enforcement of.
any of the fundamental rights conferred by Part III and there is nothing thereunder which makes any distinction between one fundamental right or another.
As article 359 stands, it seems to us, it clearly envisages that once a Proclamation of Emergency has been issued, the security of India or any part of the territory thereof may require that the President should suspend the enforcement of any of the fundamental rights conferred by Part III.
There is in our opinion no scope for inquiry into the question whether the fundamental right the enforcement of which the President has suspended under article 359 has anything to do with the security of India which is threatened whether by war or external aggression or internal disturbance, for article 359 posits that it may be necessary for the President to suspend any of the fundamental rights in Part HI for the sake of the security of India.
There is thus a basic assumption in article 359 that it may be necessary for the President to suspend the enforcement of any of the fundamental rights conferred by Part III in the interest of the security of India.
If he considers that necessary, it is unnecessary in the face of that basic assumption to inquire whether enforcement of a particular fundamental right suspended by the President has anything to do with the security of India, for that is implicit in article 359.
It follows therefore that it is open to the President to suspend the enforcement of any of the fundamental rights conferred by Part III by an order under article 359 and this Article shows that wherever such suspension is made it is in the interest of the security of India and no further proof of it is necessary.
This brings us to the main ground ' raised on behalf of the petitioner that an order under article 359 is a law made by the State within the meaning of article 13(2) and has therefore to be 233 tested under Part III of the Constitution.
We may assume for present purposes that the President is comprised within the word "State" in article 12.
We may also assume that the order made by the President under article 359 is a law in its widest sense.
The question however is whether such an order can be considered to be a law for the purpose of article 13(2) and tested thereunder.
Article 13(2) and article 359 being parts of the same Constitution stand on an equal footing and the two provisions have to be read harmoniously in order that the intention behind article 359 is carried out and it is not destroyed altogether by article 13(2).
It follows that though an order under article 359 may be assumed to be law in its widest sense, it cannot be law within the meaning of article 13(2), for if that were so, article 359 would be made nugatory.
The Constitution through article 359 says that the President may suspend the enforcement of any of the fundamental rights in Part III where a Proclamation of Emergency is in force and that means that during the period of Emergency the fundamental rights, enforcement of which is suspended, cannot be enforced.
If the order is a law within the meaning of article 13(2), the result would be that though the order says that the enforcement of a particular fundamental right is suspended during the period of Emergency the order can still be tested with the aid of article 13(2) on the anvil of the same fundamental right, the enforcement of which it suspends.
That would in our opinion result in making article '359 completely nugatory, for then a declaration made there under that the enforcement of certain fundamental rights is suspended during the period of Emergency would have no meaning whatsoever. ' Therefore, applying the principle of harmonious construction we are of opinion that an order passed under article 359.
cannot be law for the purpose of article 13(2), assuming it to be law in its widest sense.
It follows therefore that an order under article 359 derives its force from article 359 itself and takes effect in accordance with its tenor and cannot be affected by article 13 (2), and cannot be tested under any of the provisions of Part III of the Constitution which it suspends.
Reliance in this connection is placed on the judgment of this Court in Ghulam Sarwar vs Union of India(1), where the majority made a distinction between the President 's order itself under article 359 and the effect of that order.
In that case it was observed that "there is a clear distinction between deprivation of fundamental rights by force of a constitutional provision itself and such deprivation by an order made by the President in exercise of a power conferred on him under a constitutional provision.
" It was further observed.
that "Article 359(1) does not operate by its own force.
The President has to make an order declaring that the right to move a court in respect of a fundamental right (1) ; 234 or rights in Part III is suspended.
He can only make an order which is a valid one.
" It was further observed that an order making an unjustified discrimination in suspending the right to move a court under article 14, would be void at its inception and would be a still born order.
We must say with greatest respect that it is rather difficult to understand how an order under article 359 which suspends the enforcement of a fundamental right can be tested under that very fundamental right.
It is true that there is a distinction between article 358 and Art 359(1).
Article 358 by its own force suspends the fundamental rights guaranteed by article 19; article 359(1) on the other hand does not suspend any fundamental right of its own force but it gives power to the President to suspend the enforcement of any fundamental right during the period of Emergency.
But that cannot mean that an order passed under article 359(1 ) suspending the enforcement of a particular fundamental right has still to be tested under the very fundamental right which it suspends.
That would in our opinion be arguing in a circle and make Art 359 completely nugatory.
It seems that the majority in Ghulam Sarwar 's(1) case was also conscious of the fact that the reasoning on which it came to the conclusion that an order made under article 359 could be tested under article 14.
though it suspended that Article, was open to the criticism that it was an argument in a circle.
The argument was however met by making a distinction between the order and the effect of that order and it was observed that if the order did not violate article 14 it could validly 'take away ,the right to enforce the fundamental right under article 14.
With greatest respect it is difficult to appreciate this reasoning and the distinction on which it is based.
It seems to us that if article 359 is to have any meaning at all and is not to be wiped out from the Constitution an order passed thereunder suspending a fundamental right cannot possibly be tested under ' that very fundamental right which it suspends.
If that were permissible no order under article 359 could really be passed.
If article 359 is not to be rendered nugatory, it must be held that an order passed thereunder cannot be tested under the very fundamental right the enforcement of which it suspends.
We must therefore respectfully differ from the view taken in Ghulam Sarwar 's case(1) and hold that an order passed under article 359(1) cannot be tested with the aid of article 13(2) under that very fundamental right the enforcement of which it suspends.
There is therefore no force in the first point raised on behalf of the petitioners.
We ,also see no force in the second point raised by the petitioners.
As we have already indicated article 359 envisages that an (1) ; 235 order passed thereunder for suspension of the enforcement of particular fundamental right is for the sake of security of India It is therefore not necessary to enquire whether there is any nexus between a particular fundamental right suspended and the security of India.
Article 359 itself posits that it may be necessary in the interest of the security of India to pass an order suspending the enforcement of any fundamental right thereunder.
This is clear from the fact that article 359(1), provides for the suspension of the enforcement of the fundamental rights in Part III of the Constitution only during the period of Emergency meaning thereby that suspension of the enforcement of any of the fundamental rights which the President considers necessary is for the security of India.
We fail to see why only fundamental rights under article 22 or under article 31(2) can be suspended under article 359; Article 359 clearly shows that any fundamental right in Part Ill can be suspended during an Emergency and we cannot limit Article 359 in the face of the unambiguous and express words thereof and say that only the enforcement of fundamental right under Articles 22 and 31(2) can be suspended.
It may be that prima facie these two fundamental rights appear to have a clearer nexus with security of India; but it does not follow that other fundamental fights may not in an Emergency have such a nexus.
In any case article 359 itself proceeds on the basis that the suspension of the enforcement of all or any of the fundamental rights is for the sake of security of India and so gives the power to the President to suspend such enforcement if he considers it necessary for that purpose.
The second contention raised on behalf of the petitioners must also be rejected.
As to the third contention, we have already indicated that an order passed under article 359(1) suspending the enforcement of a particular fundamental right cannot be tested under that very fundamental right.
We cannot see how if the order under Art 359 suspends article 14 its validity can still be tested under that very Article.
We have already expressed our respectful dissent from the view taken in Ghulam Sarwar 's case(1) and must reject this contention.
As the enforcement of the fundamental right under article 14 was suspended by the President 's order under article 359, no question of that order being bad under that Article can arise even if we assume that the provisions for detention under the Act and the Rules are more stringent than the provisions for detention under the Preventive Detention Act.
The fourth contention also fails.
As to the fifth contention it is urged that on.
the words of the order passed by the President suspending the enforcement of fundamental rights under articles 14, 21 and 22, there had to be a 236 provision in the Act and the Rules expressly to the effect that these fundamental rights would not be enforceable.
We cannot understand how any provision could have been made in the Act and Rules to this effect.
Such a provision in the Act 43r the Rules would be clearly unconstitutional.
It is only because article 359(1)provides that the President may suspend the enforcement of a particular fundamental right that it is possible for the enforcement of any fundamental right to be suspended during the Emergency.
What the President has provided in the present case is that the enforcement of fundamental rights under articles 14, 21 and 22 would be suspended if any person has been deprived of such right under the Defence ' of India Ordinance (later replaced by the Act) or the Rules or orders made thereunder.
It is necessary to emphasis that the President 's order speaks of suspension under the Ordinance (later replaced by the Act) or the Rules or orders made thereunder.
It does not say that the enforcement of such right is suspended if any person is deprived of it by the Ordinance the Rules or orders made thereunder.
Therefore it was not necessary that there should be any express provision in the Act or the Rules suspending the enforcement of fundamental rights under articles 14,21 and 22.
The clear intendment of the President 's order is that if any fundamental right of any person under articles 14, 21 and 22 was invaded by any action taken under the Ordinance (later replaced by the Act), or any rule or order thereunder, that action could not be tested on the anvil of those fundamental rights.
It was therefore not necessary to make any express provision in the Act or the Rules for the suspension of the enforcement of the fundamental rights under articles 14, 21 and 22.
The fifth contention must also fail.
The sixth contention is that article 22(5) which lays down that grounds of detention must be communicated to the person detained must still be applicable.
We have not been able to understand this argument at all.
If the President 's order is validly made as we hold it to be and if it suspends article 22 as it does we fail to see how clause (5 ) continues, for it is only a part of article 22 which has been suspended.
There is no question therefore of furnishing any ground under article 22(5) to the detenu if the detention is under the Act on the Rules, for the entire article 22 has been suspended.
The argument under this head is also rejected.
This brings us to the subsidiary points raised on behalf of the petitioners.
It is first said that the fresh order was not communicated to the detenues.
This has been denied on behalf of the State.
We see no reason why the fresh order which was passed on the same day on which the earlier order was cancelled would not have been communicated.
Nothing has been shown to us to disbelieve the statement on behalf of the State that the fresh order was 237 communicated in each case and.
therefore any argument based on its not being communicated must fail.
Then it is argued that the order is not in the form as required by article 166.
It is enough to say that article 166 does not apply to the State of Jammu and Kashmir.
We have to look to the Constitution of Jammu and Kashmir to see whether the form of the order is in accordance therewith.
It is clear that the order is in the form required by section 45 of the Constitution of Jammu and Kashmir.
The presumption must therefore be made that it was passed validly unless the petitioners can show that it was not passed as required by law.
No attempt has been made on behalf of the petitioners to show that.
The contention on this head must therefore also be rejected.
Lastly, it is urged that the orders in these cases were mala fide.
This has been denied on behalf of the State.
No grounds have been shown which may lead us to the conclusion that the fresh orders which were passed were mala fide.
The necessity for fresh orders arose because the review was not made in accordance with the manner indicated by this Court in Lakhanpal 's case(1).
The fresh order that was made was on the same facts and must in the circumstances be held to be valid in view of the judgment of this Court in Jagdev Singh 's case(2).
The petitions therefore fail and are hereby dismissed.
Hidayatullah, J. I agree that the petitions be dismissed.
As I was a member of the Constitution Bench which decided Ghulam Sarwar 's(2) case I wish to say a few words in explanation.
The judgment of Subba Rao, C.J. to which I was a party has expressed itself somewhat unhappily on ,the point on which it has been overruled in the judgment just delivered.
The former Chief Justice upheld the extension of G.S.R. 1418/30 10 62 (which suspended the benefits of articles 21 and 22 to a foreigner) by G.S.R. 1275/27 8 3965.
The latter order suspended article 14 in addition to the two articles already suspended.
This 'suspension was upheld on the ground that there was a clear classification between citizens and foreigners and in a state of war and emergency foreigners could be treated as a class.
In other words, the order was tested on the ground of article 14 itself which the order of the President sought to suspend.
In the judgment just delivered it has been said that the reasoning in Ghulam Sarwar 's(3) case is difficult to understand and that the suspension of article 14 precludes examination of the order under that article.
I should have thought that I had sufficiently explained my position during the discussion of the draft judgment (1) ; (2) ; (3) ; 238 in Ghulam Sarwar 's(1) case but it appears that in spite of my doubts about the width of language in that judgment, the decision to which I became a party continued to bear the meaning now attributed to it.
If I may say with, great respect, the judgment just delivered also suffers from a width of language in the other direction.
The truth lies midway.
Although a suspension of a fundamental right under article 359(1) may be made either for the whole of India or any part of the territory of India, Ghulam Sarwar 's(1) case points out that there is nothing to prevent the President from restricting the scope of the order to a class of persons provided the operation of the order is confined to an area and to a period.
As the order was applicable to the whole of India and for the duration of the emergency although it affected a class, namely, foreigners, it was upheld.
This was not the application of article 14.
This was said because the argument was that the order could only be with reference to the whole or a part of the territory of India and not with respect to a class such as foreigners.
That meant that the Order was considered in relation to the words of article 359(1).
Room was, however, to be left for the play of article 14 for those theoretically possible (and fortunately 'only theoretically possible) cases in which the exercise of the power itself may be a cloak for discrimination, in other words, cases of mala fide action and clear abuse of the power for some collateral purpose.
This strict reservation only was intended to go into the judgment in Ghulam Sarwar 's(1) case but if a wider meaning can be spelled out from that judgment I dissent from it and say that I never intended to 'be a party to such a wide statement.
The examination under article 14 of the suspension of the article itself, as expressed in the judgment of Subba Rao C.J. gives a very different impression.
For the same reason I cannot subscribe to the width of language in the judgment just delivered which apparently 'does not make any reservation at all.
Therefore I agree to the order proposed but reserve my reasons.
R.K.P.S. Petitions dismissed.
| The ten appellants were ratings who had entered into an agreement with a shipping company in Cochin to navigate one of its ships between December 11, 1963 and June 10, 1964.
During this period, after they had performed some voyages and while the ship was berthed in Calcutta port, a dispute arose between the appellants and the Company as to the payment of bazar money (victualling charges) which the ratings were allowed according to a custom obtaining in merchant shipping.
The appellants claimed Re. 1 per day while the Company normally paid only 0.62 P. per day.
The dispute was referred to the Shipping Master, Calcutta, whereupon meetings took place between representatives of the Company and the appellants before the Shipping Master and an agreement was reached according to which the Company promised to pay the amount claimed.
However, it was not clear whether this payment was to be made before the commencement of the next voyage or on the termination of the agreement.
As the appellants were in fact not paid before commencement of the voyage, upon the instigation of certain labour leaders they left the vessel in a body and, as a result, the ship could not leave port at the appointed time of sailing.
The appellants were thereafter prosecuted for deserting the ship and were convicted under section 191 and (b) and section 194(b) and (e) read with section 436 of the .
Their revision applications to the High Court were summarily rejected.
In the appeal to this Court by special leave, it was contended on behalf of the appellants (a) that there was no desertion on their part, and (b) that even if they be held to have left the ship, they were protected by the fact that there was reasonable cause for absenting themselves at the time.
of the sailing of the ship.
HELD: dismissing the appeal: (i) The gist of desertion is the existence of animus not to return to the ship or, in other words, to, go against the agreements under which the employment of seamen for sea voyages generally take place.
The way the appellants had acted clearly showed that they were using the weapon of strike with a view to force the issue ,with their employers and were not intending to, return to the vessel unless their demands were acceded to immediately.
It was therefore legitimate to infer that they were breaking the agreement with the company which was to keep the ship in voyage up to June 10, 1964 .
and this was rendered impossible by all the appellants absenting themselves.
Their action therefore amounted to desertion.
[309 B, F G] 307 Moore vs Canadian Pacific Steamship Co., ; The West morland; , ; referred to.
(ii), Section 191(1) is in two parts.
The first part deals with only desertion and therefore, if desertion was proved, the penalty which the law provides under the Act was duly incurred.
There is no excuse against desertion became reasonable cause which is indicated in the same section is included in cl.
(b) and not in el.
In the present case there was not that sufficient cause even for the purpose of el.
(b) of section 191(1).
The dispute was already before the Shipping Master, meetings had taken place and minutes had been recorded.
the log book of the shipping Company and other records would clearly show the mount of money due to the appellants.
The settlement of the claim could well have waited till the completion of the voyage and there was machinery in law for the enforcement of a demand.
[309 H; 310 D F] The law has chosen to regard the duties of seamen as of paramount importance and has therefore, in addition to the ordinary liabilities which arise under the general law, added a penalty of imprisonment for absence from duty without reasonable cause and has also provided for forfeiture of wages and the effects left on board.
This indicates that the policy of the law is that the crew must perform their duties under such agreements as they execute with the shipping company on pain of being found guilty and punished if they cannot make out that they had sufficient and reasonable cause for what may otherwise be regarded as dereliction of duty.
[310 C D]
|
vil Appeals Nos.
2403 & 2404 of 1966.
Appeals from the judgment and order dated April 4, 1963 of the Assam and Nagaland High Court in Civil Rule Nos. 90 of 1960 and 382 of 1961.
D.N. Mukherjee, for the appellant.
Naunit Lal and B.P. Singh, for the respondents.
The Judgment of the Court was delivered by Ramaswami, J.
These appeals are brought by certificate from the judgment of the High Court of Assam and Nagaland dated April 4, 1963, in Civil Rule No. 90 of 1960 and Civil Rule No. 382 of 1961, whereby the High Court dismissed the petitions under articles 226 and 227 of the Constitution filed by the appellant.
Messrs. Hardeo Das Jagan Nath (hereinafter called the 'appellant ') is a partnership firm carrying on business at Mawk 263 har, Shillong in the District of United Khasi and Jaintia Hills.
By a notification issued under Rule 6 of the Assam Sales Tax Rules 1947, the Commissioner of Taxes, Assam fixed May 20, 1948 as the date by which the dealers of Shillong administered area had to make applications for registration under the Assam Sales Tax Act, 1947 ( 17 of 1947 ), hereinafter called the 'Act '.
By notification dated April 15, 1948, the Government of India had extended the provisions of the Act with slight modifications to the administered area in Shillong under section 4 of the Extra Provincial Jurisdiction Act, 1947.
The appellant got itself registered under the Act.
Upto the half yearly return periods ending September 30, 1957, the appellant was assessed to sales tax and the tax was realised by the Sales Tax Authorities.
On March 6, 1959, the Superintendent of Taxes, Shillong, respondent No. 4 raided the business premises of the appellant and seized the account books etc.
The appellant filed a petition under article 226 of the Constitution in the High Court.
By its order dated June 3, 1960, the High Court directed the Deputy Commissioner of Taxes, Assam to return the seized books and documents within three weeks of the date of the order to.
the appellant.
As directed by the High Court, the documents were returned to the appellant but on the basis of the information received from the account books the Superintendent of Taxes issued notices dated April 4, 1959 under section 19A of the Act for reassessment of the appellant in respect of the half yearly return periods ending on September 30, 1956, March 31, 1957 and September 30, 1957.
Thereafter, ex parte reassessment was made for the return period ending September 30, 1956 by an order dated July 8, 1959 and for return periods ending March 31, 1957 and September 30, 1957 by orders dated July 24, 1959 and tax amounting to Rs. 1,22,933/ was levied for these three periods.
A further sum of Rs. 47,504.70 was levied in respect of the return period ending March 31, 1958 by an ex parte assessment order dated March 23, 1959.
For the other return period ending September 30, 1958; a sum of Rs. 49,427.90 was levied by an ex parte assessment order dated April 8, 1959.
For these two return periods a penalty of Rs. 1,000/ in respect of each return was also levied by two separate orders dated June 27, 1959.
Thus the total amount of salestax and penalty amounting to Rs. 2,19,865.60 in respect of the five return periods was levied.
The appellant paid Rs. 20,074.68 at the time of original assessments in respect of the periods ending on September 30, 1956, March 31, 1957 and September 30, 1957.
The appellant thereafter filed appeals against all the seven ex parte orders before the Assistant Commissioner of Taxes, Assam.
Along with the memoranda of appeals for the periods ending March 31, 1958 and September 30, 1958, two separate applications were made by the appellant alleging that it was not 264 necessary to pay the assessed tax since the provisions of section 30 of the Act as amended did not apply to the case and it was prayed that appeals should be admitted without payment of the assessed tax.
The contention of the appellant was rejected by the Assist.ant Commissioner though he reduced the amount of deposit for the periods ending March 31, 1958 and September 30, 1958.
The .appellant moved the Commissioner of Taxes in revision, but the order of the Assistant Commissioner was affirmed by the Commissioner of Taxes though he reduced the amount further.
On the application of the appellant the matter was referred to the High Court which held that the amended section 30 of the Act was intravires.
In the meantime, the appellant also applied in respect of the appeals relating to the periods ending September 30, 1956, March 31, 1957 and September 30, 1957 as well as the penalty appeals of periods ending on March 31, 1958 and September 30, 1958 and prayed for admission of these appeals without payment of the assessed tax.
In this case also the amount was reduced by the Assistant Commissioner of Taxes but the matter was kept pending till the disposal of the reference by the High Court.
On May 21, 1960, the appellant filed separate petitions before the Assistant Commissioner praying that as the financial condition of the appellant was not good the appellant may be allowed to furnish reasonable security in lieu of cash and the appeals may be admitted on such security.
By his order dated May 23, 1960 the Assistant Commissioner of Taxes fixed June 8, 1960 f, or payment of the amount required for admission of the appeals, failing which the appeals were ordered to be dismissed.
The appellant then moved the Commissioner praying that in view of his financial difficulty he should be .allowed to furnish reasonable security in lieu of cash to be paid.
The application was rejected by the Commissioner on June 21, 1960.
Thereafter all the five appeals were rejected by a common order dated June 22, 1960 and the two appeals against the imposition of penalty were also summarily rejected by an order dated June 22, 1960.
The appellant was further asked to show cause why penalty should not have been imposed in respect of the periods ending September 30, 1956, March 31, 1957 and September 30, 1957.
The appellant filed a petition to the High Court under article 226 of the Constitution, being Civil Rule No. 90 of 1960 praying for a writ to quash the order of the Commissioner dismissing the appeals in respect of the five periods and for further reliefs.
The appellant also filed another petition under article 226, being Civil Rule No. 382 of 1961 asking for similar reliefs with regard to the periods ending March 31, 1959, September 30, 1959, March 31, 1960, September 30, 1960 and March 31, 1961.
The writ petitions were dismissed by the High Court by a common judgment dated April 4, 1963.
The first question to be considered in these appeals is whether the provisions of the Act were validly extended to the Shillong 265 Administered Areas.
By a notification dated April 15, 1948 the Central Government extended the provisions of the Act to the Shillong Administered Areas including Bara Bazar in exercise of powers conferred by section 4 of the Extra Provincial Jurisdiction Act, 1947.
It was argued on behalf of the appellant that on April 15, 1948 when the notification was issued, the Extra Provincial Jurisdiction Act, 1947 (Act XLVII of 1947) was not applicable to the Shillong Administered Areas as the instrument of accession by which the administration of the State of Mylliem was transferred to the Central Government was accepted by the GovernorGeneral of India on August 17, 1948.
The preamble to the Extra Provincial Jurisdiction Act, 1947 (hereinafter called the Act of 1947) provides: "Whereas by treaty, agreement, grant, usage, sufferance and other lawful means, the Central Government has, and may hereafter acquire, jurisdiction in and in relation to areas outside the Provinces of India; It is hereby enacted as follows : " The expression "extra provincial jurisdiction" has been defined under section 2 of the Act of 1947 as meaning "any jurisdiction which by treaty, agreement, grant, usage, sufferance or other lawful means the Central Government has for the time being in or in relation to any area outside the Provinces".
Section 3 states: "3.
(1) It shall be lawful for the Central Government to exercise extra provincial jurisdiction in such manner as it thinks fit.
(2) The Central Government may delegate any such jurisdiction as aforesaid to any officer or authority in such manner and to such extent as it thinks fit.
" Section 4 provides as follows: "4.
(1) The Central Government may, by notification in the official Gazette, make such orders, as may seem to it expedient for the effective exercise of any extra provincial jurisdiction of the Central Government.
(2) Without prejudice to the generality of the powers conferred by sub section (1 ), any order made under that sub section may provide (a) for determining the law and procedure to be observed, whether by applying with or without modifications all or any of the provisions of any enactment in force in any Province or otherwise; (b) for determining the persons who are to exercise jurisdiction, either generally or in particular 2 Sup.
C1/69 18 266 cases or classes of cases, and the powers to be exercised by them; (c) for determining the courts, judges, magistrates and authorities by whom, and for regulating the manner in which, any jurisdiction auxiliary or incidental to or consequential on the jurisdiction exercised under this Act is to be exercised within any Province; and (d) for regulating the amount, collection and application of fees.
" Section 5 is to the following effect: "Every act and thing done, whether before or after the commencement of this Act, in pursuance of any extra provincial jurisdiction of the Central Government in an area outside the Provinces shall be as valid as if it had been done according to the local law then in force in that area.
" The argument was stressed on behalf of the appellant that the extra provincial jurisdiction could only be exercised by the Central Government if by treaty, agreement, grant, usage, sufferance or other lawful means the Central Government has for the time 'being in or in relation to any area outside.
the provinces exercised such jurisdiction.
It was contended that after the declaration independence on August 15, 1947 the paramountcy lapsed and the State of Mylliem became an independent State and the Central Government could not exercise any extra provincial jurisdiction till the instrument of accession was signed by the GovernorGeneral.
It was pointed out that the notification by which the Act was applied to Shillong Administered Areas was issued after the lapse of paramountcy and before the instrument of accession was signed by the Governor General.
It was therefore argued that the notification dated April 15, 1948 was not validly issued and the provisions of the Act were not operative in the Shillong Administered Areas.
It was said that before the State of Mylliem became an independent State on August 15, 1947 there was no treaty, grant, usage or arrangement whereby the British Crown enjoyed any rights to levy taxes on the sale of goods within the Mylliem State or any right to extend to that area any such Act without the express consent or approval of the ruler of that State.
The opposite view point was put forward on behalf of the respondents.
It was said that before August 15, 1947 the relations of the Crown Representative with Khasi Hills States were conducted through the Governor of Assam.
In practice the administration of the Hill States was in great measure assimilated to that of the Province of Assam partly by the application of the British Indian Laws under the Indian (Foreign Jurisdiction) Order in Council 267 and partly by administrative measures.
It was argued that by virtue of the instrument of accession all previous existing arrangements between Khasi Hills States and the Government of India in the Assam Province were continued and the Central Government could therefore exercise extra provincial jurisdiction by usage.
To put it differently, the argument of the respondents was that though the instrument of accession was accepted by the Governor General on August 17, 1948, it recognised the fact that there was a certain existing arrangement regulating relations between the Government of India and the Chiefs of the Khasi Hills States.
The Central Government therefore exercised extra provincial jurisdiction by agreement or usage and it cannot therefore be said that the notification of the Central Government dated April 15, 1948 was invalid.
When the appeals were originally heard we considered that the material on the record was not sufficient to enable us to determine the disputed question, namely whether the Dominion of India was entitled to exercise extra provincial .jurisdiction over the Shillong Administered Areas on April 15, 1948 which was the material date.
The question at issue is not purely a question of fact but a question relating to a "fact of State" which is peculiarly within the cognizance of the Central Government (For expression "Fact of State" see Halsbury Laws of England, 3rd edn.
Vol. 7, p. 285).
In view of the insufficiency of material we thought it proper to avail ourselves of the procedure indicated by section 6 of the Act of 1947 which enacts: "6.
(1) If in any proceeding, civil or criminal in a Court established in India or by the authority of the Central Government outside India, any question arises as to the existence or extent of any foreign Jurisdiction of the Central Government, the Secretary to the Government of India in the appropriate department shall, on the application of the Court, send to the Court the decision of the Central Government on the question, and ' that decision shall for the purposes of the proceeding be final.
(2) The Court shall send to the said Secretary, in a document under the seal of the Court or signed by a judge of the Court, questions framed so as properly to raise the question, and sufficient answers to those questions shall be returned to the Court by the Secretary and those answers shall on production thereof be conclusive evidence of the matters therein contained.
" By an order of this Court dated September 21, 1967 the following two questions were forwarded to the Union of India under the seal of this Court for submission of their answers: 268 "(1) Whether the Dominion of India exercised extra provincial jurisdiction over the Shillong Administered Area including Bara Bazar, which also included Mawkhar, a part of the erstwhile Mylliem State, on April 15, 1948; (2) Whether the Dominion of India had extra provincial jurisdiction on April 15, 1948 to extend the Assam Sales Tax Act, 1947 (Act 17 of 1947) to the Shillong Administered Area including Bara Bazar under section 4 of Extra Provincial Jurisdiction Act (Act 47 of 1947) .
" In compliance of that order the Union of India have submitted their answers on January 12, 1968 in the following terms: "Ministry of Home Affairs.
Replies to the questions mentioned in the order dated September 21,1967 passed by the Supreme Court of India in Civil AppeaLs Nos. 2403 and 2404/1966.
(1) The British Government in India had by treaty, grant.
usage, sufferance and other means acquired jurisdiction over certain territories of the erstwhile State of Mylliem.
The jurisdiction was exercised under the Indian (Foreign Jurisdiction) Order in Council, 1902 as amended by the Indian (Foreign jurisdiction).
Order in Council, 1937.
Mawkhar was a part of the territories of Mylliem jurisdiction over which had been agreed to be given by the Siem of Mylliem to the British Government.
It was included in those parts of Shillong which came, in course of time, to, be called the Shillong Administered Area.
It has been reported that on actual survey the small area known as Bara Bazar area comes partly under Mawkhar proper and partly under South East Mawk har and Garikhana.
Bara Bazar area was thus a part of the area belonging to the erstwhile Mylliem State in which the British Government in India exercised jurisdiction under the Indian (Foreign jurisdiction) Order in Council.
On the withdrawal of British Rule the jurisdiction over the territories of the erstwhile Mylliem State which had been included in the Shillong Administered Area continued to be exercised with the consent of the Siem and the jurisdiction which was until then exercised in those areas by the British Government in India was assumed by the Dominion of India and it was retained thereafter by virtue of the instrument of accession signed by the Siem of Mylliem 269 and the agreement annexed thereto.
The Dominion of India exercised extra provincial jurisdiction over the Shillong Administered Area including the Barra Bazar which also included Mawkhar a part of the Mylliem State on April 15, 1948.
(2) The jurisdiction exercised by the British Government in India over the Shillong Administered Area was quite extensive.
In exercise of that jurisdiction that Government had extended, with appropriate reservations, a number of Acts Central as well as Provincial to the Shillong Administered Area e.g. the Indian Income Tax Act and the Assam Municipal Act with the consent of the Siem of Mylliem where necessary.
On the withdrawal of British rule the Dominion of India acquired the same jurisdiction over the Shillong Administered Area by virtue of the instrument of accession signed by the Siem of Mylliem and the agreement annexed thereto.
The Dominion of India therefore had on April 15, 1948 extra provincial jurisdiction in terms of the Extra Provincial Jurisdiction Act, 1947 (Act 47 of 1947) to extend the Assam Sales Tax Act, 1947 (Act 17 of 1947) to the Shillong Administered Area including Barra Bazar.
The Assam Sales Tax Act was actually extended to the Shillong Administered Area including Barra Bazar, .after obtaining the consent of the Siem of Mylliem, in the Ministry.
of States Notification No. 186 IB dated the 15th April,1948.
L.P. SINGH, Secretary to the Govt.
of India.
New Delhi, January 12, 1968.
" It is clear from the letter of the Union Government that it was entitled to exercise extra provincial jurisdiction over Shillong Administered Area on April 15, 1948.
The reason is that prior to that date the British Government had exercised that jurisdiction under the Indian (Foreign Jurisdiction) Order in Council, 1902 as amended by the Indian .(Foreign Jurisdiction) Order in Council, 1937.
On the withdrawal of British rule the jurisdiction over the territory of Mylliem State continued to be exercised with the consent of the ruler by the Dominion of India and the jurisdiction was retained thereafter by virtue of the instrument of accession signed by the Siem of Mylliem and the agreement annexed thereto.
It is also manifest that the jurisdiction exercised by the British Government over the Shillong Administered Area was quite exten 270 sive and in exercise of that jurisdiction a number of Acts Central & Provincial were extended to the Shillong Administered Area, for example, the Indian Income Tax Act and the Assam Municipal Act with the consent of the Siem of Mylliem where necessary.
On the withdrawal of the British rule the Dominion of India acquired the same jurisdiction which included the extension of the Act to the Shillong Administered Area.
Under section 6(2) of the Act of 1947 the answers of the Central Government to the questions forwarded by this Court shall be treated as conclusive evidence of the matter therein contained.
We accordingly hold that the argument of the appellant on this aspect of the case should be rejected.
It was then contended on behalf of the appellant that section 30 of the Act after the amendment was not applicable and the Assistant Commissioner of Taxes had no authority to ask the appellant to deposit the amount of tax assessed before hearing the appeal.
Section 30 of the Act, as it originally stood, was to the following effect: "30.
(1) Any dealer objecting to an order of assessment or penalty passed under this Act may, within thirty days from the date of the service of such order, appeal to the prescribed authority, against such assess ment or penalty; Provided that no appeal shall be entertained by the said authority unless he is satisfied that such amount of tax as the appellant may admit to be due from him has been paid; Provided further that the authority before whom the appeal is filed may admit it after the expiration of thirty days, if such authority is satisfied that for reasons beyond the control of the appellant or for any other sufficient cause it could not be filed within time. . . . . . " After the amending Act of 1958 the section reads as follows: "30.
(1) Any dealer objecting to an order of assessment or penalty passed under this Act may, within thirty days from the date of the service of such order, appeal to the prescribed authority, against such assessment or penalty; ' Provided that no appeal shall be entertained by the said authority unless he is satisfied that the amount of tax assessed or the penalty levied, if not otherwise directed by him, has been paid; 271 Provided further that the authority before whom the appeal is filed may admit it after the expiration of thirty days, if such authority is satisfied that for reasons beyond the control of the appellant or for any other sufficient cause it could not be filed within time.
. . . . . . . ." It was contended that the amendment came into force with effect from April 1, 1958 and it cannot be given retrospective effect so as to apply to assessment periods ending on September 30, 1956, March 31, 1957 and September 30, 1957.
We are unable to accept this argument as correct because the assessments for these three periods were completed after the amending Act came into force i.e., after April 1, 1958.
The appeals against the assessments were also filed after the amendment.
It is therefore not correct to say that the amending Act has been given a retrospective effect and the Assistant Commissioner of Taxes was there.fore right in asking the appellant to comply with the provisions of the amended section 30 of the Act before dealing with the appeals.
It was lastly contended on behalf of the appellant that the Sales Tax Authorities were not right in holding that there was no provision under the Act by which security can be accepted in lieu of cash payment.
Reliance was placed upon the phrase "otherwise directed" in the amended section 30 of the Act.
In our opinion, there is no substance in this argument.
The expression "otherwise directed" only means that the appellate authority can ask the assessee to deposit a portion of the amount and not the whole, but the section gives no power to the appellate authority to permit the assessee to.
furnish security in lieu of cash amount of tax.
We accordingly reject the argument of the appellant on this point.
For the reasons expressed we hold that the High Court was right in dismissing the writ petitions and these appeals must be dismissed with costs there will be one set of hearing fees.
V.P.S. Appeals dismissed.
| By a notification dated April 15, 1948 .the
Government of India extended the Assam Sales Tax Act, 1947 to the Administered Area in Shillong under section 4 of the Extra Provincial Jurisdiction.
Act, 1947.
The instrument of accession by which the administration of the Indian Princely State, of Mylliem in the Shillong Administered Area was transferred to the Central Government was accepted by the Governor General of India on August 17, 1948.
Under section 30 of the Assam Sales Tax Act, as amended by Act 6 of 1958, a dealer may appeal against an order of assessment or penalty, but the appeal shall not be entertained by the appellate authority unless he was satisfied that the amount of tax assessed or penalty levied, if not otherwise directed by him, had been paid.
The sales 'tax authorities assessed the appellant to sales tax and imposed penalties for Various periods.
Though some of the; assessment periods were before April 1, 1958 when the Amending Act 6 of 1958 came into force, all the orders of assessment and penalty were passed after April 1, 1958.
The appellant did not pay the tax assessed or the penalty but filed petitions along with its appeals praying that it may be allowed to furnish security in lieu of payment of cash on account of its financial condition.
The petitions were rejected and the appeals were consequently dismissed.
Writ petitions flied by the 'appellant in the High Court, to quash the orders of dismissal of the appeals, were also dismissed.
In appeal to this Court, it was contended that; (1) After August 15, 1947 the State of Mylliem became an independent State and since the Central Government could exercise extra provincial jurisdiction under the Extra Provincial Jurisdiction Act, only if the Central Government exercised ' such jurisdiction under a treaty, agreement, or by other lawful means, the Central Government in the present case, could not exercise such jurisdiction till August 17, 1948 when the instrument of accession was acCepted; and therefore, the notification dated April 15, 1948 was not validly issued and hence the Assam sales Tax Act was not operative in the Shillong Administered Area; (2) As the Amending Act of 1958 came into force on April 1, 1958 it could not be given retrospective effect so as to apply to assessment periods anterior to that date; and (3.) The authorities were not right in holding that there was no provision in the Act empowering them to accept security in lieu of cash payment.
262 As the material on the record was not sufficient to enable the Court to determine the question whether the Dominion of India was entitled to exercise extra provincial jurisdiction over the Shillong Administered Area on April 15, 1948 this Court under section 6 of the Extra Provincial Jurisdiction Act, forwarded to the Union Government the questions: (a) whether the Dominion of India exercised such jurisdiction on April 15, 1948, and (b) whether the Dominion of India had such jurisdiction to extend the Assam Sales Tax Act to, the Area After receiving the answers, HELD: (1) The answers submitted by the Union Government showed that prior to April 15, 1948, the British Government had exercised jurisdiction over the Area under the Indian (Foreign Jurisdiction) Order in Council, 1902, as amended by the Order in Council of 1937 that on the withdrawal of British rule the jurisdiction continued to be exercised with the consent of the Siem (ruler) of Mylliem State by the Dominion of India, that the Jurisdiction was retained thereafter by the instrument of accession signed by the Siem, and that the exercise of the jurisdiction by the British Government and the Dominion of India several Acts were extended to the Shillong Administered Area.
Since under section 6(2) of the Extra Provincial Jurisdiction Act the answer of the Central Government is conclusive evidence of the matter therein the Union Government was entitled to exercise such jurisdiction over the Shillong Administered Area on April 15, 1948 and therefore, the Assam Sales Tax Act was properly extended to the Area.
[269 F H, 270 B C] (2) The assessments for periods anterior to April 1, 1958 were completed after the Amending Act came into force and the appeals were also filed thereafter.
Therefore the Amending Act of 1958 was applicable to the appeals before the appellate authority and was not given retrospective effect.
[271 C D] (3) The expression 'otherwise directed ' only means that the appellate authority can ask the assessee to deposit a portion of the amount and not the whole but the section gives no power to the appellate authority to permit the assessed to furnish security in lieu of the cash amount of tax.
[271 D E]
|
: Criminal Appeal No.490 of 1985.
From the Judgment dated 29.5.1985 of the Judge, Special Court, Ferozepur in Case No.62/84, Trial No.23/85 and FIR No.154 of 1984.
U.R.Lalit and Prem Malhotra for the Appellants.
261 N.S.Das Behl and R.S.Suri (NP) for the Respondent.
The Judgement of the Court was delivered by K.RAMASWAMY,J.
This appeal under s.14(1) of the , 61 of 1984 for short `the Act ' the reference under s.15(3) thereof and s.366 of the Code of Criminal Procedure, 1973 for short `the Code ' for confirmation of the death sentence of Malkiat Singh, accused No. 1 in Sessions case No.62 of 1984, Trial No.23 of 1985 on the file of the Special Court, Ferozepur.
The first accused was convicted under s.302 read with s.34, I.P.C. for causing the deaths of Ram Babu, D 1, Sunder Lal, D 2, Ram Nath, D 3 and Ram Chand, D 4 of each death and sentenced to death subject to confirmation by this court.
He was also further convicted under s.307 read with s.34, I.P.C. and sentence to undergo rigorous imprisonment for 5 years for attempt to murder Ashok Kumar, PW 4.
Sukhdev Singh A 2 and Sohna Singh, A 3 were convicted under s.302 read with s.34, I.P.C. for causing deaths of D 1, to D 4 and sentenced to undergo imprisonment for life.
A 2 and A 3 were convicted under s.307 read with S.341 I.P.C. for attempt to murder of PW 4 and were sentenced to undergo rigorous imprisonment for 5 years, all the sentences to run concurrently.
Ram Avtar, PW 3 and D 3 Ram Nath, first cousin, had liquor contract in the village Kotli Ablu from 1983 and 1984.
D 2 and PW 4 were working in the liquor shop.
The wives of D 2 and D 4 are sisters.
D 4 came to see D 2.
D 1 was working in the liquor shop at Ablowbad.
Since the liquor therein had exhausted he came to Kotli Ablu to sell the liquor in the shop of D 3.
A 1 and A 2 are brothers and are residents of Kotli Ablu and Sohna Singh, A 3 is their maternal uncle (mother 's brother) and a resident of Rameana situated at a distance of 8 km.
to Kotli Ablu.
These are the admitted facts.
It is the case of the prosecution that at about 9.00 p.m. On June 4, 1984, A 1 and A 3 came to the liquor shop of D 3 wherein PW 3, D 1, D 2 and PW 4 were also present and were vending the liquor.
They sold one bottle of liquor to A 1 and A 3 on credit.
After its consumption A 1 and A 3 demanded another bottle to which D 3 refused to sell on credit.
Thereon A 1 and A 3 abused them and a quarrel ensued.
Both left the shop in anger.
D 1 and D 2 slept on a cot in front of the liquor shop.
D 3 and D 4 slept wooden takthposh in front of the liquor shop.
PW 3 and PW 4 climbed the roof of the shop and slept there.
During past midnight of June 4 5, 1984 at about 12.30 a.m. PW 3 and PW 4 heard gun shot fire and got up and saw with visibility of electric light emanating 262 from the house of one Gurbax Singh whose son was examined on DW 2 that A 1 was firing with rifle at D 1 to D 4 and A 2 and A 3 hitting them with Gandasas (sharp edged weapons).
Seeing PW 3 and PW 4 on the terrace A 1 fired at them but they escaped uninjured and they jumped down.
PW 3 jumped towards back side of the shop and ran towards the village and hid in the school.
PW 4 jumped to the front side and ran towards the village.
A 1 fired at PW 4 and A 2 hit him.
He received seven bullet injuries fired by A 1 on the backside, of right, leg, thigh and left side of the abdomen while he was running.
A 2 hit him on the right shoulder and had incised injury.
He ran to the house of Gurmail Singh, PW 3 with bleeding injuries, knocked the door and fell down unconscious.
On June 5, 1984 at about 9.00 a.m. Jit Singh, the Chowkidar of the village reached Kotli Police Station and reported to PW 5, S.H.O. who reduced Ex.P 24 into writing.
In the F.I.R. he stated that he had heard gun shot firing from the side of the liquor shop.
Due to fear and the prevailing tense situation he did not come out.
Next day morning he saw several people collected at the liquor shop and saw the dead bodies of D 1 to D 4 and PW 4 was lying unconscious in the house of DW 3 and he was asked to report the matter accordingly.
PW 5 after issuing F.I.R. to all the concerned, went alongwith police party to the spot at noon and saw the dead bodies.
He went to the house of DW 3 and found PW 4 under shock and unconscious.
He sent him for medical examination by PW 2, the Doctor as his condition was serious.
PW 3 on coming to know the arrival of the police and the military people at noon mustered courage and came out from the school and went to the shop.
He was examined at the inquest and he also attested the statement recorded by the police at the inquest.
PW 5 enclosed the copies of his statement to the inquest report Ex.P 4, P 6, P 8 and P 10 and sent the dead bodies with the reports for post mortem by PW 2 Doctor.
He also prepared rough sketch of the scene under Ex P1/A.
He recovered the blood stained earth and cots etc under exhibit
He recovered 7 empty and two live cartridges exhibit M 0/1 to M 0/9 under panchnama Ex.p 18.
He remained on the spot till 10.30 p.m. and saw the light emanating from the house of Gurbax Singh and falling at the scene of occurrence.
He sent requisition twice to the hospital to find whether PW 4 was in a fit condition for recording his statement.
On June 7, 1984 at about 7.00 a.m. he received an endorsement that PW 4 was in a fit condition to make the statement.
Accordingly he recorded the statement.
He sent M.O.S.1 to 9 cartridges and pellets recovered from body of D 4 under exhibitP 25 to ballistic expert for report.
on June 15, 1984 when he was picketing on the drain of village Chand Bhan at about 3.30 a.m. he arrested the appellants and recovered from the person of A 1.
exhibit 263 M 0/11 rifle, 351 bore (semi automatic) of U.S.A. make loaded with two cartridges M 0/12 and M 0/13 under panchnama in the presence of panch.
Pursuant to a statement made under s.27 Evidence Act by A 3 leading to discover Gandasa M 0/14 was recovered under ex.P 27 and sent them to the chemical examination and the ballistic reports.
Under exhibitP 28, the Ballistic expert found that the empties exhibit M 0/1 to M 0/9 had been fired from rifle exhibit M 0/11.
Gandasa was stained with human blood as per the report exhibit PW 2 who conducted the post mortem on D 1 and D 2 found on each of the dead bodies two gun shot entry and exit wounds.
D 3 and D 4 were found to have 4 gun shot lacerated and two incised injuries and 5 lacerated and two incised injuries respectively.
He removed M.O.S.16 and 17 pellet from the body of D 4.
He issued post mortem certificates Ex.P 3, P 5, P 7 and P 9 respectively.
He also examined PW 4.
He found as many as 7 lacerated gun shot injuries and one incised injury and issued medical certificate Ex.
Injuries and one incised injury and issued medical certificate exhibit Injuries 1 to 7 were caused by gun shot fire and injury 8 by a sharp weapon.
PW 5 sent two pellets recovered by him from the body of D 4 to the Ballistic and Chemical Examination.
The defence consented to mark F.I.R., the affidavits of panch witnesses and constables; the fire arms licence of A 1 under exhibit P 17 and also the reports of the ballistic expert and chemical examination reports without oral evidence.
PW 6, the Deputy Superintendent of Police supervised the investigation conducted by PW 5.
The prosecution examined 6 witnesses and defence examined 3 witnesses and marked the documents.
The accused were examined 3 witnesses and marked the documents.
The accused were examined under s.313 and denied their complicity and examined DW 1 to DW 3 to prove that the bulb of Gurbax Singh was not burning and PW 3 was residing at Medhak and he was brought to Kotli Ablu by the Police and PW 4 was conscious and did not disclose the names of the appellants at that time.
The lower court believed the direct evidence of PW 3 and PW 4 and the prosecution case that A 1 fired at the deceased with M 0/11 rifle, A 2 and A 3 also participated in the attack.
If also found that M 0/11, the rifle belongs to A 1 and he fired the deceased and PW 4.
Accordingly convicted them for an offences under sections 302/34 and 307/34 I.P.C. When they were asked under s.235(2), they declined to lead evidence and the Sessions Court awarded sentence to the accused as referred to earlier.
Shri Lalit, the learned senior counsel for the appellants contended that the evidence of PW 3 and PW 4 is highly artificial, unbelievable and untrustworthy; barring their evidence, there is no other evidence to connect the appellants with the commission of the crime.
The story that PW 3 and PW 4 climbed on the terrace and were sleeping is 264 false as they cannot climb to a height of 8/1/2 ft. PW 3 did not disclose his witnessing the occurrence to any one till noon.
DW 3 the Sarpanch of Madhok spoke that PW 3 alongwith the panch witnesses were brought from Madhok in a Jeep by the police, so he is a planted witness.
In support thereof he contends that the specific evidence of DW 3 in this regard was not challenged in cross examination.
PW 4 was not examined at the inquest though he was conscious.
The police requisitioned the dog squad to sniff the scene of offence to identify the unknown accused.
PW 5 and PW 2 the Doctor admitted that the omission of the names of the accused in the case diary and memos would belie the theory of witnesses.
The omission of the names of the accused in the cause title (Banam) would clearly show that PW 3 and PW 4 were not direct witnesses and PW 3 was introduced at a later stage and he was not examined at the inquest and that PW 4 did not identify the appellants.
This was also further corroborated from the fact that admittedly exhibit P 24, recited that three unknown assailants had killed the deceased.
Admittedly the dog squad was requisitioned.
The appellants were falsely implicated.
As regards PW 4, he further contended that as per the evidence of DW 2 son of Gurbux Singh and DW 3, Gurmail Singh, PW 4 was conscious at that time of his coming to the house of DW 3 and remained to be conscious.
The police did not examine him till June 7, 1984 as the assailants were not known.
There was no light in the house of DW 1 and PW 3 and PW 4 could not have identified the assailants.
The theory of liquor vending is doubtful for the reason that the entire State was under curfew on that day due to blue star operation on June 3, 1984 and no vending would take place when there is a curfew.
If really the appellants 1 and 3 had taken the liquor on credit, nothing prevented the prosecution to produce the chit admittedly taken by D 3.
The theory of burning the shop shows that it is an act of terrorists as was noted in the case diary by PW 6.
Thus the appellants were implicated by suspicion and the prosecution had not established the guilt of the appellant beyond reasonable doubt.
The conviction and sentence by the special court was on the same day, namely May 29, 1985 which contravenes the mandatory provision of s.235 of the Code.
In view of the decision of this court in Allauddin vs State of M.P., J.T.(1989) 2 SC 171 and Anguswamy vs State of Tamilnadu, J.T. the sentence of death awarded to A 1 is illegal.
A 2 had no axe to grind against the deceased.
He neither went for drinking at 9.00 p.m. on that day nor had a quarrel.
He bears no motive to kill the deceased or attack PW 4.
No recovery of Gandasa was made from him.
PW 3 and PW 4 have no prior acquaintance with him.
Therefore, it was highly doubtful whether A 2 had participated in the offence.
As regards to the third 265 appellant (A 3), it is his contention that he is a resident of Rameana.
PW 3 or PW 4 do not know A 6 at all.
Therefore, he may not be able to have participated in the crime.
It was resisted by Mr.Das Bahl, learned counsel for the State.
The acceptance of the prosecution case rests on the evidence of PW 3 and PW 4.
PW 3 and D 3 had the licence to vend liquor at Kotli Ablu.
PW 4 and D 2 were vending liquor under them.
D 4 came to see D 2 as they were married sisters.
D 1 came and was vending on the fateful day in the shop.
D 1 to D 4 were killed in the intervening night of June 4 5, 1984 is practically admitted from the evidence of DW 3.
During the course of the same transaction PW 4 sustained 7 lacerated gunshot injuries and one incised injury is also admitted through the evidence of DW 2 and DW 3, PW 2, the Doctor 's evidence conclusively established that D 1 and D 2 died due to gun shot injuries.
D 1 and D 2 each had two entry and exit wounds due to gun shots.
D 3 and D 4 also had gunshot lacerated as well as incised injuries.
They also died on the spot due to the injuries which are sufficient to cause death in the ordinary course of nature.
Seven empty and two live cartridge fired from M 0/11 rifle of 351 bore of U.S.A. make belonging to A 1 were recovered from the scene of occurrence.
Therefore, the deaths of D 1 and D 2 due to gunshot injuries and D 3 and D 4 due to gunshot and incised injuries are proved beyond doubt.
Equally PW 4 sustained injuries is also established.
The only question is whether the appellants are assailants.
The conviction of the appellants hinges upon the acceptability of the testimony of PW 3 and PW 4.
Let us first take the evidence of PW 4, the injured witness whose presence at the time of occurrence stands confirmed.
He is aged about 19 years.
He was working in the liquor shop of D 3 and PW 3 at Kotli Ablu.
He is residing in that village was not disputed.
As stated earlier he sustained 8 injuries (7 gunshot and one incised) during the course of the same transaction is also indisputable, and in fairness, was not disputed by Shri Lalit.
His serious attack is that PW 4 did not disclose the names of the assailants for two days which would show that he did not either see the assailants or the assailants were not known him.
We find it difficult to accept.
His case that he jumped from the terrace in front of the shop and he was attacked by the assailants was not disputed in the cross examination.
The suggestion that he was sleeping alongwith D 4 would show that he could see A 1 who fired at him while he was running away and it receives corroboration from medical evidence of PW 2 that the injuries are on the backside while he was chased by the accused.
So he 266 could clearly identify his own assailants as the occurrence did not take place at a fleet or glimpse.
In the F.I.R. at the earliest, it was specifically stated that PW 4 was not in a condition to speak.
It would mean that he was either under shock or unconscious.
The First Information Report given by the Chowkidar was admitted in evidence with the consent of the defence.
It is settled law that the First Information Report is not substantive evidence.
It can be used only to contradict the maker thereof or for corroborating his evidence and also to show that the implication of the accused was not an after thought.
Since the examination of first information was dispensed with by consent Ex P 24, F.I.R. became part of the prosecution evidence.
Under section 11 of the Evidence Act read with s.6 the facts stated therein namely, PW 4 was not in a speaking condition, could be used only as a relevant fact of prior existing state of facts in issue as resgestae of "the earliest information".
It is not used to corroborate the prosecution case, but can be looked into as an earliest information of the existing condition of PW 4 at 9.00 a.m. on June 5, 1984 i.e. when the report was given in exhibit p 24, PW 4 was still unconscious.
When PW 4 had stated that he became unconscious as soon as he came and tapped the door of DW 3, and fell down, by operation of section 11 of the Evidence Act it may be relevant fact of the previous existing condition that PW 4 contained to remain unconscious till the report was given.
Therefore, the F.I.R. could be used as relevant existing state of fact namely the continuous unconscious condition of PW 4 till PW 5 S.H.O.reached and saw him within the meaning of s.11 read with s.6 of the Evidence Act.
When PW 4 received 7 gun shot injuries and one incised injury and ran for life to a distance with bleeding injuries, it would be quite likely that he would be under severe shock and his evidence that after reaching the home of DW 3 and knocked the door he fell down unconscious appears to be quite natural and probable.
The evidence of PW 5, that on seeing PW 4 in critical unconscious condition he sent him to the Doctor for medical examination and the doctor administering sadation appear to be human probabilities and there is nothing intrinsic to suspect their evidence.
Thus PW 4 was not in a fit condition to give statement till June 7, 1984 at 7.00 a.m. PW 4 's evidence that he was residing at Kotli Ablu and that he knew the accused was not disputed in the cross examination.
It is not uncommon in normal human probability that he was not expected to know the names of the relations of A 3.
When A 1 and A 3 came in that very night to the shop and quarreled for non supply of liquor on credit, it would be fresh in the memory of PW 4 and as he saw the assailants he could have easily recognized A 3. 267 Undoubtedly, ocular defence evidence, if it is not subjected to critical cross examination, is entitled to the same weight as prosecution evidence.
But merely because the prosecution, as usual, made insipid cross examination, the defence evidence is not to be believed automatically.
Witnesses may be prone to speak lies but circumstances will not.
So even though the burden of the defence is not as heavy as of the prosecution, the oral evidence tendered by the defence must also be subjected to critical scrutiny and be considered in the light of the given facts and attending circumstances of the case and human probabilities.
The evidence on record is clear that PW 4 was left attended, though was lying with injuries at the house of DW 3, till the investigating officer PW 5 came and saw him in critical condition.
The normal human conduct, which is common in the country side, is to give immediate first aid and then to make inquire of the cause for injuries and the persons who caused the same.
As DW 3 betrayed such conduct, make us to suspect the credibility and veracity of his evidence and of DW 2 that PW 4 was conscious all through and that he did not disclose the assailants ' names.
Therefore, the evidence of DW 2 and DW 3 that PW 4 was professed to have disclaimed the names of the assailants is unbelievable despite no specific cross examination was directed on that aspect.
That apart they did not tender themselves to be examined by PW 5, the investigating officer.
As regards the shedding of the light from the house of Gurbax Singh is concerned, there is uncontroverted evidence of PW 5, that he remained in the village till 9.30 p.m. on June 5, 1984 to see whether the light was emanating from the house of Gurbax Singh and found to be so and sufficient for PW 3 and PW 4 to identify the assailants.
No cross examination on this aspect was directed.
Gurbax Singh, the owner of the house was not examined by the defence.
Only his son DW 2, an youngster, came into the box and perjured the evidence.
Therefore, the claim that the light was not working for three months prior to the date of occurrence, cannot be believed.
Even assuming that there was no light, even then, PW 4 could identify his own assailants when he was attacked and chased in the course of the same transaction.
Nothing worthwhile was brought out in the cross examination to disbelieve his testimony.
He had no axe to grind against any of the accused.
To motive to make false implication of the accused was even suggested.
He cannot be expected to allow his own assailants to go unpunished and would implicate innocent persons.
Moreover the medical evidence of PW 2 fully corroborated the evidence of PW 4.
It is settled law that corroboration is not a rule of law, but one of caution as an assurance.
The conviction could be made on the basis of 268 the testimony of a solitary witness.
The occasion for the presence at the time of occurrence, opportunity to witness the crime, the normal conduct of the witness after the incident, the nearness of the witness to the victim, his pre disposition towards the accused, are some of the circumstances to be kept in view to weigh and accept the ocular evidence of a witness.
It is not the quantum of the evidence but its quality and credibility of the witness that lends assurance to the court for acceptance.
Considered in this light, we have no hesitation to conclude that PW 4 is a witness of truth and inspires us to believe his evidence.
He would, even in the absence of any light have identified the accused, who had attacked him and committed the murders of sleeping, unarmed and innocent D 1 to D 4.
The evidence of PW 3, though was severely attacked by Shri Lalit, giving our anxious consideration and subjecting to careful analysis, we find that the Special Court committed no error in accepting his evidence.
It is common knowledge that the villagers during summer sleep outside the house, court yard of the house, if any, or on the terrace of the concrete houses.
No doubt there is no stairs to the terrace of the shop whose height is only 8 and 1/2 feet.
PW 4 and PW 3 being young men it is not difficult to climb up and sleep and now it was proved providential for them.
Therefore, the absence of producing, the quilts or lack of steps is not a serious infirmity to doubt the presence of PW 3 and PW 4 and that they slept on the terrace of the shop.
In view of curfew and tense condition in the State, it would be unlikely that PW 3 would have traveled in the night to Madhok at a distance of 23 km.
The evidence on record clearly shows that the defence has freely used the entries in the case diary as evidence and marked some portions of the diary for contradictions or omissions in the prosecution case.
This is clearly in negation of and in the teeth of s.172(3) of the Code.
Section 172 reads thus: "Diary of proceedings in investigation. (1) Every police officer making an investigation under this Chapter shall day by day enter his proceedings in the investigation in a diary, setting forthwith the time at which the information reached him, the time at which he began and closed his investigation, the place or places visited by him, and a statement of the circumstances ascertained through his investigation.
269 (2) Any Criminal Court may send for the police diaries of a case under inquiry or trial in such Court, and may use such diaries, not as evidence in the case, but to aid it in such inquiry or trial.
(3) Neither the accused nor his agents shall be entitled to call for such diaries, nor shall he or they be entitled to see them merely because they are referred to by the Court; but, if they are used by the police officer who made them to refresh his memory, or if the Court uses them for the purpose of contradicting such police officer, the provisions of Section 161 or Section 145, as the case may be, of the (1 of 1872) shall apply.
" It is manifest from its bare reading without subjecting to detailed and critical analysis that the case diary is only a record of day to day investigation of the Investigating Officer to ascertain the statement of circumstances ascertained through the investigation.
Under sub section(2) the Court is entitled at the trial or enquiry to use the diary not as evidence in the case, but as aid to it in the inquiry or trial.
Neither the accused, nor his agent, by operation of sub section(3), shall be entitled to call the diary, nor shall he be entitled to use it as evidence merely because the Court referred to it.
Only right given thereunder is that if the police officer who made the entries in the diary uses it to refresh his memory or if the Court uses it for the purpose of contradicting such witness, by operation of s.161 of the Code section 145 of the Evidence Act, it shall be used for the purpose of contradicting the witness, i.e. Investigation Officer or to explain it in re examination by the prosecution, with permission of the court.
It is, therefore, clear that unless the investigating officer or the Court uses it either to refresh the memory or contradicting the investigating officer as previous statement under s.161 that too after drawing his attention thereto as is enjoined under s.145 of the Evidence Act.
The entries cannot be used by the accused as evidence.
Neither PW 5, nor PW 6, nor the court used the case diary.
Therefore, the free use thereof for contradicting the prosecution evidence is obviously illegal and it is inadmissible in evidence.
Thereby the defence cannot place reliance thereon.
But even if we were to consider the same as admissible that part of the evidence does not impinge upon the prosecution evidence.
As regards the omission of the names of the appellants in the memos sent to the Medical Officer PW 2 under exhibit D 13 and 15 it is also not evidence except as record of investigation.
It is not a rule of 270 law that the memo should bear names with cause title of accused.
It is enough if the name of the injured is mentioned in the memo.
Therefore, the omission to refer their names after the word Banam in the memos sent to the Doctor would not create any doubt that the appellants were later implicated.
Equally the prosecution cannot rely on the statement of PW 3 enclosed to the inquest reports as substantive evidence, as is done and argued with vehemence by Sri Das Bahl.
Section 174 of the Code empowers a police officer to investigate in the presence of two or more respectable witnesses and report only the cause of death and the person, if known, that has committed the offence.
Section 175 empowers him to summon any person who appears to be acquainted with the facts of the case and every person so summoned shall be bound to attend the inquest and answer truely all the questions other than questions the answers to which would have a tendency to expose him to a criminal charge or to a penalty or forfeiture.
The statement made by such person is a "previous statement" within the meaning of s.162 and it shall not be signed.
So the statement made by such a person to police officer is in the course of the investigation, and when reduced to writing, it shall be used only by the accused to contradict such witness in the manner provided by s.145 of the Evidence Act or with the permission of the court the prosecution could use it for re examination only to explain the matter referred to in his cross examination.
It is settled law that s.162 was conceived to protect an accused creating an absolute bar against the previous statement made before the police office being used for any purpose whatsoever.
The obvious reason is that the previous statement under the circumstances was not made inspiring confidence.
It enables the accused to rely thereon only to contradict the witnesses in the manner provided by s.145 drawing attention of the witness of that part of the statement intended to be used for contradiction.
It cannot be used for corroboration of a prosecution or defence witness or even a court witness, nor can it be used contradicting a defence or a court witness.
The investigating officer is enjoined to forward the inquest report to the Magistrate alongwith the statement recorded at the inquest, so that the court would see the record, at the earliest of the circumstances leading to the cause of the death of the deceased and the witness examined during the inquest.
Therefore, the statement of PW 3 record during inquest is not evidence.
It is a previous statement reduced to writing under s.162 of the Code and enclosed to the inquest report and cannot be used by the prosecution for any purpose including to show the names of the accused except to contradict the maker thereof, or to explain the same by prosecution.
271 It is true that DW 1 had stated and was not effectively cross examined that PW 3 was brought by the police in a jeep alongwith the Panch.
But he was examined at the inquest is evident from the record.
PW 3 was present at 9.00 p.m. at the time of vending liquor on credit to A 1 and A 3 and the quarrel.
PW 4 stated that PW 3 and himself slept together on the terrace.
He was examined at the inquest is corroborated by doctor 's evidence that statement of PW 3 recorded under s.162 was enclosed to the inquest reports and sent to PW 2, the Doctor alongwith the dead bodies.
There is ring of truth in the evidence of PW 3.
During curfew, in the night he would not have under taken to go to Madhok at a distance of 23 km.
The attending circumstances for coming to the scene of offence appear to be natural and probable in the ordinary course of human conduct.
Having seen that four of his companions were done to death, the instinct of self preservation and the grip of fear would have made him not to stir out from the school and mustered courage only when the police and the military people arrived at the scene at noon.
Thus he came to be examined at the earliest at inquest whereat he disclosed the names and the participation of the appellants.
Thus the evidence of PW 3 would lend to corroborate PW 4 's evidence.
In addition there is a strong circumstantial evidence against A 1 and A 3.
On his arrest on June 15, 1984, M/0/11, rifle was recovered from A 1.
As per exhibit P 17 licence, it belongs to him, the ballistic report exhibit P 20 establishes that the empty cartridges exhibit M.1 to M.7 were discharged from the bore of M/0/11.
This evidence clearly established that M/0/11 was used by A 1 in the crime.
In his examination under s.313, no explanation was given as to how M/0/11 rifle could go out from his custody for being used, in committing the crime by third parties.
From its recovery from the person of A 1, it is clear that it continued to remain in his custody from the time of user in the crime till it was recovered from him.
These circumstances coupled with oral evidence of PW 4 and PW 3 clearly establish the complicity of A 1 in committing the offences of murder of D 1 to D 4.
As equally A 3 accompanied A 1 to the liquor shop and had quarrel.
When A 1 and A 3 left the shop in anger, it is clear that they left the shop in a huff smarting from humiliation at the hands of the contractor from out side the state and their staff.
To avenge the humiliation heaped upon them, they animated to finish the prosecution party.
Obviously they chose past mid night to be sure that all would be asleep and no evidence of their crime would be available.
Thus they have strong motive to kill the deceased and to make murderous attack on PW 4.
Moreover gandasa was recovered pursuant to A 3 's statement under s.27 of 272 Evidence Act leading to its discovery and it contained human blood though blood group could not be detected due to disintegration.
The two incised injuries each on the persons of D 3 and D 4 as corroborated by medical evidence clearly establishes the participation of A 3 in attacking the deceased.
He accompanied A 1 at dead of night to the liquor shop and killed D 1 to D 4 and attempted to kill PW 4.
Thus he shared with A 1 the common intention to kill the deceased D 1 to D 4 and attempt to kill PW 4.
The production of the credit chit kept on the table in the shop would have lent corroboration to the prosecution case of the sale of liquor to A 1 and A 3 on credit.
It is not the prosecution case that it was signed by either of the accused.
It is now in evidence that it was burnt out also with the shop, though no definite evidence for cause of burning is on record, except vague suggestions but denied by the prosecution witnesses that the terrosists committed the arson and killings.
From a totality of facts and circumstances it cannot be concluded that terrorists committed the offence.
As regards A 2 we have grave doubt of his participation in the crime.
Admittedly, he had no motive to kill any of the deceased or to attack PW 4.
He did not come at 9.00 p.m. on June 4, 1984 to the liquor shop for drinking.
There is no recovery of gandasa from him, though he was arrested alongwith A 1 and A 3.
The doubt whether A 2 was likely to be a participant in the commission of this grave crime of four deaths has not been removed from our minds.
It is undoubtedly true that PW 4 had stated that A 2 attacked him with the gandasa but when he was attacked while he was fleeing for life the possibility of mistaken identity of A 2 to A 3 cannot be ruled out.
We make it clear that we are not doubting the veracity of PW 4.
In these circumstances A 2 is entitled to the benefit.
Accordingly, we hold that A 1 and A 3 have shared common intention, they had motive to kill the deceased.
They came together, killed the sleeping innocent four persons D 1 to D 4 and also attempted to kill PW 4.
Accordingly, we hold that A 1 committed the offence of murder of D 1 and D 2 punishable under s.302; D 3 and D 4 's under s.302 read with s.34 I.P.C. and attempt of murder of PW 4 punishable under s.307 read with s.34, I.P.C. A 3 shared the common intention with A 1 and also committed the said offences under s.302 read with s.34; s.307 read with s.34 I.P.C. A 3 was given the minimum sentence of imprisonment of life.
The sentences were directed to run concurrently.
273 On finding that the accused committed the charged offences, s.235(2) of the Code empowers the Judge that he shall pass sentence on him according to law on hearing him.
Hearing contemplated is not confined merely to oral hearing but also intended to afford an opportunity to the prosecution as well as the accused to place before the Court facts and material relating to various factors on the question of sentence and if interested by either side to have evidence adduced to show mitigating circumstances to impose a lesser sentence or aggravating grounds to impose death penalty.
Therefore, sufficient time must be given to the accused or the prosecution on the question of sentence, to show the grounds on which the prosecution may plead or the accused may show that the maximum sentence of death may be the appropriate sentence or the minimum sentence of life imprisonment may be awarded, as the case may be.
No doubt the accused declined to adduce oral evidence.
But it does not prevent to show the grounds to impose lesser sentence on A 1.
This Court in the aforestated Alluddin and Anguswamy 's cases held that the sentence awarded on the same day of finding guilt is not in accordance with the law.
That would normally have the effect of remanding the case to the Special Court for reconsideration.
But in the view of the fact that A 1 was in incarceration for long term of six years from the date of conviction, in our considered view it needs no remand for further evidence.
It is sufficient that the sentence of death awarded to A 1 is converted into rigorous imprisonment for life.
The sentences of death is accordingly modified and A 1 is sentenced to undergo rigorous imprisonment for life for causing the deaths of all four deceased.
The conviction of A 1 for attempt to murder PW 4 and sentence of five years ' rigorous imprisonment is also upheld and all the sentences would run concurrently.
A 2 is acquitted of all charges.
The bail bonds are cancelled.
He shall be set at liberty unless he is required in any other case.
The appeal is allowed only to the above extent.
V.P.R. Appeal Partly allowed.
| The case of the prosecution was that at about 9.00 p.m. on June 4,1984, A 1 and A 3 came to the liquor shop of D 3 wherein PW 3, D 1, D 2 and PW 4 were also present and were vending the liquor.
They sold one bottle ofliquor to A 1 and A 3 on credit.
After its consumption A 1 and A 3 demanded another bottle to which D 3 refused to sell on credit.
There on A 1 and A 3 abused them and a quarrel ensued.
Both left the shop in anger.
D 1 and D 2 slept on wooden takthposh in front of the liquor shop.
PW 3 and PW 4 climbed the roof of the shop and slept there.
During past mid night of June 4 5, 1984 at about 12.30 a.m., PW 3 and PW 4 heard gun shot fire and got up and saw with the visibility of electric light emanating from the house of one Gurbax Singh, the father of DW 2 that A 1 was firing with rifle at D 1 to D 4 and A 2 and A 3 hitting them with Gandasas (sharp edged weapons).
Seeing PW 3 and PW 4 on the terrace A 1 fired at them but they escaped uninjured and they jumped down.
PW 3 jumped towards back side of the shop and ran towards the village and hid in the school.
PW 4 jumped to the front side and ran towards .
the village A 1 fired at PW 4 257 and A 2 hit him.
He received seven bullet injuries fired by A 1 on the backside, of right leg, thigh and left side of the abdomen while he was running.
A 2 hit him on the right shoulder and had incised injury.
He ran to the house of PW 3 with bleeding injuries, knocked the door and fell down unconscious.
On June 5, 1984 at about 9.00 a.m. the Chowkidar of the village reached Kotli Police Station and reported to PW 5, H.O.who reduced F.I.R. into writing.
In the F.I.R. the chowkidar stated that he had heard gun shot firing from the side of the liquor shop.
Due to fear and the prevailing tense situation he did not come out.
Next day morning he saw several people collected at the liquor shop and saw the dead bodies of D 1 to D 4 and PW 4 was lying unconscious in the house of DW 3 and he was asked to report the matter accordingly.
The defence consented to mark F.I.R., the affidavits of the panch witnesses and constables, the fire arms licence of A 1 under Ex.p 17 and also the reports of the ballistic expert and chemical examination reports without oral evidence.
The lower court believed the direct evidence of PW 3 and PW 4 and the prosecution case that A 1 fired at the deceased with MO 11 rifle, A 2 and A 3 also participated in the attack.
The first accused was convicted under s.302 read with s.34, I.P.C. for causing the deaths of D 1, D 2, D 3 and D 4 and sentenced to death subject to confirmation by this Court.
He was also further convicted under s.307 read with s.34, I.P.C. and sentenced to undergo rigorous imprisonment for 5 years for attempt to murder PW 4.
A 2 and A 3 were convicted under s.302 read with s.34, I.P.C. for causing deaths of D 1 to D 4 and sentenced to undergo imprisonment for life.
A 2 and A 3 were convicted under s.307 read with s.34 I.P.C. for attempt to murder of PW 4 and were sentenced to undergo rigorous imprisonment for 5 years, all the sentences to run concurrently, against which the accused filed appeal u/s.14(1) of the Terrorist Affected Areas (Special Court) Act, 1984.
The appellants contended that the evidence of PW 4 was highly artificial, unbelievable and untrustworthy; that barring their evidence, there was no other evidence to connect the appellants with the commission of the crime; that the omission of the names of the accused in the case diary and memos would belie the theory of witnesses; that the appellants were implicated by suspicion and the prosecution had not 258 established the guilt of the appellant beyond reasonable doubt; that the conviction and sentence by the special court was on the same day, which contravened the mandatory provision of s.235 of the Code.
Partly allowing the appeal, this Court, HELD: 1.
The First Information Report is not substantive evidence.
It can be used only to contradict the maker thereof or for corroborating his evidence and also to show that the implication of the accused was not an after thought.
[266B C] 2.
Since the examination of first information was dispensed with by consent F.I.R. became part of the prosecution evidence.
[266B C] 3.
Ocular defence evidence, if it is not subjected to critical cross examination, is entitled to the same weight as prosecution evidence.
But merely because the prosecution, as usual, made insipid cross examination, the defence evidence is not to be believed automatically.
[267A B] 4.
Witnesses may be prone to speak lies but circumstances will not.
So even though the burden of the defence is not as heavy as of the prosecution, the oral evidence tendered by the defence must also be subjected to critical scrutiny and be considered in the light of the given facts and attending circumstances of the case and human probabilities.
[267A C] 5.
Corroboration is not a rule of law, but one of caution as an assurance.
The conviction could be made on the basis of the testimony of a solitary witness.
The occasion for the presence at the time of occurrence, opportunity to witness crime the normal conduct of the witness after the incident, the nearness of the witness to the victim, his pre disposition towards the accused, are some of the circumstances to be kept in view to weigh and accept the ocular evidence of a witness.
It is not the quantum of the evidence but its quality and credibility of the witness that lends assurance to the court for acceptance.
[267H 268B] 6.
The case diary is only a record of day to day investigation of the Investigating Officer to ascertain the statement of circumstances ascertained through the investigation.
Under Section 172(2) the Court is entitled at the trial or inquiry to use the diary not as evidence in the case, but as aid to it in the inquiry or trial.
Neither the accused, nor his agent, by operation of sub section
(3), shall be entitled to call the diary, nor shall he be entitled to use it as evidence merely because the Court 259 referred to it.
Only right given thereunder is that if the police officer who made the entries in the diary uses it to refresh his memory or if the Court uses it for the purpose of contradicting such witness, by operation of s.161 of the Code and s.145 of the Evidence Act, it shall be used for the purpose of contradicting the witness, i.e., Investigation Officer or to explain it in re examination by the prosecution, with permission of the Court.
It is, therefore, clear that unless the investigating officer or the court uses it either to refresh the memory or contradicting the investigating officer as previous statement under s.161 that too after drawing his attention thereto as is enjoined under s.145 of the Evidence Act.
The entries cannot be used by the accused as evidence.
[269C G] 7.
The memos sent to the Medical Officer are not evidence except as record of investigation.
It is not a rule of law that the memo should bear names with cause title of accused.
It is enough if the name of the injured is mentioned in the memo.
[269H 270A] 8.
Section 174 of the Code empowers a police officer to investigate in the presence of two or more respectable witnesses and report only the cause of death and the person if known, that has committed the offence.
Section 175 empowers him to summon any person who appears to be acquainted with the facts of the case and every person so summoned shall be bound to attend the inquest and answer truely all the questions other than questions the answers to which would have a tendency to expose him to a criminal charge or to a penalty or forfeiture.
The statement made by such a person is a "previous statement" within the meaning of section 162 and it shall not be signed.
So the statement made by such a person to police officer is in the course of the investigation, and when reduced to writing, it shall be used only by the accused to contradict such witness in the manner provided by section 145 of the Evidence Act or with the permission of the court the prosecution could use it for re examination only to explain the matter referred to in his cross examination.[270B E] 9.
S.162 was conceived to protect an accused creating an absolute bar against the previous statement made before the police officer being used for any purpose whatsoever.
The obvious reason is that the previous statement under the circumstances was not made inspiring confidence.
It enables the accused to rely thereon only to contradict the witnesses in the manner provided by s.145 drawing attention of the witness of that part of the statement intended to be used for contradiction.
It cannot be used for corroboration of a prosecution or defence witness or even a court witness, nor can it be used contradicting a 260 defence or a court witness.
The investigating officer is enjoined to forward the inquest report to the Magistrate alongwith the statement recorded at the inquest, so that the court would see the record, at the earliest of the circumstances leading to the cause of the death of the deceased and the witness examined during the inquest.
[270E G] 10.
The statement of witness PW 3 recorded during inquest is not evidence.
It is a previous statement reduced to writing under s.162 of the Code and enclosed to the inquest report and cannot be used by the prosecution for any purpose including to show the names of the accused except to contradict the maker thereof, or to explain the same by prosecution.
[270G H] 11.
On finding that the accused committed the charged offence, s.235(2) of the Code empowers the Judge that he shall pass sentence on him according to law on hearing him.
Hearing contemplated is not confined merely to oral hearing but also intended to afford an opportunity to the prosecution as well as the accused to place before the Court facts and material relating to various factors on the question of sentence and if interested by either side to have evidence adduced to show mitigating circumstances to impose a lesser sentence or aggravating grounds to impose death penalty.
Therefore, sufficient time must be given to the accused or the prosecution on the question of sentence to show the grounds on which the prosecution may plead or the accused may show that the maximum sentence of death may be the appropriate sentence or the minimum sentence of life imprisonment may be awarded, as the case may be.
If the accused declines to adduce oral evidence, it does not prevent to show the grounds to impose lessor sentence on.
[273A D] 12.
The sentence awarded on the same day of finding guilt is not in accordance with the law.[273C D] Allauddin vs State of M.P., J.T.(1989) 2 SC 171 and Anguswamy vs State of Tamilnadu, J.T.(1989) 2 SC 184, referred to.
|
No. 254 of 1968.
Petition under article 32 of the Constitution of India for the enforcement of fundamental rights.
V. M. Tarkunde, V. M. Limaye and section section Shukla for the petitioners.
V. section Desai, M. C. Bhandare and section P. Nayar, for the res pondent.
The Judgment of the Court was delivered by P. Jagamohan Reddy, J.
The petitioner challenges the vires of the Bombay Tenancy and Agricultural Lands (Amendment) Act, 1964 (Maharashtra Act XXXI of 1965) (hereinafter referred to as the 'impugned Act ').
The parent Act is the Bombay Tenancy and Agricultural Lands Act 1948 (Bombay Act XLVII of 1948) (hereinafter referred to as 'the parent Act ').
In 1956 the State Legislature amended the parent Act by Bombay Tenancy and Agricultural Lands (Amendment) Act 1956 (Bombay Act XIII of 1956) (hereinafter referred to as 'the Amendment Act ') which came into force on 1st August 1956.
The State of Bombay undertook legislation in furtherance of its policy of social welfare and to give effect to agrarian reform.
The parent Act was passed by the Bombay State Legislature in order to amend the law which governed the relationship between the landlord and tenants of agricultural lands, the object sought to be achieved being as indicated in its preamble that "on account of the neglect of a landholder or disputes between the landlord and his tenants, the cultivation of his estate has as a result suffered or for the purposes of improving the economic and social conditions of peasant or ensuring the full and efficient use of land for agriculture, it is expedient to assume management of estates held by the landholders and to regulate and impose restrictions on transfer of agricultural lands, dwelling houses, sites and lands 663 appurtenant thereto belonging to or occupied by agriculturists, agricultural labourers and artisans in the province of Bombay and to make provisions for certain other purposes".
By the Constitution first Amendment Act 1951 the parent Act was included in the Ninth Schedule and came within the pur view of article 31B of the Constitution.
In 1956 the State Legislature in order to implement the directive principles of the State Policy set out in Aft. 38 and 39 of the Constitution of India by seeking to promote the welfare of the tenants, the landless peasants and labourers and to enable them to acquire land and with a view to bring about equitable distribution of ownership of land, passed the amendment Act which received the assent of the President on March 16, 1956.
This Act made further changes in the relationship of landlord and tenants which were more drastic.
The main effect of the amendments of Section 32 to 32 B was that on the 1st April 57 (hereinafter referred to as the tiller 's day) every tenant was, subject to the other provisions deemed to have purchased from his landlord free of all encumbrances subsisting thereon, on the said day, the land held by him as a tenant subject to certain conditions (vide Section 32).
The tenant under Section 32 A was deemed to have purchased the land up to the ceiling area.
It was further provided by Section 32 B that if a tenant held the land partly as owner and partly as tenant, but the area of the land held by him as owner is equal to or exceeds the ceiling area he shall not be deemed to have purchased the land held by him as a tenant under Section 32.
Section 32 E provided that the balance of any land after the purchase by the tenant under Section 32 shall be disposed of in the manner laid down in Section 15 as if it were land surrendered by the tenant.
Section 32 F further provided that in the case of disabled landholders namely minors, widows or persons subject to any mental or physical disability or where the tenants are equally disabled as aforesaid or where they are members of the Armed Forces, the tiller 's day was postponed by one year after the cessation of disability.
As a result of the Amendment Act, on the 1st of April, 1957 the relationship of landlord and tenant came to an end, the landholder ceased to be a tenure holder and the title thereto was vested in the tenants defeasible only on certain specified contingencies.
The relationship of landholder and tenant was thus transformed into a relationship of a creditor and debtor, the erstwhile landlord being entitled only to recover the price fixed under the provisions of the Amendment Act in the manner provided therein under Section 32G read with 32H, the price which.
was to be paid by the tenant Was to be determined by the tribunal as soon 664 as may be after the tiller 's day and in the manner provided thereunder subject however to the amount so determined not being less than 20 times and not more than 200 times of the assessment.
An appeal against the decision of the Tribunal was provided to the State Govt.
under Section 32 J. The mode of payment by the tenant of the price fixed by the Tribunal is prescribed under Section 32 K which shall be payable in annual instalments not exceeding 12, with simple interest at 4 1/2% per annum, on or before the said dates as may be prescribed by the Tribunal and 'the tribunal shall direct that the amount deposited in lumpsum or the amount of instalments deposited shall be paid to the former landlord.
The landlord however did not have the right to recover the amount by recourse to a Court of law.
The only way in which he could recover it if the instalments were not duly paid by the tenant voluntarily was by an application to the concerned authorities under the Revenue recovery Act to recover it as arrears of land revenue (Section 32 L) which provision it may be stated was subsequently deleted by the impugned Act under Section 32 M.
On the payment of the price either in lumpsum or of the last instalment of such price the tribunal was required to issue a certificate in the prescribed form to the tenant purchaser in respect of the land, which certificate shall be the conclusive evidence of purchase.
If the tenant fails to pay the lumpsum within the period prescribed for, or is at any time in arrears of four instalments the purchase was to be ineffective and the land was to be put at the disposal of the Collector and any amount deposited by such tenant towards the price of the land was to be refunded to him.
It 'is important to note that Section 32 P provides that if the tenant fails to exercise his right to purchase or the sale becomes ineffective on account of default of payment of purchase price the tenant shall be evicted and the land shall be surrendered to the former landlord.
Sections 32 Q and 32 R provide that the amount of purchase price was to be applied towards the satisfaction of debts and the purchaser was to be evicted from the land purchased by him as aforesaid if he fails to cultivate the land personally.
The Amendment Act was challenged by a petition under article 32 but this Court held that it is protected by article 31A of the Constitution and is therefore valid.
We shall presently refer to that decision but the petitioner 's grievance is against the changes that have been affected by the impugned Act in the law as it stood after Amendment Act.
It is the contention of the learned Advocate for the Petitioner that he changes that transgress the fundamental rights of the petitioner are (1) that if the tenant does not pay the instalments by the end of twelve years but before the end of the period he makes an application that he is at the time incapable of paying the arrears within the time and 665 pays one instalment together with the interest on the total amount of one year 's instalment, the period of payment is extended by another 12 years.
(2) where he fails to pay the price in lumpsum or is in arrears of four instalments where the number of instalments fixed is four or more and the purchase has thereby become ineffective even then if he was in possession of the land on the 1st of May '65 and files an application within six months therefrom or from the date of default of the payment of price in lumpsum or of the last instalment whichever is later and applies to the tribunal to condone the default on the ground that there being sufficient reason as he was incapable of paying the price in lumpsum or the instalment within the time, the tribunal can if it is satisfied condone the default and allow further time, in the case of payment of lumpsum one year and for payment of arrears in the case where payment is by instalments by increasing the total number of instalments to sixteen.
(3) Even when the arrears are not paid as required under the law during the extended period and sale becomes ineffective and the tenant purchaser has nevertheless continued in possession, the landlord has no right to have the tenant purchaser evicted, till the tribunal admits that it has failed to recover the amount of the purchase price.
Shri Tarkunde contends that these changes have effected the petitioner 's right to property in that he has neither the right to recover the amount through a Court of law nor has he any hope of recovering it through the procedure prescribed by the impugned Act within any reasonable time; that in spite of the fact that under the previous law the sale had become ineffective under 32 H or 32 G by the default of the tenant purchaser to pay the price the Collector under 32 P was required to give possession to the landlord but under the impugned Act that right has become illusory because the landholder has no effective remedy either to recover the amount or to recover the land and that all that the tenant has to do is to sit tight, he need not apply for extension nor need he pay the instalment nor is there any time fixed for the tribunal to determine that it has failed in the efforts to recover the amount under the revenue recovery Act.
No distinction in fact, it is said, has been made between a person who is unable to pay and one who will not pay.
In view of these contentions 'it is necessary to point out that this very petitioner had challenged the constitutionality of the Amendment Act in Sri Ram Ram Narain Medhi vs State of Bombay (1) on the ground that it was beyond the competence of the legislature; that legislation not being protected by article 31(A) had infringed articles 14, 19 and 31 of the Constitution; and that it was a piece of colourable legislation vitiated in part by excessive (1) ; 666 delegation of legislative power to the State.
On behalf of the Respondent, it was urged that the impugned legislationfall within entry 18 in List II of the Seventh Schedule to the Constitution, that it provided for the extinguishment or modification of rights to estates and was as such protected by article 31 A of the Constitution and that there was no excessive delegation of legislative power.
This Court held (1) that the legislation fell within entry 18 of List II and therefore the legislature was competent to enact the Amendment Act; (2) that the word estate applied to landholders as defined by Section 2(5) of the Bombay Land Revenue Code which is equally applicable to tenure holders and occupants of unalienated lands; (3) that the word 'landholder ' as defined in Section 2(9) of the parent Act made no distinction between alienated and unalienated lands and showed that the interest of the landholder fell within the definition of 'estate ' contained in Section 2(5) of the Bombay Land Revenue Code ; (4) that there was no warrant for the proposition that extinguishment or modification of any rights in estates as contemplated by article 3 1 A(.1) (a) of the Constitution must mean only what happened in the process of acquisition of any estate or of any rights therein by the State.
The language of the Article was clear and unambiguous and showed that it treated the two concepts as distinct and different from each other, and (5) that Sections 32 to 32 R of the Amendment Act contemplated the vesting of title in the tenure on the tiller 's day defeasible only on certain specified contingencies and intended to bring about an extinguishment or modification of rights in the estate within the meaning of article 31A(1)(a) of the Constitution.
For the aforesaid reasons it was held that the Amendment Act was not vulnerable as being violative of articles 14, 19 and 31 of the Constitution.
This decision concludes the most important question whether the petitioner 's fundamental rights are infringed under articles 14, 19 and 31 as the parent Act as well as the amending Act is now protected by article 31A of the Constitution.
Neither the question of discrimination nor of compensation or its adequacy can be gone into nor can the unreasonableness of the provisions under which the landlords title has been extinguished nor the manner in which the price is to be paid can be challenged.
Once it has been held that article 31A applies the petitioner cannot complain that his rights under articles 14, 19 and 31 of the Constitution have been infringed.
This protection is available not only to Acts which come within its terms but also to Acts amending such Acts to include new items of property or which change some detail of the scheme of the Act provided firstly that the change 667 is not such as would take it put of article 31A or by itself is, not such as would not be protected by it and secondly that the assent of the President has been given to the amending statute.
To put it differently as long as the amendment also relates to a scheme of agrarian reforms providing for the acquisition of any estate or of any right thereunder or for extinguishment or modification of such right the mere transfer of the tenure from one person to another or the payment of the price in instalment or even the postponement of payment by a further period cannot be challenged under articles 14, 19 and 31.
In this case we have noticed that the impugned legislation has merely amended that provision which related to the recovery of the amounts from the tenant who has become purchaser and the postponement of the time, of ineffectiveness of sale till the tribunal has tried and failed to recover the amount from the tenant purchaser.
The only way under which the petitioner could have recovered the amounts under the Amendment Act was by an application to the Collector under the Revenue Recovery Act for collecting it as arrears of land revenue but that provision under Section 32 L has now been deleted.
While the vesting of the title of the tenure in the erstwhile tenant is still defeasible only on certain specified contingencies as was before the impugned Act it only modified the previous provisions to the extent that the erstwhile tenant has been given the benefit of having the payment postponed or instalments increased by requiring the tribunal to make an enquiry as to whether there were sufficient reasons for the tenant purchaser making a default and if it is satisfied to condone the delay and extend the period of payment.
It also vested in the tribunal instead of the Collector the power to make the recovery on behalf of the landholder.
It may also be noticed that under the impugned Act the sale still becomes ineffective as was under the amendment Act when the amount is not recovered with this difference that under the former it has to be shown that the tenant purchaser was not in a position to pay.
No doubt before the impugned Act, if the tenant purchaser did not pay, the Collector could take action under the revenue recovery Act to recover the amount and if he did not recover it the sale became ineffective and the landlord could be put in possession by evicting the tenant purchaser provided he was entitled to get possession of it under the Act, as when his holdings do not come within the ceiling.
The basic position still remains the same after the impugned Act and there is nothing in the Amendment Act which is destructive of the scheme of agrarian reform which the legislation seeks to implement and which is protected under article 31A of the Constitution.
This view of ours is amply borne out also by the statement of objects and reasons which impelled the legislature to state the difficulty that was being felt in the implementation of the agrarian 668 land reforms and indicate how it sought to find a remedy and got over it.
This is what was stated "According to provisions of Section 32 K, 32 L and 32 M of the Bombay Tenancy Agricultural Land Act 1942; it is left to the tenant to deposit with the tribunal the purchase of the land which is deemed to have been purchased by him under Section 32 of that Act.
If he fails to deposit the price in lumpsum or instalments the purchase becomes ineffective and under Section 32 P the tenant can be summarily evicted from the land.
It has been brought to the notice of the Government that in the case of an Act a large number of tenants specially belonging to the Scheduled Caste and Scheduled Tribe, the purchase is in danger of being ineffective for failure to deposit the sale price on due dates.
It is noticed that these tenants being illiterate and socially backward have failed to deposit the amount more out of ignorance than willful default.
Unless therefore immediate steps are taken to provide for recovery of purchase price through Government agency a large number of tenants are likely to be evicted from their lands due to purchase becoming ineffective.
This will result in defeating the object of the tenancy legislation.
To avoid this result, it is therefore considered that the agricultural lands tribunal showed be empowered to recover the, purchase price from tenants as arrears of land revenue and until the tribunal has failed to recover the purchase price, the purchase should not become ineffective.
It is also considered that the benefit of these provisions should be given to tenants whose purchase has already become ineffective but who have not yet been evicted from their lands under Section 32 P.
This bill is intended to achieve these objects".
We do not therefore think that the impugned Act has in any way affected the main purpose of the Act or the object which it seeks to achieve nor do the amendments effected thereby take the provisions out of the protection given to it under article 31A of the Constitution.
Shri Tarkunde has referred us to the case of Maharana Shri Jayvantsinghji Ranmalsinghji etc.
vs The State of Gujarat (1) in support of his contention that the impugned Act infringes article 19(1)(f) of the Constitution and is not saved by clause 5 thereof as the provisions of the said Act are unreasonable in that the indefinite postponement of the recovery of the price makes the payment thereof illusory, and even after the sale has become ineffective the landholder is not entitled to recover the land.
What fell for determination in the case referred to was whe ther as a result of the provisions of the Bombay Land Tenure (1) [1966] Supp.
S.C.R. 411.
669 Abolition Laws (Amendment) Act 1958, particularly under Sec tions 3 and 4 read with Section 6 thereof certain non permanent tenants were deemed to have become permanent tenants as from the commencement of the Bombay Taluqdari Tenure Abolition Act 1949 and thereby became entitled to acquire the tenure on payment of 6 times the assessment or 6 times the rent instead of atleast the minimum of 20 times to 200 times the assessment which right infringed the fundamental right of the landlord to acquire hold and dispose of property.
This result it was contended had substantially deprived the petitioners of the right which they acquired on the tiller 's day by reason of the provisions contained in Section 32 and other provisions in the parent Act as amended from time to time.
The majority held that the provisions of Sections 3, 4 and 6 of the Bombay Land Tenure Abolition Laws (Amendment) Act, 1958 insofar as they deemed some tenants as permanent tenants in possession of Taluqdari land were unconstitutional and void in that under the guise of changing the definition of a permanent tenant and changing a rule of evidence, it really reduced the purchase price that the petitioners were entitled to receive from some of their tenants on the 'tiller 's day ' under Section 32 H of the parent Act.
It would appear from the Judgment of section K. Das, J. speaking for himself and Sinha C.J., that the constitutional validity of the relevant provisions of the Taluqdari Abolition Act 1949 and the parent Act read with the Amendment Act had not been challenged before them.
The decision of Dhirubha Devisingh Gohil vs The State of Bombay (1) and Shri Ram Ram Narain Medhi vs The State of Bombay (1) were cited as upholding the constitutionality of the relevant provisions of those 2 Acts.
After pointing out that what has been challenged before them was the constitutional validity of the Bombay Act LVII of 1958 particularly the provisions 3, 4 and 6 of that Act, and referring to the earlier decision that this Court had held that Sections 32 to 32 R of parent Act read with the Amendment Act were designed to bring about an extinguishment or in any event a modification of the landlords rights in the estate within the meaning of article 31A(1)(a) of the Constitution, it was observed that the right which the petitioners got of receiving the purchase price was undoubtedly a right to property guaranteed under article 19(1)(f) of the Constitution and was not saved by clause 5 thereof nor are the cases before them protected by article 31A. section K. Das, J. gave the following reasoning for the aforesaid conclusion at page 438 439 : "The petitioners have three kinds of tenants permanent tenant protected tenants, and ordinary tenants.
On (1) ; (2) [1959] Suppl.
1 S.C.R. 489.
670 April 1, 1957, the petitioners ceased to be tenure holders in respect of all tenants other than permanent tenants and became entitled only to the purchase price under ' section 32H.
If any tenant claimed on that date that he was a permanent tenant, he had to establish his claim in accordance with section 83 of the Revenue Code.
Such a claim could be contested by the tenure holder whenever made by the tenant.
But by the impugned Act 1958, all this was changed, and unless the tenure holder made an application within six months of the commencement of the impugned Act, 1958, he was not in a position to say that a particular tenant who was in possession of tenure land for continuous period aggregating twelve years on and before August 15, 1950, was not a permanent tenant.
We are unable to hold that the six months ' limit imposed by section 5 of the impugned Act, 1958, is in the circumstances, a reasonable restriction within the meaning of article 19(5) of the Constitution.
" The decision in the above case is clearly inapplicable to the facts and circumstances of the case before us and consequently in the view we have taken this petition is dismissed with costs.
G.C. Petition dismissed.
| In March 1969, the respondent State issued a notification under section 4 of the Land Acquisition Act, 1894, as amended by the Punjab Legislature, for acquisition of the appellants ' land.
The notification stated that the land was likely to be required to be taken by Government, at public expense, for a public purpose, namely,.
the setting up of a factory for the starting of an industry and, further that action under section 17(2)(c) would be taken on the, ground of urgency and provisions of section 5A will not apply in regard to the said acquisition.
The appellants filed a writ petition in the High Court questioning the validity of the acquisition on the ground, inter alia, that there was no urgency in the mattelr, of requiring the land ', therefore recourse to section 17 was not justified.
The state government pleaded that since the Government of India had extended the time for completion of the project till April 30, 1969, it, had become necessary to take immediate steps to acquire the land.
The High Court dismissed the petition.
In the appeal to this Court it was contended that (i) the acquisition in question being one for the benefit of a Company, proceedings should have been taken under sections 38 to 44B of the Act,, and that there was no public purpose involved in the case; (ii) there was no urgency and hence recourse could not be had to section 17 of the Act; and (iii) section 17(2) (c) was inapplicable to the facts of the case, because, though section 17(2)(c) read by itself covered a very large field, applying the ejusdem generis Rule that provision had to be given a narrower meaning because of the provisions of section 17(2)(a) and (b).
Dismissing the appeal, HELD : (i) On the facts of the case the purpose for which land was acquired was a public purpose.
The question whether the starting of an industry is in public interest or not is essentially a question that has to be decided by the Government.
So long as it is not established that the acquisition is sought to be made for some collateral purpose or that there is a colourable exercise of power the declaration of the government that it is made for a public purpose is not open to challenge.
[874 E G] Smt; Somavanti and Ors vs State of Punjab, [1963] 2 S.C.R. 774 and Raja Anand Brahma Shah vs State of U.P., ; , referred to.
In view of the fact that the State Government had contributed towards the cost of acquisition it was not necessary to proceed with the acquisition under Part VII of the Act.
[875 A] 8 7 2 (ii) On the facts of the case there was urgency.
The conclusion of the Government in a given case that there was urgency is entitled to weight, if not conclusive.
(iii) In interpreting cl.
(c) of section 17(2) the rule of ejusdem generis, ,cannot be applied.
If a given provision is plain and unambiguous and the legislative intent is clear there is no occasion to call into aid that rule.
Under cls.
(a), (b) and (c) of sub section
(2) of section 17 the decision to acquire, land has not to be made by the same authority but by different authorities.
Further, the conditions under which the acquisition has to be made differ from clause to clause.
Therefore, there is no basis to say that the general words in cl.
(c) follow the particular and specific words in cls.
(b) and (c).
[877 E; 879 H] State of Bomby vs Ali Gulshan, , Lilavati Bai vs Stat of Bombay, ; , K, K. Kochuni vs State of Madras, A.I.R. 1960 S.C. 1050, referred to.
|
minal Appeal Nos.
139 to 141 of 1968.
Appeals by special leave from the judgments and orders dated January 31, 1968 of the Punjab and Haryana High Court in Criminal Appeals Nos. 653, 655 and 654 of 1967 respectively.
R. L. Kohli, for the appellants (in all the appeals).
Harbans Singh, for the resondent (in all the appeals).
The Judgment of the Court was delivered by Grover, J.
Hazara Singh, his brothers Bachan Singh and Jamail Singh and three others Bhajan Singh, Baj Singh and Balwant Singh were tried under section 148 of the Indian Penal Code for being members of an unlawful assembly and in prosecution of the common object of that assembly which was to attempt to murder the police party, while these persons were armed with deadly weapons Eke pistol and rifle, having committed the offence on the midnight intervening 21st and 22nd July 1964.
Hazara Singh and Bhajan Singh were also charged under section 307, Indian Penal Code, while the other four were charged under section 307 read with section 149 of the Code for Hazara Singh and Bhajan Singh having fired pistol shots at the police party with such intention and under such circumstances that if they had there by caused the death of any member of the police party they would have been guilty of murder.
Hazara Singh and Bhajan Singh were further tried on a charge under section 25 of the Indian Arms Act.
The learned Sessions Judge found that all the six persons were proceeding towards Pakistan in order to smuggle six bags containing 40 Kg.
cardamom each.
Hazara Singh and Bhajan Singh were armed with a rifle and a pistol respectively and when challenged by the police party they fired shots from their weapons at the police party in their attempt to murder them in pursuance of the common object of them all and as such they were guilty of an offence under section 148 of the Indian Penal Code.
They were con 676 victed and sentenced to one year 's rigorous imprisonment on that count.
Hazara Singh and Bhajan Singh were found guilty of the offence under section 307 of the Indian Penal Code while their co accused were found guilty of the offence under sections 307 and 149, Indian Penal Code, and each one of them was sentenced to rigorous imprisonment for a period of five years and payment of a fine of Rs. 5001.
The sentences were to run concurrently.
Bhajan Singh and Hazara Singh were further found guilty of the illegal possession of firearms under section 25 of the Arms Act and were sentenced to rigorous imprisonment for one year each.
On appeals to the High Court the conviction of the aforesaid persons was upheld but the sentences of Bachan Singh, Jarnail Singh, Baj Singh and Balwant Singh were reduced to three years ' rigorous imprisonment.
All the convicted persons have filed appeals to this Court (Cr.
139 141/68) by special leave.
These shall stand disposed of by this judgment.
The prosecution story was that Inderjit Singh P.W. I who was posted as Deputy Superintendent of Police P.A.P. Border, Khem Karan, had received information on 31st July 1964 that a party of smugglers would be smuggling some goods to Pakistan during the night.
He organised a raiding party consisting of Sub Inspector Ajit Singh P.W. 1,5, Agya Ram P.W. 12, A.S.1s.
Darshan Singh, Nand Singh and Mulakh Raj, Head Constables Surjit Singh P.W. 3, and Ajai Singh P.W. 13.
The entire raiding party was divided into four groups.
Each group was headed by one of the officers including Inderjit Singh D.S.P.
At about midnight the police party noticed some persons coining from the side of village Lakhna by the katcha path with some mares.
The path led to Pakistan.
It was a moonlit night but was cloudy at that time.
It is unnecessary to go into the details which will be presently noticed of how the firing of the shots took place by the accused persons and how they were identified and arrested.
Four of them were taken into custody at the spot but Hazara Singh and Bhajan Singh escaped on their mares ' They were arrested later and on their disclosure a rifle and 'a revolver were recovered.
No one was injured and although some empty cartridges were found but no attempt was made to find the bullets which are alleged to have been fired by the party of the appellants.
The evidence of the police officers was consistent and we may only refer to the deposition of Inderjit Singh D.S.P. who appeared as P.W. 1 According to him when the culprits were at a distance of 25 to 30 karams (One karam is equal to 5 67 7 feet) he alerted members of the police party to be on their guard and directed Sub Inspector Ajit Singh to challenge the culprits and inform them that the police party was holding its positions and they should stop proceeding further.
Ajit Singh accordingly challenged the culprits.
Thereupon the, leader of the party fired a shot at the police party.
Inderjit Singh then ordered Sub Inspector Agya Ram to fire a light pistol so that there might be light and it might be possible to identify the culprits.
Agya Ram fired a shot and in the light that emerged the leader of the party was identified as Hazara Singh appellant who was riding a mare and who had a rifle in his hand.
He was followed by Bhajan Singh or Harbhajan Singh who also was riding a mare and had a loaded, bag and was armed with pistol.
He was followed by the other four on foot.
These persons then shouted to their companions Hazara Singh and Bhajan Singh that they should open fire on the police party.
Thereupon Hazara Singh and ' Bhajan Singh started firing shots from their respective weapons.
Sub Inspector Ajit Singh ordered the police party to open fire in defence.
Four Head Constables fired two shots each from their rifles at the culprits.
At this stage Agya Ram fired another light pistol shot.
Hazara Singh and Bhajan Singh ran away on their mares throwing away the bags.
The other four persons were found lying down on the ground.
There can be no manner of doubt that if Hazara Singh and Bhajan Singh fired shots at the police party and even though no one was injured the appellants would be guilty of the offences with which they were charged.
The real question is whether it had been proved beyond doubt that the shots were fired at the police party.
There could be two possibilities in such a situation, one could be of the shots being fined in the direction of the police party or taking aim at them and the other could be of the shots being fired in the air or in some other direction and not in the direction of the police party merely to create confusion for the purpose of running away.
On the evidence of Inderjit Singh P.W. 1 himself it was a moonlit night but owing to the weather being cloudy it was dark and light pistol shots bad to be fired by Sub Inspector Agya Ram on two occasions in order to provide sufficient light for seeing and identifying them.
The light provided by these pistol shots admittedly lasted only for 2 or 2 1/2 seconds.
If the shots which are alleged to have been fired by Hazara Singh and Bhajan Singh had been fired,at the time when there was light as a result of the firing of the light pistol shots by Sub Inspector Agya Ram then it could be said to have been established that the Deputy Superintendent of Police and the other witnesses could have seen in which direction the fire arms were fired by Hazara Singh and 678 Bhajan Singh and their statement could have been accepted that ,the shots had been fired at them.
But from the evidence of Inderjit Singh as also of Sub Inspector Agya Ram who actually fired the light pistol shots which provided the light on two occasions it is quite clear that the shots which were fired by Hazara Singh and Bhajan Singh were not fired during the few seconds there was light as a result of the light pistol shots of Agya Ram.
In other words the shots which are stated to have been fired by the aforesaid two appellants were fired in complete darkness when it was not possible for any member of the police party to see the direction in which they were fired or the aim which was taken by Hazara Singh and Bhajan Singh.
It is not possible to say from this evidence that Hazara Singh and Bhajan Singh fired the shoots in the direction of the police party or at them, and the possibility that the shots were fired in the air cannot be excluded.
Thus the conviction under section 307 of Hazara Singh and Bhajan Singh and of the other appellants under section 307 read with section 149, Indian Penal Code cannot be maintained and they must ' be acquitted of that charge.
It is unfortunate that the judgment of the High Court ' is very sketchy and there is hardly any discussion or examination of all the above material facts.
As regards, the conviction of the appellants under section 148 of the Indian Penal Code we find it difficult to uphold the same.
According to that section whoever is guilty of rioting being armed with deadly weapons or with anything which used as a weapon of offence, is likely to cause death, shall be punished with imprisonment of either description for a term which may extend to three years, or with fine, or with both.
Rioting is defined by section 146 which provides that whenever force or violence is used by an unlawful assembly or any member thereof in prosecution of the common object of such assembly every member of such assembly is guilty of the offence of rioting.
Section 349 gives the meaning of the word "force".
The learned counsel for the State has not been able to show how any force or violence is proved to have been used by the appellants in prosecution of the common object of the unlawful assembly of which they were members.
With the exception of the firing of the shots in a direction which cannot be determined no attempt was made by any of the appellants to use any force or violence on any member of the police party.
Consequently the conviction of the appellants under section 148 must also be set aside.
As regards the conviction of Hazara Singh and Bhajan Singh under section 25 of the Indian Arms Act it is most unfortunate that the witnesses who were produced with regard to the disclosure statements made by them and the recoveries effected at their 6 7 9 instance are of such a type that their evidence could never have been believed by any court.
Lal Singh P.W. and Karnail Singh P.W. admitted that they had been joining in the police raids and had been appearing as witnesses for the police for the last 15 years.
Apart from that the statements made by them were so similar particularly with regard 'to the manner in which they happened to join the investigation that their whole evidence looks tutored and unconvincing.
P.W.11 Hakam Singh admitted that Pooran Singh was the son of his cousin Geja Singh and that he had been convicted in a case of murder and sentenced to life imprisonment.
Charan Singh, uncle of the two appellants had appeared as a witness against Pooran Singh in that case.
He was obviously an inimical witness.
It is again surprising that the High Court in its very sketchy judgment had made no mention of these salient facts and has contended itself by saying that there was nothing on the record to indicate that the appel lants had been falsely implicated.
The conviction of Hazara Singh and Bhajan Singh, therefore, cannot be maintained under section 25 of the Arms Act.
In the, result the appeals are allowed and the convictions and sentences of all the appellants are here by set aside.
The bail bonds of the appellants who were ordered to be released on bail by this Court on July 15, 1968 shall stand discharged.
| The first respondent applied to the Deputy Commissioner, Lakhimpur for settlement of a Tea Garden for "special cultivation of tea".
In March, 1964 the Government of Assam permitted the settlement on payment of Rs. 3.86 lakhs as premium.
Upon the respondent failing to make payment of the amount, the State Government directed the auction of the tea garden.
The first respondent thereafter moved a petition in the High Court for a declaration inter alia that the State Government had acted illegally in fixing the amount of premium.
The High Court allowed the petition holding that the order fixing the premium was not in conformity with rule 40 framed under the Assam Land Revenue Regulations which required the State Government to fix the rate of premium for a particular locality; it did not empower the Government to fix the premium payable by an intending holder in a particular case.
On appeal to this Court, HELD : The High Court was in error in setting aside the order passed by the Government of Assam and in declaring that the offer to settle the tea garden on payment of the amount specified Rs. 3,86,000 was not in conformity with rule 40.
There was no warrant for the assumption made by the _High Court that in settling the premium to be fixed in respect of its own property, the Government is bound to fix the premium generally in respect of a region.
The Government is by the Act or the Rules not disqualified from fixing the premium to be paid in respect of an individual tea garden.
In the absence of any indication to the contrary a tea garden may appropriately be regarded as a locality within the meaning of Rule 40.
The rate of premium may be fixed by the State Government acccording to its commercial value.
|
minal Appeal No. 134 of 1965.
Appeal by special leave from the judgment and order dated May 14, 1965 of the Patna High Court in Government Appeal No. 25 of 1962.
Nur ud din Ahmed and A. K. Nag, for the appellant.
D. P. Singh, Anil Kumar and Shivpujan Singh, for the respondent.
The Judgment of the Court was delivered by Sikri, J.
This appeal by special leave is directed against the judgment of the Patna High Court allowing the appeal filed by the State Government, and convicting the appellant, Mohd. Usman, under section 5 (3) (a) of the Indian (IV of 1884) hereinafter referred to as the Act and sentencing him to undergo rigorous imprisonment for two years and also to pay a fine of Rs. 2,000, in default to undergo rigorous 429 imprisonment for a further period, of six months.
The High Court, however, agreed with the Magistrate that the appellant could not be held guilty under section 304A, IPC.
The High Court did not find the two other accused persons, Abdul.
Rahinan and Abdul Aziz, guilty, and State appeals against them were dismissed.
The prosecution case, in brief, is that an explosion occurred in appellant 's factory at Matkuria, PS Dhanbad, on April 28, 1960.
As a result of the explosion Kashi Bhokta, Gobardhan Bhokta and Mohan Bour died.
On that day, the appellant, who manufactures fireworks, had allowed minors (under 16 years of age), viz., Kashi Bhokta, Guhi Bhokta Gobardhan and Subhas Chamar to work in the manufacture of fireworks, thus contravening r. 16 of the Explosives Rules, 1940 hereinafter referred to as the Rules made under the Act, and had thereby committed an offence punishable under section 5 (3) (a) of the Act.
The High Court, disagreeing with the Magistrate who tried the case, held that "the three minor boys, Kashi, Guhi and Subhas, were employed and Gobardhan, in any event, was allowed to enter the premises licensed under the Rules for manufacture of explosives" in contravention of r. 16, and convicted the appellant as already stated.
Section 5(3) of the Act reads thus: "Any person contravening the rules made under this section shall be punishable (a) if he imports or manufactures any explosive in such contravention, with imprisonment for a term which may extend to three years, or with fine which may extend to five thousand rupees, or with both; (b) if he possesses, uses, sells or transports any explosive in such contravention with imprisonment for a term which may extend to two years, or with fine which may extend to three thousand rupees, or with both; and (c) in any other case, with fine which may extend.
to one thousand rupees.
" Rule 16 of the Explosives Rules provides: "16.
Children and intoxicated persons, No child under 16 years of age and no Person who is in a state of intoxication shall be employed on the loading, unloading or transport of explosives, or be employed in or allowed to enter any premises licensed under these rules.
" 430 The first question which arises is whether every breach of r. I6 falls under section 5 (3) (a), of the Act.
In our opinion, the answer is in the negative.
It will be noticed that cl.
(a) of section 5 (3) deals with a person who imports or manufactures in contravention of the; Rule, cl.
(b) deals with a person who posses uses, sells or transports any explosive in contravention of the Rules and cl.
(c) deals with contraventions of the Rules in other.
It seems to us that the scheme of this sub section is to divide the contravention of the Rules into three categories.
In the first category fall rules which person must observe while he imports or manufactures.
In other words, rules relatable to the import or manufacture.
of explosives would fall in the first category.
For example, clause 11 ' of the licence issued to the "Not more than four persons shall be allowed at any one time in any one building or tent in which the explosive is being manufactured and only persons actually employed in manufacturing or superintending manufacture shall be allowed inside the place of manufacture.
" Clause 12 of the Licence provides: "No iron or steel implements shall be used in the manufacture.
only copper gun metal or wooden tools are permissible.
" Now, if the appellant had infringed the provisions of the clauses it could be said that the contravention would fall under cl.
(a) of section 5(3).
We may mention that r. 81 provides that "no explosive shall be manufactured, possessed used or sold except under and in accordance with the conditions of a licence granted under these rules", and a breach of the, conditions would be contravention of r. 81.
But suppose the appellant had contravened clause 2 of the licence his licence is for the manufacture, possession and sale of 25 pounds of fireworks which prescribes the modes in which the explosives shall be kept in the premises, i.e. "(a) in a building, substantially constructed of brick stone or concrete or in a securely I constructed fire proof safe; or (b) in an excavation formed in solid rock or earth. he would be guilty under cl.
(b) 'of section 5(3) and not cl.
(a) of section 5(3).
Similarly, a contravention of clause 18, which provides that "all sales of explosives under this licence must be effected on the premises described on the face of the licence, and an explosive shall not be sold to 'any person under the age of 16 years" would fall under cl.
(b) of section 5 (3).
The learned counsel for the appellant contends that on the facts found by the High Court the conviction of the appellant 431 under cl.
(a) of section 5(3) cannot be sustained.
He says that there is no finding or evidence that the four minors were engaged to manufacture or were taking part in the manufacture of fireworks.
We have gone through the evidence and we find that no witness states that these minor boys were employed by the appellant to manufacture fireworks.
Subhas Chamar, P.W. 1, says that he "was working in the workshop of explosives at Matkuria owned by Usman .
We were working in the normal manner and in the same place at the time of occurrence.
" Puran Bhokta, P.W. 2, father of Kashi and Gobardhan, says that all his sons "worked in the explosive workshop of Matkuria owned by Usman.
" He does not enlighten us about the nature of work done by his sons.
Guhi Bhokta, P.W. 8, only states that "about 18 months ago, on a Thursday, I was working in the explosive shop in village Matkuria under the supervision of Rahman accused.
There is no other evidence bearing on this point.
From this evidence it cannot be definitely inferred that the four minors were actually employed in the manufacture of explosives on April 28, 1960.
In fact, there is no evidence at all that any fireworks were being manufactured that day.
It was for the prosecution to prove all the ingredients of the offence, and section 106 of the Evidence Act does not, as contended by the learned counsel for the State, absolve the prosecution from proving its case.
There is no doubt that there has been a contravention of r. 16, inasmuch as the four minors were employed in or allowed to enter the premises licensed under the Rules.
But r. 16 is, a comprehensive rule and applies to employment of minors in the premises for various purposes manufacture and sale of explosives it would also apply to employment of a minor to sweep floors and keep the premises clean.
If a minor is employed to keep clean the premises, would this contravention fall under cl.
(a) cl.
(b) or cl.
(c) of section 5(3)? It seems to us that if cl.
(a) and cl.
(b) are read widely so as to cover every activity which might take place on the premise cl.
(c) would be rendered redundant.
This is not a permissible way of reading statutes.
If will be noticed that the legislature regards an offence under cl.
(a) of section 5(3) to be more serious than one under cl.
(b) and an offence under cl.
(b) to be more serious than one under cl.
Further, the rules are many; some regulate minor matters, and if would be absurd to treat the breach of every rule to be a breach of cl.
(a) or cl.
In our opinion, if there is a breach of a rule, it has to be ascertained in each case whether the rule or part of it relates to activities mentioned in cl.
(a) of section 5(3) or cl.
(b) of section 5(3).
If it does not relate to any of the activities mentioned in cl.
(a) 432 or cl.
(b) of section 5 (3), the breach of the rule would fall under cl.
(c) of section 5 (3).
In this case the prosecution has not proved that the four minors were employed in any of the activities mentioned in cl.
(a) or cl.
(b) of section 5 (3).
Nor has it proved that any manufacture of fireworks was done on April 28, 1960.
It follows that the contravention of r. 16, on the facts found, can only come under cl.
(c) of section 5 (3).
We may mention that the learned counsel for the appellant challenged the findings of fact made by the High Court, but, in our opinion, they are not vitiated in any manner.
In the result, the appeal is partly :allowed.
The conviction is altered to one under cl.
(c) of section 5 (3) of the Act, and the.
appellant is sentenced to pay a fine of Rs. 1,000 and in default to undergo rigorous imprisonment for a period of three months.
Fine, if paid in excess, shall , be refunded.
Y.P. Appeal partly allowed.
| The appellant, a manufacturer of fireworks was convicted under section 5 (3) of the Indian as he had allowed minors to work in the manufacture of fireworks thus contravening r. 16 of the Explosives Rules.
HELD: Clause (a) of section 5(3) deals with a person who imports or manufactures in contravention of the Rules; el.
(b) deals with a person who possesses, uses, sells or transports any explosive in contravention of the Rules; and el.
(c) deals with the contravention of the Rules in other cases.
If there is a breach of a rule, it has to be ascertained in each case whether the rule or part of it relates to activities mentioned in el.
(a) of section 5(3) or el.
(b) of section 5(3).
If it does not relate to any of the activities mentioned in el.
(a) or cl(3)(b) of section 5(3) the breach of the rule would fall under cl.
(c) of section 5(3) .
[430 A B; 431 H] In this case, though it was established that the minors were employed in or allowed to enter the premises, it was not proved that the minors were employed in any of the activities mentioned in el.
(a) or el.
(b) of section 5(3).
Nor it has been proved that any manufacture of fireworks was done on that day.
So the contravention of r. 16 on the facts found, could only be punishable under el.
(e) of section 5(3).
[432 B]
|
Appeal No. 697 of 1962.
Appeal by special leave from the judgment and order dated March 21, 1962, of the Madras High Court in Writ Appeal No. 154 of 1960.
B. Sen, Ravinder Narain, O. C. Mathur and J.B. Dadachanji, for the appellant.
A. V. Visvanatha Sastri, and R. Gopalakrishnan, for respondent 1.
A. Ranganadham Chetty and A. V. Rangam, for respondent Nos. 2 and 3. 1963.
February 6.
The judgment of the Court was delivered by 811 SUBBA RAO J.
This appeal by special leave is directed against the judgment of a division Bench of the High Court of judicature for Madras confirming that a single judge of that Court allowing.
the petition filed by the respondent under article 226 of the constitution and quashing the order made by the State Transport Appellate Tribunal granting a stage carriage permit to the appellant for the route Tanjore Mannargudi via Vaduvoor.
The facts relevant to the question raised may be briefly stated.
The Regional Transport Authority, Tanjore, called for applications in respect of the issuing of a stage carriage permit for the route Tanjore Mannargudi via Vaduvoor.
11 persons applied for the permit.
The Regional Transport Authority, adopting the marking system prescribed in ' G.O. Ms. No. 1298 (Home) dated April 28,1956, awarded marks to different applicants : the appellant of the highest number of Marks, viz., 7, and the first respondent got only 4 1/4 marks, with the result the appellant was preferred to the respondent and a permit was issued to him.
It is not necessary to notice the marks secured by the other applicants before the Regional Transport Authority, for they are not before us.
Total of the said marks secured by each of the said two parties was arrived at by gadding the marks given under the following heads: Viable Work Resi Experi Special To Unit shop dence ence circums tal tances.
1 2 3 4 5 K.M.S 4 1 1 1/2 1/4 7 S.R.V.S. 1 1 1 1 1/4 4 It would be seen from the said table of marks that if the 4 marks secured by the appellant under the 812 first column "Viable Unit" were excluded from his total, he would have got only a total of 3 marks under the remaining heads and the first respondent would have got a total of 41 marks under the said heads.
Under the said G.O., as interpreted by this Court, the marks under the first column, i.e., those given under the head "Viable Unit", would be counted only if other things were equal; that is to say, if the total number of marks obtained by the said two applicants under Cols.2 to 5 were equal.
It is, therefore, obvious that on the marks given the Regional Transport Authority went wrong in issuing, a permit in favour of the appellant, as he should not have taken into consideration the 4 marks given under the 1st Column since the total marks secured by him under Cols.
2 to 5 were less than those secured by the first respondent.
Aggrieved by the said order, the first respondent preferred an appeal to the State Transport Appellate Tribunal, hereinafter called the Appellate Tribunal.
The said Appellate Tribunal recast the marks in respect of the said two .parties in the following manner: Viable Work Resi Experi Special To Unit shop dence ence circums tal tances 1 2 3 4 5 K.M.S. 4 2 1 3/4 1/4 8 S.R.V.S. 2 1 1 4 It would be seen from the marks given by the Appellate Tribunal that the total of the marks secured by the appellant under Cols.
2 to 5 is equal to that secured by the first respondent under the said columns, each of them securing 4 marks.
It was contended before the Appellate Tribunal that the first respondent was entitled to some mark under the column "Residence or place of business" on the ground 813 that it had the places of business at Tanjore and Mannargudi and that the Regional Transport Authority had given one mark to the first respondent under the said column ; but the Appellate Tribunal rejected that contention on the ground that the first respondent had a branch office at Kumbakonam and, therefore, the office at Tanjore or Mannargudi could not be treated as a branch office.
Aggrieved by that order, the first respondent filed a petition before the High Court under article 226 of the Constitution for setting aside that order.
Ramachandra lyer, J., who heard the said application allowed it.
The main reason given by the learned judge for allowing the petition was that the Appellate Tribunal omitted to give any mark in respect of residential qualification, which amounted to refusal to take into consi deration the admitted fact, namely, the existence of a workshop at Mannargudi and therefore, it amounted to a breach of section 47 (1) (a) and (c) of the Motor Vehicles Act.
The same idea was expressed by the learned judge in a different way thus: It. . in regard to residential qualification, it (the Appellate Tribunal) declined to consider whether the office workshop at Mannargudi are sufficient to entitle the petitioner to any marks under head for the mere reason that it was a branch of a branch office." He held that the said refusal was an error apparent on the face of the record; and he accordingly quashed the order and at the same time indicated that the result 'was that the State Transport Appellate Tribunal would have to dispose of the appeal afresh.
The Letters Patent appeal filed by the appellant was heard by a division Bench consisting of Anantanarayanan and Venkatadri, jj.
The learned judges dismissed the appeal and the reason of their decision is found in the following remarks "In essence, the judgment really proceeds on the basis that with regard to the claim of the 814 respondent to some valuation under Col. 3, arising from the existence of an alleged branch office at Mannargudi there has been no judicial disposal of the claim.
" They also observed "The Tribunal is, of course, at liberty to adopt its own criteria for the valuation under Col. 2, provided they are consistently applied, and based upon some principle." In dismissing the appeal the learned judges concluded ". . we desire to make it clear that we are not in any way fettering the discretion of the State Transport Appellate Tribunal to arrive at its own conclusion on the claims of the two parties irrespective of any observations that might have been incidentally made by this Court on those claims.
" The appellant has preferred the present appeal by special leave against the said order.
It will be seen from the aforesaid narration of facts that the High Court issued the writ as it was satisfied that there was a clear error apparent on the face of the record, namely, that the Appellate Tribunal refused to take into consideration the existence of the branch office at Mannargudi for awarding marks under the head "residence" on the ground that there was another office of the first respondent at Kumbakonam.
While it gave marks to the appe llant for his residence, it refused to give marks to the first respondent for its office on the aforesaid ground.
Mr. Sen, learned counsel for the appellant, raised before us the following points (1) The.
Court has no jurisdiction to issue a writ of certiorari under 816 article 226 of the Constitution to quash an order of a Tribunal on the ground that there is an apparent error of fact on the face or the record, however gross it may be, and that, in the instant case, if there was an error, it was only one of fact; (2) this Court has held that directions given under section 43 of the Motor Vehicles Act are only administrative in character and that an order made by a Tribunal in breach thereof does not confer a right on a party affected and, therefore, the Appellate Tribunal 's order made in derogation of the said directions could not be a subject matter of a writ.
The argument of Mr. Viswanatha Sastri, learned counsel for the first respondent, may be summarized thus : The petitioner (appellant herein) has a fundamental right to carry on business in transport.
The Motor Vehicles Act is a law imposing reasonable restrictions in public interest on such right.
The Appellate Tribunal can decide, on the material placed before it, whether public interest would be better served if the permit was given to the appellant or the first respondent within the meaning of section 47 of the said Act.
The Government, in exercise its powers under section 43 of the said Act, gave administrative directions embodying some principles for enabling the Tribunal to come to a conclusion on the said point.
The Tribunal had jurisdiction to decide the said question on the basis of the principles so laid down or dehors them.
In either view, it only decides the said question.
The first respondent raised before the Tribunal that public interest would be better served if a permit was issued to it as it had a well equipped branch office at Mannargudi.
The said question was relevant.
in an inquiry under section 47 of the said Act, whether the Tribunal followed the instructions given by the Government or ignored them.
In coming to a conclusion on the said 816 question, the Tribunal made a clear error of law inasmuch as it held that in the case of the first respondent, as it had a branch at Kumbakonam, its other branch at Mannargudi should be ignored.
This, the learned counsel contends, is an error apparent on the face of the record.
He further contends that the scope of an inquiry under article 226 'is wide and that it enables the court to issue an appropriate direction even in a case of an error of fact apparent on the face of the record.
It is not necessary to express our opinion on the wider question in regard to the scope and amplitude of article 226 of the Constitution, namely, whether the jurisdiction of the High Court under the said Article to quash the orders of Administrative tribunals is confined only to circumstances under which the High Court of England can issue a writ of certiorari or is much Wider than the said power, for this appeal can satisfactorily and effectively be disposed of within the narrow limits of the ambit of the English Court 's jurisdiction to issue a writ of certiorari as understood by this Court.
If it was necessary to tackle the larger question, we would have referred the matter to a Bench of 5 judges as it involved a substantial question of law as to the interpretation of the Constitution; and under article 145 thereof such a question can be heard only by a Bench of at least 5 judges.
In the circumstances a reference to the decisions of this Court cited at the Bar, which are alleged to have expressed conflicting views thereon, is not called for.
We shall therefore, confine ourselves to the narrow question.
Adverting to the scope of a writ of certiorari in common law, this Court, in Hari Vishnu Kamath vs Syed Ahmed Ishaque(1) laid down the following propositions: (1) Certiorari will be issued for correcting errors of jurisdiction, as when an inferior (1) ; ,1121, 1123.
817 Court or Tribunal acts without jurisdiction or in excess of it, or fails to exercise it.
(2) Certiorari will also be issued when the Court or Tribunal acts illegally in the exer cise of its undoubted jurisdiction, as when it decides without giving an opportunity to the parties to be heard, or violates the principles of natural justice.
(3) The Court issuing a writ of certiorari acts in exercise of a supervisory and not appellate jurisdiction.
One consequence of this is that the Court will not review findings of fact reached by the inferior Court or Tribunal, even if they be erroneous.
(4) An error in the decision or determination itself may also be amenable to a writ of certiorari but it must be a manifest error apparent on the face of the proceedings e.g., when it is based on clear ignorance or disregard of the provisions of law.
This view was followed in Nagendra Nath Bora, vs The Commissioner Hills Division and Appeals, Assam (1), Satyanarayan vs Mallikarjun (2) Shri Ambica Mills Co. vs section B. Bhutt (3) and in Provincial Transport Services vs State Industrial Court, Nagpur (4 ).
But the more difficult question is, what is the precise meaning of the expression " 'manifest error Apparent on the face of the proceedings ?" Venkatarama Ayyar, J., attempted to define the said expression in Hari Vishnu Kamath 's Case (5) thus "Mr. Pathak for the first respondent contended on the strength of certain observations of Chagla, C. J., in Botuk K. Vyas vs Surat Municipality (1), that no error could be said to be apparent on the face of the record if it was (1) ; (2) [1960] 1 S.C.R. 8140 (3) (4) [1963] 3 S.C.R. 650.
(5) ; ,1121, 1123 (6) A.I.R. 1953 Bom.
133. 818 not self evident, and if it required an examination or argument to establish it.
This test might afford a satisfactory basis for decision in the majority of cases.
But there must be cases in which even this test might break down, because judicial opinions also differ, and an error that might be considered by one judge as self evident might not be so considered by another.
The fact is that what is an error apparent on the face of the record cannot be defined precisely or exhaustively, there being an element of indefiniteness inherent in its very nature, and it must be left to be determined judicially on the facts of each case.
" It would be seen from the said remarks that the learned judge could not lay down an objective test, for the concept necessarily involves a subjective element.
Sinha,J., as he then was speaking for the Court in Nagendra Nath Bora 's Case (1), attempted to elucidate the point further and proceeded to observe at p. 1269 70 thus : " 'It is clear from an examination of the authorities of this Court as also of the courts in England, that one of the grounds on which the jurisdiction of the High Court on certiorari may be invoked is an error of law apparent on the face of the record and every error either of law or fact, which can be corrected by a superior court, in exercise of its statutory powers as a court of appeal or revision.
" This decision assumes that the scope of a. writ in the nature of certiorari or an order or direction to set aside the order of an inferior tribunal under article 226 of the Constitution is the same as that of a common law writ of certiorari in England we do not express any opinion on this in this case.
This decision practically accepts the opinion expressed (1) ; 819 by this Court in Hari Vishnu Kamath 's Case (1).
The only addition it introduces is the anti thesis it made between " 'error of law and error of fact" and "error of law apparent on the face of the record.
" But the question still remains in each case whether an error is one of law or of fact and that falls to be decided on the facts of each case.
Das Gupta, J., makes yet another attempt to define the expression when he says in Satyanarayan vs Mallikarjun (2), at p. 141 thus : "An error which has to be established by a long drawn process of reasoning on points where there may conceivably be two opinions can hardly be said to be an error apparent on the face of record.
As the above discussion of the rival contentions show the alleged error in the present case is far from self evident and if it can be established, it has.
to be established, by lengthy and complicated arguments.
" The learned judge here lays down the complex nature of the arguments as a test of apparent error of law.
This test also may break, for what is complex to one judicial mind may be clear and obvious to another : it depends upon the equipment of a particular judge.
In the ultimate analysis the said concept is comprised of many imponderables : it is not capable of precise definition, as no objective criterion can be laid down, the apparent nature of the error, to a large extent, being dependent upon the subjective element.
So too, in some cases the boundary between error of law and error of fact is rather thin.
A tribunal may hold that 500 multiplied by 10,000 is 5 lakhs (instead of 50 lakhs); another tribunal may hold that a particular claim is barred by limitation by calculating the period of time from 1956 instead of 1961 ; and a third tribunal may make an obvious error deciding a mixed question of fact and law.
The question whether the said errors are errors of (1) ; ,1121, 1123.
(2) [1960] 1 S.C.R. 890.
820 law or fact cannot be posited on a priori reasoning., but falls to be decided in each case.
We do not,, therefore, propose to define with any precision the concept of "error of law apparent on the face of the record"; but it should be left, as it has always been done, to be decided in each case.
The only question therefore, is whether the State Transport Appellate Tribunal committed an error of law apparent on the face of the record.
A look at the provisions of section 47 and section 43 of the , as amended by the Madras Legislature, will facilitate the appreciation of the problem.
Under section 47, a Regional Transport Authority in considering an application for a stage carriage permit is enjoined to have regard, inter alia, to the interests of the public generally.
Section 43 A, introduced by the Madras Legislature by the Motor Vehicles (Madras Amendment) Act, 1948, says that the State Government may issue such orders and directions of a general character as it may consider necessary in respect of any matter relevant to road transport to the State Transport Authority or to a Regional Transport Authority and such Transport Authority shall give effect to all such orders and directions.
It has been held by this Court in M/s. Raman & Raman Ltd. vs The State of Madras (1), that section 43A conferred a power on the State Government to issue administrative directions, and that any direction issued thereunder was not a law regulating rights of parties.
It was also pointed out that the order made and the directions issued under section 43 A of the Act cannot obviously add to, or subtract from, the consideration prescribed under section 47 thereof on the basis of which the tribunal is empowered to issue or refuse to issue a permit, as the case may be.
It is, therefore clear that any direction given under section 43A for the purpose of considering conflicting claims for a permit by applicants can only be to enable the Regional Transport (1) [1959] Supp. 2 S.C.R. 227. 821 Authority to discharge its duties, under section 47 of the Act more satisfactorily, efficiently and impartially.
To put it differently,the directions so given cannot enlarge or restrict the jurisdiction of the said tribunal or authority but only afford a reasonable guide for exercising the said jurisdiction.
Concretely stated, an applicant in advancing his claim for a permit may place before the Authority an important circumstance in his favour, namely, that he has a branch office on the route in respect whereof he seeks for a permit.
He may contend that he has an office on the route, and that the interests of the public will be better served, as the necessary amenities or help to meet any even tuality in the course of a trip will be within his easy reach.
The Government also under section 43A may issue instructions to the Regional Transport Authority that the existence of an office of a particular applicant on the route would be in the interests of the public and, therefore, the said applicant should be given a preferential treatment if other things are equal.
The issue of such an instruction only emphasizes a relevant fact which an authority has to take into consideration even if such an instruction was not given.
But if the Authority under a manifest error of law ignores the said relevant consideration, it not only disobeys the administrative directions given by the Government, but also transgresses the provisions of section 47 of the Act.
The disobedience of the instructions which are administrative in nature may not afford a cause of action to an aggrieved party, but the transgression of the statutory law certainly does.
What is the position in the present.
case ? The Government issued G. O. No. 1298 (Home), dated April 28, 1956, introducing a marking system for assessing the merits of applicants for stage carriage permits.
Column 3 reads thus "Location of residence or place of business of the applicant on the route or at the terminal : 822 This qualification not only is in favour of local enterprise but also secures that the owner will pay prompt and frequent attention to the service entrusted to him.
One mark may be assigned to this qualification.
" Under this instruction the location of the residence or the place of business is considered to be in the interests of the public, for whose benefit the service is entrusted to a permit holder.
The first respondent contended before the Regional Transport Authority that he had branch offices at Tanjore and mannargudi and therefore that fact should be taken into consideration and a mark should be given to him thereunder.
The Regional Transport Authority gave one mark to the appellant and also one mark to the first respondent under that column.
But the Appellate Tribunal refused to give any mark under that column to the first respondent for the following reasons : "On behalf of the other appellants and the Respondent it is contended that appellant No. 1 (1st respondent before the Supreme Court) is a Private Ltd. Company having its registered office at Madras, that their offices at Kumba konam is only a branch office, that the offices, if any at Tanjore or at Mannargudi cannot be treated as branch offices, and that, as such they are not entitled to any mark in column 3 of the mark list.
This contention is a valid one." In regard to the Tanjore office the said appellate Tribunal has given an additional reason by holding on the facts that it was not an office at all.
We can, therefore, ignore the Tanjore office for the purpose of this appeal.
So far as the mannargudi office is concerned, the decision of the Appellate Tribunal was based upon an obvious error.
It took the view that if a company bad a branch office at 823 one particular place, it could not have in law any other branch office though it had one in fact.
Whatever conflict there may be, on which we do not express any opinion, in a tax law or the company law, in the context of the marking system and the evaluation of an amenity in the interest of the public, it is obviously an untenable proposition to hold that even if a company has a well equipped office on a route in respect of which a permit is applied for, it shall be ignored if the company has some other branch somewhere unconnected with that route.
That was what the Appellate Tribunal held and in our view it is an error apparent on the face of the record.
On that erroneous view, the Appellate Tribunal did Dot decide the relevant question raised, namely, whether the respondent has any such office at mannargudi.
Both Ramachandra Iyer, J., at the first insta nce, and Anantanarayanan and Venkatadri, jj., in 'appeal, rightly pointed out this error.
As this is an error apparent on the face of the record, they quashed the order of the Appellate Tribunal and left the question open for decision by it.
In our view, the conclusion arrived at by the High Court is correct.
It remains only to notice the decisions on which strong reliance is placed by learned counsel for the appellant in support of his contention.
In M/s. Raman and Raman Ltd. vs The State of Madras (1), the relevant facts were : the appellant and the 4th respondent therein, along with others, were applicants for a stage carriage permit.
The Regional Transport Authority granted the permit to the appellant on the basis of instructions issued by the State Government under section 43A of the ; on appeal, the Central Road Traffic Board set aside that order on the footing of fresh instructions issued by the Government; and a division Bench of the Madras High Court dismissed the writ petition filed by the appellant.
It was, (1) [1959] Supp. 2 S.C.R. 227.
824 inter alia, contended before this Court that the ins tructions given under section 43A being law regulating rights of parties, the appellate authority could not ignore that law and set aside the order of the Regional Transport Authority on.
the basis of subsequent instructions.
The contention was rejected on the ground that instructions under section 43A were not law, but were only administrative directions and that the fact that the appellate tribunal ignored them would not affect its jurisdiction if it had come to a decision having regard to the considerations laid down in section 47 of the Act.
The question before the tribunal was whether a small unit or a large one would be viable or would be in the interest of the public.
There was scope, for taking different views on the question, and the appellate tribunal, contrary to the earlier directions, came to the conclusion that smaller units would be more in the interest of the public than larger ones.
This judgment, therefore, is an authority only for the position that a tribunal in issuing or refusing to issue a permit to an applicant would be acting within its jurisdiction notwithstanding the fact that it ignored the administrative directions given by the Government under section 43A of the Act, provided it had come to a decision on the relevant considerations laid down in section 47 of the Act.
In Abdulla Rowther vs The State Transport Appellate Tribunal, Madras (1), the Regional Transport Authority issued a permit each to the appellant therein and to one Gopalan Nair.
On appeal, the Appellate Tribunal set aside that order and gave the permits to respondents, 3 and 4.
Both the Regional Transport Authority and the Appellate Tribunal considered the applications on the basis of G.O. No. 1298 issued by the Government of Madras on April, 28, 1956.
The Regional Transport Authority gave 4 marks each to the appellant and Gopalan Nair under Col. 1, which dealt with the building (1) A.I.R. 1959 S.C. 896.
825 strength to viable units, and refused, to give any marks to respondents 3 and 4 under the said column on the ground that they were fleet owners; with the result that the appellant and Gopalan Nair secured more marks than respondents 3 and 4 and were, therefore, given the permits.
But the Appellate Tribunal held that the appellant and Gopalan Nair were not entitled to claim the benefit of the marks under Col. 1, as they had secured less marks than respondents 3 and 4 under Cols.
3 to 5, for they held, on a fair obstruction of the said G.O., that it was only when the marks obtained by applicants under Cols.
2 to 5 were equal, recourse could be had to 'Col. 1.
On that basis, the Appellate Tribunal quashed the order of the Regional Transport Authority and gave the permits to respondents 3 and 4.
The appellant challenged the said order by an application under article 226 of the Constitution for a writ of certiorari in the High Court of Madras.
Rajagopalan, J., dismissed the application on two grounds, namely, (1) that the construction of the G.O. was not shown to be wrong and (2) that even if the G. O. was misconstrued, it would not justify the issue of a writ of certiorari, as the said G. O. embodied only administrative directions.
The Letters Patent Appeal filed against the said order was dismissed.
The appeal filed to this Court was also dismissed.
This Court followed the decision in M/s. Raman and Raman Ltd. vs The State of Madras (1), and held that the instructions given under section 43 A of the were only administrative directions and that, therefore, even if the rule as to the assignment of marks was infringed, it was not an error of law at all.
This decision only follows the earlier decision and lays down that instructions given under section 43A of the are only administrative directions and that a wrong construction of the said instructions would not enable the party affected to apply for a writ of certiorari.
The instructions laid down a method of evaluation (1)[1959] Supp. 2 S.C.R. 227.
826 of the respective claims vis a vis 'the considerations laid down in section 47 of the Act.
The Regional Transport Authority and the Appellate Tribunal have borne in mind the said considerations, in deciding upon the rival claims, though they may have wrongly interpreted one of the instructions.
It may be pointed out that in that case the interpretation put upon the instructions was a correct one, though this Court proceeded on the assumption also that they might have been wrongly interpreted.
But the decision cannot obviously be an authority for the position that on a wrong interpretation of the administrative directions or dehors the said directions, a tribunal can ignore the relevant considerations laid down in section 47 of the.
Act or on the basis of an error of law apparent on the record wrongly refuse to decide on any of such considerations.
To the same effect is the decision of this Court in Ayyaswami Gounder vs M/s. Soudambigai Motor Service (1).
There, the Regional Transport Authority followed the marking system as laid down by the Government of Madras and gave to the appellant (therein) 5 marks and to the respondent 6 marks.
Though the respondent got 6 marks, he was not given the permit, as in the view of the said Authority he was guilty of misconduct.
As between the other applicants, the appellant having secured the highest number of marks, he was given a permit.
But on appeal the Appellate Tribunal reallotted the marks and under the reallotment the appellant got the highest number of marks; and because of that fact and also for the reason that he was a small operator of two buses, who should be given an opportunity to build up a viable unit as quickly as possible, he was given the permit by the Appellate Tribunal upholding the order of the Regional Transport Authority.
One of the question raised there was whether the appellant was entitled to marks under Col. 2 for repair and maintenance, facilities at Dharapuram the (1) Civil Appeal No. 198 of 1962 (decided on 17 9 1962).
827 Appellate Tribunal found that he had such facilities.
The appellant filed a writ in the High Court and the learned single judge thought that some mistakes had been committed by the Appellate Tribunal in the allotment of marks and that it acted in contravention of the directions given by the Government under the said G. O., but dismiss the petition on the ground that, as the said instructions are Only executive directions, their contravention did not confer any right on the parties before the tribunal.
On Letters Patent Appeal a Division Bench of that Court set aside that order on the ground that the Appellate Tribunal had taken into consi deration the following two irrelevant considerations: (i) the appellant 's claim should suffer because of the punishment for his past misconduct, and (ii) the third respondent being a small operator, he would be entitled to better Consideration than the appellant who was a monopolist.
On appeal, this court followed the decision in M/s. Raman and Raman Ltd. vs The State of Madras (1) and Abdullah Rowther vs The State Transport Appellate Tribunal (2) and held that under the said G. O. the Government issued only administrative directions and that the failure of the transport authorities to follow them would not entitle the respondents to a writ.
As regards the two reasons given by the High Court, this Court came to the conclusion that they were not irrelevant considerations, but were considerations germane in the matter of issue of permits.
In the result this Court allowed the appeal.
This decision accepts two propositions, namely, (1) misconstruction or even disregard of the instructions, given by the Government does not confer a right upon an aggrieved party to file a writ, for the said instructions are only administrative directions, and (2) the decision implies that if the Tribunal decides on irrelevant considerations, the Court can issue a writ.
But in that case it came to the conclusion that no such irrelevant considerations weighed with the Tribunal.
(1) [1959] Supp. 2 S.C.R. 227 (2) A.I.R. 1959 S.C. 896. 828 The last of the cases relied upon is that in Sankara Ayyer vs Narayanaswami Naidu (1).
There too.
, the Regional Transport Authority and the State Transport Appellate Tribunal considered the applications for the grant of a permit for anew route on the basis of the administrative directions given by the State Government.
The regional Transport Authority gave the appellant 3 marks on the basis that he was a small operator, but the Appellate Tribunal came to the conclusion that he was not entitled to any marks as a small operator.
A single judge of the High Court set aside the order of the Appellate Tribunal on the ground that it misconstrued the directions contained in the Government Order relating to small operators.
But a division Bench of that Court in Letters Patent appeal held, relying upon the earlier decision of this Court, that the said directions were only administrative in nature and that they did not confer any legal rights and in that view allowed the appeal.
This Court again following the earlier decisions dismissed the appeal holding that by construing the administrative directions the Tribunal did not take irrelevant consi derations or refused to take relevant considerations in the matter of issue of permits.
It is always a controversial question whether the issue of a permit to a small operator or to a big operator would be in the interest of the public and a Tribunal is certainly entitled to take either view.
It will be seen from the aforesaid decisions that this Court only laid down that the instructions given under section 43A of the were only administrative directions and that the infringement of those instructions by the Tribunal did not confer any right on a party to apply to a High Court for a writ under article 226 of the Constitution.
In all those cases the Tribunal either ignored the instructions or misconstrued them, but nonetheless decided the question of issue of permits on considerations relevant (1) Civil Appeal No. 213 of 1960 (decided on 10 10 1960).
829 under section 47 of the Act.
They are not authorities on the question whether a writ of certiorari, would lie, where a Tribunal had on an obviously wrong view of law refused to decide or wrongly decided on a consideration relevant under section 47 of the Act, whether or not it was covered by the instructions given under section 43 A.
For if on the basis of such an error of law, it refuses to decide a relevant question, the fact that the Government also issued instructions to the Tribunal to apply some objective standards in deciding such a question does not make the said question anytheless a relevant consideration under section 47 of the Act.
That is the position in the present case.
As we have already indicated, on the basis of an error manifest on the record, namely, that a company cannot have a branch office on the route in question, if it has another branch elsewhere, it refused to take into consideration a relevant fact, namely, whether the respondent has an office on the said route.
The High Court, therefore, was right in quashing the order of the Appellate Tribunal and giving an opportunity to the Tribunal to decide that question on merits.
In the result, the appeal fails and is dismissed with costs.
Appeal dismissed.
| On applications for permits made to it the Regional Transport Authority, applying the markinig system prescribed by the Government order issued under section 43A of the Motor Vehicles Act, granted the permit to the appellant.
On appeal by the first respondent, the State Transport Appellate Tribunal recast the marks but in doing so did not allot any mark to the first respondent under the head of "residence or place of business" and thereby treating the appellant and the first respondent as equal, gave the appellant the further advantage of four marks under the head "viable unit".
The first respondent challenged the order of the Appellate Tribunal before the High Court under article 226 on the ground that the Appellate Tribunal had failed to allot him any mark in respect of his admitted residential qualification and had thereby committed a breach of section 47 (1) (a) and (c) of the Motor Vehicles Act.
This contention was accepted by the learned single judge of the High Court who quashed the order of the Appellate Tribunal and directed it to proceed according to law.
On appeal the Division Bench confirmed the issue of the writ.
On appeal by special leave by the appellant it was contended in this Court that the High Court has no jurisdiction to issue a writ of certiorari, as the error, if any, was one of fact and that the directions issued by the Government under section 43A of the Motor Vehicles Act being only administrative in character, order made in breach thereof did not give rise to an error of law which could be the subject matter of a writ.
Held, that the question whether or not there was such an error apparent on the face of the record as to enable the High Court to interfere under article 226 of the Constitution was one to be determined in each case and no particular test can or need be laid down as a general rule.
810 Hari Vishnu Kamath vs Syed Ahmad Ishaque, [1955] 1 section C. R. 1104, Nagendra Nath Bora vs Commissioner of Hills Division and Appeals, Assam ; , Satya narayan vs Mallikarjun, [1960] 1 section C. R. 890, Shri Ambica Mills Co. vs section B. Bhatt, ; , Provincial Transport Service vs State Industrial Court [1963] 3 section C. R. 650, Batuk Vyas vs Surat Municipality, A. I. R. 1953 Bom.
133 and M/s. Raman & Raman Ltd. vs The State of Madras, [1959] Supp. 2 section C. R. 227, referred to.
Held, further, that though the directions issued under section 43A of the Act were administrative, they were intended to facilitate an objective, judgment of the considerations laid down in section 47 of the Motor Vehicles Act and if applying the directions to a given case result in the breach of section 47, namely, ignoring a relevant consideration, it must give rise to a manifest error of law and furnish a ground for interference under article 226 of the Constitution.
M/s. Raman & Baman Ltd. vs State of Madras [1959] Supp. 2 section C. R. 227, Abdulla Rowther vs State Transport Appellate Tribunal, Madras, A. 1.
R. , Ayyasswani Gounder vs M/s. Soudambigai Motor Service C. A. No. 198 of 1962 decided on 17 9 62 and Sankara Ayyar vs Marayanaswami Naidu, C. A. No. 213 of 1960 decided on 10 10 60, distinguished.
|
Civil Appeal No. 996 of 1979 From the Judgment and Order dated 26.10.78 of the Madhya Pradesh High Court in Misc.
Petition No. 176/74.
S.N. Kacker, S.K. Ghambir and Ashok Mahajan for the appellant.
T.U. Mehta, S.S. Khanduja, R.D. Jain, Mehfooz Khan and Yashpal Dhingra for the respondents.
The Judgment of the Court was delivered by CHANDRACHUD, C.J.
Respondent 1 was appointed as an Agent of the appellant Bank, which is a co operative society registered under and governed by the provisions of the Madhya Pradesh Co operative Societies Act.
By an order dated June 5, 1968 passed by one S.P. Jain, the services of respondent 1 were terminated on the ground that he had over stayed the leave granted to him.
Aggrieved by that order, respondent 1 raised a dispute under section SS(2) of the Act, before the Registrar of the Co operative Societies.
The Registrar referred the matter to the Deputy Register, who by an order dated February 27, 1972, allowed the claim of respondent 1 on the ground that the order terminating the services was not in accordance with Rules 44 and 45 of Co operative Bank Employees Service Rules.
He also ordered the reinstatement of respondent 1 with full back salary and allowances.
In an appeal filed by the Bank, the Addl.
Registrar took the view that the only remedy which was open to respondent 1 was to claim damages for wrongful termination of his services and that, therefore, he could not be reinstated in service Respondent 1 than filed an appeal before the Board of Revenue which held by an order dated August 28, 1974, that, S.P. Jain who held the enquiry against respondent 1 and passed the order terminating his services had no power to do so.
The Board of Revenue set aside the order of termination and remanded the matter to the Bank for disposal in accordance with law.
The writ petition filed by the Bank in the High Court of Madhya Pradesh was dismissed on October 26, 1973.
According to the High Court, since section P. Jain had no authority to hold the enquiry or to pass the impugned order of dismissal, the said order had no existence in the eye of law and, 858 therefore, respondent 1 should be deemed to be in service and be reinstated.
Aggrieved by the judgment of the High Court the Bank has filed this appeal.
We are in agreement with the conclusion to which the High Court has come, though for somewhat different reasons which are as follows: "The Board of Directors of the appellant Bank was superseded by the Registrar of the Co operative Societies by an order dated July 25, 1967 and its powers were vested in Madhya Pradesh State Cooperative Bank, Jabalpur, which is an Apex Bank, as "officer in charge" of the superseded Bank.
By Resolution No. 23 dated May 19, 1968, the Apex Bank confirmed the action of its Chairman/Vice Chairman in deputing, amongst others S.P. Jain as the Chief Executive officer of the superseded Bank.
The Apex Bank had no authority or power so to appoint S.P. Jain for two reasons: In the first place, the Apex Bank, being an appointee of the Registrar, had no authority to divest itself of the power conferred upon it by the Registrar and to invest S.P. Jain with that power.
The only authority which could have conferred the necessary power.
On S.P. Jain was the Registrar.
The Registrar did not confer that power upon S.P. Jain under Section 53(4) of the Act".
In the result, this appeal is dismissed with costs.
We would like to add that as long as 16 years have passed since the impugned order was passed and that too by a person who had no authority to pass it.
Secondly, the consensus of opinion of the various authorities which have dealt with this matter is that, in overstaying the leave granted to him, respondent l was not guilty of "misconduct".
It is desirable and prudent that no further proceedings be taken against respondent 1 for the alleged default on his part, which is the subject matter of the present proceedings.
We modify the order of the High Court by directing that respondent l will be entitled to fifty per cent of the , back wages and i allowances only from June 5, 1968 until September 30, 1984.
The appellant will back respondent 1 in its service with effect from October 1, 1984.
M.L.A. Appeal dismissed.
| The Board of Directors of the appellant bank was superseded by the Registrar of the Cooperative Societies and its powers were vested in the M.P. State Cooperative Bank which is an Apex Bank as "officer in charge" of the superseded bank.
The Apex Bank appointed one S.P. Jain as the Chief Executive officer of the appellant bank.
Respondent No. 1, an employee of the appellant bank, was dismissed from service by S.P. Jain on the ground that he had overstayed the leave granted to him.
The Dy.
Registrar of Cooperative Societies set aside the said order of dismissal and directed reinstatement of respondent No. 1, but it was reversed by the Addl.
Registrar in appeal by the appellant Bank.
In further appeal by Respondent No. 1 the Board of Revenue set aside the order of termination.
The High Court in the Writ Petition filed by appellant Bank agreed with the Board of Revenue and also ordered reinstatement of Respondent No. 1.
Dismissing the appeal by the appellant Bank and modifying the order of the High Court, ^ HELD: The Apex Bank had no authority or power so to appoint S.P. Jain for two reasons: In the first place, the Apex Bank, being an appointee of the Registrar, had no authority to divest itself of the power conferred upon it by the Registrar and to invest S.P. Jain with that power.
The only authority which could have conferred the necessary power on S.P. Jain was the Registrar.
The Registrar did not confer that power upon S.P. Jain under section 53 (4) of the Act.
Therefore the said order had no existence in the eye of law.
[858D E] 857
|
il Appeals Nos.
194 of 1956 and 353 of 1958.
Appeals by special leave from the judgment and orders dated December 26, 1953 and April 30, 1957, of the Custodian General and Deputy Custodian General of Evacuee Property in Revision Nos.
5055R/Judl/ 1953 and.
1161/R/Judl/1954 respectively.
Achhru Ram and T. R. V. Sastri, for the appellants.
N. section Bindra and D. Gupta, for respondents.
March 21.
The Judgment of the Court was delivered by 459 DAS, GUPTA, J.
Of these two appeals, one (Civil Appeal No. 194 of 1956) is against the order of the Custodian General of India, declining to interfere with ' the order of the Custodian of Evacuee Property, Orissa, in respect of certain properties claimed by the appellant as his; and the other appeal (Civil Appeal No. 353 of 1958) is against the order of the Deputy Custodian General of India, declining to interfere with the order of the Custodian of Evacuee Property, Madras, in respect of properties situate in Madras, claimed by the same appellant as belonging to him.
Though most of the considerations that arise in the two appeals are identical, it will be convenient to take them up one after the other so as not to confuse a clear understand ing of the facts on which these considerations which are all based on question of law arise.
The appellant Fazal Bhai Dbala and his brother Abdulla Dhala were partners in a business of hides and skins.
A deed of partnership was executed on January 1, 1941, and the firm was registered in the Register of Firms, Cuttack, under section 59 of the Indian Partnership Act.
On August 10, 1949, Abdulla Bhai Dhala executed a deed of sale in respect of some immovable properties at Jharsuguda in Orissa, and also certain properties, at Madras, in favour of Fazal Bhai Dhala.
The consideration in the document was mentioned as Rs. 85,000 of which Rs. 50,000 was mentioned as the value of the Madras properties and Rs. 35,000 as the value of the Orissa properties.
The sum of Rs. 85,000 appears to have been paid in the presence of the Registrar by Fazal Bhai to Abdulla Bhai on August 11, 1949.
A deed of dissolution of the partnership was also executed on the following day the 12th August, 1949.
It was stated therein that the two partners had agreed "that the said partnership shall stand dissolved as and from 2 11 48 and it has further been agreed that as from that day, 2 11 1948, the said business of Fazalbhoy Dhala & Co shall belong to and be continued and carried on by Fazalbhoy Dliala.
" It was also stated that in view of the fact that "accounts of the said partnership have not yet been taken or settled and cannot be taken or 460 settled without much delay and trouble it has further been agreed that Fazal Bhai Dhala shall pay to Abdulla Dhala a sum of Rs. 40,000 in full settlement and satisfaction of all the claims, as partner of Abdulla Bhai Dhala against the partnership, its assets, goodwill etc., in respect of his share therein".
A receipt of the sum of Rs. 40,000 was also acknowledged in this deed.
On receipt of information that Abdulla Dhala had migrated to Pakistan after transferring his properties to his brother Fazal Bhai Dhala, the Assistant Custodian of Evacuee Property, Sambalpur (Orissa), issued a notice under section 7(1) of the Ordinance XXVII of 1949 to Fazal Bhai Dhala on December 30, 1949, in respect of im movable properties at Jharsuguda including the properties covered by the sale deed of August 10, 1949, and the business in hides and skins under the name of Fazalbhoy Dhala & Co., and certain immovable properties standing in the name of that firm.
In reply to the notice, Fazal Bhai contended that Abdulla Bhai was not an evacuee; and that in any case, he, Fazal Bhai, had become the sole proprietor of the business, with all assets and liabilities, with effect from November 2, 1948, when the partnership was dissolved and that while some of the immovable properties as mentioned in the notice had been conveyed to him by a deed of sale by Abdulla Bhai, the rest being assets of the firm of Fazal Bhai Dhala, had vested in him after the dissolution of partnership, he prayed that his "title" in the assets of the firm, and in the immovable properties, mentioned in the notice should be confirmed.
The Assistant Custodian held after consideration of the evidence that though the transfer of the properties mentioned in the sale deed was for adequate and valuable consideration it was not at all bona fide: as regards the other properties ' and the hides and skins business itself the Assistant Custodian held that Abdulla Bhai had no interest as the partnership had been dissolved on November 2, 1948.
Against this decision Fazal Bhai appealed to the Custodian and prayed that the order of the Assistant Custodian as regards the properties mentioned in Schedule "A" (1) and (II) mentioned in the notice under sub section 1 of section 7 of the Government of India Ordinance 461 No. XXVII of 1949 should be sot aside.
The Custodian agreed with the Assistant Custodian, in respect of these properties, and held that these had been rightly declared as evacuee properties.
He went further and held that there was no justification for the Assistant Custodian taking a different view as regards the other properties.
His conclusion was that "in fact, with regard to these properties also the same amount of mala fides was present and as such these should also be included in the list of evacuee properties"; and that "it is but proper that the entire 8 annas share of the properties mentioned in Schedules A and B of the evacuee Abdulla should be treated as evacuee properties".
The Custodian finally ordered: "in consequence of my above decision according to section 6 of the Evacuee Interest Separation Act, the entire properties in Schedules A and B should now be treated as evacuee pro perties and revised action should be taken to notify as ,such under section 7(3) of the Administration of Evacuee Property Act and the appellant be directed to get his 8 annas share in the properties separated in the Court of the Competent Officer".
Fazal Bhai moved the Custodian General of India for revision of this order of the Custodian, Orissa.
The Custodian General, however, refused to interfere.
It is proper to mention at the outset that it is no longer disputed that Abdulla Bhai is an evacuee, though the exact date from which he became such an evacuee does not clearly appear from the record, and that all the immovable properties, which are the subject matter of the appeal, were the assets of the firm Fazalbhai Dhala & Co. Four contentions were urged in support of the appeal.
The first contention, and the one to which Mr. Achhru Ram devoted a considerable portion of his argument, was that the Custodian General should have held that the Custodian acted without jurisdiction, and at any rate, irregularly in the exercise of his jurisdiction, if he had any, in interfering with the order passed by the Assistant Custodian that the immovable property and the hides business and the properties mentioned in Sell.
A III, that is the properties 462 other than those covered by the sale deed, were not evacuee properties and should be released.
Mr. Achhru Ram has pointed out that against the Assistant Custodian 's order in respect of these two items of properties the hides business and the immovable properties in Sch.
A III mentioned in the notice, the Custodian 's department had not preferred any appeal, so that the Custodian could not interfere with it, in exercise of his appellate jurisdiction.
Learned Counsel then contends that the Custodian 's order in respect of these properties the hides business and the Jharsuguda properties in Sch.
A III could not have been passed, in exercise of the revisional jurisdiction conferred on him by section 26 of the Administration of Evacuee Property Act (Act No. XXXI of 1950), as no notice of such intention to examine the records in revision, had been issued to Fazal Bhai.
While it is true that the order does not clearly mention that in respect of the hides business and the Sch.
A III properties it was being made in exercise of revisional jurisdiction, it is clear that the only jurisdiction the Custodian could exercise, in the absence of any appeal against that portion of the Assistant Custodian 's order would be his revisional jurisdiction under section 26.
When we find that the Custodian has made the order it is proper and reasonable to hold that he passed it in the exercise of the only jurisdiction he had viz.
, the revisional jurisdiction and the fact that this was not clearly stated in the order can be no ground for holding that he was not exercising revisional jurisdiction.
It is quite another matter whether in the exercise of that jurisdiction, he proceeded in accordance with law.
Mr. Aehhru Ram contended that under the law, the Custodian was required to issue a notice to the parties concerned before exercising his, revisional jurisdiction.
Admittedly, no such notice was issued; and this omission to issue a notice was put by the appellant in the forefront of his grievances both in his petition for revision before the Custodian General and in the application for special leave to appeal to this Court.
Turning however to section 26 we find that there is no 463 provision for service of any notice.
The section runs thus: "26.
Powers of review or revision of Custodian etc.
(1) The Custodian, Additional Custodian, or( Authorised Deputy Custodian may at any time, either on his own motion or on application made to him in this behalf, call for the record of any proceeding under this Act which is pending before, or has been disposed of by, an officer subordinate to him for the purpose of satisfying himself as to the legality or propriety of any orders passed in the said proceeding, and may pass such order in relation thereto as he thinks fit: Provided that the Custodian, Additional Custodian or Authorised Deputy Custodian shall not pass an order under this sub section revising or modifying any order prejudicial to any person without giving such person a reasonable opportunity of being heard: Provided further that if one of the officers aforesaid takes action under this sub section, it shall not be competent for any other officer to do so. . .
The proviso secures the requirements of the principles of natural justice when it says that any order prejudicial to any person shall not be passed without giving such person a reasonable opportunity of being heard.
No specific provision for service of notice in order that such a reasonable opportunity of being heard be given has however been made by any rule.
It goes without saying that in the large majority of cases, the Custodian "will, in order to give the party concerned a reasonable opportunity of being beard, first give him a notice of his intention to examine the records to satisfy himself as to the legality or the propriety of any order passed by the subordinate officer and require such person to show cause if any why the order should not be revised or modified, and then if and when the party appears before him in response to the notice, the Custodian has also to allow him, either personally or through counsel, a reasonable opportunity of being heard.
In suitable cases it may be proper and necessary for the Custodian to allow 464 the party concerned even to adduce evidence.
There may be cases however where the party concerned is already before the Custodian, so that all that is necessary for the Custodian to do is to inform such party of his intention to examine the records to satisfy him,self whether a particular order should be revised, and then to give him a reasonable opportunity of being heard.
There would be no necessity in such a case to serve a formal notice on the party who is already before the Custodian and the omission to serve the notice can be of no consequence.
What the law requires is that the person concerned should be given a reasonable opportunity of being heard before any order prejudicial to him is made in revision.
If this reasonable opportunity of being heard cannot be given without the service of the notice the omission to serve the notice would be fatal; where however proper hearing can be given without service of notice, it does not matter at all, and all that has to be seen is whether even though no notice was given a reasonable opportunity of being heard was given.
A perusal of the Custodian 's judgment makes it reasonably clear that he informed the counsel who appeared on Fazal Bhai.
Dhala 's behalf, that he proposed to consider whether the order made by the Custodian in respect of the hides business and the Sch.
A III properties had been rightly made and to revise the same, if necessary, after giving a reasonable opportunity of being heard to Fazal Bhai on this point.
It is equally clear that the appellant 's advocate was fully heard in the matter.
We have no doubt therefore that the requirements of law as embodied in the proviso to section 26(1) of the Act were fully satisfied.
The contention that the Custodian acted without jurisdiction or irregularly exercised his jurisdiction must therefore fail.
The next contention raised in the appeal is to use the learned counsel 's own words that in view of section 43 of the Indian Partnership Act the partnership stood dissolved from November 2, 1948 and the Custodian had no jurisdiction to declare the "business" to be an evacuee property.
It does not appear to have been 465 disputed either before the Assistant Custodian or the Custodian that the partnership of Fazalbhai Dhala & Co., was a partnership at will.
The deed of dissolution ' was dated August 1.2, 1949 and it has been found by the Custodian that the deed of dissolution was purposely concluded to provide a common safeguard for properties to remain in the hands of the brothers.
The mention of the date November 2,1948 as the date of dissolution cannot therefore be accepted.
The firm must however be held to have been dissolved on August 12, 1949 on which date the deed of dissolution was executed.
The argument of the learned counsel appears to be that once the partnership business, was dissolved there could be no question of declaring the dissolved partnership as an evacuee property.
Once the fact of dissolution is accepted the declaration as regards the business must necessarily be construed as a declaration that the property that remained in Abdulla Bhai on the dissolution of the firm was an evacuee property.
It seems to us clear that that was really what is intended to be meant by the order made by the Custodian.
A further contention of the appellant is that the transactions evidenced by the two deeds, viz., the sale deed and the dissolution were merely in furtherance of the winding up of the affairs of the dissolved partnership and therefore in determining the validity or otherwise of the transactions it has to be borne in mind that Fazal Bhai could not resist the claim of the other partners to wind up.
The story that the dissolution of partnership had taken place earlier and the two deeds were excited later on has not been accepted by the Custodian and we can see no reason to interfere with his conclusion.
The deeds of sale were executed prior to the actual dissolution which was effected by the deed of dissolution there is no scope therefore for saying that the sale deed was in the course of the winching up of the affairs of the dissolution of partnership.
As regards the deed of dissolution itself it is wholly beside the point whether Abdulla Bhai could have resisted the claim to wind 59 466 up; for the declaration merely is that Abdulla Bhai 's share in the dissolved partnership as it stood on the date of dissolution is an evacuee property.
The validity of the dissolution is not touched.
It is hardly necessary to add that the dissolution of the partnership did not by itself mean that Abdulla 's share stood transferred to Fazal Bhai any more than that Fazal Bhai 's share stood transferred to Abdulla Bhai.
A purported transfer of Abdulla 's share was made by the deed itself.
But this having been held to be without good faith, had in view of section 40 of the Evacuee Property Act, no effect.
It has to be made clear that the Custodian would not be bound by the statements made in the deed of dissolution as regards the settlement of the accounts of the firm and that the Custodian, in whom the evacuee properties vest will have in respect of the dissolved business all the rights which Abdulla had under sections 37, 46, 47, 48 and other sections of the Partnership Act.
There remains for consideration the appellant 's contention that in any case the Custodian acted illegally in the exercise of his jurisdiction in ordering that "the entire properties in Schs.
A and B should now be treated as evacuee properties".
It appears that the order by the Custodian was made in these terms even though his conclusion was that "the entire 8 annas share of the properties mentioned in Schs.
A and B of the evacuee Abdulla should be treated as evacuee properties", in view of the fact that under the original definition of evacuee property in section 2(f) of the Administration of Evacuee Property Act (Act XXXI of 1950) it meant "any property in which any evacuee has any right or interest".
This definition has however since been amended and now evacuee property means "any property of an evacuee" instead of "any property in which an evacuee has any right or interest".
The legal position after the amendment therefore is that it is only the 8 annas share of Abdulla set out in the Schedule in the Assistant Custodian 's order dated the 28th January, 1950, which is evacuee property.
It is therefore necessary to state in clarification of the position that instead of the 467 entire Schedules A and B properties being treated as evacuee property only 8 annas share of these properties which belonged to the evacuee Abdulla should be treated as evacuee properties.
With this clarification of the Custodian 's order the appeal is dismissed.
There will be no order as to costs.
Pi The other appeal C. A. No. 353 of 1958 is in respect of properties in Madras.
Fazal Bhai made an application on July 21, 1950 purporting to be under section 40 of the Administration of Evacuee Property Act (Act XXXI of 1950) in reply to a notice which had been issued on him under section 7 of the Act.
His case, as in respect of the Orissa properties mentioned earlier, was that the dissolution of the firm took place in November, 1948 and that the final transaction and settlement of accounts was brought about by a deed of sale dated August 11, 1949 in respect of Orissa and Madras pro perties and a deed of dissolution dated August 12, 1949 for a consideration of Rs. 40,000 making in all the entire amount of Rs. 1,25,000 which in this final settlement had been agreed to be paid to Abdulla.
He prayed for a declaration that the properties mentioned in the notice be held to have been legally and properly passed to him, and that the transfer in his favour may be confirmed.
The Assistant Custodian of Evacuee Property, Madras, accepted Fazal Bhai 's case that the transfer was only a step in the apportionment of the assets of the firm and not a transfer outside the partition of the assets of the firm.
He held that the transfer was bona fide and made an order in these terms: "I therefore accept the dissolution of the firm of Fazalbhai Dhala and Company covered by the dissolution deed dated 12 8 49 and confirm the transfer of the immoveable properties covered by the deed dated 10 8 49 under section 40(5) of the .
" When this matter came to the notice of the Custodian General of Evacuee Property in the course of the proceedings before him in respect of the Orissa property, he observed: "As for the Madras properties, I notice that Mr. 468 Rathanam 's order was allowed to go unchallenged by the department and as it is not before me, therefore, I am not called upon to express my opinion.
" This was on December 26, 1953.
It appears that the Custodian General also made a suggestion to the Custodian, Madras, that he might examine the propriety of the order passed by the Assistant Custodian., Madras.
Accordingly, the Custodian, Madras, examined the records and issued notice to interested parties including Fazal Bhai Dhala to show cause why the Assistant Custodian 's order should not be set aside in revision.
Cause was shown by Fazal Bhai Dhala and thereafter after hearing arguments on his behalf by his Advocate, Mr. T. section Raghavachari, the Custodian held that "the transactions covered by the sale deed dated August 10, 1949 and the deed of dissolution dated the 12th August, 1949 were not bona, fide".
Accordingly, he set aside the order of the Assistant Custodian which confirmed the transfer of properties covered by these two deeds.
He directed the Assistant Custodian, Madras, to take steps under the Evacuee Property Act in respect of these evacuee properties consequent on the cancellation of the confirmation of transfer.
Fazal Bhai 's application to the Custodian General of Evacuee Property, India, for revision of the Custodian 's order was heard by the Deputy Custodian General of Evacuee Property, India, and was rejected.
The only additional ground urged by Mr. Achhru Ram in support of this appeal is that the notice issued on Fazal Bhai to show cause why the Assistant Custodian 's order should not be revised did not say anything as regards the Assistant Custodian 's order in respect of the business and so the Custodian had no jurisdiction to interfere with the Assistant Custodian 's order in so far as that order was in respect of the business ' Turning now to the Assistant Custodian 's order we find that in addition to confirming the transfer of immovable properties covered by the deed of August 10, '1949 he also said: " 'I therefore, accept the dissolution of the firm of Fazal Bhai Dhala & Company., 469 covered by the dissolution deed dated August 12, 1949.
The Custodian in his order dated July 5, 1954, has held that the transaction covered by the deed of ' dissolution also was not bona fide.
It has to be borne in mind that the purported dissolution of the firm in November, 1948, the settlement of accounts recorded in the deed of August, 1949 and the transfer of properties effected were all integral and indivisible parts of the same transaction.
While it is true that the notice issued to Fazal Bhai made no reference to the deed of dissolution, it is clear from Fazal Bhai 's own statement filed in response to this notice that he clearly understood that the revising authority would be considering the question of bona fides in respect of the numerous statements about the settlement of accounts in connection with the dissolution of business made in the deed of dissolution.
We are satisfied, therefore., that the appellant Fazal Bhai had reasonable opportunity of being heard as regards the bona fides of the transactions mentioned in the deed of dissolution.
As we have already mentioned in connection with the other appeal, the fact that the firm stood dissolved with effect from the date on which the deed of dissolution was executed can no longer be disputed.
The effect of the Custodian 's order in regard to the deed of dissolution merely is that the transactions mentioned in that deed on the purported basis of an earlier dissolution has been declared to be not bona fide and confirmation was refused of whatever transfers of properties were purported to have been effected by that deed.
This appeal, is, therefore,, dismissed with costs.
Appeals dismissed.
| Rule 268 of the Madras Motor Vehicles Rules, 1940, as it originally stood did not empower the Transport Authority to alter from time to time the starting places and termini for motor vehicles.
The rule was amended in 1950 so as to empower the Transport Authority to do so, and after giving notice to the appellant who was the owner of a bus stand in a municipality, which was being used for several years as the starting place and terminus for motor buses plying to and from the municipality, the Transport Authority passed a resolution changing the starting place and terminus for the convenience of the public.
The appellant applied for a writ of certiorari contending that r. 268 as amended was ultra vires as it went beyond the rule making powers conferred by section 68 (2) (r) of the and was also repugnant to article 19 (1) (g) of the Constitution: Held, (i) that the fixing and alteration of bus stands was not a purpose foreign to the " control of transport vehicles ", the purpose for which rules could be made under section 68 (1), and the power to make rules prohibiting the picking up or setting down of passengers at specified places mentioned in section 68 (2) (r) necessarily included the power to alter the situation of bus stands, and r. 268 as amended did not therefore go beyond section 68 (2) (r) ; (ii) the restriction placed upon the use of the bus stand for the purpose of picking up or getting down passengers to or from outward journeys cannot be considered to be an unreasonable restriction on the right to carry on any profession, trade or business of the appellant, and r. 268 was not in any way repugnant to article 19 (1) (g) of the Constitution.
The expression " duly notified stand " in the Madras means a stand duly notified by the Transport Authority.
There is no warrant for the view that it means a stand 291 notified by the municipality.
The provisions of section 270 (b), (c) and (e) do not affect the power of the Transport Authority to regulate traffic control or impose restrictions upon the licence of cart stands.
|
Appeals Nos. 845 and 846 of 1963.
Appeals by special leave from the judgment and order dated January 17, 1958 of the Madras High Court in Civil Revision Petitions Nos. 981 and 982 of 1956.
section V. Gupte and R. Thiagarajan, for the appellants (in both the appeals).
Naunit Lal, for the respondents Nos. 1(c) and 17 (in C.A. No. 845 of 1963) and respondents Nos. 1 (c) and 16 (in C.A. No. 846 of 1963).
The Judgment of the Court was delivered by Hegde, J.
These appeals arise from an insolvency proceeding wherein one Ponnayya Konar and his sons were adjudicated as insolvents.
In the said proceeding the petitioning creditor sought to get annulled two mortgages one for Rs. 15,000 (Exh.
A 1) executed by the insolvents in favour of Ayyappa Naicker, the appellant in Civil Appeal No. 845 of 1963 and the other for Rs. 10,000 (Exh.
A 2), the subject matter of Civil Appeal No. 846 of 1963, in favour of one Srinivasa Naicker, the father in law of the aforementioned Ayyappa Naicker.
The said Srinivasa Naicker is dead and the appeal is being prosecuted by his legal representatives.
Both those mortgages are dated November 4, 1950 and they were registered on November 6, 1950.
The Insolvency Court held that those mortgages were not supported by consideration and that they were executed with a view to screen some of the properties of the insolvents from their creditors.
It accordingly annulled those mortgages under section 53 of the (hereinafter referred to as the Act).
In appeal the learned District Judge reversed the findings of the trial court.
He came to the conclusion that those mortgages were fully supported by consideration and that they were genuine transactions.
The High Court acting under the 1st proviso to section 75(1) of the Act reversed the judgment of the learned District Judge and restored that of the Insolvency Court.
These appeals have been brought against the decision of the High Court after obtaining special leave from this Court.
The learned Counsel for the appellants challenged the decision of the High Court primarily on two grounds.
According to him 700 the High Court while acting under the 1st proviso to section 7 5 (1) of the Act had no power to disturb the findings of fact reached by the appellate court.
Next he contended that the conclusions of the High Court are unsustainable on the evidence on record.
The learned Counsel for the contesting respondents supported the decision of the High Court.
The two principal questions that arise for decision in these appeals are (1) was the High Court within its jurisdiction in interfering with the findings of the learned District Judge that the impugned transactions are bona fide transactions and that they were supported by consideration and (2) are the conclusions reached by the High Court correct on the facts and circumstances of the case ? It would be convenient to take up first, the question as to the scope of the powers of the High Court under the 1st proviso to section 75 (1) of the Act.
That section reads : "The debtor, any creditor, the receiver or any other person aggrieved by a decision come to or an order made in the exercise of insolvency jurisdiction by a Court subordinate to a District Court may appeal to the District Court, and the order of the District Court upon such appeal shall be final : Provided that the High Court, for the purpose of satisfying itself that an order made in any appeal decided by the District Court was according to law, may call for the case and pass such order with respect thereto as it thinks fit : Provided further, that any such person aggrieved by a decision of the District Court on appeal from a decision of a subordinate Court under section 4 may appeal to the High Court on any of the grounds mentioned in sub section (1) of section 100 of the Code of Civil Procedure, 1908.
" According to Shri section V. Gupte, learned, Counsel for the appellants the jurisdiction of a High Court under the 1st proviso to section 75(1) is a very limited one, the same being not more than that conferred on it by sub section
(1) of section 100 of the Code of Civil Procedure.
In support of his contention he invited our attention to the scheme of section 75(1) of the Act.
He urged ' that sub section
(1) of section 75 prescribes that the decision of the District Court in appeal is final and the finality conferred on the decision of the District Court is subject to a very limited scrutiny by the High Court.
We were further told that the power conferred on the High Court under the 1st proviso to section 75(1) is only a revisional power, which power in its very nature is narrower in compass than an appellate pow&.
According to him the power conferred under the 1st proviso to section 75(1) of the Act is co extensive with that 701 given to the High Court under section 100(1) (a) of the Code 'of Civil Procedure.
On the other hand Mr. Naunit Lal, learned Counsel for the respondent urged that the High Court under the 1st proviso to section 75(1) of the Act has an extensive power and that power is very much wider than the power conferred on it under section 100(1) (a) of the Code of Civil Procedure; the power of the High Court under the 1st proviso to section 75 (1) of the Act to call for the case to satisfy itself that the order made by the District Court was according to law and pass such other order in respect.
thereto as it thinks fit includes within itself the right to examine whether the District Court had taken into consideration all the material evidence and whether it had properly assessed that evidence.
We are of the opinion that the extreme contentions advanced on either side cannot be accepted.
Quite clearly the legislature did not confer on the High Court under the 1st proviso to section 75 (1) of the Act an appellate power nor did it confer on it a jurisdiction to reappreciate the evidence on record.
While exercising that power the High Court, is by and large bound by the findings of fact reached by the District Court.
If the legislature intended to confer power on it to reexamine both questions of law and fact it would have conveyed its intention by appropriate words as has been done under various other statutes.
A wrong decision on facts by a competent court is also a decision according to law.
For these reasons we cannot accept the, contention of Mr. Naunit Lai that the power conferred under the 1st proviso to section 75 ( 1 ) of the Act enables it to de novo examine the findings of fact reached by the District Court.
A decision being "contrary to law" as provided in section 100(1) (a) of the Code of Civil Procedure is not the same thing as a decision being not "according to law" as prescribed in the 1st proviso of section 75(1) of the Act.
The latter expression is wider in ambit than the former.
It is neither desirable nor possible to give an exhaustive definition of the expression "according to law".
The power given to the High Court under the 1st proviso to section 75(1) of the Act is similar to that given to it under section 25 of the Provincial Small Causes Courts Act.
Explaining the scope of the latter provision Beaumont, C.J. (as he then was) in Bell & Co., Ltd. vs Waman Hemraj (1) observed: "The object of section 25 is to enable the High Court to see that there has been no miscarriage of justice, that the decision was given according to law.
The section does not enumerate the cases in which the Court may (1) [1938]40 Bom.
L.R. 125.
L10Sup./69 10 702 interfere in revision, as does section 115 of the Code of Civil Procedure, and I certainly do not propose to attempt any exhaustive definition of the circumstances which may justify such interference; but instances which readily occur to the mind are cases in which the Court which made the order had no jurisdiction or in which the Court has based its decision on evidence which should not have been admitted, or cases where the unsuccessful party has not been given a proper opportunity of being heard, or the burden of proof has been placed on the wrong shoulders.
Wherever the Court comes to the conclusion that the unsuccessful party has not had a proper trial according to law, then the Court can interfere.
But, in my opinion, the Court ought not to interfere merely because it thinks that possibly the Judge who, heard the case may have arrived at a conclusion which the High Court would not have arrived at." The said statement of the law was accepted as correct by this Court in Hari Shankar vs Rao Girdhari Lal Chowdhury(1).
We think the same applies squarely to the 1st proviso to section 7 5 (1) of the Act.
In support of his contention Mr. Gupte placed considerable reliance on the decision of this Court in Official Receiver, Kanpur and Anr.
vs Abdul Shakur and Ors.
(2) wherein this Court held that the High Court in exercise of its power under the 1st proviso to section 75 (1) of the Act is incompetent to disturb the findings of fact reached by the District Court and further the question whether a statutory presumption was rebutted by the rest of the evidence on record was also a question of fact which again was not open to be reviewed by the High Court.
Shah, J. who spoke for the Court observed thus at p. 259.
"The District Court inferred from the facts found that the statutory presumption under section 118 of the Negotiable Instruments Act had been weakened and the burden which lay upon the insolvent was discharged and it was not open to the High Court exercising jurisdiction under section 75(1) proviso 1, nor even under proviso 2 of the to set aside the judgment of the District Court, for it is well settled that the question whether a statutory presumption is rebutted by the rest of the evidence is a question of fact.
" It may be remembered that Shah, J. was also a party to the decision in Hari Shankar 's, case(2), We see no conflict between (1) (1962) 1 Supp.
S.C.R. 933.
(2) ; 703 the two decisions.
The former decision enumerates some of the circumstances under which the High Court can interfere while considering whether the decision under review was made according to law.
All that is laid down in Abdul Shakur 's case(1) is that the High Court is not competent to disturb a finding of fact reached by the District Court even ' if in reaching that finding it was required to take into consideration a statutory presumption.
We shall now proceed to examine the facts of this case bear ing in mind the principles set out above.
We shall first set out the undisputed facts.
The respondent Ponnayya Konar was a well to do person.
He had one rice mill at Kivalur and another at Sirkali.
He also had landed properties in Sirkali and Tuticorin.
He was having money dealings with the family of Sreenivasa Naicker from about the year 1925 Under the original of Exh.
B 1, a registered deed of Othi dated 28th September, 1925, he had borrowed a sum of Rs. 30,000 from Rangappa Naicker, the father of Srinivasa Naicker.
On October 5, 1930 the said deed was renewed by the execution of a simple mortgage deed by Ponnayya Konar and his sons in favour of Rangappa Naicker.
Under the registered mortgage deed dated 13th January, 1942 (Exh.
B 4 is its copy), tile insolvents had borrowed from Ayyappa Naicker Rs. 20,000 out of which he discharged some of the debts due to Rangappa Naicker.
Ayyappa Naicker was himself a rich man.
Under the partition deed entered into in his family on October 30, 1936 (Exh.
B 3) he got a cash of Rs. 52,000 and lands measuring 250 acres.
The debt due to Ayyappa Naicker under the deed dated 13th January 1942 was discharged by payment of Rs. 5,000 and interest on 3rd April, 1948 and Rs. 15,000 and interest on the 28th March, 1949, as can be seen from Exhs.
B 5 and B 6.
The case of the mortgagees is that when Exh.
A 1 and A 2 were executed they were unaware of the fact that the insolvents had got into financial difficulties by then.
The learned District Judge has accepted this plea and the learned Judge of the High Court has not come to a contrary conclusion.
There was no relationship between the insolvents and the mortgagees.
In fact they belong to different communities.
The insolvents are Hindus and the mortgagees are Christians.
They also live at different places.
The insolvents were residing at Sirkali and the mortgagees at Tuticorin, a place which is at a considerable distance from Sirkali.
According to the mortgagees the circumstances under which Exh.
A 1 and A 2 came to be executed are as follows (1) ; 704 In about the beginning of 1950 Ponnayya Konar approached Srinivasa Naicker for a loan of Rs. 30,000.
Srinivasa Naicker told him that he and his son in law Ayyappa Naicker together would lend him a sum of Rs. 25,000 on the mortgage of his properties at Tuticorin.
But as they did not have the entire sum of Rs. 25,000 in their hands at that time, a sum of Rs. 10,000 was paid to Ponnayya Konar on April 28, 1950 and a promissory note was taken for that amount.
A 11).
In the beginning of September, 1950 Ponnayya Konar sent his son Arulappan with the letter (Exh. B 7) to get some more money.
Accordingly another sum of Rs. 5,000 was paid on September 8, 1950 and the pronote (Exh.
A 12) was taken from Arulappan.
They agreed to pay the balance amount promised to be advanced at the time of the execution of the mortgage deeds.
The mortgage deeds were got written up and executed on 4th November 1950.
Therein it was recited that they were executed for cash consideration.
It was thought that the mortgagees would be able to pay the balance amount before the registration of the documents on November 6, 1950.
But by that time they were not able to get together the entire amount that remained to be paid.
On the date of the registration Ayyappa Naicker paid to the mortgagors only a sum of Rs. 4,500 another sum of Rs. 500 was adjusted towards the interest due on the sum of Rs. 15,000 previously advanced in April and September.
The remaining sum of Rs. 5,000 was paid in two instalments, a sum of Rs. 1700 through Amirthan, the 3rd son of Ponnayya Konar on January 7, 1951 and the remaining sum of Rs. 33,00 again through Amirthan on February 10, 1951.
In the insolvency proceedings on the application of the petitioning creditor, a commissioner to search the house of the insolvents and seize their books of account and other relevant records was appointed.
After search the Commissioner seized from the house of the insolvents several account books (ledgers as well as day books) as well as A 1 1 and A 1 2 which were found punched and defaced.
A 11, A 12 as well as several of the entries in the ledger and day books were marked by consent in the proceedings from which these appeals have arisen.
Hence their genuineness is not open to question.
It is most unlikely that those documents were got up by the insolvents and kept in their house, depending on the off chance of a court commissioner searching their house and seizing them, so that they may serve as corroborating evidence in support of the impugned mortgages.
If Exh.
A 11 and A 12 as well as the entries in the account books were intended to support the claim tinder Exhs.
A 1 and A 2, the most natural course would have been to draw up the mortgage deeds in such a way as to 705 take assistance from them.
In that case the mortgage deeds would not have recited that they were executed for cash consideration.
Further Exhs.
A 11 and A 12 would have been left in the possession of the mortgagees.
We are convinced that the version put forward by the mortgagees is substantially true.
The original agreement between the parties was to take mortgages of the Tuticorin properties for cash consideration. 'The intermediate steps taken were necessitated by the fact that mortgagees were not able to get together in one, lump the required amount.
The promissory notes Exhs.
A 11 and A 12 were taken as stop gap arrangements.
The recitals in the mortgage deeds accord with the original agreement between the parties.
That was likely to be the reason why the promissory notes Exh.
A 11 and A 12 were returned to the parties.
The entries in the account books of the insolvents reflect the transactions as they took place.
If they were bogus entries made to support Exhs.
A 1 and A 2, a receipt of Rs. 25,000 in cash on 4th November 1950 would have been shown therein.
The learned District Judge correctly thought that the account entries in question had a great deal of intrinsic value.
On the other hand the insolvency court and the High Court unnecessarily allowed themselves to be influenced by the apparent contradiction appearing between the recitals in Exhs.
A 1 and A 2 and those in Exhs.
A 11, A 12 and the account entries.
One other circumstance which had weighed with the High Court in holding that Exhs.
A 1 and A 2 do not represent genuine transactions is that in their pleadings the mortgagees have struck to their case that cash consideration passed under Exh.
A 1 and A 2 and this the Court thought was a deliberately false plea.
The learned District Judge had carefully considered this circumstance but was of opinion that the same was of no consequence.
We think that the High Court had attached undue importance to that circumstance.
The issue before the parties at the time of the pleadings was whether the mortgages in question were supported by consideration or not and not the manner in which that consi deration was paid.
In their plea the mortgagees were merely adhering to the tenor of the mortgage deeds.
From the facts stated earlier, it is clear that the mortgagees at all stages proceeded on the basis that Exhs.
A 1 and A 2 were executed for cash consideration, the other steps taken by them being merely incidental.
The last and by far the most important circumstances that appears to have influenced the High Court was the failure of the mortgagees to produce their account books.
This circumstance was carefully considered by the District Judge.
He held that the adverse, inference that could be drawn from that circumstance was rebutted by the other evidence available in the case.
It was open to him to do so.
His finding on this point is also a finding 706 of fact and by no means a wholly unreasonable finding.
The High Court could not have interfered with the same.
From the above discussion it follows that generally speaking we shall come to the details of consideration presently the findings of the District Court as regards the payment of consideration under Exh.
A 1 and A 2 are findings of facts and they were not open to review by the High Court.
This takes us to the various items of consideration said to have passed under Exhs.
A 1 and A 2 and the proof thereof.
The District Court has held that the entire consideration mentioned in those documents has passed.
We have now to see whether its finding in respect of the various items of consideration is supported by legal evidence.
The challenge to the payment of consideration under Exhs.
A 1 and A 2 made by the petitioning creditor includes a challenge to the passing of the various items of consideration said to have passed.
Ordinarily the burden of proving that a document impeached under section 53 of the Act is not supported by consideration is on the party who challenges its validity.
That is so because the party who stands by the document can take advantage of the admission made by the insolvent in the document in question.
, But in this case the mortgagees themselves do not stand by the recitals in the documents as regards the manner in which consideration was paid.
Therefore it is for them to prove the passing of consideration.
Hence we have to see how far they have succeeded in proving the same.
We shall first take up Exh.
A 2, the mortgage deed executed in favour of Srinivasa Naicker.
It is said that the consideration payable under that mortgage was paid in the following manner: Rs. 5,000 under promissory note Exh.
A 11; Rs. 1,700 paid in cash on 7 1 1951 and Rs. 3,300 also paid in cash on 10 2 1951; The receipt of the aforementioned sums is entered in the day book and edger of the insolvents.
The relevant entries amount to an admission on the part of the insolvents of having received the amounts mentioned therein.
We have earlier considered the authenticity of those account books.
The evidence of the mortgagees as regards the payment of consideration is strongly corroborated by the entries in the insolvents ' account books.
It was open to the learned District Judge to rely on them.
Hence his finding as regards the validity of the mortgage under Exh.
A 2 must be held to be final.
So far as the consideration for Exh.
A 1 is concerned it is said to have been made up of (i) a sum of Rs, 10,000 advanced under Exh.
A 11; 707 (ii) Rs. 500 the interest due under Exh.
A 11 and A 12; and (iii) Rs. 4,500 paid on 6 11 1950.
The receipts of the various sums mentioned above excepting the sum of Rs. 4,500 said to have been paid on 6th November 1950, are entered in the day book and the ledger of the insolvents.
Hence to that extent the finding of the learned District Judge is unassailable.
So far as the payment of Rs. 4,500 said to have been made on November 6, 1950 is concerned no corresponding entry in the day book or the ledger had been proved.
This important circumstance was not noticed by the learned District Judge.
He proceeded on the basis that the account entries support the payment of that item as well.
The evidence of Ayyappa Naicker as regards that payment is necessarily interested.
The only other evidence on that point is that of P.W. 2, the Registrar who registered Exhs.
A 1 and A 2.
He is a relation of the insolvents.
He did not endorse that payment in Exh.
A 1, though he knew that he was required to do so under the rules.
We are also surprised how he could have remembered that fact after several years.
Had the learned District Judge 's attention been drawn to the fact that there is no documentary evidence in proof of the payment of that item it is highly doubtful whether he would have held in favour of the mortgagee as regards the payment of that item.
After going through the evidence bearing on the point we are not satisfied that the payment of that amount is satisfactorily proved.
In the result Civil Appeal No. 846 of 1963 is allowed and the judgment and decree of the High Court is set aside and that of the District Court restored.
Civil Appeal No. 845 is allowed in part i.e. the mortgage Exh.
A 1 is held to be valid to the extent of Rs. 10,500 and interest thereon.
In the circumstances of the case we direct the parties to bear their own costs in all the courts.
R.K.P.S, C.A. 845/63 allowed in part.
C.A. 845/63 allowed in part.
| There is no hard and fast rule for determining whether a given transaction is a mortgage by conditional sale or sale outright with a condition for repurchase.
Each case must be decided on its own facts.
The numerous decisions of the High Courts on the point are of no help because two documents are seldom expressed in identical terms.
The intention of the parties is the determining factor but the intention must be gathered from the document itself which has to be construed to find out the legal effect of the words used by the parties.
If the words are express and clear, effect must 'be given to them and any extraneous enquiry into what was thought or in.
tended is ruled out.
If however there is ambiguity in the language employed then it is permissible to look to the surrounding circumstances to determine what was intended.
175 In view of the provisions of the amended section 58(c) of the Transfer of Property Act, if the sale and agreement to repurchase are embodied in separate documents, then the transaction cannot be a mortgage whether the documents are contemporaneously executed or not.
But the mere fact that there is only one document does not necessarily mean that it must be a mortgage and, cannot be a sale.
If the condition of repurchase is embodied in the document that effects or purports to affect the sale, then it is a matter for construction which was meant.
Balkishen Das vs Legge (27 I.A. 58), Alderson vs White ; at 928), Bhagwan Sahai vs Bhagwan Din (17 I.A. 98 at 102), and Thanda Singh vs Wahid ud din (43 I.A. 284 at 293) referred to.
|
Petition No. 7667 of 1987.
IN Writ Petitions Nos.
348 352 of 1985.
(Under Article 32 of the Constitution of India).
Madan Lokur for the Petitioners.
G. Viswanatha Iyer and P.K. Pillai for the State of Kerala.
J.R. Das and D.K. Sinha for the State of West Bengal.
A.K. Ganguli and Mariarputham for the State of Himachal Pradesh.
D.N. Dwivedi, R.P. Srivastava, Mrs. Halida Khatun and Ms. A. Subhashini for the Union of India.
747 P.H. Parekh, E.K. Jose, Mrs. section Dikshit, A.V. Rangam R. Rana, M. Veerappa, B.R. Agarwal, B.D. Sharma, R.C. Verma, C.V. Subba Rao, D.K. Sinha, J.R. Dass, M.E. Sardhana, S.K. Nandy, A.S. Bhasme, A.M. Khanwilkar, P.P. Singh, R.K. Mehta, T.V.S.N. Chari, A.K. Sanghi, M.N. Shroff, D. Goburdhan, Suryakant, H.K. Puri, M.K.D. Namboodiry, B.P. Singh, K. Ramkumar, E.M.S. Anam, T,V. Ratnam, L.R. Singh, D.R. Agar wal, R.S. Sodhi, Mrs. Sushma Suri, A. Subba Rao, Prabir Choudhary, D.N. Mukharjee, S.K. Mehta, M.K. Garg, P. Par meshwarn, M. Karanjawala, L.K. Pandey, K. Rajindera Choud hary, P.C. Kapur, Pramod Swarup, T. Sridharan, Rajesh, N.M. Ghatate, Ravi P. Wadhvani, S.K. Gambhir ,and D.N. Mishra for the Interveners.
The following Order of the Court was delivered by ORDER On June 22, 1984, a three Judge Bench to which one of us was.a party delivered the judgment in a group of writ peti tions and while disapproving of the prevailing wholesale reservation on different scores in regard to admission of students into medical courses of study such as M.B.B.S. and Post Graduate specialities, proceeded.
to observe that "the very mandate of the equality clause viewed in the perspec tive of social justice would justify some extent of reserva tion based upon residence requirement within the State or on institutional preferences for students passing the qualify ing examination.
" One of the considerations perhaps the primary one in formulating the scheme for creating a nation al forum for choice of candidates for the reserved seats was the growth of a broad based national approach as against the prevailing State based reservationist policy.
The Judgment was delivered during the long vacation of the court perhaps with the fond hope that the scheme evolved by this Court could be implemented in the educational ses sion to follow.
This Court had not then assessed what magni tude the task of implementation of the scheme would involve.
When the scheme did not become operative even in the following year (1985 86), this Court directed the Government of India to convene a meeting in which Medical faculties of universities, Health Secretaries of State Governments, representatives of the Medical Council of India, the Dental Council of India, National Board of Examinations, National Academy of Medical Sciences, the Central 748 Board of Secondary Education and representatives of the Ministries of Education and Law were to participate with a view to scrutinising and giving shape to the scheme prepared by the Medical Council of India under orders of this Court and finalise every detail regarding the holding of the All India Entrance Examination for the MBBS/BDS and Post Gradu ate Courses.
This meeting was held on September 16, 1985, and after deliberations a shape was given.
The resultant scheme and certain objections came to be dealt by this Court in its order dated July 21, 1986.
By this order the reservation of 30% indicated in the main judgment was reduced to 15% of the total seats for MBBS course in each medical college or institution without taking into account any reservations validly made and this Court observed: "This new formula is in our opinion fair and just and brings about real equality of opportunity in admissions to the MBBS/BDS course without placing the students in one State in an advantageous or disadvantageous position as compared to the students in anoth er State." This Court dealt at length with the objections to the syllabus and ultimately said: "We approve of the syllabus since it has been accepted by the Medical Council of India, the Government of India and all the State Governments except the State of Maha rashtra which also did not make any submis sions to the Court at the hearing of this case.
" This Court further said : "Since as a result of the direction given by us on 2nd May, 1986, our judgment dated 22nd June, 1984, is going to be opera tive only with effect from the academic year commencing in 1987 and the first All India Entrance Examination for admission to the MBBS/BDS course would be held only in June, 1987, we would request the Education Depart ment of each State as also the Board of Sec ondary and/or Higher Secondary Education in each State to take note of this syllabus which we have approved for the All India Entrance Examination and to suitably amend its syllabus or course for the 12th year (perhaps class) 749 so as to bring it in line with the syllabus approved by us so that the students passing the qualifying examination of the 12th class may be properly equipped to face the All India Entrance Examination.
It would be desirable if a common syllabus is adopted at +2 level throughout the country so that there may be uniformity in the educational pattern and the students in various States may be able to appear in the All India Entrance Examination on a footing of equality without any undue advantage to one as against the other.
" By the same order, the Court held that the Central Board of Secondary Education would be the agency to conduct the All India Entrance Examination for admission to the MBBS course.
It was further clarified that the scheme in the main judgment as modified later is meant to apply to medical colleges or institutions maintained or run by the Union of India, any State Government or Municipal or Local Authority.
That order also directed that : "All India Entrance Examination for MBBS/BDS course shall be held once in a year which may commence at any time between 15th July and 1st August each year.
The dates indicated in paragraph 14 of the Scheme of All India En trance Examination for MBBS/BDS course are quite in order but we would add one more date, namely, that the result of the All India Entrance Examination shall be declared some time between the 15th and the 20th June.
A list of successful candidates shall be pre pared in order of merit and it shall comprise the names of as many students as the number of vacant seats available for admission plus 10% more and there shall also be a waiting list as indicated in paragraph 8 of the scheme.
There shall also be an interval of time of at least three weeks between the date of publication of the list and the date of admission to the medical colleges or institu tions covered by the scheme.
" There is an apparent mistake in the working schedule in this part of that order.
If the examination is to be held between July 15 and August 1, the result cannot be declared between the 15th and the 20th of June.
We clarify this apparent error by directing that the examination shall be held be tween 16th May and 31st May and the results shall be noti fied between 15th and 20th June.
The list of the candidates as directed in that order will be prepared within one week from the publication of the results and three weeks ' time shall be allowed to 750 intervene before actual admission starts.
By the end of August such process having been completed, actual teaching should start from the beginning of September.
In all medical colleges/institutions to which the scheme applies, teaching for MBBS/BDS course should start on the first working day of September and even those institutions which are outside the scheme might as well commence their academic sessions from September so that throughout the country there would be uniformity in that regard.
In that order, this Court further held: "The schemes of examination for admission to MBBS/BDS course . . are therefore approved by us, subject to the various modifications discussed and formulated in this judgment.
We would direct the Govern ment of India to revise these schemes in accordance with the modifications directed in this judgment and to submit such revised schemes to this Court within two weeks from today.
The Government of India will supply copies of the revised schemes to the learned advocates appearing on behalf of the State Governments, the Medical Council of India and the Bombay University so that if the revised schemes are not in accordance with the direc tions given by us in this judgment in any respect, they may be able to point out such discrepancies in the revised schemes.
" The Writ Petitions were directed to be placed for hear ing on 4th of August, 1986, for confirmation of the revised schemes prepared by the Government of India in accordance with the directions given in that judgment.
The revised schemes were not placed for finalisation before the Court in the manner directed but ultimately the concerned authorities proceeded with the making of arrangements for holding of the All India Entrance Examination.
At that stage, several applications were moved objecting to the holding of the examination in the absence of a final clearance from this Court.
In that order of 21st July, 1986, this Court had directed: "We would like to make it clear that students shall be entitled to appear at the All India Entrance Examination even if the result of the qualifying examination has not yet been declared, provided they have appeared at the qualifying examination but they cannot be admitted to the MBBS/ BDS course unless they have passed the qualifying examination.
" 751 In the advertisement which was given calling for applica tions from candidates seeking admission to the entrance examination, eligibility was limited to successful candi dates in the qualifying examination and the above direction of this Court was not reflected there.
On 30th of April, 1987, this Court made the following order: "We understand that notice of the Scheme has been served on all the States.
Some of the States have filed their objections to the proposed Scheme.
The remaining States may file their objections by June 15, 1987 latest.
The Registry of this Court will serve a copy of this Order on the Chief Secretary of each State to enable those States who have not filed objections to do so by the aforesaid date.
Those States who do not have a copy of the Scheme with them will apply to the Regis try within time for such copy.
It is distinct ly understood that no further time will be allowed to any State for filing objections.
The Union of India will file its response to those objections by July 10, 1987.
The matter shall be listed on July 14, 1987 for final disposal.
Meanwhile, the examination scheduled for May 3, 1987 shall stand postponed.
The postponement of the examination shall be notified publicly in all prominent newspapers, the All India Radio and Doordarshan immediate ly.
We also restrain the States and their respective medical Colleges from filling up 15% of the seats in the First Year M.B.B.S. Course . . . until fur ther orders.
" In compliance with the said direction, the objections filed by the various States have been placed before us which are being disposed of by this order.
The States which have filed ' their objections are the following: (1) Assam (2) Goa (3) Gujarat (4) Haryana (5) Karnataka (6) Kerala 752 (7) Orissa (8) Punjab (9) Rajasthan (10) Tamil Nadu (11) Uttar Pradesh (12) West Bengal.
Apart from these States, the Bombay Municipal Corporation has sent some objections to the scheme.
Most of the States had a common objection, namely, some more time is needed to Conveniently adapt to the switch over as contemplated by the scheme and, therefore, implementation of the Scheme.
under the main judgment should be deferred at least for two more years.
We have already pointed out that the Scheme was intended to be enforced in 1985 86 academic session and when it was deferred to the next year, the Court was hopeful that it could be introduced in the academic session of 1986 87.
We have indicated at length by quoting from the order of July 21, 1986, how under adverse circum stances it was not possible to enforce it in that academic session but the Court felt assured that the Scheme would be operative in the current academic session, namely, of 1987 88.
Even in April, 1987 when injunction against filling the 15% of the seats was directed, this Court seems to have still been hopeful of the working out the Scheme in this session.
For reasons which we shall indicate presently, it is not possible to enforce the Scheme in the current academ ic session of 1987 88.
By the time the Scheme is put into operation in 1988 89 Session, all States would have four years of notice of this judgment proposing the switchover to the Scheme.
Four years ' period is certainly sufficient notice and no one can have any occasion to feel aggrieved that there is any hustling up in the implementation of the Scheme.
We are, therefore, not impressed at all by the stand taken in the objections that more time necessary for imple menting the Scheme and, therefore, its implementation should be deferred until 1990.
The next objection which most of the States have voiced is that the syllabus curriculum of study in some of these States being different from the syllabus formulated under the orders of this Court, the students would be handicapped when taking the entrance examination.
Here again we see no force.
We have extracted at considerable length from a part of the order of July 21, 1986, where this aspect was 753 in the mind of the Court and as the Scheme syllabus was already prepared, the Court indicated that the courses of study at least for the 12th Class should be so changed as to fit into the syllabus.
The State Governments should have taken immediate steps for that purpose.
Now that we are deferring the implementation of the scheme till the next session, a gap of almost two years would have intervened between the earlier order of the Court and the time when the Scheme would be implemented.
Those States who have not taken steps to bring their syllabi in line with the Scheme sylla bus must be blamed for indifference but there is still time to remedy the situation.
Such of the students who propose to sit at the entrance examination must from now on undertake an extended study of the subjects covered by the syllabus in case some portions from the approved scheme syllabus are not covered by their own.
We do not consider this objection as a valid one for deferring the implementation of the Scheme any further beyond the coming session.
On behalf of some of the States like Rajasthan and Tamil Nadu, it was pointed out that the medium of study in the qualifying course being the State language, it would be difficult for the students to take the All India Entrance Examination in English.
This is not the first time this objection has been raised.
Even on an earlier occasion, it was claimed that the entrance examination should be held by adopting regional or State languages.
On this count, the Court had indicated the reasons and had refused to accept that request.
We do not think there is any justification to take a different view of the situation.
We would reiterate that the medium of study of the MBBS Course being in Eng lish, those students who propose to study the MBBS have got to be reasonably proficient in that language.
Besides, the manner in which the entrance ' examination would be held, does not require long answers to be written so that profi ciency in English should become an absolute necessity so far as that examination itself is concerned.
In these circum stances we do not see any real force in the objection relat ing to the language of the examination.
On behalf of the State of Assam, a plea was raised that the enforcement of the Scheme should be deferred for a period of five years.
By way of justification for such a request, it was maintained that the State has suffered badly on account of the continuous agitation for about three to four years and during this period, the educational institu tions were mostly closed and the State is still in a process of recovery.
It is a fact that the State passed through a period of agitational cloud but we do not think there would be any justification to keep the 754 State out from the national stream.
It is quite possible that for the first year or two, some inconvenience may be experienced but we are sure, the young students from Assam would maintain high spirits and would match up to the na tional standards for competition in respect of the 15% seats.
We are of the view that it would be in the interest of the State of Assam to quickly join the national stream.
A similar request has been made on behalf of the State of Punjab though on different grounds.
It is stated that the prevailing situation of law and order in Punjab being what it is, it may be difficult for students from outside Punjab to be in Punjab for pursuing their courses of studies in the MBBS and equally unfavourably would be the position for youngsters from Punjab to go out to other institutions located in different parts of the country.
We cannot shut our eyes to the realities of the situation but there is still almost a year for the Scheme to be implemented and we hope the present situation would not continue so long.
In case the present situation continues, it may be open to the State of Punjab to apply for directions of this Court when the Scheme is about to be implemented.
For the present we reject the request of the Punjab State '.
Ours is a large country and the level of education is not uniform throughout.
Undoubtedly some States are more advanced than others in the field of education.
The idea underlying the Scheme is to bring about a national cohesion and understanding and the Scheme has to be looked at from that stand point.
In introducing a Scheme of this type which requires a switch over from the prevailing pattern, there is bound to be some inconvenience.
Whether it is introduced now or two years after, would indeed bring about a feeling of anxiety and uncertainty till one gets used to it.
This is a part of human nature.
We have found a general welcome to the Scheme but an objection to its implementation.
The Scheme is intended to be implemented and if the Scheme is welcome, its implementation should also be received well.
There could, therefore, be no room for objection at the threash hold.
Now that the objections are not entertained and the Scheme is finalised and the syllabus was earlier approved all formalities for the holding of the examina tion are complete.
The next question is as to when should the examination be held.
Learned counsel for the Union of India as also the Indian Medical Council suggested that it could be done in October this year so that the candidates selected at the entrance examination could join the 1987 88 755 Session from November.
In most of the colleges, admission in respect of 85% seats has been completed and actuaL teaching has either begun or is about to begin.
By November a sub stantial part of the course would have been read.
To meet the situation, learned counsel for the Union of India sug gested that we should direct the colleges and institutions to have a supplementary course for the students admitted against.
the 15% vacancies.
In the absence of consent from the institutions, it would be difficult to work out that.
As it is, there exists a lot of confusion in the field and we do not propose to add to it by giving a direction of the type proposed.
On the other hand it would be appropriate to bring the Scheme into operation from the coming year so that all the preliminaries can be properly conducted and in regular course the students can seek admission to the 1988 89 Session.
We accordingly direct the authorities to hold the examination in the manner directed, in June, 1988.
The Union of India, the Medical Council, the Dental Council, the several States, Universities and Medical Colleges or insti tutions who are covered by the Scheme are directed to comply with these orders in time so as to give full effect to what has been said here.
We have no intention to accept any application for further modification or alteration of our orders except in regard to the State of Punjab to the extent we have indicat ed in this order.
We had put the parties appearing before us to notice of our intention and we reiterate it in our present order that no such application shall be entertained.
We hope and trust that all concerned would cooperate in giving an easy workable switch over to the Scheme to be implemented in the 1988 89 academic session so far as the MBBS/BDS course is concerned.
In view of our directing the Scheme to be operative from the 1988 89 academic session, the order of injunction passed on 20th of April, 1987, regarding the 15% seats is recalled.
The respective institu tions are now free to fill up these vacancies in accordance with their own procedure of admission.
A copy of this order shall be communicated forthwith by the Registry to the Chief Secretary of every State and or Union Territory as the case may be.
| The Supreme Court having quashed in appeal the dismissal orders dated April 14, 1967 passed against the appellant policemen, they were served fresh orders of dismissal on June 5, 1971 In exercise of the power conferred under clause (c) of second proviso to Article 311(2) of the Constitution.
The appellants challenged that these orders, without an inquiry as envisaged in Ariticle 311(2), were vitiated as the power under sub clause (c) of the second proviso to that Article had not been exercised upon personal satisfaction of the President.
On behalf of the respondent Union of India, it was contended that the President had personally consid ered all the facts and circumstances of each case and, after having satisfied himself, passed the order that in the interest of the security of the State it was not expedient to hold the inquiry.
The High Court held that the exercise of the power by the President under clause (c) to the proviso to Article 311(2) was fully covered by clause (1) of Article 361 and the President was not answerable to any court for the exer cise and performance of his powers and duties under this clause of the proviso to Article 311 and no court had juris diction to examine the facts and circumstances that led to the satisfaction of the President envisaged in clause (c) except probably on the ground of mala fide, and dismissed the Writ Petitions.
705 In the appeals before this Court, it was contended on behalf of the appellant that the impugned order of dismissal in 1971 which was claimed to have been passed on the person al satisfaction of the President was vitiated in view of the rule laid down in the case of Shamsher Singh and Anr.
vs State of Punjab, that the appellants having been reinstated in service in terms of judgment of this Court, without leave of the Court, no second order of dismissal on the same material could have been passed, and that the High Court was wrong in holding that the sufficiency of satisfaction of the President was not justiciable.
Dismissing the appeals, this Court, HELD: 1.1 The order of the President was not on the basis of his personal satisfaction as required by the Rule in Sardari Lal 's case but was upon the aid and advice of the Council of Ministers, as required in Shamsher Singh 's case.
The dismissal order was, therefore, not vitiated.
[711H, 712A] 1.2 This Court quashed the orders of dismissal earlier on account of non compliance of the requirement of law and when the police officers returned to service it was open to the employer to deal with them in accordance with law.
No leave of Court was necessary for making a fresh order in exercise of the disciplinary jurisdiction after removing the defects.
[712B] 1.3 There was a constitutional obligation to record in writing the reason for the satisfaction that one of the sub clauses was applicable and if such reason was not re corded in writing, the order dispensing with the inquiry and the order of penalty following thereupon would both be void and unconstitutional, and the communication of the reason to the aggrieved Government servant was not obligatory but perhaps advisable.
[712D] In the instant case, the record of the case indicates that the reason has been recorded though not communicated.
That would satisfy the requirements of law.
[712E] Union of India & Anr.
vs Tulsiram Patel & Ors., ; , followed.
1.4 No malafides could be attributed to the impugned order of dismissal.
The President 's order is dated 2nd of June and the typed orders of dismissal bear the date of the following day.
There is, there 706 fore, no scope to suggest that typed orders representing Government 's decision were available on the record by the time the matter was placed before the President.
[712F] [This Court has no sympathy for indiscipline.
In an orderly force like police, indiscipline is bound to give rise to serious problems of administration.
The Government had made it known that they intended to treat even these policemen liberally by giving them compassionate aliowances.
The situation would be met in a just way if lump sum amounts are paid to the dismissed policemen who are alive or to their legal representatives in the case of those who are dead, at the rate of Rs.60,000 to Sub Inspectors, Rs.50,000 to Head Constables and Rs.40,000 to Constables.] [713B, D F] Sardari Lal vs Union of India & Ors., ; and Shamsher Singh & Anr.
vs State of Punjab, ; , referred to.
|
minal Appeal No. 167 of 1968.
Appeal from the judgment and order dated January 18, 1968 of the Allahabad High Court in Criminal Revision No. 1482 of 1966.
O. P. Rana, for the appellant.
Bashir Ahmed and section Shaukat Hussain, for the respondent.
The Judgment of the Court was delivered by Dua J.
The State of U.P. has appealed to this Court on certificate of fitness granted by the Allahabad High Court from 495 that court 's order dated January 18, 1968, acquitting the respondent of an offence punishable under section 14 of the Foreigners Act (Act No. 31 of 1946).
This appeal was originally heard by us on January 11 & 14, 1971, when it was considered desirable to send for the original records of the case from the courts below and also to call for the Me relating to the inquiry held by the Central Government under section 9(2) of the (Act No. 57 of 1955) into the question of the acquisition of citizenship of Pakistan by the respondent.
On July 11, 1963, the respondent was arrested for 'over staying in India as a, foreigner and on March 6, 1965, he was charged by the City Magistrate, Varanasi, with the commission ,of an offence punishable under section 14 of the Foreigners Act (Act No. 31 of 1946).
The charge reads : "I, D. section Sharma, City Magistrate, Varanasi, hereby charge you Rahmatullah as follows : That you being a Pakistani Citizen entered into India on 1 4 55 on Pakistani Passport No. 283772 dated 15 3 55 and Indian visa No. 16326 Category C dated 22 3 55 and got your extension to stay in India up to 25 5 56 after which date you are overstaying in India illegally without any passport and visa : and thereby committed an offence punishable u/s 14 of Foreigners Act within my cognizance, and hereby I direct you to be tried on the said charge by me." According to the prosecution case against the respondent as put in the Trial Court, he was a Pakistani national and had on April 1, 1955, entered India on a Pakistani passport dated March 15, 1955, and an Indian Visa dated March 22, 1955, obtained by him as a Pakistani national, but even after the expiry of the permitted period he was overstaying in India without a valid passport or visa).
The original visa, it is not disputed, expired on June 21, 1955, but it was extended thrice, the last extension being valid only up to May 25, 1956.
Thereafter the respondent went underground and has since been residing in India illegally.
He was treated after several years and was arrested on July 11, 1963.
The respondent pleaded in defence that though he had entered India on a Pakistani passport he was not a Pakistani national.
On the contrary he claimed to be an Indian citizen and therefore rightfully living in India.
According to him he had been born in India of Indian parents in 1932 and was an Indian citizen under the Constitution.
496 During the pendency of the present criminal proceedings an inquiry was made by the Central Government under section 9(2) of the read with r. 30 of the Citizenship Rules, 1956, and by means of an order dated November 5, 1964, it was determined that the respondent had acquired citizenship of Pakistan after January 26, 1950, and before March 15, 1955.
March 15, 1955 was apparently fixed because on that date the respondent had secured his Pakistani passport.
In that inquiry the respondent was given full opportunity of adducing proof in support of his plea.
The respondent was informed of the determination of the Central Government on March 29, 1965 in the Trial Court.
The City Magistrate, Varanasi, trying the case came to the conclusion that the respondent had voluntarily gone to Pakistan and had stayed there for 8 or 9 months.
The fact that he had obtained a Pakistani passport was in the opinion of that court an indication of his intention to have gone to that country with the object of becoming a Pakistani national.
The argument that the determination in regard to the respondent 's citizenship was made by the Central Government after the commencement of the present proceedings was considered by the Trial Court to be irrelevant because the determination by the Central Government was immune from challenge and whether it was made before or after the framing of the charge was immaterial.
The respondent was held to be a Pakistani national and as it was not denied that he had entered India on a Pakistani passport and also that on the expiry of the period for which he had been permitted to stay in India including the extended period, he had stayed on in this country without obtaining valid permit, he was convicted of an offence under section 14 of the Foreigners Act.
He was sentenced to rigorous imprisonment for 18 months and to pay a fine of Rs. 200/ and in default of payment of fine to rigorous imprisonment for a further period of three months.
The Sessions Judge dismissed the respondent 's appeal holding that the charge had been framed against him several months after the determination by the Central Government that he was a Pakistani national.
According to that court the order of the Central Government was dated November 5, 1964, and it was communicated by the Sahayak Sachiv, U. P. to the Senior Superintendent of Police, Varanasi, on December 28, 1964.
On revision the High Court disagreed with the view of the courts below.
According to the High Court the respondent was not a foreigner when he entered India though he had obtained 497 a Pakistani passport.
Having not entered as a foreigner the respondent 's case was held to be outside para 7 of the Foreigners Order, 1948, made under section 3 of the Foreigners Act.
The High Court held the respondent to be a foreigner when he was prosecuted for an offence under section 14 of the Foreigners Act.
But in its opinion that fact could not attract para 7 of the Foreigners Order, 1948 made under section 3 of the Foreigners Act.
On this reasoning the respondent 's conviction was set aside and he was acquitted.
In this Court, to begin with, it was argued on behalf of the State that section 2(a) of the Foreigners Act defines a "foreigner" to mean a person who is not a citizen of India.
If, therefore, the respondent is not a citizen of India, then being a foreigner his prosecution and conviction under section 14 of the Foreigners Act was unassailable, contended Shri Rana.
The order of the High Court acquitting the respondent was, therefore, contrary to law, he added.
This submission is misconceived.
The definition of the word "foreigner" relied upon by the counsel was substituted for the earlier one by the Foreigners Law (Amendment Act 11 of 1957) with effect from January 19, 1957.
Quite clearly the new definition is of no assistance in determining the status of the respondent at the time of his entry into India in 1955.
The word "foreigner" according to the definition as in force in 1955 meant, a person who (i) is not a natural born British subject as defined in sub sections (1) and (2) of section 1 of the British Nationality and Status of Aliens Act, 1914, or (ii) has not been granted a certificate of naturalization as a British subject under any Jaw for the time being in force in India, or (iii) is not a citizen of India.
The , having been published in the Gazette of India on December 30, 1955, was also not in force at the time when the respondent entered India.
We may, therefore, turn to the Constitution to see if the respondent was a citizen of India at the time of the commencement of the Constitution.
Clause (a) of Article 5 clearly covers the case of the respondent who was born in the territory of India, and had his domicile in this territory at the commencement of the Constitution.
Being a citizen of India at the commencement of the Constitution in 1950, unless he lost his citizenship under some law between the commencement of the Constitution and his entry into India in 1955, the respondent would continue to be an Indian citizen till such entry.
Even on behalf of the appellant no serious attempt was made to show that the respondent had lost his Indian citizenship in any other manner except on the basis of his having obtained a Pakistani passport and on the basis of the determination of the question of his citizenship by the Central Government on November 5, 1964.
Indeed after some faint argument the appellant 's learned counsel based his case exclusively on the determination 32 1 section C. India/71 498 by the Central Government, and in our opinion on the existing record rightly so.
According to his submission the determination made by the Central Government under section 9(2) of the is final and since the respondent has been held to have acquired citizenship of Pakistan before March 15, 1955, his entry into India after that date and his subsequent continued stay in this country after the expiry of the extended period on May 22, 1955, would amount to an offence punishable under section 14 of the Foreigners Act.
As will presently be shown the real question which arises for our decision lies in a short compass and the relevant facts essential for the decision are no longer in dispute.
When the respondent entered India on April 1, 1955, he was in possession of a Pakistani passport and a visa to which no objection was taken by the Indian authorities.
He did not enter India clandestinely, and he is not being tried for having entered India in violation of any law.
Indeed his visa was, admittedly extended by the appropriate authority up to May 22, 1965.
As he was clearly a citizen of India at the commencement of the Constitution and the question arose whether he had lost Indian citizenship thereafter, the Central Government had to determine under section 9 of the the question of the acquisition of Pakistan nationality by the respondent.
This Court in Government of Andhra Pradesh vs Syed Mohd. Khano after referring to its earlier decision in lzhar Ahmad Khan vs Union of India(1) made the following observation : "Indeed, it is clear that in the course of the judgement, this Court has emphasised the fact that the question as to whether a person has lost his citizenship of this country and has acquired the citizenship of a foreign country has to be tried by the Central Government and it is only after the Central Government has decided the point that the State Government can deal with the person as a foreigner.
It may be that if a passport from a foreign Government is obtained by a citizen and the case falls under the impugned Rule, the conclusion may follow that he has "acquired the citizenship of the foreign country" , but that conclusion can be drawn only by the appropriate authority authorised under the Act to enquire into the question.
Therefore, there is no doubt that in all cases where action is proposed to be taken against persons residing in this country on the ground that they have acquired the citizenship of a foreign State (2) [1962] Supp.
3 section C. R. 235.
(1) [1962] Supp. 3 section C. R. 288.
499 and have lost in consequence the citizenship of this country, it is essential that question should be first considered by the Central Government.
In dealing with the question, the Central Government would undoubtedly be entitled to give effect to the impugned R. 3 in Sch.
III and deal with the matter in accordance with the other relevant Rules framed under the Act.
The decision of the Central Government about the status of the person is the basis on which any further action can be taken against him." In that case an argument was raised on the authority of lzhar Ahmad Khan 's case(1) that as soon as a person acquired a passport from a foreign Government his citizenship of India automatically came to an end, but it was repelled.
in Shuja Ud Din vs The Union of India and Another(2) this pondent there was born in India in 1924 and had lived in this 'Country all along tiff about the end of 1954.
At the end of 1954 or the beginning of 1955 he went to Pakistan from where he returned on January 20, 1955 on a passport granted by the Pakistan Government which had a visa endorsed on it by the Indian authorities permitting him to stay in this country upto April 1955.
He applied to the Central Government for extension of the time allowed by the visa, but there was no material to show what orders, if any, were made on it.
The respondent having stayed in this country beyond the time specified in the visa, on September 3, 1957 he was served with an order under section 3(2)(c) of the Foreigners Act, requiring him to leave India.
On his failure to comply with this order he was prosecuted under section 14 of the Foreigners Act.
His defence was that he was an Indian national.
The Magistrate trying him rejected his defence and convicted him holding that he had disowned Indian nationality by obtaining a Pakistan passport and that by refusing to extend the time fixed by the visa the Central Government had decided that the respondent was a foreigner under section 8 of the Foreigners Act and that such a decision was final.
He was convicted by the Trial Court and the conviction was upheld by the Sessions Judge.
The High Court in revision set aside his conviction.
On appeal this Court held that neither the Magistrate nor the Sessions Judge was competent to come to a finding of his own that the respondent, an Indian national, had disowned his nationality and acquired Pakistan nationality for under section 9(2) of the that decision could only be made by the prescribed authority.
The respondent in that case, according to this Court, had become an Indian citizen under article 5(a) of.
the Constitution when it (1) [1962] Supp.
3 section C. R. 233 (2) ; 500 came into force and there being no detention by the Central Government that he had lost his nationality thereafter.
the order of the High Court acquitting him was upheld.
in Shuja Ud Din vs The Union of India and Another (1) this Court speaking through Gajendragadkar, J. as he then was, said: "it is now well settled that the question as to whether a person who was a citizen of this country on January 26, 1950, has lost his citizenship thereafter, has to be determined under the provisions of section 9 of the (No. LVII of 1955).
There is also no doubt that this question has to be decided by the Central Government as provided by Rule 30 of the Rules framed under the in 1956.
The validity of section 9 as well as of Rule 30 has been up held by this Court in the case of Izhar Ahmad Khan and Ors.
vs Union of India and Ors.
It has also been held by this Court in The State of Madhya Pradesh vs Peer Mohd. and Anr.
Appeal No. 12 of 1961 decided on Sept. 28, 1962) that this question has to be determined by the Central Government before a person who was a citizen of India on January 26, 1950, could be deported on the ground that he has lost his citizenship rights thereafter under section 9 of the .
Unless the Central Government decides this question, such a person cannot be treated as a foreigner and cannot be deported from the territories of India.
" In Abdul Sattar Haji Ibrahim Patel vs The State of Gujarat(2), Gajendragadkar, C. J., speaking for a bench of five Judges approved the decisions in the cases of Izhar Ahmed Khan(3) and Syed Mohd. Khan(4), it being emphasized that the decision of the Government of India is a condition precedent to the prosecution by the State of any person on the basis that he has lost his citizenship of India and has acquired that of a foreign country.
That an inquiry under section 9 of the can only be held by the Central Government was again reaffirmed by this Court in Mohd. Ayub Khan vs Commissioner of Police, Madras (5).
In view of these decisions it seems to us to be obvious that till the Central Government determined the question of the respondent having acquired Pakistan nationality and had thereby (1) C. A. No. 294 of 1962 decided on Oct. 30, 1962.
(2) Cr.
A. No. 153 of 1961 decided on Feb. 17,1964.
(3) [1962] Supp.
3 section C. R.235.
(4) [1962] SUPP.
3 section C. R. 288.
(5) 501 lost Indian nationality, he could not be treated as a foreigner and no penal action could be taken against him on the basis of his status as a foreigner, being national of Pakistan.
It is not the appellant 's case before us that any directions under the law governing foreigners were given to the respondent after November 5, 1964, which were disobeyed entailing his prosecution, and indeed it is admitted that he was not even informed of the decision of the Central Government till March 29, 1965.
It is also noteworthy that at the time when the Central Government determined his nationality he was being tried in this country by the criminal court after having been arrested and bailed out, and he was not free to leave this country for proceeding to Pakistan.
In the background of these facts it appears to us that the wide charge as framed against him was misconceived and he could not be convicted of overstaying in this country at least till he was duly found to be a Pakistani national and to have ceased to be an Indian citizen.
The order of the Central Government is clearly final, and it has remained unchallenged by the respondent even after he was informed of this order on March 29, 1965.
We have seen the proceedings of the Central Government and we find that the respondent had been given full opportunity of putting forth his case.
The binding nature of that order was not, and indeed it could not be, questioned before us.
The determination by the Central Government in this case could not have the effect of retrospectively rendering a penal offence an act which was not so at the time of its commission.
The respondent even though held to be a Pakistani, and therefore a foreigner, before the charge was framed against him is entitled to the protection of our laws.
As a result of the foregoing discussion, the High Court was in our opinion right in setting aside the respondent 's conviction on the charge framed.
It will of course be open to the Central Government to take such suitable action against the respondent under the Foreigners Act or under any other provision of the law which may be applicable to him, for the purpose of either deporting him or otherwise dealing with him as is thought fit.
This appeal, however, must fail.
Y.P.S. Appeal dismissed.
| It is well settled that while Article 14 of the Constitution forbids class legislation, it does not forbid reasonable classification for the purposes of legislation.
In order, however, to pass the test of permissible classification two conditions must be fulfilled, namely, (i) the classification must be founded on an intelligible differentia which distinguishes persons or things that are grouped together from others left out of the group; and, (ii) that differentia must have a rational relation to the object sought to be achieved by the statute in question.
The classification may be founded on different bases; namely geographical, or according to objects or occupations or the like.
What is necessary is that there must be nexus between the basis of classification and the object of the Act under consideration.
Further Article 14 condemn,,; discrimination not only by a substantive law but also by a law of procedure.
The Constitution does not assure unanimity of decisions or immunity from merely erroneous action, whether by the courts or the executive agencies of a State.
Section 30 of the Code of Criminal Procedure does not infringe the fundamental right guaranteed by Article 14 of the Constitution.
Chiranjit Lal Chowdhuri vs The Union of India ( ; , The State of Bombay vs F.N. Balsara ([1951] S.C.R. 682), The State of West Bengal vs Anwar Ali Sarkar ([1952] S.C.R. 284), Kathi Raning Rawat vs The State of Saurashtra ([1952] S.C.R. 435), Lachmandas Kewalram Ahuja vs The State of Bombay ([1952] S.C.R. 710), Qasim Razvi vs The State of Hyderabad ([1953] S.C.R. 581), Habeeb Mohamad vs The State of Hyderabad ([1953] S.C.R. 661), The State of Punjab vs Ajaib Singh ([1953] S.C.R. 254), Yick Wo vs Peter Hopkins ([1886] ; 29 L. Ed. 220) and Snowden vs
Hughes ([1944] ; ; , referred to.
|
peaINo. 4235 of 1991.
From the Judgment and Order dated 5.6.1987 of the Cal cutta High Court in original order No. 129 of 1985 and/915 of 1983.
A.K. Ganguly, A.K. Chakraborty, A.D. Sikri and Ms. Mridula Ray for the Appellants.
D.N. Mukherjee and Rathin Das for the Respondents.
The Judgment of the Court was delivered by PUNCHHI, J.
We are required in this matter to interplay some of the provisions of the Urban Land (Ceiling and Regu lation) Act, 1976 to determine whether the appellant herein had any excess vacant land.
Probhavati Poddar (Proforma respondent herein) was the owner of two properties in the city of Calcutta being (i) premises No. P 290, C.I.T. Road, comprising 414.56 sq.
of land of which 321 sq.
was covered by a build ing, constructed thereon long before the coming into force of the Urban Land (Ceiling and Regulation) Act, 1976 (hereafter referred to as 'the Act '), with a dwelling unit therein, and (ii) property No. P 210, C.I.T. Scheme VII(M), Calcutta comprising 339.65 sq.
of vacant land.
Hereaf ter these would be referred to as the 'built up property ' and 'vacant property ' respectively.
The exact date/period of the construction of the built up property is not available on the present record but the litigation has proceeded on the footing that it was constructed long before February 17, 1976, the day when the Act came into force in the State of West Bengal.
The State 1egislatures of 11 States, including the State of West Bengal, considered it desirable to have a uniform legislation enacted by Parlia 506 ment for the imposition of ceiling on urban property for the country as a whole, and in compliance with clause (1) of Article 252 of the Constitution, passed a Resolution to that effect.
Accordingly, the Urban Land (Ceiling and Regulation) Bill, 1976 was introduced in the Lock Sabha on January 28, 1976 covering all the Union Territories and the 11 resolving States.
After the passing of the Bill by the Parliament, the Act came into force on February 17, 1976 at once.
Later from time to time, the Act was adopted by some other States after passing Resolutions under Article 252(1) of the Constitu tion.
The Act now apparently is in force in 17 States and all the Union Territories in the country.
The primary object and purpose of the Act was to provide for the imposition of the ceiling on vacant land in urban ag glomerations, for the 'acquisition of such land in excess of the ceiling limit, to regulate the construction of buildings on such land and for matters connected therewith, with a view to preventing the concentration of urban land in the hands of a few persons and speculation and profiteering therein, and with a view to bringing about an equitable distribution of land in urban agglomerations to sub serve the common good, and in furtherance of the directive princi ples of Articles 39(B) & (C) of the Constitution.
These features were .spelled out by this Court in Union of India etc.
V.B. Chaudhary etc.
[1979]3 SCR 802.
That it is valid piece of legislation, save and except Section 27(1), and had received the protective umbrella of Article 31 C as it stood prior to its amendment by 42nd Amendment Act was held by this Court in Maharao Sahib Shri Bhim Singhji etc.
vs Union of India & Others.
[1981]1 SCC 166. "Appointed day" has been defined in Section 2 A of the Act.
It means (i) in relation to any State to which the Act applies in the first instance, the date of introduction of the Urban Land (Ceiling and Regulation) Bill, 1976 in Par liament, and (ii) in relation to any State which adopts the Act under Clause (1) of Article 252 of the Constitution, the date of such adoption.
In relation to the State of West Bengal, in which the town of Calcutta is situated, the "appointed day" is January 28, 1976.
It is thus evident that between the appointed day and the date of enforcement of the Act, there is a 20 day 's gap.
The Act ordains a ceiling limit of 500 sq. mtrs.
for the urban agglomeration of Calcutta, as per item 15 of Category A in .Schedule
I of the Act.
Both the properties of Smt.
Poddar,.
the proforma respondent herein, thus became liable to be screened by the Authorities under the Act.
Before hand on July 8, 1978, Smt.
Poddar entered into an agreement with Smt.
Meera Gupta, the appellant herein, to sell the vacant property on 507 terms entered.
On November 23, 1978, the proposed vendor and the proposed vendee gave notice under Section 26 of the Act to the Competent Authority, appointed for the purpose of the proposed sale.
On August 7, 1980, the competent authority in exercise of powers under Section 6(2) of the said Act, issued a notice under Section 6(1) thereof to Smt.
Poddar directing her to file a statement in Form No. 1 on the basis that she held vacant land in the Calcutta Urban Area in excess of the ceiling limit of 500 sq. mtrs.
Having got no response, a reminder was sent to her, but in vain.
The Competent Authority thereafter initiated suomo to proceed ings against Smt.
Poddar and sent her a draft statement on September 18, 1979, exercising powers under Section 8(1) of the Act intimating that she could submit her objection, if any, to the draft statement.
It was specified in the said statement that she was tentatively required to surrender 254.21 sq.
of land (figure arrived by totalling .414.56 sq. mtrs.
of the built up property and 339.65 sq. mtrs.
of the vacant property to 754.21 sq. mtrs, are substracting therefrom 500 sq.
resulting in 254.21 sq. mtrs.).
The objections of Smt.
Poddar filed to the draft statement were rejected by the Competent Authority, who published the final statement under section 9 of the Act vesting the said 254.21 sq.
of excess land in the State, and the same was communicated to Smt.
Poddar on June 22, 1981.
She preferred an appeal under Section 33 of the Act before the Special Secretary, Land and Land Reforms Department, Government of West Bengal, the Appellate Author ity under the Act, but the same was dismissed in default on January 18, 1983.
Before hand the appellant herein filed suit No. 121 of 1981 against Smt.
Poddar in the Calcutta High Court claiming specific performance of the agreement dated July 8, 1978.
On August 21, 1981, a decree for specific performance was passed in favour of the appellant in the usual terms.
Pursu ant to the said decree, the deed of conveyance in respect of the vacant property was executed in favour of the appellant on November 19, 1981 for a consideration of Rs.1,26,000/ paid over to Smt.
Poddar.
Possession of the vacant property was delivered to the appellant and necessary entries were made in the municipal and revenue registers.
The appellant then got scent of the dismissal of the appeal of Smt.
Poddar in default on July 2, 1983.
The appel lant then filed a Review Petition before the Appellate Authority stating, inter alia, that she had become the owner of the vacant property and prayed for retrieval of the same from being treated as excess land in the hands of Smt.
Podar.
The Review Petition was rejected on August 10, 1983, which occasioned a petition under Article 226 of the Consti tution being filed by the appellant in the Calcutta 508 High Court on a variety of grounds.
The Writ Petition was opposed on each and every ground.
The learned Single Judge, before whom the writ petition was placed, taking aid from some observations in two decisions of this Court in Maharao Sahib Shri Bhim Singhji 's case (supra), and State of U.P. & Others vs L J. Johnson & Others, allowed the writ petition on November 27, 1984.
On appeal by the State of West Bengal and its responding officers, a Division Bench of the High Court reversed the judgment and order of the Single Judge on June 5, 1987 in Appeal No. 129 of 1985, leading to this appeal by special leave at the instance of the appellant.
The matter having come before a two Judge Bench of this Court, of which one of us was a member, on 28.7.1988, it was felt that lohnson 's case (supra) may have to be tested, and thus the matter was ordered to be heard by a larger Bench at least of three Judges.
This is how the matter stands placed before us.
As said at the outset, we have to interplay some of the provisions occurring in Chapter 3 titled as "Ceiling on Vacant Lands" in the Act.
We shall presently set out those provisions which have a bearing in the case.
But before we do that we do not wish to leave the impression that we have not viewed the statute as a whole.
The endeavour on our behalf to construe the provisions has not left any part thereof altogether.
So we proceed thenceforth to the interpretative process.
Section 3 of the Act provides that except as otherwise provided in this Act, on and from the commencement of this Act, no person shall be entitled to hold any vacant land in excess of the ceiling limit in the territories to which this Act applies under sub section (2) of Section 1.
Ceiling limit of vacant land in case of every person like the prece dessor in interest of the appellant is 500 sq.
as set up under Section 4.
Clauses (g) and (q) defining "vacant land" and "land appurtenant" and sub sections (9) and (11) of Section 4 which have precedence in engaging our attention are set out below, but without the Explanation to sub sec tion (11), for it is not relevant for our purpose: "2(g) "Land appurtenant", in rela tion to any building means (i) in an area where there are building regulations, the minimum extent of land required under such regulations to be kept as open space for the enjoyment of such building, which is no case shall exceed five hundred square meters; or (ii) in an area where there are no building regulations, an extent of five hundred square metres contiguous to the land oc 509 cupied by such building, and includes, in the case of any building constructed before the appointed day and with a dwelling unit therein, an additional extent not exceeding five hundred square metres of land, if any, contiguous to the minimum extent referred to in subclause (i) or the extent referred to in sub clause (ii), as the case may be; 2(q) "Vacant Land", means land, not being land mainly used for the purpose of agricul ture, in an urban agglomeration, but does not include (i) land on which construction of a building is not permissible under the building regula tions in force in the area in which such land is situated; (ii) in an area where there are building regulations, the land occupied by any building which has been constructed before, or is being constructed on, the appointed day with the approval of the appropriate authority and the land appurtenant to such building; and (iii) in an area where there are no building regulations, the land occupied by any building which has been constructed before, or is being constructed on, the appointed day and the land appurtenant to such building.
4(9) where a person holds vacant land and also holds any other land on which there is a building with a dwelling unit therein, the extent of such other land occupied by the building and the land appurtenant thereto shall also be taken into account in calculat ing the extent of vacant land held by such person.
4(11) For the removal of doubts it is hereby declared that nothing in sub sections (5), (6), (7), (9) and (10) shall be construed as empowering the competent authority to declare any land referred to in sub clause (ii) or sub clause (iii) of clause (q) of section 2 as excess vacant land under this Chapter.
" To begin with "vacant land" as per the definition given in clause (q) of Section 2 means land as such, not being land mainly used for the put 510 pose of agriculture, but situated in an urban agglomeration. "Vacant Land", however, does not include, as per the defini tion, land of three categories.
The first category is land on which construction of a building is not permissible under the building regulations in force in the area in which such land is situated.
But this is a category with which we are not concerned in the instant case.
Johnson 's case (supra) is of this category.
The second category is of land occupied by any building in an area, where there are building regula tions, which has been constructed upon, or is under con struction on the appointed day, with the approval of the appropriate authority, and the land appurtenant to such building.
This means that if the building stood constructed on the land prior to January 28, 1976, the land occupied under the building is not vacant land.
It also covers the land on which any building was in the process of construc tion on January 28, 1976 with the approval of the appropri ate authority.
That too is not "vacant land".
Additionally, the land appurtenant to these two kinds of buildings is also not "vacant land".
The third category likewise conditioned is of land occupied by any building in an area where there are no building regulations, which has been constructed before January 28, 1976 or is in the process of construction on such date, and the land appurtenant to these two kinds of buildings.
The aforesaid three categories of lands would otherwise be "vacant land" but for the definitional exclusion.
The specific non inclusion of these three categories of land is by itself an integral part of the definitional and function al sphere.
The question that arises what happens to lands over which buildings are commenced after the appointed day and the building progresses to complete thereafter.
On the appointed day, these lands were vacant lands, but not so thereafter because of the surface change.
Here the skill of the draftsman and the wisdom of the legislature comes to the fore in cognizing and filling up the gap period and covering it up in the scheme of sub section (9) of Section 4.
The visible contrast between "vacant land" and "any other land" held by a person on which there is a building with a dwell ing unit therein becomes prominent.
The said "any other land" is reckoned and brought at par with the "vacant land" for the purpose of calculating the final extent of vacant land.
It seems to us that the expression "vacant land" in the first portion of the provision connotes land minus land under buildings constructed or in the process of construc tion before and on the appointed day, and the expression "vacant land" in the latter portion of the provision con notes the sum total of "vacant land" of the first order and distinctly the "other land" on which is a building with a dwelling unit therein of which construction commenced after the appointed day, and the land appurtenant thereto.
Such an interpretation is required by the conext 511 as otherwise the concept of the appointed day and the gap period would be rendered otiose.
The legislature cannot be accused to have indulged in trickery or futility in giving something with one hand and taking it away with the other.
"Any other land"in the sequence would thus mean any other built upon land except the one excluded from the expression "vacant land" on account of it being occupied by a building which stood constructed, or was in the process of construc tion, on the appointed day.
Such interpretation of ours finds support from Section 5 of the Act which pursues and does not leave alone transfer of vacant land in the gap period.
It provides as follows: "5.
TRANSFER OF VACANT LAND (1) In any State to which this Act applies in the first in stance, where any person who had held vacant land in excess of the ceiling limit at any time during the period commencing on the appointed day and ending with the commencement of this Act, has transferred such land or part thereof by way of sale, mortgage, gift, lease or otherwise, the extent of the land so trans ferred shall also be taken into account in calculating the extent of vacant land held by such person and the excess vacant land in relation to such person shall, for the pur poses of this Chapter, be selected out of the vacant land held by him after such transfer and in case the entire excess vacant land cannot be so selected, the balance, or, where no vacant land is held by him after the trans fer, the entire excess vacant land, shall be selected out of the vacant land held by the transferee: Provided that where such person has trans ferred his vacant land to more than one per son, the balance, or, as the case may be, the entire excess vacant land aforesaid, shall be selected out of the vacant land held by each of the transferees in the same proportion as the area of the vacant land transferred to him bears to the total area of the land trans ferred to all the transferees.
(2) Where any excess vacant land is selected out of the vacant land transferred under sub section (1), the transfer of the excess vacant land so selected shah be deemed to be null and void.
(3) In any State to which this Act applies in the first instance and in any State which adopts this Act under clause (1) of Article 252 of the Constitution, no person holding vacant land 512 in excess of the ceiling limit immediately before the commencement of this Act shall transfer any such land or part thereof by way of sale, mortgage, gift, lease or otherwise until he has furnished a statement under Section 6 and a notification regarding the excess vacant land held by him has been pub lished under sub section (1.) of Section 10; and any such transfer made in contravention of this provision shall be deemed to be null and void." [Underlining ours].
The underlining is reflective of the scheme of the Act in as much as transfers of vacant land within the gap period are ignorable, and likewise, in our view, vacant land brought under construction of building by a person within the gap period is also ignorable for the purposes of calcu lating the extent of vacant land, so that the provisions of law are not defeated by human ingenuity.
At this juncture, sub section (11) of Section 4 may be noticed.
It provides removal of doubts declaring.
inter alia, that nothing in sub section (9) shall be construed as empowering the competent authority to declare any land referred to in sub clause (ii) or sub clause (iii) of clause (q) of Section 2 as excess vacant land under this Chapter.
Though this provision is not happily worded, yet when mean ingfully construed in the context, it means that a building which gets excluded by virtue of the definition of "vacant land" gets clothed with the protective cloak for not being reckoned again as any other land, over which there is a building with a dwelling unit therein.
Sub section (11) of Section 4 means to convey that what is not vacant land under sub clauses (ii) and (iii) of clause (q) of Section 2 cannot go to add up as "vacant land" under sub section (9) of Section 4 by descriptive overlapping.
If we wipe out the distinction of "vacant land" and "any other land" as demon strated in sub section (9) of section 4, we strangulate and destroy the spirit and life blood of the "appointed day" and the gap period.
We would loathe giving such a construction and would rather opt for a construction which carries out the objectives of the Act, primary of which is to fix a ceiling limit on the holding of vacant lands, conditioned as they are on the appointed day, and as held on the date of the commencement of the Act.
It would be worthwhile at this stage to take note of the expression "land appurtenant" as defined in Section 2(g).
When related to any building in an area where there are building regulations, as well as in an area where there are no building regulations, the additional extent as permitted is based on the principle of contiguity.
The expression applies to buildings constructed before the "appointed day" as well as to buildings, construction of which commenced before the "appointed day", and was in progress on that day.
It, no doubt, applies to buildings, constructed thereafter too.
513 When we import this understanding to sub section (9) of Section 4, two different results discernably follow, based on the commencement of the construction.
If the construction of a building with a dwelling unit therein had begun after the appointed day, then it is all the same "any other land" to be reckoned for calculating the extent of vacant land held by a person.
And if the construction of a building with a dwelling unit therein on land had been completed or was in progress by and on the appointee day, then is not "any ' other land" to be reckoned for calculating the extent of vacant land held by a person.
This is the interpretation which commends to us of sub section (9) of Section 4 as also of sub section (11) of Section 4 and the definitive expres sions used therein as explained and highlighted earlier.
Applying that interpretation on the facts found by the High Court we hold that the built up property, which in any event had been built up prior to the commencement of the Act, and it is nobody 's case that construction thereof had begun after the "appointed day", is outside the purview of "vacant land".
If that is excluded from being reckoned towards calculating the extent of vacant land held by the predeces sor in interest of the appellant, the vacant land in the vacant property cannot be declared excess for that is within the permissible limits.
Even if no land is left as land appurtenant to the built up area, then 93.56 sq. mtrs, the remainder plus 339.65 sq. mtrs, of the unbuilt property would total up to the figure less than 500 sq.
; again within the permissible limit.
Therefore, interpretation to the contrary of the dealt with provisions by the Division Bench of the High Court, bereft as it is of the concept of the appointed day and the gap period, would have to give way, meriting the acceptance of this appeal and setting aside of the judgment of the Division Bench of the High Court by issuing the necessary writ, direction and order so as to quash the entire proceedings towards declaring excess land in the hands of the appellant and her predecessor in title.
We order accordingly.
The interpretation we have put to the provisions pertinently relate to sub clause (ii) and (iii) of clause (q) of Section 2.
This interpretation in express terms cannot apply to sub clause (i) of clause (q) of Section 2.
Johnson 's case (supra) as said before, is a case under sub clause (i) of clause (q) of Section 2.
In the instant case, there appears to be no occasion to test its correctness or even to dilate upon the judgments of the High Courts reported in AIR 1981 Madhya Pradesh 17, AIR 1984 Bombay 122 and AIR 1987 Allahabad 272, cited at the bar.
As a result, this appeal is allowed.
The appellant shall have her costs throughout.
T.N.A. Appeal allowed.
| "Vacation " "Sufficient Cause" Meaning of.
Section 14(3) of the Himachal Pradesh Urban Rent Control Act 1987 enables a landlord to obtain an order for eviction of the tenant if he requires the building for his own occu pation and he has no other building in the area concerned.
This right however stands deferred under second proviso for a period of five years if the landlord has vacated a build ing in use without sufficient cause.
The appellant, an owner of a house, was in occupation of first floor of the house, while the second floor was let out to a Judge.
His entire house is requisitioned for occupation of a Judge.
The appellant did not file any objection under section 3(2) of the Requisition Act.
However, after vacating the building he applied for eviction of respondent.
The Courts in view rejected his application by applying the second proviso to section 14(3) of the Himachal Rent Control Act.
468 Allowing the Landlord 's appeal and setting aside the order of Courts below, this Court, HELD: 1. 'Sufficient cause ' is an expression which is found in various statutes.
It has been construed liberally in keeping with its ordinary dictionary meaning as adequate or enough.
That is any justifiable reason resulting in vacation has to be understood as sufficient cause.
For instance economic difficulty or financial stringency or family reasons may compel a landlord to let out a building in his occupation.
So long it is found to be genuine and bona fide it would amount to vacating a building for suffi cient cause.
And the bar of second proviso stands lifted In other words if the vacation of the building was not a pre tence or pretext the proviso could not frustrate the right of landlord to approach the controller for necessary direc tion to tenant to hand over possession to him.
[470 B C] 1.1 Vacation of a building by landlord in pursuance of an order of requisition by the competent authority could not be characterised as 'not without sufficient cause '.
A land lord has no option.
He is required to vacate under con straint of law.
Therefore the statutory restriction created by second proviso would not apply in such a case.
[470 D] 2.
Validity or invalidity of an order under Requisition Act could not adversely reflect on sufficiency of cause under Rent Control Act.
Reason for either arises in differ ent circumstances.
Vacating a building, even under an incor rect order passed by a competent authority under Requisition Act would be for sufficient reason.
The Rent Control author ities could not examine merit of the order under Requisition Act Therefore it could not be a valid consideration for holding that the building was vacated without sufficient cause.
The courts below thus committed an error of law in applying second proviso to reject the application filed on behalf of the appellant.
[470 H, 471 A B]
|
Appeal No. 130 of 61.
Appeal by special leave from the judgment and decree dated April 25, 1959 of the Madhya Pradesh High Court in First Appeal No. 139 of 1955.
M.C. Setalvad, Attorney General of India, section T. Desai, J. B. Dadachanji, 0.
C. Mathur and Ravinder Narain, for the appellants.
Sarjoo Prasad and G. C. Mathur, for respondents No. 1 and 2.
Ganpat Rai, for respondent No. 3. 1962.
February 23.
The Judgment of the Court was delivered by SHAH, J.
This appeal with special leave is against the decree of the Madhya Pradesh High Court confirming the decree of the 1st Additional District Judge, Jabalpur in Civil Suit No. 12 A of 1952.
The dispute between the parties arose in a suit for partition of joint family property.
The parties are Digambar Jains of the Porwal Sect and are residents of Jabalpur which at the material time 421 was in Madhya Pradesh.
The following pedigree explains the relationship between the parties Garibdas=Mst.
Khilonabai d. 24.7.34 (Def. 3) d.3.7.56 Gulzarilal d. 13.4.39 Munnalal Padamchand d.10.1.36 Ramchand (Def 1) (Def 2) Pyaribabu widow Bhuribai Chandrani bahu (Def. 4) (Def. 11) (Def. 8) Adupted son Rajkumar (Def. 12) adopted 26.7.52 Saheblal Ballu Nand Hiralal Ishwari Kumar Prasad (Plaintiff) (dead) (Def. 5) (Def. 6) (Def.7) Rajendra Kumar Abhay Kumar (Def 9) (Def. 10) Saheblal son of Munnalal filed Suit No. 12A of 1952 in the Court of the 1st Additional Subordinate Judge, Jabalpur on June 21, 1952, for a decree of partition and separate possession of his 1/12th share in the joint family property.
He claimed that in the property his father 's branch was entitled to have a half share and the remaining half was owned by 422 Ram Chand and his branch.
The Additional District Judge ordered that Khilonabai grandmother of Munnalal and Ram chand the wives of Munnalal and Ramchand and their sons and Bhuribai (widow of Padamchand) and Rajkumar who claimed to be a son of Padam Chand by adoption by Bhuribai on July 26, 1952, be impleaded as defendants to the suit.
At the trial of the suit the right of Saheblal to a share in the property was Dot questioned .
the dispute principally turned upon the claim made by Bhuribai and her adopted son Rajkumar to a share in the property.
Padamchand had died before the enactment of the Hindu Womens ' Rigbt to Property Act, 1937, and his widow could not claim by virtue of that Act a share in the property of the family.
But Bhuribai and Rajkumar pleaded that the parties were governed in the matter of adoption by the customary law prevalent amongst the Jains of Central India, Madhya Pradesh, Vindhya Pradesh.
North and Western India, and Rajkumar as a son adopted by Bhuribai to Padam Chand became a coparcener in the joint family and entitled to a share in the property and accretions thereto.
The validity of the adoption of Rajkumar was challenged on many grounds, one only of which is material in this appeal.
It was submitted by the contesting defendants and Bhuribai had no authority express or implied from her husband Padam Chand to adopt a son and that the adoption of Rajkumar as a son without such authority was invalid. '.the
Additional District Judge rejected this plea and ordered a preliminary decree for partition and declared that the share of the plaintiff was 1/24th, of Munnalal, his wife and 3 sons collectively was 5/24th, of Ramchand and his sons 1/4th, of Khilonabai 1/4th and the remaining 1/4th share belonged to Rajkumar.
423 Against them decree, Munnalal, Ramchand, Khilonabai, wife and sons of Munnalal and the wife and sons of Ramchand who were defendants 1 to 10 preferred an appeal to the High Court of Madhya Pradesh.
During the pendency of this appeal Khilonabai died on July 3, 1956 and Ramchand and Munnalal applied to be impleaded as her legal representatives in respect of the interest in the property awarded to Khilonabai by the preliminary decree.
By order dated December 12, 1957, the District Judge held that the interest of Khilonabai devolved upon the applicants by virtue of sections 15 and 16 of the which was brought into operation on June 14, 1956, and that the sons of Munnalal, Ramchand and Padam Chand could not take a share in Khilonabai 's interest.
Before the High Court two questions were canvassed: (1) as to the factum and validity of the adoption of Rajkumar, and (2) devolution of the share of Khilonabai declared by the preliminary decree on her death.
The High Court upheld the finding of the trial Court that Rajkumar was in fact adopted by Bhuribai as a son to her husband on July 26, 1952, and that amongst the Jains residing in the North West Province, Central India, Northern India and in Bombay a widow could adopt a son to her deceased husband without any express authority in that behalf In so holding the High Court relied upon the judgments of the Privy Council in Pemraj vs Mst.
Chand Kanwar and Mangibai Gulabchand vs Suganchand Baikamcand (1).
But the High Court diclined to accept the view of the trial Court that the right of Khilonabai declared by the preliminary decree devolved upon Munnalal and Ramchand alone.
In their view, Khilonabai 's interest under the decree being incohate was not "Possessed" by her within.
the meaning of section 14 (1) (1947) L.R. 74 I.A. 254.
(2) A.I.R. (1948) P.C. 177.
424 of the , and on her death it merged into the estate, The High Court observed : "The result is that the interest of Smt.
Khilonabai remained incohate and fluctuating so that after her death, the interest declared by the preliminary decree is available for partition as joint family property and consequently ss.15 and 16 of the are inapplicable to the interest.
As the property never became her absolute property by virtue of s.14 of the Act, the same remained joint family property.
" Accordingly the decree of the trial Court was modified and 1/3rd Share in the joint family property was awarded to Rajkumar, 1/3rd to the branch of Munnalal and the remaining 1/3rd to the branch.
of Ramchand and adjustments were made on that footing in the shares of the plaintiff and other members of the family.
In this appeal by defendant No. 1 (Munnalal) 2 (Ramchand) and 4 to 10, three contentions were raised : (1) in the absence of express authority from her husband, Bhuribai could not adopt a son, (2) that the 'interest of Khilonabai under the preliminary decree became her absolute property by virtue of s.14 of the and on her death it devolved upon her grandsons Munnalal and Ramchand defendants 1 and 2 and (3) the trial Court was in error in delegating to a Commissioner judicial function, such as, ascertainment of property to be divided and effecting parti tion.
The third question is easily answered.
The trial court appointed a commissioner to propose a partition of joint family property, and for that purpose the court authorised him to ascertain the property, the debts which the family owed and also the individual liability of the parties for the debts.
For deciding those questions the Commissioner was empowered to record statements of the parties, frame 425 issues and to record evidence as might be necessary.
The commissioner was also directed to submit his proposals relating to the right of Bhuribai to be maintained out of the joint family property.
This order, it appears, was passed with the consent of all the parties.
It is true that the decree drawn up by the trial Court is not strictly in accordance with the directions given in the judgment.
But it is manifest that the trial Judge only directed the Commissioner to submit his proposals for partition of the property, and for that purpose authorised him to ascertain the property which was available for partition and to ascertain the liability of the joint family.
By so authorising the Commissioner, the trial Court did not abdicate its functions to the comissioner : the commissioner was merely called upon to make proposals for partition, on which the parties would be heard, and the Court would adjudicate upon such proposals in the light of the decree, and the contentions of the parties.
The proposals of the commissioner cannot from their very nature be binding upon the parties nor the reasons in support thereof.
The order it may be, remembered was made with the consent of the parties and no objection to the order was, it appears, pressed before the High Court.
We do not think that any case is made out for modifying that part of the order.
The parties to this dispute are Digamber Jains of the Porwal sect and are resident of Jabalpur.
Jains have generally been regarded as heterodox Hindus and in the absence of special custom they are governed by the rules applicable to Hindus.
As observed by the Privy Council in Sheokuarbai vs Jeoraff.(1) The Jains are of Hindu origin; they are Hindu dissenters, and although as was pointed out by Mr. Mayne in paragraph 46 of his Hindu Law and Usages "Generally adhering to ordinary Hindu law, that is, the law of the three (1) 426 superior castes, they recognise, no divine authority in the Vedas and do not practise the Shradhs, or ceremony for the dead." "The due performance of the Shradhs, or religious ceremonies for the dead, is at the base of the religious theory of adoption, but the Jains; have so generally adopted the Hindu law that the Hindu rules of adoption are applied to them in the absence of some contrary usage x x x." But amongst the Jainsa custom enabling a widow to adopt a son to her husband without express authority has been reco.
gnised by judicial decisions spread over a period longer than a century.
In Pemraj vs Musammad Chand Kanwar(1), the Judicial Committee of the Privy Council after a review of the case law observed : " x x x x, in many other parts of India" (parts other than the Provinces of Madras and the Punjab) "it has now been established by decisions based on evidence from widely separated districts and from different sects that the Jains observe the custom by which a widow may adopt to her husband without his authority.
This custom is based on religious tenants common to all sects of Jains, and particularly their disbelief of the doctrine that the spiritual welfare of the deceased husband may be affected by the adoption, and though it cannot be shown that in any of the decided cases the parties were of the Khandelwal sect, yet in none of the cases has a distinction been drawn between one sect and another.
It is now in their Lordship,% ' opinion no longer premature to hold that the custom prevails generally among all Jains except in those areas in which there are special reasons, not operative in the rest of India, which explains why the custom has not established itself.
Mayne, in his treaties on Hindu Law and Usage, at page 209, has lent the weight of his authority to the proposition that among the Jains, except in the Madras Presidency a sonless widow can adopt a son to her (1) (1947) L.K. 74 I.A. 254.
427 husband without his authority or the consent of his sapindas".
This view was reiterated by the Privy Council in a case reported in Mangibai Gulabchand vs
Suganchand Bhikamchand (1).
The Attorney General for the appellants, however, contends that there is no evidence of a custom authorising the widow of a Porwal Digamber Jain residing in Jabalpur to adopt a son to her husband without express authority.
Counsel sub mitted that the observations in the two cases relating to the custom of adoption must be restricted to the sects to which the parties to these cases belonged, and in so far as they purport to extend the custom to all Jain residents in India outside Madras and the Punjab they are mere dicta and not binding upon this Court.
In Pemraj 's case the parties belonged to the Khandelwal sect domiciled and resident in Ajmer and in Mangibai 's case the parties were Marwari Jains of the Vis Oswal sect who having migrated from Jodhpur had settled down in the Thana District of the Bombay Province, but the opinion of the Judicial Committee expressly proceeded upon a well recognised custom applicable to all Jains in the territory of India (excepting Madras and the Punjab) and not upon proof of a restricted custom governing the sects of Jains to which the parties belonged.
Undoubtedly, as observed by this Court in Saraswathi ' Ammal vs Jagadamhal (2) in dealing with the quantum of proof required to prove a family or loca I custom, " it is incumbent on a party getting up a custom to allege and prove the custom on which he relies and it is not any theory of custom or deductions from other customs which can be made a rule of decision but only any customs applicable to the parties concerned that can be the rule of decision in particular case.
x x x (1).
A.I.R. (1948) P.C. 177.
(2) ; 428 Theory and custom are antitheses, custom cannot be a matter mere of theory but must always be a matter of fact and one custom cannot be deducted from another.
A community living in one particular district may have evolved a particular custom but from that it does not follow that the community living in another district is necessarily following the same custom.
" But the application of the custom to the parties to this appeal does not appear to proceed upon analogies or deductions.
It governs the parties, because the custom has become a part of the law applicable to Jains in India (except in Madras and the Punjab) by a long and uninterrupted course of acceptance.
A review of the cases decided by different Courts clearlyshows that the custom is generally applicable to Jains all over India, except the Jain domiciled in Madras and the Punjab.
The earliest case of which a report is available is Maharaja Govindnath Bay vs Ray Chand (1) decided by the Saddar Court Calcutta in 1933. 'in that case the validity of an adoption by a Jain 'Widow of a son without express authority from her husband was questioned.
The Court after consulting the Pandits held that by Jain law a sonless widow could adopt a son just as her husband for the performance of religious rites and that the section of the vitis or priests to the adoption is not essential.
In Bhagwandas Tejmal V. Rajmal alias Hiralal Lachmidas(2) the Bombay High Court opined that the widow of a Jain was a delegate either by express or implied authority to adopt a son, but she could not delegate to another person that authority to adopt a son to her husband after her death.
In Sheo Singh Rai vs Mussumut Dakho and Moorari Lal, (3) decided in 1878, the Privy 'Council affirmed the view of the North West Provinces High Court that a sonless widow of a Jain had the right of adoption without the permission of her husband or the consent (1) (2) (1873) 10 Bom.
H.C. Rep. 241.
(3) (1878) L.R. 5 I.& 87 429 of his heirs.
In that case before the Subordinate Judge and before the High Court evidence was recorded of the custom applicable to Jains generally, in different place such as Delhi, Jaipur, Mathura, Banaras and it was held that ' the custom was established by evidence.
The parties to the suit were Agarwal Jains of Meerut District, but decision of the Board proceeded upon a custom found on evidence to be common to all Jains.
In Lakhmi Chand vs Catto Bai.
(1) decided in 1886, again the power of a Jain widow to adopt a son to her deceased husband was held proved.
In Manik Chand Golecha vs Jagat Settani, (2) decided in 1889, the High Court of Bengal upheld a custom in respect of adoption by a widow of an.
Oswal Jain.
The decision of the Court did not proceed upon any custom peculiar to the Oswal sect.
In Harnabh Pershad alias Rajajee vs Mangil Das(3) decided in 1899, it was held upon the evidence consisting partly of judicial decisions and partly of oral evidence that the custom that a sonless Jain widow was competent to adopt a son to her husband without his permission or the consent of his kinsmen, was sufficiently established and that in this respect there was no material difference in the custom of the Aggarwal, Choreewal (Porwal), Khandwal and Oswal sects of the Jaim ; and that there was nothing to differentiate the Jains at Arrab from the Jains elsewhere.
The judgment of the case proceeded upon an elaborate examination of numerous instances in which the custom was held established.
In Manohar Lal vs Banarsi Das(4) and in Asharfi Kumar vs Rupchand(5) a similar custom was hold established.
In the latter case a large number of witnesses were examined at different places and on a review of the decisions and the evidence the Court held the custom proved.
The judgment of the Allahabad (1) All. 319.
(2) Cal.
5 1 8.
(3) Cal.
(4) (1907) 1.L.R. 29 All.
(5) All.197 430 High Court in Asharfi 's case was affirmed by the Privy Council in RupChand vs Jambu Prasad.
(1) It may be stated that the right of a Jain widow to adopt without authority of her husband was not questioned before the Privy Council.
In Jiwraj vs Mt. Sheokuwarbai the Court of the Judicial Commissioner ' Nagpur held that the permission of the husband was not necessary in the case of a Jain widow to adopt a son.
This case was also carried to the Privy Council and the judgment was affirmed in Sheokuarbat vs Jeoraj (3).
In Banarsi Das vs Samat Prasad (4) a similar custom was held established.
The decisions in all these cases proceeded not upon any custom peculiar to the locali ty, or to the sect of Jains to which they belonged, but upon the view that being Jains, they were governed by the custom which had by long acceptance become part of the law applicable to them.
It is well settled that where a custom is repeatedly brought to the notice of the Courts of a country, the courts may hold that custom introduced into the law without the necessity of proof in each.
individual case.
(Rama Rao vs Raja of Pittapur) (5).
The plea about the invalidity of the adoption of Rajkumar by Bburibai must therefore fail.
Khilonabai died after the was brought into operation on June 14, 1956.
This Act by section 2(1)(b) applies to Hindus and also to persons who are Jains by religion.
The preliminary decree was passed on July 29, 1955, and thereby Khilonabai was declared entitled to a fourth share in the property of the family.
Section 14 of the provides: "14(1) Any property possessed by a female Hindu, whether acquired before or after the commencement of this Act, shall be (1) All. 217.
(3) (2) A.I.R. (1920) Nag. 162.
(4) All.
1019, (5) (1918) L.R. 4 5 1.A. 148.
431 held by her as full owner thereof and not as a limited owner.
EXPLANATION.
In this sub section ,property" includes both movable property acquired by a female Hindu by inheritance or devise, or at a partition, or in lieu of maintenance or arrears of maintenance, or by gift from any person, whether a relative or not, before, at or after her marriage, or by her own skill or exertion, or by purchase or by prescription, or in any other manner whatsoever, and also by such property held by her as stridhana immediately before the commencement of this Act.
(2) Nothing contained in sub section (1) shall apply to any property acquired by way of gift or under a will or any other instrument or under a decree or order of a civil court or under an award where the terms of the gift, will or other instrument or the decree, order or award prescribe a restricted estate in such property.
" Section 15 provides: "115 (1) The property of a female Hindu dying intestate shall devolve according to the rules set out in section 16, (a) firstly, upon the sons and daughters (including the children of any predeceased son or daughter) and the husband; (b) secondly, upon the heirs of the husband; (c) thirdly ' upon the mother and father; 432 (d) fourthly, upon the heirs of the father; (e) lastly, upon, the heirs of the mother; (2) Notwithstanding anything contained in sub section (1), (a) any property inherited by a female Hindu from her father or mother shall devolve, in the absence of any son or daughter of the deceased (including the children of any predeceased son or daughter) not upon the other heirs referred to in sub section (1) in the order specified therein but upon the heirs of the father: and (b) any property inherited by a female Hindu from her husband or from her father in law shall devolve, in the absence of any son or daughter of the deceased (including the children of any predeceased son or daughter) not upon the other heirs referred to in sub section (1) in the order specified therein, but upon the heirs of the husband." Section 16 which prescribes the order of succession and manner of distribution among, the heirs of a Hindu female provides by Rule ,,Among the heirs specified in sub section (1) of section 15, those in one entry shall be preferred to those in any succeeding entry, and those included in the same entry shall take simultaneously." 433 Counsel for Rajkumar concedes, and in our judgment he is right in so conceding that if the share declared by the preliminary decree in favour of Khilonabai is property possessed by her at the date of her death, it should devolve upon her grandsons Munnalal and Ramchand, to the exclusion of Rajkumar adopted son of Padam Chand.
This Court in Gumalapara Taggina Matada Kotturuswami vs Setra Veeravva (1) held that "The word "possessed" in section 14 is used in a broad sense and in the context means the state of owning or having in one 's power".
The preliminary decree declared that Khilonabai was entitled to a share in the family 'estate and the estate being with the family of which she was a member and in joint enjoyment, would be possessed by her.
But counsel for Rajkumar submitted that under the preliminary decree passed in the suit for partition the interest of Khilonabai in the estate was merely inchoate, for she had a mere right to be maintained out of the estate and that her right continued to retain that character till actual division was made and the share declared by the preliminary decree was separated to her: on her death before actual division the inchoate interest again reverted to the estate out of which it was carved.
Counsel relied upon the judgment of the judicial committee in Pratpamull Agarwalla vs Dhanabati Bibi (2) in support of his plea that under the Mitakshara law, when the family estate is divided a wife or mother is entitled to a share. but is not recognised as the owner of such share until the division of the, property is actually made,as she has no preexisting right in the estate except a right of maintenance.
Counsel submitted that this rule of Hindu law was not affected by anything contained in section 14 of the .
By section 14 (1) the Legislature sought to convert the interest of a Hindu female which under the (1) [1959] 1 Supp.
S.C.R. 968.
(2) (1935) L.R. 63 I.A 33. 434 Sastric Hindu law would have been regarded as a limited interest into an absolute interest and by the explanation thereto gave to the expression property" the widest connotation.
The expression includes property acquired by a Hindu female by inheritance or devise, or at a partition, or in lieu of maintenance or arrears of maintenance, or by gift from any person, whether a relative or not, before at or after her marriage, or by her own skill or exertion, or by purchase or by prescription, or in any other manner whatsoever.
By section 14(1) manifestly it is intended to convert the interest which a Hindu female has in property however restricted the nature of that interest under the Sastric Hindu law may be into absolute estate.
Pratap mull 's case undoubtedly laid down that till actual division of the share declared in her favour by a preliminary decree for partition of the joint family estate a Hindu wife or mother, was not recognized as owner, but that rule cannot in our judgment apply after the enactment of the .
The Act is a codifying enactment, and has made far reaching changes in the structure of the Hindu law of inheritance, and succession.
The Act confers upon Hindu females full rights of inheritance, and sweeps away the traditional limitations on her powers of dispositions which were regarded under the Hindu law as inherent in her estate.
She it; under the Act regarded as a fresh stock of descent in respect of property possessed by her at the time of her death.
It is true that under the Sastric Hindu, law, the share given to a Hindu widow on partition between her sons or her grandsons was in lieu of her right to maintenance.
She was not entitled to claim partition.
But the Legislature by enacting the Hindu Women 's ' Right to Property Act, 1937 made a significant departure in that branch of the law: the Act gave a Hindu widow the same interest in the property 435 which her husband had at the time of his death, and if the estate was partitioned she became owner in severally of her share, subject of course, to the restrictions on disposition and the peculiar rule of extinction of the estate on death actual or civil.
It cannot be amused having regard to this development that in enacting 8. 14 of the , the Legislature merely intended to declare the rule enunciated by the Privy Council in Pratapmulls case.
Section 4 of the Act gives an overriding effect to the provisions of the Act.
It enacts"Save as otherwise expressly provided in this Act, (a) any text rule or interpretation of Hindi law or any custom or usage as part of that law in force immediately before the commencement of this Act shall cease to have ;effect with respect to 'any matter for which provision is made in this Act : (b) x x x x X" Manifestly, the legislature intended to supersede the rules of Hindu law on all matters in respect of which there was an express provision made in the Act.
Normally a rights declared in an estate by a preliminary decree would be regarded as property, and there is nothing in the context in which section 14 occurs or in the phraseology used by the Legislature to warrant the view that such a right declared in relation to the estate of a joint family in favour of a Hindu widow is not property within the meaning of section 14.
In the light of the scheme of the Act and its avowed purpose it. would be difficult, without doing violence to the language used in the enactment, to assume that a right declared in property in favour of a person under a decree for partition is not a right to property.
, If under a preliminary decree the right in favour of a Hindu male be regarded as property the right declared in favour of a Hindu female must also be regarded 436 as property.
The High Court was therefore, in our judgment, in error in holding that the right declared in favour of Khilonabai was not possessed by her, nor are we able to agree with the submission of the learned counsel for Raj Kumar that it was not property within the meaning of section 14 of the Act.
On that view of the case, by virtue of so. 15 and 16 of the Act, the interest declared in favour of Khilonabai devolved upon her sons Munnalal and Ramohand to the exclusion of her grandson Rajkumar.
The decree passed by the High Court is therefore modified in this respect and the decree passed by the trial Court restored.
Having regard to the partial success of the parties, there will be no order as to costs in this appeal and in the High Court.
| G, a Digamber Jain of the, Porwal sect, died in 1934 leaving behind his widow Smt.
K, his son G who died in 1939 and three grandsons M, P and R.
In 1952 M 's son S filed a suit for partition of the joint family properties.
Rajkumar, claiming to be a son of P adopted by his widow, claimed a 1/4th share in the joint family property.
The adoption was challenged on the ground that no express authority had been given by P to his widow to adopt.
The trial court held that no express authority was required by a sinless Jain widow to adopt a son and that the adoption was duly and properly made.
Accordingly, a preliminary decree declaring the shares of Smt.
K, the branch of M, the branch of R and of Rajkumar to be 1/4th each was passed.
M and others pre ferred an appeal to the High Court mainly against the findings on the question of adoption.
During the pendency of the appeal, the , came into force.
Shortly thereafter Smt.
K died.
The High Court upheld '.he decision of the trial court on the question of the adoption of Rajkumar.
With respect to the share of Smt.
K the High Court held that her interest declared by the preliminary decree was inchoate, that she never became "possessed", 419 of any share within the meaning of s 14 of the Act and that it remained joint family property which became divisible amongst the parties proportionately to their shares.
The appellants contended that the adoption of Rajkumar was invalid as no custom applicable to the Porwal sect of the jains had been established empowering a widow to adopt without the authority of her husband and that the 1/4th share of Smt.
K declared by the preliminary decree had become her absolute property by virtue of section 14 of the Act and upon her death it descended to her grandsons M and R to the exclusion of other parties.
Held, that the adoption of Rajkumar was valid.
A sonless Jain widow could adopt a son without the express authority of her husband.
Such a custom among the Jains not domiciled in the States of Madras and the Punjab) has been recognised by judicial decisions spread over a period longer than a century.
Though none of these decisions related to the Porwal sect of Jabalpur to which the parties belonged.
They laid down a general custom of the jains which were applicable to the parties.
The decisions proceeded not upon.
any custom peculiar to any locality or to any sect of the jains but.
upon general custom which had by long acceptance become part of the law applicable to them.
Where a custom is repeatedly brought to the notice of the Courts, the courts may held that custom introduced into the law without the necessity of proof in each individual case.
Pemraj vs Mst.
Chand Kanwar, (1947) L. R. 74 1.
A. 224 and Mangibai Gulabchand vs Suganchand Bhikamchand, A.I.R. (1948) P. C. 177, relied on.
Sheokuarbai vs
Jeoraj, , Saraswathi Ammal vs ,Jagadambal, , Maharajah Govind nath Ray vs Gulal Chand, (1833) 5 Sel.
Rep. 276, Bhagwandas Tejmal vs Rajmal Alias Hiralal Lachmindas, (1873) 10 Bom.
H.C. Rep. 241, Sheo Singh Rai vs Mst.
Dakho and Morari Lal (1878) L.R. 5 1.
A. 87, Lakhmi Chand vs Gatto Bai, All. 319, Manik Cha nd Golecha vs Jagit Settani, Cal.
518, Harar nabh Parshad alias Rajajee vs Mangil Das, Cal. 379, ManoharLal vs Banarsi Das All.
495, Asharfi Kumar vs Rupchand, All. 197, Rup Chand vs Jambu, Prasad All, 2 47, Jiwaraj vs Mst.
Sheokuwarbai, A.I.R. (1920) Nag. 162, Banarsi Das vs Sumat Prasad, All.
1019 and Rama Rao vs Raja of Pittapur, (1918) L. R. 43 1.
A. 148, referred to.
Held, further that the 1/4th share of Smt.
K declared by the preliminury decree was "possessed" by her and on her 420 death it descended to her grandsons in accordance with provisions of sections 15 and 16 of the Act.
The word "possessed" in section 14 was used in a broad sense meaning the state of owing or having in one 's power.
The rule laid down by the Privy Council that till actual division of the share declared in her favour by a preliminary decree for partition of the,joint family prop" a Hindu wife or mother was not recognised as owner of that share cannot apply after the enactment of the .
Section 4 of the Act made it clear that the Legislature intended to supersede the rules of Hindu law on all rs in respect of which there was an express provision made in the Act.
Gumalapura Taggina Matada Kotturuswami vs Setra Veerayya, (1959) 1 Supp.
S.C.R. 968 and Pratapmull Agarwalla vs Dhanabati Bibi, (1935) L.R. 63 I.A. 33, referred to.
|
ivil Appeal Nos.
281 285 of 1970.
From the Judgment and Order dated 25/28 4 1969 of the Gujarat High Court in SCA Nos.
1520, 850, 1079, and 1117 of 1967 and 201 of 1968.
section T. Desai, P. H. Parekh, C. B. Singh and M. N. Shroff for the Appellants.
Mrs. E. Udayarathnam for respondent No. 1 in CA 284/70.
The Judgment of the Court was delivered by VENKATARAMIAH, J.
These five appeals by certificate are preferred by the State of Gujarat against the common judgment dated April 25/28, 1969 delivered in five petitions under Article 226 of the Constitution on the file of the High Court of Gujarat in which the constitutional validity of the Resolution of the Government of Gujarat bearing No. L.B.B. 3964/101585 C dated December 28, 1966 issuing directions regarding the procedure to be followed in the disposal of 'bhatha lands ' with effect from January 1, 1967 inter alia providing for showing preference to Harijans, adivasis, backward class persons and co operative farming societies consisting of landless labourers or small holders in the matter of cultivation rights over bhatha land was challenged.
The expression 'bhatha land ' means land which forms part of the bed of a river on which vegetables, melon, cucumber etc.
can be grown during the lean period after the rainy season is over when the level of the water in the river is quite low.
The cultivation of this land is possible only till the next rainy season and when the river swells during the rainy season, the said land again gets submerged under the river water.
The occupancy rights over such land 1186 cannot ordinarily be granted on a permanent basis as in the case of other cultivable lands in view of the land getting submerged under river water every year for 4 5 months.
The lands in question are situated in the Bombay area of the State of Gujarat.
Till the year 1951, the cultivation rights over bhatha lands in the area in question were being disposed of by public auction and the successful bidders were being treated as lessees of the lands for short periods.
In the year 1951, the State Government ordered that the leasehold rights over bhatha lands should be disposed of by selection in the following order of priority: 1.
Bona fide agriculturists who had cultivated the land personally for five years or more.
Adjacent land holders who, in the Collector 's opinion, had insufficient land for maintenance of their families.
Co operative farming societies and 4.
Priority holders under the Waste Land Rules.
The above order was cancelled and superseded by the Government Resolution dated September 19, 1962 which provided that on the expiry of the then existing leases, not held by co operative farming societies, bhatha lands should be disposed of on the basis of five years ' lease by public auction.
Experience showed that only the moneyed people were able to purchase the lease hold rights at the public auction and persons belonging to Scheduled Castes, Scheduled Tribes and other weaker sections of society were not even able to participate in such auctions.
In the year 1964 however, lease hold rights over bhatha lands were disposed of on eksal basis by public auction.
The question relating to the procedure to be followed in the disposal of the lease hold rights over bhatha lands was discussed at the meeting of the Collectors held in 1965 66 and after taking into consideration all relevant matters and the suggestions made at the above said meeting, the State Government passed the following Resolution in supersession of all existing orders: "Government of Gujarat Revenue Department No. L.B.B. 3964/101585 C Sachivalaya, Ahmedabad 15 Date: 28 12 1966 RESOLUTION OF GOVERNMENT In cancellation of all existing orders in regard to disposal of Bet and Bhatha land by auction, Government is pleased to direct that 1187 existing procedure of disposal of Bhatha land by auction should be discontinued from 1st January, 1967 and such land should be disposed of according to instructions detailed below: 1.
The existing lease held by co operative society should be renewed on their expiry only to the members of co operative society.
Individually held land less than 16 acres excluding the bet bhatha land and the total holding of the number including the land to be granted is not more than the member or members 16 acres.
If condition (1) is fulfilled the lease in favour of the co operative societies should be renewed for a further period of 10 years on payment of revised rent which should be fixed on the basis of the factors enumerated hereinafter instruction number (6) below.
As regards Bhatha lands which have been leased in favour of individuals such lease should not be renewed but on the expiry of such lease the lands should be disposed of to priority holders as enumerated in instruction No. 5 on payment of rent to be determined on the basis of factors enumerated in instruction No. 6.
There will be no objection to renew the lease in favour of such individual if he is otherwise eligible as per principles fixed in this G.R. 4.
As regards new Bet Bhatha lands which are to be disposed of for the first time they should also be granted to priority holders as mentioned in instruction No. 5, on the basis of rent charged for similar lands which have been disposed of as per instructions contained in the G.R. or which have been disposed of in the past by auction.
The priority for disposal of Bet Bhatha land should be as under: 1.
Bona fide agriculturists of the village who are holding land less than 5 acres.
Preference in this case will be given to Harijan adivasi and backward class people.
Holders of the land adjoining the Bet Bhatha land holding land less than 16 acres and who in the opinion of Collector have a genuine need of additional lands for maintenance of their families.
Inter se preference in this case also will be as per (1) above.
Co operative farming societies of Harijans, adivasi and backward class persons.
1188 4.
Co operative farming societies consisting of landless labourers or small holders.
Any of the priority holders under the waste land rules.
The individuals as well as co operatives of the village in which the Bet Bhatha lands are situated will have their first priority while the individuals and co operative societies of neighbouring villages within a radius of 5 miles shall be given priority in the order of nearness from village where the Bet Bhatha Lands are situated.
If there are claims of two equal priority holders for the same land the disposal will be by lots.
" Thereafter twenty two members belonging to Waghari Harijan community were granted lease hold rights in respect of a bhatha land for a period of ten years pursuant to the above Government Resolution by the Collector of Ahmedabad on July 18, 1967.
The relevant part of the aforesaid order of the Collector dated July 18, 1967 reads as follows: No. C.B.A.R.E.V. 165 District Collector 's Office Ahmedabad 18 7 67 . . .
ORDER It is hereby ordered that under mentioned twenty two members of Waghari Harijan Ganotia Samuha Kheti Mandali (unlimited) Santhal, have been granted lands for cultivation, out of the Government BHATHA LANDS, for the period of ten years each member not to have more than four acres of land, on the conditions hereinafter mentioned. . .
Names of members of the Waghari Harijan Ganotia Samuha Kheti Mandali (unlimited) . . .
TERMS 1.
These lands are granted on the condition that Waghari Harijan Ganotia Samuha Kheti Mandali (unlimited) must get itself registered within one year.
Either the individual or a co operative society shall not be granted BET BHATHA LANDS at more than one place.
1189 3.
Within the period of fifteen days from the date of the harvest of the crop from BET BHATHA lands shall be paid up.
Rules regarding suspension or remission of land revenue shall not be applicable to the realization of this rent.
The land shall be cultivated personally by the grantee, unless under exceptional circumstances.
The decision of the Collector regarding the existence of such exceptional circumstances shall be final on this condition.
Lease shall be terminated, without granting any compensation.
Rent shall be fixed and payable according to sections 6 and 7 of Government Resolution Revenue Department No. L.B.B. 3964 101585 G dated 28 12 1966.
All conditions mentioned in PATTA shall be complied with. 7.
The Collector shall be authorised to revoke the lease deed before the expiration of the period of the lease.
Unless lease deeds are executed, the occupation of the land shall be treated as unauthorised one.
Besides conditions mentioned above, all conditions mentioned in Government Resolution Revenue Department No. L.B.B. 3964 101585 G dated 28 12 1966 shall be applicable to this grant.
This grant shall be valid for the period of ten years from the year 1967 68.
This grant expires on 31 5 1977.
Lease deed to be executed and kept in record.
Sd/ Niranjan Singh, Collector, Ahmedabad." Aggrieved by the above grant, the petitioners in Special Civil Application No. 1079 of 1967 which was one of the writ petitions out of which these appeals arise questioned the validity of the Government Resolution dated December 28, 1966 and the order of the Collector granting the lease dated July 18, 1967 in favour of the said twenty two persons.
In the other four petitions also, the said Resolution and certain grants made by the Collector were questioned.
The petitioners in all the petitions alleged that some of them were in possession of portions of the lands which had been disposed of by the order of the Collector by virtue of the eksal tenures created in their favour under auctions held in or about the year 1964 and they could not be dispossessed without following the procedure prescribed by 1190 section 79 A read with section 202 of the Bombay Land Revenue Code, 1879 (hereinafter referred to as 'the Code ').
One of them alleged that he was a permanent tenant of a portion of the land.
They contended that the Government Resolution dated December 28, 1966 and the grants made by the Collector on the basis of the said Resolution were liable to be struck down on the ground that they were violative of Article 14 of the Constitution.
Their main grievance was that they had been arbitrarily deprived of an opportunity to offer bids at public auctions and to acquire lease hold rights.
They prayed for the issue of a writ in the nature of mandamus directing the State Government and the Revenue authorities not to dispossess them on the basis of the impugned Resolution of the Government and the orders of the Collector.
The State Government and the other respondents in the writ petitions resisted the petitions.
After hearing the parties, the High Court quashed the Government Resolution and the grants made by the Collector holding that they were ultra vires the scheme of the Code and were also violative of Article 14 of the Constitution.
The State Government was directed not to take into consideration the Government circular issued pursuant to the impugned Resolution while considering the question of renewal of leases or disposal of bhatha lands in question and not to dispossess the writ petitioners except in due course of law.
The State Government has questioned the order made by the High Court in these appeals.
Before going into the question relating to the validity of the impugned Resolution and the grants made by the Collector, it is necessary to deal with the question whether any of the writ petitioners were in possession of the lands in question.
The allegation made by them in this regard was denied by the State Government.
In the course of the counter affidavits filed before the High Court, it was pleaded on behalf of the State Government that none of the writ petitioners was in possession of any portion of the lands in question on the date of the petition that some of them who continued to remain in possession of certain portions of the land after the expiry of the eksal leases were dispossessed in accordance with law and that the land had been handed over to the grantees as per kabza receipts.
Dealing with the question of possession, the High Court observed in the course of its order as follows: "The petitioners claim in these petitions that they were cultivating these lands as tenants, except the petitioner in Sp.
C.A. No. 1079/1967 who claims to be a permanent tenant.
The case of the petitioners was that at the relevant time they had been given Eksali (of one year) leases on the 1191 expiry of which their right of renewal was completely taken away by the aforesaid circular.
The circular had completely fettered the discretion of the competent authorities under the Bombay Land Revenue Code, 1879, hereinafter referred to as 'the Code ' and had created an absolute rule excluding the petitioners so much so that they could not even now give a bid at any public auction for these lands.
Even though in Sp.
C.A. No. 1079/67 the case of the petitioner was of a lease in perpetuity the State had controverted this allegation and no such grant was produced.
The case of the State was that the petitioner was in illegal possession after the Eksali lease in 1964.
Therefore, even that case also stands on the same footing.
In view of the said disputed questions of facts which cannot be resolved by us, the petitioner, therefore, challenged the impugned circular on the grounds (1) that it is ultra vires the Code, especially as it creates an absolute rule excluding the petitioners who would have been entitled under the provisions of the Land Revenue Code to get these leases by bidding at the public auction as per the relevant rules.
The impugned order in this connection violates the policy of the Code which is to augment the Government revenue and which does not contain any policy of excluding any person from the disposal of these unalienated Government lands, (2) the petitioners, further challenge the impugned order on the ground that it is discriminatory and violates Article 14 and the inequality is writ large on the face of the entire order especially the so called reservations in favour of Harijans, adivasis and backward class people are so excessive that all the 100 per cent lands would get reserved for them under this policy of priority and the petitioners would be completely excluded.
" There is no reference to the question of possession of the land by the respondents in any other part of the judgment of the High Court.
From the portion of the judgment extracted above, it is seen that the High Court did not record any firm finding on the question of possession of any part of the land by any of the writ petitioners.
It, therefore, follows that the direction issued by the High Court to the State Government and the Revenue authorities not to dispossess the writ petitioners except in due course of law becomes unsustainable.
What remains to be considered in these appeals is whether the impugned Resolution and the orders of the Collector are valid or not.
1192 There is no dispute that the writ petitioners were not eligible under the impugned Resolution for any grant being made in preference to the grantees in these cases and if the impugned Resolution is valid, the grants made by the Collector become unassailable.
It is on account of the above position the writ petitioner challenged the validity of the Resolution passed by the Government on December 28, 1966.
The High Court quashed the said Resolution on two grounds: (1) that the act of the State Government in passing the Resolution amounted to a fraud on the statute as the power of the State under the Code which was a taxation measure had been utilized for a collateral purpose of achieving a welfare scheme and (2) that the Resolution was violative of Article 14 of the Constitution as there was no rational nexus between the object to be achieved by the Code viz realization of land revenue and the classification of persons eligible for the grant of lease hold rights in respect of bhatha lands into several groups.
On the first ground, the High Court observed as follows: "The Code in terms directs the statutory authority, the Collector to make disposal exercising his judicial discretion, of course, subject to the statutory rules or even subject to the orders of the Government which have statutory force.
The whole purpose and object of the Land Revenue Code is never to exclude any citizen, and such exclusion by way of an absolute rules leaving no discretion even to the statutory authority would be completely beyond the scope of a regulatory measure.
This would be prescribing the end and not prescribing means to an end.
The end has been laid down by the Legislature in this case and it is one of augmenting the land revenue, and for the purpose of revenue administration under this Code, if any disposal is made, the disposal would be ordinarily to augment land revenue.
It may be that in exceptional cases, the authority may give remission as in famine years or on other grounds which are specified under the scheme of the Code or the Rules.
The end which is envisaged to be achieved by the Code is one of getting revenue augmented which is the obvious end of any taxation measure.
The end which the impugned regulation seeks to achieve is totally a different end.
" From a reading of the above observations of the High Court, it becomes obvious that the High Court felt that the Resolution which had been passed with a view to showing preference to members belonging to Scheduled Castes, Scheduled Tribes and backward classes, landless persons who belonged to the weaker sections of 1193 society and members of co operative farming societies did not subserve the object of the Code i.e. realization of maximum revenue.
The High Court also felt that there was no scope for the passing of any order or resolution in the nature of a welfare measure while administering the provisions of the code.
In order to examine the correctness of the above view of the High Court, it is necessary to refer to some of the relevant provisions of the Code.
The Preamble of the Code provides that it had been passed as it was found expedient to consolidate and amend the law relating to Revenue officers and to the assessment and recovery of Land Revenue and to other matters connected with the Land Revenue Administration.
Chapters II and III of the Code deal with constitution powers officers provision relating to the security to be furnished by certain Revenue officers and the liability of principals and sureties.
Chapter V of the Code is entitled 'Of Lands and Land Revenue ' and contains sections 37 to 59.
Section 37 of the Code declares that 'all public roads, loans and paths, the bridges, ditches, dikes, and fences, on, or beside, the same, the bed of the sea and of harbours and creeks below high watermark, and of rivers, streams, nallas, lakes, and tanks, and all canals, and water courses, and all standing and flowing water, and all lands wherever situated, which are not the property of individuals, or of aggregates of persons legally capable of holding property, and except in so far as any right of such persons may be established, in or over the same, and except as may be otherwise provided in any law for the time being in force are and are hereby declared to be, with all rights, in or over the same, or appertaining thereto, the property of the Government and it shall be lawful for the Collector subject to the order of the State Government, to dispose of them in such manner as he may deem fit, or as may be authorised by general rules sanctioned by the Government concerned, subject always to the rights of way, and all other rights of the public or of individual legally subsisting. ' The aforesaid section 37 of the Code vests the rights in all properties referred to therein the State Government and provides that it is lawful for the Collector subject to the orders of the State Government to dispose of them in such manner as he may deem fit or as may be authorised by the general rules sanctioned by the Government.
The State Government is thus constituted the proprietor of the several items referred to therein.
While the Collector has been given the power of disposal of the land belonging to the Government, he can do so only in accordance with the other provisions of the Code and the Rules made thereunder and subject to any order or resolution passed by the State Government.
The power of the State Government to make orders under section 37(1) of the Code is not in the 1194 nature of appellate or revisional powers which are dealt with separately under sections 203 and 211 of the Code but is in the nature of an administrative power enabling the State Government to regulate the power of the Collector.
Section 38 of the Code authorises the survey officers whilst survey operations are proceeding under Chapter VIII of the Code and at any other time the Collector to set apart lands which belonged to the State Government and not in the lawful occupation of any person or aggregate of persons, in unalienated villages or unalienated portions of villages, for free pasturage for the village cattle, for forest reserves, or for any other public or municipal purpose; and lands assigned specially for any such purpose shall not be otherwise used without the sanction of the Collector.
Section 39 of the Code restricts the right of grazzing on free pasturage lands to the cattle of the village or villages to which such lands belong or have been assigned.
Section 44 of the Code recognizes the existence of certain privileges of villagers or of certain classes of persons to cut fire wood or timber for domestic or other purposes even in the case of villages or lands in which the rights of the Government to the trees have been reserved under section 40 of the Code.
Section 48 of the Code sets out the manner of assessment and alteration of assessment of any land.
It provides that the land revenue leviable on any land shall be assessed with reference to the use of the land (a) for the purpose of agriculture, (b) for the purpose of building and (c) for a purpose other than agriculture or building.
Sub section (3) of section 48 of the Code empowers the Collector or a survey officer, subject to any rules made in this behalf, to prohibit the use for certain purposes of any land liable to the payment of land revenue and to summarily evict any holder who uses or attempts to use the same for any such prohibited purpose.
Chapter VIII lays down the procedure to be followed in the course of survey and settlement proceedings thus ensuring that there is an equitable classification of lands for purposes of levy of just assessment in the light of the relevant economic factors.
The principles underlying the said procedure prohibit the levy of oppressive or excessive revenue.
There is no scope for levy of extortionate revenue which may be termed as rackrent.
Chapter VI of the Code deals with the provisions relating to the grant, use and relinquishment of land.
Section 62 of the Code which lays down the conditions subject to which unoccupied land may be granted provides that the Collector may, subject to such rules as may from time to time be made by the State Government, require the payment of a price for unalienated land or to sell the same by auction or to annex such conditions as he may deem fit.
Rule 37 of the 1195 Bombay Land Revenue Rules, 1921 (hereinafter referred to as 'the Rules ') which are promulgated by the State Government in exercise of its powers under sections 213 and 214 of the Code provides that any unoccupied survey number not assigned for any special purpose may, at the Collector 's discretion, be granted for agricultural purposes to such person as the Collector 's deems fit, either upon payment of a price fixed by the Collector, or without charge, or may be put up to public auction.
When land is granted under section 62 read with Rule 37, the grantee acquires a heritable and transferable occupancy right over the land granted, subject to the lawful conditions imposed under the grant.
The proviso to section 68 of the Code, however, provides that notwithstanding any provision in the Code, it shall not be unlawful for the Collector at any time to grant permission to any person to occupy any unalienated unoccupied land for such period and on such conditions as he may, subject to rules made by the State Government in that behalf prescribe and in any such case the occupancy shall be held only for the period and subject to the conditions so prescribed.
Rule 32 of the Rules provides that land may be given free of price and free of revenue, whether in perpetuity or for a term, for any of the purposes specified in column 1 referred to in the table given below that rule viz. for sites for the construction at the cost of a municipality, a panchayat or other local bodies of schools or colleges etc., for sites used or to be used in connection with any scheme under the Community Development Programme, for sites used or to be used as market yards under the management of market committees established under the Gujarat Agricultural Produce Markets Act, 1963 etc.
Rule 35 of the Rules empowers the Collector to exempt from payment of land revenue without any limit lands used for sites of hospitals, dispensaries, schools etc.
Under Rule 41 of the Rules, land situated in the bed of a river and not included in a survey number can, save as otherwise provided in sections 46 and 64, ordinarily be leased annually by auction to the highest bidder for the term of one year or such further period as the Collector may think fit and the accepted bid should be deemed to be the land revenue chargeable on such land.
The language of this rule also enables the State Government to dispose of such lands in any other equitable way.
This Rule, however, does not apply to a land which is situated in the bed of a river and which is included in a survey number.
Rule 42 of the Rules empowers the Collector to dispose of unoccupied land required or suitable for building sites or other non agricultural purpose either by public auction or in his discretion by private arrangement either upon payment of a price fixed by him, or without charge, as he deems fit.
1196 These and the other provisions of the Code and the Rules made thereunder show that it is open to the Collector to dispose of unoccupied lands belonging to the Government either for cultivation or for any other purpose in favour of individuals or aggregate of individuals either free of charge or at an upset price to be fixed by him or by public auction.
A historical review of the several Government orders passed under the Code shows that lands belonging to Government had been set apart free of charge for several public purposes such as free pasturage, burial grounds, roads, religious institutions, village sites, cattle stands, dhobies ' ghats, potters ' grounds, threshing floors etc.
Land revenue was remitted when there were drought conditions.
Forfeited holdings were often given back to defaulters who had not paid land revenue once again on payment of arrears out of compassion.
Tagavi loans were given by Government to occupants to improve lands.
Some of the Government orders relating to grants of lands to private individuals may be stated here by way of illustration.
An order passed by the Government of Bombay in the year 1931 authorised grant of lands to kolis and other wild tribes in jungle tracts without payment of any occupancy price.
Another order passed in 1924 directed that grants of waste lands to members belonging depressed classes should be liberally made.
An order of the year 1925 for grants of lands to co operative societies free of charge.
Liberal grants of lands were made to military pensioners at concessional rates.
All these orders were passed during the British rule by the State Government in exercise of its powers under the Code.
The dominant purpose of the Code, therefore, appears to be public welfare, even though land revenue which was recoverable under the Code constituted an important source of revenue of the State Government.
After India became independent, land reforms measures had to be introduced by the States in India to prevent concentration of land in a few hands and to impose ceiling on the extent of land that could be held by an individual or a family, to take possession of land from individuals or families which was in excess of the ceiling so imposed and to distribute such excess land amongst persons belonging to Scheduled Castes, Scheduled Tribes and other weaker sections of society.
All these laws were made in order to implement the Directive Principles of State Policy contained in Articles 38, 39 and 46 of the Constitution by strengthening agrarian economy.
Never before was there a greater need as during the post Constitution period for administering land revenue laws in an equitable manner so that the economic interests of the weaker sections of the society and in particular of members belonging to the Scheduled Castes and Scheduled Tribes are protected 1197 and promoted.
It has to be mentioned here that there is no provision in the Code or the Rules made thereunder which prohibits disposal of occupancy rights or lease hold rights in respect of unoccupied lands in any manner other than public auction.
When it is felt that it is necessary to acquire excessive lands in the hands of private individuals for distribution amongst the landless and other deserving persons, it is equally necessary to observe the same rule while distributing the land which belongs to the State Government.
In view of the foregoing, we are of the view that the conclusion reached by the High Court that the basic scheme of the Code was the realization of land revenue by disposing of unoccupied lands by public auction alone appears to be baseless.
We, therefore, find it difficult to agree that the impugned Resolution which provides for the disposal of bhatha lands amongst bonafide agriculturists, harijans, adivasis and backward class people and other persons mentioned therein without resorting to public auction but by having recourse to the procedure set out in it is contrary to the letter and the spirit of the code.
We, therefore, set aside the finding of the High Court on the above question.
We shall now proceed to examine the question whether the impugned Resolution is violative of Article 14 of the Constitution.
The grievance of the writ petitioners was that they were denied the opportunity to acquire the lease hold rights at the public auction as a consequence of the policy of disposal of bhatha lands contained in the Resolution.
The finding of the High Court on the above question appears to have been influenced by its view on the object with which the Code was enacted and this becomes obvious from the following observation of the High Court: "As we have already pointed out, the object sought to be achieved is completely a collateral object and the criteria which are adopted for the alleged classification viz. the membership of the co operative society and the persons being Harijans, Adivasis or backward class people have no rational nexus whatever to the object of augmenting land revenue, which would be the implicit object underlying the entire Code, including this statutory power of disposal of the said lands for the benefit of the public.
The Code never contemplated any exclusion of persons when such statutory power was sought to be exercised by the State by any statutory order.
Therefore, this statutory order clearly violates Article 14 of the Constitution and even on that ground it must be struck down.
" For the purpose of determining the question whether the impugned Resolution is violative of Article 14 of the Constitution or not, it is 1198 necessary to examine whether the classification adopted by the State Government is based upon some intelligible differentia which distinguishes individuals and co operative societies in whose favour grants of lease hold rights in bhatha lands are required to be made by the Collector from others and whether the said classification bears any reasonable relation to the object underlying the Code.
The High Court has proceeded on the basis that the classification made by the Resolution does not have any rational relation to the object of the Code which according to it was realization of revenue and nothing more than that.
We have explained earlier that the object of the Code is to make provision for an equitable distribution of available land amongst persons who are in need of it.
As mentioned earlier, the State Government is under an obligation to ensure that the ownership and the control of material resources of the community are so distributed as best to subserve the common good and the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment.
In India which is predominantly an agricultural country, land forms the most important means of production.
It is well known that unemployment among the masses is on the increase because employment opportunities are not increasing at the same rate at which the population is increasing.
Consequently we find in India to day a large number of landless persons and persons with uneconomic holdings in villages who are either unemployed or under employed.
It is also equally well known that persons belonging to Scheduled Castes and Scheduled Tribes form the bulk of such landless persons or owners of uneconomic holdings who are in need of special care.
It is also the settled policy of the State Governments to encourage co operative movement, which is embarked upon with a view to preventing exploitation of economically weaker sections of society by others.
The State Government in the instant case appears to have passed the impugned Resolution in order to grant leases in respect of bhatha lands in favour of landless persons or persons having very small extents of land or persons belonging to Scheduled Castes, Scheduled Tribes and backward classes and members of co operative societies at a reasonable rent without being put to the necessity of offering bids at a public auction where it is well known that only moneyed persons can become successful bidders.
The impugned Resolution lays down the procedure to be followed in the disposal of lease hold rights in respect of bhatha lands.
It does not relate to all unoccupied lands available in the State of Gujarat.
The total extent of bhatha lands available in the State of Gujarat when compared with other available unoccupied lands may be a very small extent.
The writ petitioners on whom the burden of proving that the impugned 1199 Resolution is discriminatory have not furnished any information about the extent of Bhatha lands available for disposal.
Clauses (1) and (2) of the Resolution provide that the existing leases held by cooperative societies should be renewed on their expiry only in favour of the members of such co operative societies subject to certain conditions for a further period of ten years on payment of revised rent which should be fixed on the basis of the factors referred to therein.
Clause (3) of the Resolution provides that leases of bhatha lands granted in favour of individuals should not be renewed on their expiry but they should be disposed of in favour of bonafide agriculturists who belong to the weaker sections of society and co operative farming societies on the basis of priority set out in clause (5) thereof.
The rent payable by them should again be determined in accordance with the instructions given in the Resolution.
The Resolution is designed to bring about distribution of agricultural lands as best to subserve the common good thus eliminating concentration of wealth and means of production to the common detriment.
It helps persons, who are in need of lands for their bare maintenance and who have otherwise no chance of getting them, to acquire lands at a low rate of rent.
The classification made in the impugned Resolution of persons or co operative societies who are eligible to secure grants of lease hold rights, according to us, bears a reasonable relation to the object with which the Code is enacted.
It cannot be characterised as arbitrary.
We do not find that there is any infirmity in the above classification.
The Resolution aims at bringing about social and economic justice and assists people who are not strong enough to secure lease hold rights of a public auction for purposes of cultivation.
The leases to be granted are not for any unlimited period.
At the end of the period prescribed in the leases, it will be open to the Collector to dispose them of afresh.
In the above circumstances, we hold that the High Court was in error in holding that the Resolution was violative of Article 14 of the Constitution.
For the foregoing reasons, we allow these appeals, set aside the common judgment and order passed by the High Court and dismiss the writ petitions.
We feel that in the circumstances of the case, the State Government should pay the costs of respondent No. 1 in Civil Appeal No. 284 of 1970.
We order accordingly.
The other parties shall bear their own costs.
N.V.K. Appeals allowed.
| The respondents were charged with the offence of attempting to smuggle out of India 43 silver ingots in violation of the Foreign Exchange Regulation Act, 1947, Imports and Exports (Control) Act, 1947 and the .
The prosecution alleged that on the night of the occurrence the respondents carried in a truck and a jeep silver ingots some of which were concealed in a shawl, and some others hidden in saw dust bags from Bombay to a lonely creek nearby and that when the ingots were unloaded near the creek the sound of the engine of a mechanised sea craft from the side of the creek was heard by the Customs officials and that therefore they were guilty of attempting to smuggle silver out of India.
The respondents pleaded that they were not aware of the presence of silver ingots in the vehicles, that they were only employed for driving the jeep and the truck to another destination and that the police stopped them en route and had driven them to the creek.
The Trial Court convicted and sentenced them to various terms of imprisonment and fine.
On appeal, the Sessions Judge acquitted all the respondents taking the view that the facts proved showed no more than that the accused had only made "preparations" for bringing the silver to the creek and "had not committed any act amounting to a direct movement towards the commission of the offence" and that until the silver was put in the boat with intent to export, it would merely be in the stage of preparation falling short of an "attempt" to export in contravention of the law.
The High Court dismissed the State 's appeal.
Allowing the appeal to this Court, ^ HELD: Per Sarkaria, J.: (Chinnappa Reddy, J. concurring) 1.
The High Court was in error in holding that the circumstances established by the prosecution fell short of constituting the offence of an "attempt" to export unlawfully silver out of India.
[1165F] 2.
The expression "attempt" within the meaning of the penal provisions is wide enough to take in its fold any one or series of acts committed beyond the stage of preparation in moving contraband goods deliberately to the place of embarkation, such act or acts being reasonably proximate to the completion of the unlawful export.
[1165E].
1159 3.
The definition of 'proved ' contained in section 3 of the Evidence Act does not draw any distinction between circumstantial and other evidence.
If the circumstances establish such a high degree of probability that a prudent man ought to act on the supposition that the accused was attempting to export silver from India in contravention of the law, that would be sufficient proof of that fact in issue.
[116A B] 4(a) What constitutes an "attempt" is a mixed question of law and fact, depending largely on the circumstances of the particular case.
"Attempt" defies a precise and exact definition.
Brodly speaking, all crimes which consist of the commission of affirmative acts are preceded by some covert or overt conduct which may be divided into three stages: the first stage exists when the culprit first entertains the idea or intention to commit an offence; in the second stage he makes preparations to commit it; and the third stage is reached when the culprit takes deliberate overt steps to commit the offence.
Such overt act or step, in order to be criminal, need not be the penultimate act towards the commission of the offence.
It is sufficient if such act or acts were deliberately done and manifest a clear intention to commit the offence aimed, being reasonably proximate to the consummation of the offence.
[1164C E] Abhayanand Mishra vs State of Bihar, [1962] 2 S.C.R. 241, followed.
(b) There is a distinction between "preparation" and "attempt".
Attempt begins where preparation ends.
In sum, a person commits the offence of 'attempt to commit a particular offence ' when (i) he intends to commit that particular offence and (ii) he, having made preparations and with the intention to commit the offence, does an act towards its commission; such an act need not be the penultimate act towards the commission of that offence but must be an act during the course of committing that offence.
[1164E F] In the instant case the respondents carried silver ingots in the two vehicles to the sea shore and started unloading them near a creek from which the sound of the engine of a sea craft was heard.
In short they did all that was necessary to export the silver ingots by sea and the only step that remained was to load them on the sea craft for moving out of the territorial waters of the country.
But for the intervention of the Customs officials, the unlawful export would have been consummated.
The disappearance of the sea craft reinforces the inference that the accused had deliberately attempted to export silver by sea in contravention of law.
[1164G H] Chinnappa Reddy, J (concurring).
In order to constitute an "attempt" first there must be an intention to commit a particular offence, second, some act must have been done which would necessarily have to be done towards the commission of the offence and third such act must be 'proximate ' to the intended result.
The measure of proximity is not in relation to time and action but in relation to intention.
In other words, the act must reveal with reasonable certainty, in conjunction with other facts and circumstances and not necessarily in isolation, an intention as distinguished from a mere desire or object to commit the particular offence, though the act by itself may be merely suggestive or indicative of such intention.
[1170E F] In the instant case had the truck been stopped and searched at the very commencement of the journey or even on the way much before its destination the discovery of silver ingots in the truck might at the worst lead to the inference 1160 that the accused had prepared or were preparing for the commission of the offence.
It could be said that the accused were transporting or attempting to transport the silver somewhere but it would not necessarily suggest or indicate that the intention was to export silver.
The fact that the truck was driven up to a lonely creek from where the silver could be transferred into a sea faring vessel was suggestive or indicative, though not conclusive, that the accused wanted to export the silver.
It might have been open to the accused to plead that the silver was not to be exported but only to be transported in the course of inter coastal trade.
But the circumstance that all this was done in a clandestine fashion, at dead of night revealed, with reasonable certainty, the intention of the accused that the silver was to be exported.
[1170G H] Reg vs Eagleton ; Gardner vs Akeroyd ; Davey vs Lee ; Haughten vs Smith [1975] A.C. 476, 492; Director of Public Prosecutions vs Stonehouse , referred to.
Abhavanand Mishra vs The State of Bihar ; @ 253, applied.
Malkiat Singh & Anr.
vs State of Punjab @ 667, distinguished.
|
vil Appeal No. 5 186 of 1989.
From the Judgment and Order dated 31.8.1989 of the Delhi High Court in Company Appeal No. 35 of 1988.
F.S. Nariman, Ashok K. Mahajan and Subhash Sharma for the Appellants.
Anil B. Devan and Vinoo Bhagat for the Respondents.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, CJ.
Leave granted.
This is an appeal from the judgment and order of the Division Bench of the High Court of Delhi, dated 31st Au gust, 1989.
The appellant No. 1 M/s World Wide Agencies (P) Ltd. is a private limited company incorporated under the provisions of the Indian (hereinafter referred to as 'the Act ') to which Table 'A ' of Schedule 1 to the Act applies, as stipulated under the Articles of Association of the company.
As per the memorandum of associ ation the appellant company was carrying on the business of travel agents at G 40, Connaught Circus, New Delhi.
The authorised Share capital of the company was to the tune of Rs.5 lakhs divided into 5000 equity shares of Rs. 100 each.
The paid up capital as per the last annual return filed by the company with the Registrar of Companies, was Rs.2,01,000.
The company had at all relevant times 7 share holders and the total number of shares subscribed and paid up was 2010 shares.
The appellant No. 2 Mrs. Amrit Kaur Singh, at all rele vant times, was a shareholder holding 545 fully paid up shares in the share capital of the company, and was also the whole time working Director of the company, holding the office from 1974 onwards.
Late Mr. S.K. Desor was a British national.
He held 600 shares in the said company, acquired by him from the Ex Managing Director Mr. Amrik Singh Saluja and his family.
The respondents Nos. 2 & 3 to this appeal are children of late Mr. S.K. Desor who died on 5th March, 1985.
As per the certified copy of the annual return made up to 15th February, 1984 548 the shareholders of appellant No. 1 (company) were as fol lows: Mr. S.K. Desor 600 shares Mrs. Amrit Kaur Singh 545 shares Mr. Yash Pal Malhotra 250 shares Mrs. Amrit Gupta 200 shares Mrs. Savitri Devi Kohli 5 shares Mr. A.S. Saluja 5 shares Mr. Balwant Singh 405 shares 2010 shares A petition under sections 397 & 398 of the Act and in the alternative for winding up of the company was filed by the respondents on 25th March, 1985, wherein it was alleged that on 12th March, 1985 respondent No. 1, being the widow of late Mr. S.K. Desor, applied as a legal heir of late S.K. Desor to the Board of Directors of the appellantcompany for transmission of 850 shares held by her late husband.
It is stated that the shares of Yash Pal Malhotra had been ac quired by late Mr. S.K. Desor; and that respondent No. 1 filed an affidavit of her daughter Ms. Kim Paul, relinquish ing her claim to the shares of her late father.
The Board of Directors resolved that they had no objection to transmis sion of the shares held by Mr. S.K. Desor but the actual transmission would take place on respondent No. 1 's obtain ing Reserve Bank of India 's permission and the succession certificate.
The respondent No. 1 's application for allot ment of 5 shares as per her letter of the same date was allowed by the Board of Directors, and it was resolved that in view of allotment of these shares, her interest in the shares of her late husband, she be appointed as a Director of the company, subject to Reserve Bank of India 's permis sion.
It is stated in the judgment under appeal that at the said meeting of the Board of Directors, they recorded their deep appreciation for the services rendered by late Mr. S.K. Desor as Managing Directorcum Chairman of the company, and.
mourned his passing away.
The quorum of the said meeting was two Mrs.
Amrit Gupta and Mrs. Savitri Devi Kohli.
It is recorded in the judgment under appeal that on 23rd March, 1985 the Board of Directors held another meeting.
The minutes of the meeting of 12th March, 1985 were confirmed by the two above mentioned Directors.
The third Director, Mrs. Amrit K. Singh, however, objected as she stated that she had not been informed of the last meeting.
Various averments had been made in the petition with 549 regard to oppression and removal of certain valuables of Mrs. Amrit K. Singh and illegal operation of the bank ac count etc.
It was also asserted that Mrs. Singh was holding 545 shares benami and these in fact belonged to Mr. S.K. Desor.
A preliminary objection was raised on behalf of Mrs. Amrit K. Singh regarding the maintainability of the petition on the ground that the appellants were not members of the company as their names had not been recorded in the register of members.
A further objection was taken that a composite petition under sections 397 & 398 of the Act with an alternative prayer for winding up of the company was not maintainable.
The learned single Judge of the High Court sitting as a Company Judge dealt with the application and held that the appellants who were the wife and children of late Mr. S.K. Desor and had obtained letters of administration.
u/s 290 of the Indian Succession Act read with section 273 of the Act, as also the permission of the Reserve Bank of India, should be treated as members for the purpose of maintaining a petition sections 397 & 398 of the Act.
The learned single Judge also held that a composite petition was maintainable.
The appellant Mrs. Amrit K. Singh filed an appeal for herself and, as she alleged, as "Working Director" from the judgment and order dated 21st September, 1988 of the learned single Judge.
It appears that the appellants, aggrieved thereby, had also moved this Court under article 136 of the Constitution.
This Court by its order dated 18th January, 1989 stayed the further proceedings before the learned single Judge and directed expeditious disposal of the appeal pending before the division bench or the High Court, from the said order of 21st September, 1988 which had been admit ted on 13th October, 1988, for consideration by the Division Bench of the High Court of the application for.
directions.
By a judgment and order delivered on 31st August 1989 the Division Bench dismissed the said appeal and held that the petition section 397 & 398 was maintainable by the respondents in the facts and circumstances of the case, and that a composite petition sections 397,398 & 433(f) of the Act was maintainable.
Aggrieved thereby, the appellants preferred this appeal to this Court.
We are concerned with two questions of law, namely, whether the legal heirs of a deceased shareholder can be treated as members of the company for the purpose of main taining a petition sections 397 & 398 of the Act, and whether a composite petition under sections 397, 398 & 550 433(f) of the Act is maintainable.
We had the advantage of hearing Mr. F.S. Nariman, counsel for the appellants and Mr. Anil Diwan for the respondents.
It may be mentioned that during the pendency of the appeal before the High Court, without prejudice to the rights and contentions of the parties, an emergent meeting of the Board of Directors was directed by the High Court to be held on 28th January, 1989 to consider the question of registration of 450 shares belonging to the deceased Mr. S.K. Desor in the name of Mrs. Margarat T. Desor and her son Sameer K. Desor, being re spondents Nos. 1 & 3 respectively.
It further appears that as per the directions of the Division Bench, dated 27th January, 1989 the court had appointed Chairman Mr. C.K. Mahajan and Mrs. Margarat T. Desor were not permitted to vote at the said meeting.
At a meeting held subsequent thereto, by a majority, it was resolved not to register the respondents Nos. 1 & 3 as members.
It must, however, be noted that the Division Bench vide its order dated 27th January, 1989 had directed that no effect would be given to the said Resolution.
The question, therefore, which is material to be consid ered, is, whether the legal heirs of a deceased shareholder whose names are not entered in the register of members, are entitled to maintain petition sections 397 & 398 of the Act.
It was contended on behalf of the appellants that sections 397 & 398 of the Act must be strictly construed.
Section 397 of the Act which is in chapter VI of the Act under the heading "Prevention of Oppression and Mismanage ment", provides as follows: "Application to Court for relief in cases of oppression.(1) Any member of a company who complains that the affairs of the company are being conducted in a manner prejudicial to public interest or in a manner oppressive to any member or members including any one or more of themselves may apply to the Court for an order under this section, provided such members have a right so to apply in virtue of section 399.
(2) If, on any application under sub section (1), the Court is of the opinion (a) that the company 's affairs are being conducted in a manner prejudicial to public interest or in a manner oppressive to any member or members, and 551 (b) that to wind up the company would unfairly prejudice such member or members, but that otherwise the fact would justify the making of a winding up order on the ground that it was just and equitable that the company should be wound up; the Court may, with a view to bringing to an end the matters complained of, make such order as it thinks fit.
" On behalf of the appellants it was contended that the right which is a specific statutory right, is given only to a member of the company and until and unless one is a member of the company, there is no right to maintain application u/s 397 of the Act.
Mr. Nariman contended that there was no automatic transmission of shares in the case of death of a shareholder to his legal heir and representatives, and the Board has a discretion and can refuse to register the shares.
Hence, the legal representatives had no locus standi to maintain an application sections 387 & 398 of the Act.
Mr. Nariman submitted that the rights under sections 397 & 398 of the Act are statutory rights and must be strictly construed in the terms of the Statute.
The right, it was submitted, was given to "any member" of a company and it should not be enlarged to include "any one who may be entitled to become a member".
In order to decide the question involved, it would be necessary to examine certain provisions of the Act.
Section 2(27) of the Act states that "member" in relation to company does not include a bearer of a share warrant of the company issued in pursuance of section 114 of the Act.
Section 41 of the Act provides as follows: "(1) The subscribers of the memorandum of a company shall be deemed to have agreed to become members of the company, and on its registration, shall be entered as members in its register of members.
(2) Every other person who agreed in writing to become a member of a company and whose name is entered in its register of members, shall be a member of the company.
" Section 26 of the English Companies Act, 1948 in sub stantially the same.
Section 109 of the Act states as follows: "A transfer of the share or other interest in a company of a 552 deceased member thereof made by his legal representative shall, although the legal representative is not himself a member, be as valid as if he had been a member at the time of the execution of the instrument of trans fer.
" In this connection, it would be relevant to refer to Articles 25 to 28 of Table A of the Act, which deal with the transmission of shares and which are in the following terms: "25.(1) On the death of a member the survivor where the member was a joint ,holder, and his legal representatives where he was a sole holder, shall be the only persons recognised by the company as having any title to his interest in the shares.
(2) Nothing in clause (1) shall release the estate of a deceased joint holder from any liability in respect of any share which had been jointly held by him with other persons.
26.(1) Any person becoming entitled to a share in consequence of the death or insolvency of a member may, upon such evidence being produced as may from time to time properly be required by the Board and subject as hereinafter pro vided, elect, either (a) to be registered himself as holder of the share; or (b) to make such transfer of the share as the deceased or insolvent member could have made.
(2) The Board shall, in either case, have the same right to decline or suspend registration as it would have had, if the deceased or insolvent member had transferred the share before his death of insolvency.
(1) If the person so becoming entitled shall elect to be registered as holder of the share himself, he shall deliver or send to the company a notice in writing signed by him stating that he so elects.
(2) If the person aforesaid shall elect to transfer the share, he shall testify his election by executing a transfer of the share.
553 (3) All the limitations, restrictions and provisions of these regulations resulting to the right to transfer and the registration of transfers of shares shall be applicable to any such notice or transfer as aforesaid as if the death or insolvency of the member had not occurred and the notice or transfer were a transfer signed by that member.
A person becoming entitled to a share by reason of the death or insolvency of the holder shall be entitled to the same dividends or other advantages to which he would be entitled if he were the registered holder of the share, except that he shall not, become being registered as a member in respect of the share, be entitled in respect of it to exer cise any right conferred by membership in relation to meetings of the company: Provided that the Board may, at any time, give notice requiring any such person to elect either to be registered himself or to transfer the share, and if the notice is not complied with within ninety days, the Board may thereafter withhold payment of all divi dends, bonuses or other moneys payable in respect of the share, until the requirements of the notice have been complied with.
" Article 28 is more or less in para materia to articles 32 of Table A to the English Companies Act.
It may also be mentioned, as it ' has been mentioned by the High Court, that section 210 of the English Companies Act, before its amendment in 1990, was substantially the same as section 397 of the Act.
As mentioned hereinbefore, it is the admitted case of the parties that the regulation for management of the compa ny as contained in Table A to the Act apply to appellant No. 1 and the said relevant provision in the articles of associ ation of the company regarding transfer of shares is Article 17, which is as follows: "No share shall be transferred to any person other than a shareholder of the company so long as any member of the company is willing to purchase the same at fair value.
This clause shall not apply to the executor of administrator of a deceased shareholder, if there is will or to the heir or lineal decend ents where no letter of administration has been taken." 554 Mr. Nariman submits that in view of the specific provi sions of section 397 of the Act only a member is entitled to move a petition under sections 397 and 398 of the Act and that member is one whose name is in the register of members in view of section 41 of the Act, as mentioned hereinbefore.
In this connec tion, it is was emphasised that not only must the applicant be a member but in terms of section 399 of the Act, he has to fulfil the conditions laid down under clauses (a) and (b) of section 399 of the Act.
These should be construed so as to mean what the words say.
According to Mr. Nariman, a member is not, in view of the scheme of the Act, the representative of a deceased member.
It is true that it must be a member and section 41 of the Act provides that a member of a company is a person who has applied in writing and "whose name is entered in the regis ter of members" is entitled to move the petition.
It appears in this case that names of respondent Nos. 2 and 3 had not then been entered in the register of members at the relevant time when the application was made.
But the name of Late Shri S.K. Desor was still on the register of members and the requisite shareholding for moving a petition under sections 397 and 398 of the Act was held by him.
This question, though res integra so far as this country is concerned, has been considered in England, where Pennycuick, J. had occasion to consider this in Re Jermyn Street Turkish Baths Ltd., The Company there was incorporated in 1946 and represented a joint venture by L and section In 1952, S transferred his shareholding to Mrs. P who became a director of the company.
L died in 1953 and thereafter Mrs. P was mainly responsible for the company 's affairs.
The petition ers therein were appointed administrators in L 's estate in 1960, and in 1961, at their request, the names of the peti tioners therein were entered in the register of members of the company against the name of L as administrators of L.
On the questions whether the entry constituted merely a note of the grant of administration or the registration of the petitioners as members, and whether the petitioners were members of the company for the purposes of presenting a petition under section 210 of the English Companies Act at p. 65 of the report, Pennycuick, J. noted that it was contended before him that the petitioners therein were not members of the company and hence had no locus standi to present the petition bearing in mind that petition under section 210 of the English Companies Act could only be presented by a member of the company.
In the facts of that case, Pennycuick, J. held that the petitioners were duly registered as members of the company but he proceeded to hold that even if it were so, the personal representatives of a deceased member must be regarded as members of the company for the purposes of 555 section 210 Of the English Companies Act.
In this connection, reference was made to the decision of Buckley, J. in Re Bayswater Trading Co. Ltd., , where at p. 609 of the report, it was held that 'member ' would in clude representative of a deceased member for the purpose of section 353 of the English Companies Act.
This judgment of Penny cuick, J. went up in appeal to the Court of Appeal and it was reversed.
See Re Jermyn Street Turkish Baths Ltd., But on the point whether the repre sentative of a deceased member can maintain an action under section 210 of the English Companies Act, the views of Penny cuick, J. were not reversed or modified.
Mr. Nariman submit ted that the observations of Pennycuick, J. were obiter for the decision of the case.
We are unable to agree.
Indeed, this was a point specifically referred to by Pennycuick, J. as being raised and specifically decided.
But we need not detain ourselves with this controversy because the decision of the English Courts are not binding in the courts of India.
But the observations or the reasoning are of persua sive value.
We are clearly of the opinion that having regard to the scheme and the purpose of sections 397 and 398 of the Act, the reasoning on a para materia provision of the English Act would be a valuable guide.
The said construction, appears to us, to further the purpose intended to be fulfilled by petitions under sections 397 and 398 of the Act.
It facilitates solution of problems in case of oppression of the minorities when the member is dead and his heirs or legal representa tives are yet to be substituted.
This is an equitable and just construction.
This construction, as suggested by Penny cuick, J. does not militate against either equity or justice of the such situation.
We would, therefore, adhere to that construction.
In this connection, it may be mentioned that in the 1972 Edition of Gore Browne on Companies, it has been stated as follows: "It has recently been settled that the person al representatives of a deceased member, even though they are not registered as members, are entitled to present a petition under section 210.
In Re. Jermyn Street Turkish Baths Ltd., Pennycuick, J. held that on its true construc tion section 210 required that the word 'member ' should include the personal represen tatives of a deceased member, on whom title of his shares devolved by operation of law.
" In 1st Supplement January 1978 of Gore Browne on Compa nies, at para 16, it is stated that "while the shares remain in the name of the deceased holder, his estate is prima facie entitled to any subsequent benefits deriving from the shares".
At p. 491 of Buckley on Companies , the decision of Re Jermyn Street Turkish Baths Ltd. 's case (supra) has also been referred to and it was observed that for the purpose of the petition under section 210 of the English Companies Act, 'member ' includes the personal representatives of a deceased member.
Buckley also notes that this decision referred herein was reversed without affecting this point by the Court of Appeal.
In Halsbury 's Laws of England, 4th Edition, Vol. 7, para 1010, at p. 604, same view has been expressed.
The division bench of the Delhi High Court also noticed that the view expressed in Re Jermyn Street Turkish Baths (supra) also finds indirect support from various other decisions of the English Courts.
Reference was made to the decision in James vs Buena Venture Nitrate Grounds Syndicate Ltd., [1896] 1 Chancery Division 456; Re Dlewellyn vs Kasintoe Rubber Estate Ltd., and New Zealand Gold Extraction Company (Newbe ryyautin Proces) Ltd. vs Peacock, These decisions do indicate that the right of members in similar, though not identical situations, should be construed as being belonging to the legal representative or heirs of deceased members.
Our attention, however, was drawn to the decision of Supreme Court of Victoria in Re Meyer Dougals Pty. Ltd., ; by Gowans, J. Article 22 of Table A to the Victorian Companies Act, 1938 (4602) provides as follows that: "22.
A person becoming entitled to a share by reason of the death, bankruptcy or insolvency of the holder shall be entitled to the same dividends and other advantages to which he would be entitled if he were the registered holder of the share, except that he shall not before being registered as a member in respect of the share be entitled in respect of it to exercise any right conferred by membership in relation to meeting of the company.
" Gowans, J. in that case found that there was a "careful distinction between members and persons entitled to share by reason of the death of a member but who are not registered appear to deny the status of a member to a legal personal representative who is not a member".
On an analysis of various decisions, Gowans, J. was of the view that a de ceased 's estate and its representative may in a particular context have to be treated as not a member and in view of the provisions of section 186(1) of the Victorian Companies Act, 1961 which provides "any member of a company who complains that the affairs of the company are being conducted in manner oppressive to one or more of 557 the members (including himself) may . apply to the court for an order under that section", Gowans, J. came to the conclusion that there was no reason for treating the word "members" in that section as not applying to a legal repre sentative who is not entitled to be accorded the right which registration would give him to vote in regulating the con duct of the company 's affairs.
The object of the section, which is in para materia to section 399 of the Act, was to pro vide a remedy for the case where, notwithstanding the fact that a person possesses the right of a member enabling him to participate in the conduct of the affairs of the company, he can claim that he as a member or as one of a number of members, is or are being oppressed by those who conduct the affairs of the company.
According to Gowans, J., it should not be treated as applying to someone who is not so entitled and cannot so claim.
With respect, we are unable to accept this view.
Having regard to the purpose of the section as we conceive it, it would not be just construction to deny the legal representatives of the deceased member the right of maintain a petition under sections 397 and 398.
We would prefer to accept the view of Pennycuick, J. in Re Jermyn Street Turkish Baths Ltd. 's case (supra).
It appears to us that this will be in consonance with the equity of the sections.
In Gower 's Principles of Modern Company Law, at p. 68, reference has been made to Re Jermyn Street Turkish Baths Ltd. 's, case (supra) and also to Re Meyer Douglas Pry Ltd. 's, case (supra), which, according to the learned author, seems to be more convincing.
Mr. Nariman also referred us to the comments in Hahlo 's Casebook on Company Law, 2nd Edi tion, p. 35 1, where in footnote, reference was made to Re Jermyn Street Turkish Baths Ltd. 's, case (supra), which have been followed in some decisions.
It was noted as fol lows: "It appears doubtful whether personal repre sentatives of deceased shareholders, who themselves are not, or cannot become, registered as shareholders, can be regarded as "members" for the purposes of section 210 of the 1948 Act: Re Cuthburt Cooper & Sons Ltd., [1937] Ch.
392 and Re Meyer Douglas Ltd., at 655.
" We do not agree for the reason mentioned before.
It further appears to us the Australian judgment does not reconcile to logic in accepting that legal representative can petition for winding up, which is called the "sledge hammer remedy", but would refuse the lesser and alternative remedy of seeking relief against oppression and mismanage ment though the latter remedy requires establishment of winding up on just and equitable grounds as a precondition for its 558 invocation.
It would be rather incongruous to hold that the case for winding up on just and equitable grounds can be made out by the legal representatives under section 439(4)(b) of the Act but not the other.
This does not appear to be logi cal.
It appears to us that to hold that the legal represen tatives of a deceased shareholder could not be given the same right of a member under sections 397 and 398 of the Act would be taking a hyper technical view which does not ad vance the cause of equity or justice.
The High Court in its judgment under appeal proceeded on the basis that legal representatives of a deceased member represent the estate of that member whose name is on the register of members.
When the member dies, his estate is entrusted in the legal repre sentatives.
When, therefore, these vestings are illegally or wrongfully affected, the estate through the legal represen tatives must be enabled to petition in respect of oppression and mismanagement and it is as if the estate stands in the shoes of the deceased member.
We are of the opinion that this view is a correct view.
It may be mentioned in this connection that succession is not kept in abeyance and the property of the deceased member vests in the legal represen tatives on the death of the deceased and they should be permitted to act for the deceased member for the purpose of transfer of shares under section 109 of the Act.
In some situations and contingencies, the "member" may be different from a "holder".
A "member" may be a "holder" of shares but a "holder" may not be a "member".
In that view of the matter, it is not necessary for the present purpose to examine this question from the angle in which the learned Single Judge of the Calcutta High Court analysed the posi tion in the case of Kedar Nath Agarwal vs Jay Engineering Works Ltd. and Ors., , to which our attention was drawn.
Admittedly in the present case, the legal representa tives have been more than anxious to get theft names put on the register of members in place of deceased member, who was the Managing Director and Chairman of the company and had the controlling interest.
It would, therefore, be wrong to insist their names must be first put on the register before they can move an application under sections 397 and 398 of the Act.
This would frustrate the very purpose of the necessity of action.
It was contended on behalf of the appellant before the High Court that if legal representatives who were only potential members or persons likely to come on the register of members, are permitted to file an application under sections 397 and 398 of the Act, it would create havoc, as then persons having blank transfer forms 559 signed by members, and as such having a financial interest, could also claim to move an application under sections 397 and 398 of the Act.
The High Court held that this is a fallacy, that in the case of persons having blank transfer forms, signed by members, it is the members themselves who are shown on the register of members and they are different from the persons with the blank transfer forms whereas in the case of legal representatives it is the deceased member who is shown on the register and the legal representatives are in effect exercising his right.
A right has devolved on them though the death of the member whose name is still on the register.
In our opinion, therefore, the High Court was pre eminently right in holding that the legal representa tives of deceased member whose name is still on the register of members are entitled to petition under sections 397 and 398 of the Act.
In the view we have taken, it is not necessary to consider the contention whether as on the date of petition, they were not members.
In that view of the matter, it is not necessary for us to consider the decision of this Court in Rajahmundry Electric Supply Corpn.
Ltd. vs A. Mageshwara Rao & Ors., 13.
In view of the observations of this Court in Life Insurance Corporation of India vs Escorts Limited & Ors., ; at p. 1412, it is not necessary, in our opinion, to consider the contention as made on behalf of the appellant before the High Court that the permission of the Reserve Bank of India had been errone ously obtained and consequently amounts to no permission.
In the present context, we are of the opinion that the High Court was right in the view it took on the first aspect of the matter.
The second question was whether a combined petition under sections 397, 398 and 433(f) of the Act was maintainable.
In view of the observations of this Court in Shanti Prasad Jain vs Kalinga Tubes, and the reasoning of the Bombay High Court in Bilasrai Joharmal & Ors.
vs Akola Electric Supply Co. Pvt. Ltd., , we are of the opinion that the averments which a petitioner would have to make to invoke the jurisdiction under sections 397 and 398 are not destructive of the averments which are required to be made in a case for winding up under section 433(f) of the Act on the just and equitable ground, though they may appear to be contradictory.
As Halsbury 's Laws of England, 4th Edition, Volume 7, at p. 604 605, discusses that the prayer must be made stating that the affairs are such which fulfil the requirement of winding up but to wind up the company would unfairly prejudice that part of the members, but otherwise the facts would justify the making of a winding up order on the ground that it was just and equitable that the company should be wound up, the Court may, with a view to bringing to an end the 560 matters complained of, make such order as it thinks fit, whether for regulating the conduct of the company 's affairs in future or otherwise.
We are of the opinion that averments which a petitioner would have to make to invoke the juris diction of sections 397 and 398 of the Act are not destructive of the averments which are required to be made in a case for winding up under section 433(f) on the just and equitable ground, though they may appear to be rather conflicting if not contradictory.
We are in agreement with the High Court that the petition must proceed upto certain stage which is common to both winding up and though there may be some difference in procedure to be adopted, it is not such which is irrecon cilable and cannot simultaneously be gone into.
Indeed these are made in the manner indicated before.
It has to be borne in mind that a discretion is conferred on the court and it is only when the Court is satisfied that the facts justify the making of a winding up order on the ground that it is just and equitable that the company should be wound up, but if the Court is further of the opinion that it would be a remedy worse than the disease, then the Court can examine whether the alternative relief by way of a direction under ' section 397 can be granted.
This is a well accepted remedy exercised by the Courts.
We are, therefore, of the opinion that the High Court.was right in the view that a composite petition under sections 397,398 and 433(f) of the Act is main tainable.
The appeal, therefore, must fail and is accordingly dismissed.
We dismiss the appeal with costs, which is as sessed at Rs.5,000.
Y. Lal Appeal dis missed.
| The Petitioner landlord filed a suit No. 213 of 1970 for eviction against the first respondent and four others in the court of Civil Judge, Senior Division, Thane.
The suit was decreed by the Trial Court.
The first respondent alone filed an appeal before the District Court.
The appeal was dis missed confirming the eviction.
Thereafter the first re spondent filed a Writ Petition in the High Court of Bombay which was also dismissed.
The first respondent then filed Civil Appeal No. 2628 of 1980 in this Court which was dis missed by this Court on 18.8.1987.
However at the request of the appellant this Court had allowed him to continue to be in possession and carry on the business till 31.3.89 subject to the appellant and all his employees in the business filing an usual undertaking in the Court that they will hand over and deliver vacant possession of the premises on the expiry of the period mentioned above and will go on deposit ing the mesne profits until possession is delivered.
In pursuance of this order an undertaking was filed by the first respondent as also by persons shown as his employees and staying in the premises.
Sometime in the beginning of 1989 one Raghuram A. Shetty Second respondent in this Petition filed Civil Suit No. 306 of 1989 in the Thane Civil Court for a declaration that the decree for eviction obtained in respect of the premises in question in civil suit No. 213 of 1970 cannot be executed against him and for a permanent injunction against the Petitioner herein.
He also moved an application for a tempo rary injunction from executing the said decree.
The Thane Civil Court granted a temporary injunction as prayed.
That is how the Petitioner herein filed this contempt petition both against the original tenant K.M.M. Shetty and the second respondent the Plaintiff in Civil Suit No. 306 of 1989.
After discussing in detail the various developments of the case 562 brought about by the first respondent as well as by the 2nd respondent herein, this Court directed that the order grant ing injunction against the Petitioner from executing the eviction decree against the 2nd respondent shall not be operative and that the Petitioner is entitled to execute the decree for eviction against all persons who are in posses sion of the property.
While holding the first respondent guilty of committing contempt by wilful disobedience of the undertaking given by him in this court, the Court, HELD: Breach of an injuction or breach of any undertak ing given to a Court by a person in civil proceedings on the faith of which the Court sanctions a particular course of action is misconduct amounting to contempt.
[568F] The remedy in such circumstances may be in the form of a direction to the contemnor to purge the contempt or a sen tence of imprisonment or time or all of them.
[568F] When a court accepts an undertaking given by one of the parties and passes an order based on such undertaking, the order amounts in substance to an injunction restraining that party from acting in breach thereof.
[568D] The breach of an undertaking given to the Court by or on behalf of a party to a civil proceeding is, therefore, regarded as tantamount to a breach of injunction although the remedies were not always identical.
For the purpose of enforcing an undertaking that undertaking is treated as an order so that an undertaking, if broken, would involve the same consequences on the persons breaking that undertaking as would their disobedience to an order for an injunction.
[568D E] In the light of this Court 's finding in the instant case, that there was a breach of the undertaking mere impo sition of imprisonment or fine will not meet the ends of justice.
There will have to be an order to purge the con tempt by directing the first respondent contemnor to deliver vacant possession immediately and issuing necessary further and consequential directions for enforcing the same.
[568G]
|
No. 142 of 1962.
PetitioN under article 32 of the Constitution of India for the enforcement of fundamental rights.
B.Chhangani and B. D. Sharma, for the petitioners.
222 C.K. Daphtary, Solicitor General of India, Kan Singh, section K. Kapoor and P. D. Menon, for the respondents.
December 14.
The judgment of ' the Court was delivered by WANCHOO, J.
This petition under article 32 of the Constitution challenges the constitutionality of a scheme finalised under section 68D (3) of the Motor Vehicles Act, No. IV of 1939, (hereinafter referred to as the Act) in the State of Rajasthan.
The petitioners are holders of stage carriage permits on Jodhpur Bilara and Bilara Beawar routes.
A draft scheme was published under section 68C of the Act by the Rajasthan Roadways, which is a State Transport Undertaking, (hereinafter referred to as the Roadways), on January 26, 1961.
It provided for taking over of the transport service on the Jodhpur BilaraBeawar Ajmer route by the Roadways.
Further it provided for taking over three overlapping routes or portions thereof which were entirely on Jodhpur Bilara Beawar Ajmerroad, namely, Jodhpur Bilara, Bilara Beawar, and Beawar Ajmer, and as required by r. 3 of the Rajasthan State Road Transport Services (Development) Rules, 1960, (hereinafter referred to as the Rules), the names of the permitholders on these three overlapping routes with their permits were also specified for cancellation, and no transport vehicles other than the vehicles of the Road ways were to ply on the route to be taken over.
The usual time was also given for filing objections to all those whose interests were affected by the draftscheme.
The petitioners filed objections under s.68D of the Act, which were heard by the Legal Remembrancer to the Government of Rajasthan, he being the person appointed to hear and decide the objec tions, The objectors wanted to lead evidence and did produce some witnesses but some witnesses to whom summonses were issued did not turn up and 223 the objectors wanted the issue of coercive processes against them.
The Legal Remembrancer however refused this on the ground that lie had no power to issue coercive process.
As the objectors did not produce any further witnesses, the arguments were heard and the Legal Remembrancer gave his decisions on May 31, 1962.
One of the main points then raised before the Legal Remembrancer was that there were a dozen other overlapping routes which were not touched by the scheme, and therefore the scheme was bad on the ground of discrimination.
It may be mentioned that these overlapping routes were not completely overlapping the route to be nationalised, though the vehicles paying on those twelve routes had to pass over part of the Jodhpur Bilara Beawar Ajmer road.
It was urged on behalf of the Roadways before the Legal Remembrancer that the intention was to render ineffective the permits on these twelve routes also insofar as they overlapped the route to be taken over, though these, routes were not mentioned in the draft scheme like the three routes which were completely covered by the Jodhpur Bilara Beawar Ajmer route and no notice was apparently given to the seventy two permit holders on these twelve partially over lapping routes.
The Legal Remembrancer held that even though these routes were not specified in the draft scheme and no notice had been given to the permit holders thereof, it was open to him to render the permits ineffective with respect to these routesalso and proceeded to pass orders accordingly.
Thereupon five writ petitions were filed in the High Court of Rajasthan by the permit holders on the three routes which had been notified in the draftscheme as well as by some of the permit holders of the twelve partially overlapping routes which had not been notified but which had been 224 affected by the order of the Legal Remembrancer.
Two main points were urged before the High Court in support of the cbchallenge to the validity of the scheme as finally published on June 16, 1962.
In the first place, it was urged that the State Government when publishing the scheme as required by section 68D(3) of the Act had made certain changes in it beyond the decision of the Legal Remembrancer and therefore the final scheme as published was invalid as it was not open to the State Government to make any changes in the scheme as approved by the Legal Remembrancer.
Secondly, it was urged on behalf of the operators on the twelve partially overlapping routes which had not been notified in the draft scheme that it was not open to the Legal Remembrancer to affect their interests when their routes were not specified in the draft scheme and they had been given no notice thereof.
The High Court accepted both these contentions.
It was of the opinion that it was not open to the State Government to make any modification in the decision of the Legal Remembrancer and inasmuch as that had been done the final scheme as published was invalid.
It also held that as the twelve partially overlapping routes were not notified in the draftscheme and no notice had been given to the permitholders thereof, it was not open to the Legal Remembrancer to pass any orders with respect to them.
It therefore set aside the scheme as published under section 68D (3) of the Act.
Finally, the High Court observed that as the scheme as published was not the scheme as approved by the Legal Remembrancer and as the decision of the Legal Remembrancer becomes final when it is published, it was open to the Legal Remembrancer to modify his decision, even though he may have signed and pronounced it.
The Legal Remembrancer was thus directed to go into the matter again and leave the question of the twelve partially overlapping routes for a subsequent scheme.
The final scheme as published under section 68D (3) of the Act was set aside and the Regional Transport 225 Authority was directed not to implement it until it was regularised in accordance with law.
The matter then went back to the Legal Remembrancer who considered the draft scheme in the light of the decision of the High Court and after hearing further agruments disposed of the objections.
The main effect of his decision was that all the twelve partially overlapping routes were left out of the scheme and only the three routes notified in the draft scheme which were completely covered by the route Jodhpur Bilara Beawar Ajmer, were affected.
The decision of the Legal Remembrancer approving the scheme as modified by him was published on August 31, 1962, and the present petition is directed against that decision.
The decision of the Legal Remembrancer is being challenged before us on the following grounds: (1)A draft scheme under the Act has to be approved as a whole and the procedure of approving a part of the scheme once and another part later is illegal, and therefore, the approval given to the draft scheme by the Legal Remembrancer does not result in approving the scheme, as required by law.
(2)It was not open to the Legal Remembracer to review his order dated May 31, 1962 even after the decision of the High Court, and insofar as the Legal Remembrancer did so in obedience to the order of the High Court he abdicated his own judgment, and the approval therefore after such abdication of his own judgment, is no approval in law.
(3)As the scheme as published on June 16, 1962 was set aside by the High Court, it was the duty of the Legal Remembrancer to give a fresh hearing ab initio to the objectors which he did not do, and therefore the approval accorded by him to the draft scheme 226 after the judgment of the High Court is no approval in law.
(4)Hearing requires taking of evidence; but as the Legal Remembrancer expressed his inability to compel attendance of witnesses, there was no hearing as contemplated by law, and therefore the approval of the draft scheme without a proper hearing is no approval in law.
(5) There was discrimination inasmuch as the operatorsof the twelve partially overlapping routes were left out of the scheme.
(1) &(2).
There is no doubt that a draft scheme has to be considered as a whole and all objections to it have to be decided before it can be approved by the State Government or by the officer appointed in that behalf, and the Act does not envisage approving of a part of the scheme once and putting it into effect and leaving another part unapproved and left over for enforcement later.
It is also true that the Act does not provide for review of an approval once given by the Legal Remembrancer, though he may be entitled to correct any clerical mistakes or inadvertent slips that may have crept in his order.
It is also true that the Legal Remembrancer when considering the objections has to exercise his own judgment subject to any directions that the High Court.
might give on questions of law relating to a particular draftscheme.
But we do not think that this is a case where the draft scheme has been approved in part and another part of it has been left unapproved to be taken up later; nor is this a case where the Legal Remembrancer abdicated his own judgment or reviewed his earlier decision when he proceeded to reconsider the matter after the High Court had set aside the scheme as published under section 68D (3) of the Act on June 16, 1962.
227 Let us see what the draft scheme was meant to provide in this case.
As we have already indicated, the draft scheme was published in order to take over the Jodhpur Bilara Beawar Ajmer route.
It also provided for taking over all the three completely overlapping routes, namely, Jodhpur Bilara, Bilara Beawar, and Beawar Ajmer routes, and also portions thereof falling entirely on this road from Jodhpur Ajmer.
There was no indication in the draft scheme for taking over what are called partially overlapping routes, only parts of which overlapped on the Jodhpur Bilara Beawar Ajmer road.
These partially overlapping routes were of two kinds.
In some cases one terminus was on Jodhpur Bilara Beawar Ajmer road while the other terminus was not on this road.
In other cases, both the termini of the overlapping routes were not on this road, though a part of the route fell on this road.
Rule 3 of the Rules provides for indi cating all such overlapping routes as are intended to be affected and the draft scheme in the present case only indicated three routes which were completely on this road namely, Jodhpur Bilara, Bilara Beawar, and Beawar Ajmer, and was not concerned at all with the other overlapping routes, where overlapping was only partial.
It was therefore in our opinion unnecessary to bring in the question of the twelve partially overlapping routes when objections to this draft scheme were being considered.
There is no doubt that the Roadways was also responsible for the introduction of this confusion for it seems to have been urged on its behalf, when the objections were considered on the first occasion, that these partially overlapping routes were also meant to be covered by the draft scheme, even though they were not mentioned in the draft scheme as required by r. 3 of the Rules and no notice had been issued to the permitholders of those routes.
The petitioners also raised a point with respect to these overlapping routes, and that is how on the first occasion, the Legal Remembrancer held that even though these routes had 228 not been included in the draft scheme and no notice had been given to the permit holders thereof, it was open to him to pass orders with respect thereto and he proceeded to render the overlapping part of these routes ineffective.
It is obvious from a perusal of the draft scheme that these twelve partially overlapping routes were not included in it at all and they were brought in only because of the objection raised by the petitioners and the reply of the Roadways that they were meant to be included.
That is why when the writ petitions were decided by the High Court, it pointed out that the scheme did not intially include the partially overlapping routes.
The High Court then went on to observe that if the Legal Remembrancer thought fit to include these routes in the scheme also, he should have given notice to all concerned to file their objections.
With respect, it seems to us that this observation of the High Court is not correct.
If the scheme did not include the partially overlapping routes as it undoubtedly did not, in spite of what the objectors might have said and what the Roadways might have maintained before the Legal Remembrancer on the first occasion it was not open to the Legal Remembrancer to include these overlapping routes in the scheme at all and he could not do so even if he had given notice to the permit holders on these overlapping routes.
The question therefore whether the final approval of the draft scheme as published on August 31,1962 is an approval of a part of the scheme only, leaving another part of the scheme unapproved and therefore liable to enforcement later, can only admit of one answer, namely, that the approval was of the scheme as a whole.
The contention therefore on behalf of the petitioners that part of the scheme has been approved and the rest of it has been left unapproved, can have no force on the facts of the present case.
The twelve overlapping routes were never meant to be affected by the scheme which left them untouched.
The contention that only part of the scheme has been 229 approved appears to have been based on the fact that these routes have not been rendered ineffective as to the overlapping part.
But as these routes were never included in the draft scheme, the approval given to the draft scheme without touching these routes cannot in the circumstances be called an approval of a part of the scheme.
Nor do we think that there is any force in the contention that the Legal Remembrancer abdicated his judgment when going into the question on the second occasion after the judgment of the High Court.
The order of the Legal Remembrancer dated August 17, 1962 shows that he reconsidered the entire matter after hearing further arguments and there can be no doubt that he was exercising his own judgment when he finally decided to approve the draft scheme with certain modification.
What the Legal Remembrancer has done in this case is to reappraise the evidence in the light of the legal position indicated by the High Court.
Nor do we think that there is any substance in the argument that the order of the Legal Remembrancer dated August 17, 1962, is a review of his earlier order dated May 31, 1962.
No question of review of that order arises for that order was in effect set aside when the High Court set aside the final scheme as published on June 16, 1962.
It is true that publication made certain further modifications into the scheme as approved by the Legal Remembrancer but that in our opinion makes no difference to the fact that the order of the High Court setting aside the final scheme as published on.
June 16, 1962 put an end to the order of the Legal Remembrancer dated May 31, 1962 also.
This argument as to review has been raised because of the observation in the Judgment of the High Court that the scheme as finally published on June 16, 1962 was not the decision of the Legal Remembrancer because of the changes made in it by the State Government and 230 therefore it was open to him to modify it, though he might have signed his decision and pronounced it.
With respect, we consider that this observation is not correct.
It may be that the State Government had no authority to modify the decision of the Legal Remembrancer but when the High Court set aside the finally approved scheme as published on June 16, 1962, it meant the decision of the Legal Remembrancer dated May 31, 1962, also came to an end, for the final scheme as published on June 16, 1962 was undoubtedly based on it, even though there were further changes in that decision at the time of publication.
In the present case the order of the High Court was analogous to a remand as understood in courts of law.
What the Legal Remembrancer did on the second occasion was to reappraise the evidence in the light of the law laid down by the High Court.
Therefore, it cannot be said that the decision of the Legal Remembrancer on August 17, 1962, is a review of his earlier decision dated May 31, 1962.
It must be treated as a fresh decision, after the High Court had set aside the final scheme as published on June 16, 1962.
Though therefore the proposition put forward on behalf of the petitioners may be accepted as correct, there is no scope for applying the principles contained in these propositions to the facts of this case.
The contention therefore that the scheme as finally published on August 31, 1962 is bad because it militates against these principles must be rejected.
(3) & (4).
It is urged that after the High Court set aside the final scheme as published on June 16, 1962, the Legal Remembrancer should have given a fresh hearing ab initio and that he did not do so.
It is further urged that in as much as there is no provision in the Rules for compelling the attendance of witnesses whom an objector might like to produce, there 231 can be no effective hearing of the objection, and therefore the scheme as finally published on August 31, 1962, is invalid.
It is not disputed that the Legal Remembrancer did give a hearing to the objectors after the order of the High Court.
What is urged however is that the objectors should have been allowed to give evidence afresh before the Legal Remembrancer finally disposed of the objections.
We are of opinion that though the result of the order of the High Court was to set aside the order of the Legal Remembracer dated May 31, 1962, it cannot be said that the order of the High Court wiped out the evidence which the objectors had given before the Legal Remembrancer on the first occasion.
We have already mentioned the two grounds on which the High Court set aside the final scheme as published on June 16, 1962, and those grounds had nothing to do with the evidence which was already produced.
In our opinion, it was open to the Legal Remembrancer to take that evidence into account and it was not necessary that evidence should be given again, particularly when no fresh issues arose; nor was the Legal Remembrancer bound to take fresh evidence simply because the final scheme as published on June 16, 1962 had been set aside on account of certain technical and Legal defects.
When the objectors had been given full opportunity to lead evidence on the previous occasion which was still there for the Legal Remembrancer to take into account, it was sufficient for the Legal Remembrancer to hear the objectors ' arguments in full after the order of the High Court in the light of the observations made by it, and the petitioners therefore cannot have any grievance on the score that they were not given any hearing after the order of the High Court.
If it is borne in mind that the order passed by the High Court in the proceedings was in the nature of a remand order, all these objections will plainly be untenable.
232 As to the contention that the Rules do not provide for compelling the attendance of witnesses and all that the Legal Remembrancer can do is to summon witnesses who may or may not appear in answer to the summonses, it is enough to say that the proceedings before the Legal Remembrancer though quasi judicial are not exactly like proceedings in court.
In proceedings of this kind, it may very well be concluded when a witness is summoned and does not appear, that he does not wish to give evidence, and that may be the reason why no provision is made in the Rules for any coercive process.
We think in the circumstances of the hearing to be given by the Legal Remembrancer, it is enough if he takes evidence of the witnesses whom the objectors bring before him themselves and if he helps them to secure their attendance by issue of summonses.
But the fact that the Rules do not provide for coercive processes does not mean in the special circumstances of the hearing before the Legal Remembrancer that there can be no proper hearing without such coercive processes.
We are therefore of opinion that the Legal Remembrancer did give a hearing to the objectors after the order of the High Court and that in the circumstances that hearing was a proper and sufficient hearing.
The challenge therefore to the validity of the scheme as published on June 16, 1962, on this ground must be rejected.
Lastly we come to the question of discrimination.
The argument is based on the fact that the twelve partially overlapping routes to which we have already alluded have not been touched by the scheme.
That is undoubtedly so.
We have already pointed out that in the case of some of these routes one terminus is on the Jodhpur Bilara Beawar Ajmer road while the other is not on this road.
In some cases neither termini is on this road and only a part of 233 the route overlaps this road.
The argument is that as the permit holders on these partially overlapping routes have not been touched by the scheme, there is discrimination inasmuch as the permit holders on the three routes which were totally overlapping the route which was being taken over, have been completely excluded.
We do not think that this amounts to discrimination.
It may be pointed out that under section 68C it is open to take over any area or route to the complete or partial exclusion of other persons.
Therefore, it was open to the State Government to take over this route only and exclude those who may be plying completely on this route or parts thereof and unless it can be shown that others who are similarly situated have not been excluded from the scheme there can be no question of discrimination.
In our opinion it cannot be said that those permit holders whose routes were completely covered by the route taken over stand on the same footing as those whose routes were only partially covered by the route taken over.
It may very well have been considered that in the first instance only those permit holders will be excluded whose routes are completely covered by the routes taken over, and if that is permissible under the law it cannot be said that that would amount to discrimination when there is an obvious distinction between routes completely covered by the route to be taken over and the routes partially covered by the route to be taken over.
We have been informed that since this scheme was approved steps have been taken even to exclude those permit holders whose routes are partially covered by making their permits ineffective over the overlapping part of the route.
But that apart, we can see no ground to uphold the plea of discrimination in the present case, for routes completely covered by the route taken over stand on a different footing from the routes only partially covered.
The contention therefore that the final scheme as published on August 31, 1962 is bad because it discriminates in this manner, must be rejected.
234 We therefore dismiss the petition but in the circumstances of this case pass no order asto costs.
Petition dismissed.
| A Government Notification issued under the Essential Sup plies Act, 1946, required every manufacturer to submit "true and accurate information relating to his undertakings" and a note of the printed form stated that "by 'delivered ' or 'delivery ' is mean physical delivery of cloth in bales and pieces but not cloth which though paid for, is still in the physical possession of the seller.
The appellant Mills were manufacturers of cloth and D.K. & Co. were their sole del credere, selling agents who guaranteed payment to the appellant of the price of all sales made and, on the other side, guaranteed delivery to the purchasers with whom they dealt direct.
One D.M. informed the Mills as the agent of an up country quota holder that he bad been authorised by the latter to take delivery of 13 bales and on this account paid Rs. 14,000 to D.K. & Co. D.K. & Co. wrote to the Mills that they bad received payment.
The Mills dispatched the goods to D.M. but meanwhile the quota.
holder had changed his agent and D.M. refused to take delivery.
The Mills credited the money which had been received from D.M. to D.K. godown till the question of delivery was settled.
In a return submitted under the Essential Supplies Act 1946, these 13 bales were shown &a "delivered" to D. K. & Co. The appellants were prosecuted and convicted on the ground that physical delivery was not given to D.K. & Co. and the return, was not therefore true and accurate: Held, that, as the goods had left the Mill premises, the price had been paid and the property in them had passed and as they were in a godown under the control of D. K. & Co., D. K. & Co. were in the circumstances, the persons to whom the goods were actually delivered, and the conviction was illegal.
A del credere agent is an agent of the seller only up to a point.
Beyond that he is either a principal or an agent of the buyer.
|
Civil Appeal No. 1795 of 1970.
From the Judgment and order dated the 15th October, 1968 of the Madras High Court in Writ Petition No. 2252 of 1965.
section T. Desai and T. A. Ramachandran, for the appellant.
N. D. Karkhanis and section P. Nayar, for the respondent.
The Judgment of the Court was delivered by CHANDRACHUD,J.
The appellant filed a writ petition in the High Court of Madras under Article 226 of the Constitution to challenge an assessment order dated August 22, 1963 made by the respondent, levying additional surcharge on its residual income.
The High Court dismissed the writ petition by its judgment dated October IS, 1968 but it has granted to the appellant a certificate to file an appeal to this Court under Articles 133(a) and (c) of the Constitution.
The appellant is a co operative society engaged in the business of banking.
Its total income for the assessment year 1963 64 was computed by the respondent at Rs. 10,00,098.
Out of this, Rs. 9,48,335 was its business income while Rs. 51,763 was its income from other sources.
Since, under section 81(i)(a) of the Income tax Act, 1961 a co operative society engaged in the business of banking is not liable to pay income tax on its business income the tax amounting to Rs. 23,845.47 was charged on Rs. 51,763 only though for the purposes of rate the income was taken at Rs. 9,48,335 in view of section 110 of the Act.
Applying the Finance Act, XIII of 1963, the respondent computed the residual income of the appellant at Rs. 5,39,386 and levied on it an additional surcharge of Rs. 52,828.60.
Thus the total tax levied on the appellant came to Rs. 23,845.47 plus Rs. 52,828.60 i.e., Rs. 76,674.07.
The main grievance of the appellant before the High Court was that whereas its taxable income was only Rs. 51,763, a tax of Rs. 76,674.07 was imposed on it.
The relevant provisions of the Finance Act were accordingly said to be invalid as they could not subject to additional surcharge an income which was exempt from tax under the provisions of the Income tax Act.
The additional surcharge, it was contended, was intended as an additional levy on the income 139 tax and had no independent existence apart from it.
These contentions were rejected by the High Court and hence this appeal.
Section 81 of the Income tax Act, 1961 was deleted by the Finance Act, XX of 1967, with effect from April 1, 1968 but its provisions were incorporated by the same Finance Act in section 80P.
Section 81 (i)(a) read thus: "81.
Income of co operative societies.
Income tax shall not be payable by a co operative society (i) in respect of the profits and gains of business carried on by it, if it is (a) a society engaged in carrying on the business of banking or providing credit facilities to its members;" It is indisputable that by reason of this provision, the tanking income of the appellant amounting to Rs. 9,48,335 is exempt from income tax.
It is equally clear that by reason of section 99(1)(v) of the Act of 1961, the appellant is not liable to pay supertax on its business income.
That section provides that where the assessee is a co operative society, super tax shall not be payable by it on any income in respect whereof no income tax is payable by it by virtue of the provisions of section 81.
The dispute really centers round the provisions of Finance Act, VIII of 1963.
The provisions of that Act which are relevant for our purpose are sections 2(1)(a), 2(8), 3, Paragraph A(ii) of Part I of the First Schedule, and clause (c) of that` portion of Part 1, called ` 'Surcharges on Income Tax." Section 2(1)(a) of the Finance Act, 1963 provides that: 2.
Income tax and super tax (1) Subject to the provisions of sub section (2), (3), (4) and (5), for the assessment year commencing on the 1st day of April, 1963, (a) income tax shall be charged at the rates specified in Part I of the First Schedule and, (i) in the cases to which paragraphs A,C,C and E of that Part apply, shall be increased by a surcharge for purposes of the Union and, except in the cases to which the said paragraph applies a special surcharge, calculated in either case in the manner provided therein; and (ii) in the cases to which paragraphs A and of the aforesaid Part apply, shall further be increased by an additional surcharge for purposes of the Union (hereinafter referred to as additional surcharge) calculated in the manner provided in the said Schedule;" Section 2 (8) provides that: For the purposes of paragraphs A and of Part I of the First Schedule, the expression "residual income" means the amount of the total income as reduced by 140 (a) the amount of the capital gains, if any, included therein; and (b) the amount of tax (exclusive of additional surcharge) which would have been chargeable on such reduced total income if it had been the total income no part of which had been exempt from tax and on no portion of which deduction of tax had been admissible under any provisions of the Income tax Act or this Act.
" Section 3 provides that: "Notwithstanding anything contained in the provisions of Chapter VII or Chapter VIII A or section 110 of the Income tax Act or sub section (5) of section 2 of this Act, in calculating any relief rebate or deduction in respect of income tax payable on the total income of an assessee which includes any income on which no income tax is payable or in respect of which a deduction of income tax is admissible under any of the aforesaid provisions, no account shall be taken of the additional surcharge.
" The First Schedule of the Finance Act, 1963 consists of three parts out of which we are only concerned with Part I. Part I which is called "Income tax and surcharges on income tax" consists of Paragraphs A, B, C, and out of which we are concerned with Paragraph A only.
Clause (ii) of Paragraph A prescribes rate of income tax for incomes accruing, inter alia, to "association of persons".
Since a co operative society is an association of persons, Paragraph A of Part I would apply to the case of the appellant for`the purposes of section 2(1)(a)(ii) of the Finance Act oil 1963, though not for the purpose of bringing its exempted business income to income tax.
That portion of Part I, Paragraph A, called "Surcharges on Income Tax" provides: "The amount of income tax computed at the rates hereinbefore specified shall be increased by the aggregate of the surcharges calculated as under".
Clause (a) provides for a surcharge for the purposes of the Union at the rates mentioned in sub clauses (i), (ii) and (iii).
Clause (b) provides for the levy of a special surcharge.
Clause (c) with which we are concerned provides for the levy of "an additional surcharge for the purposes of the Union calculated on the amount of the residual income" at the rates mentioned therein.
The grievance of the appellant, which appears to have been pressed before the High Court with some earnestness, that the tax levied upon it exceeds its taxable income can afford no true guide to the construction of the relevant provisions of the Income tax Act or the Finance Act.
Harshness of a taxing statute, apart from a possible challenge to it under Article 13 of the Constitution, cannot be an invalidating circumstance.
But the grievance on this score is basically misconceived.
It assumes, what has to be examined, that no part of the income exempted from income tax and super tax under the Income tax Act can be brought to tax by a Finance Act.
The total income of the appellant was computed 141 at Rs. 10,00,098.
By reason of sections 81 (i) (a) and 99 (1) (v) of the Income tax Act, 1961 the appellant enjoys an exemption from income tax and super tax in respect of its business income which amounts to Rs. 9,48,335.
The balance, viz. Rs. 51,763 which was the appellant 's income from other sources was alone taxable under the Act of 1961 and a tax of Rs. 23,845.47 was imposed on that income; The Finance Act of 1963 subjects 'residual income ' to certain charges and such in come was computed, admittedly correctly, at Rs. 5,39,386.
An additional surcharge of Rs. 52,828.60 was levied on the residual income.
Thus on the assumption that the Finance Act, validly and on a true interpretation, imposes the additional surcharge on residual income, the tax imposed on the appellant is Rs. 23,845.47 plus Rs. 52,828.60.
The total tax of Rs. 76,674.07 thus imposed is far less than the.
appellant 's total taxable income arrived at by the addition of its non business income and the residual income.
That leads to the inquiry first as regards the scope of a Finance Act and then as regards the interpretation of the Finance Act of 1963.
Learned counsel for the appellant, during the course of his arguments, gave up the challenge to the power of the Parliament to impose a new charge by a Finance Act.
This concession was properly made.
By Article 246(1) of the Constitution, Parliament has the exclusive power to make laws with respect to any of the matters in List I of the Seventh Schedule.
Entry 82 in List I relates to "taxes on income other than agricultural income".
The Income tax Act, 1961 and the annual Finance Acts are enacted by the Parliament in exercise of the power conferred by Article 246(1) read with Entry 82 of List I.
Once the Parliament has the legislative competence to enact a law with respect to a certain subject matter, the limits of that competence cannot be judged further by the form or manner in which that power is exercised.
Accordingly, though it would be unconventional for the Parliament to amend a taxing statute by incorporating the amending provision in an Act of a different pith and substance, such a course would not be un constitutional.
Much more so can the Parliament introduce a charging provision in a Finance Act.
True, as said in Kesoram Industries and Cotton Mills Ltd vs Commissioner of Wealth Tax, (Central) Calcutta(1), that the Income tax Act is a permanent Act vs while the Finance Acts are passed every year and their primary purpose is to prescribe the rates at which the income tax will be charged under the Income tax act.
But that does not mean that a new and distinct charge cannot be introduced under the Finance Act.
Exigencies of the Financial year determine the scope and nature of its provisions.
If the Parliament has the legislative competence to introduce a new charge of tax, it may exercise that power either by incorporating that charge in the Income tax Act or by introducing it in the Finance Act or for the matter of that in any other Statute.
The alternative in this regard is generally determined by the consideration whether the new charge is intended to be more or less of a permanent nature or whether its introduction is dictated by the financial exigencies of the particular year.
Therefore, what is not 'income ' under 142 the Income tax Act can be made 'income ' by a Finance Act, an exemption granted by the Income tax Act can be withdrawn by the Finance Act or the efficacy of that exemption may be reduced by the imposition of a new charge.
Subject to constitutional limitations, additional tax revenue may be collected either by enhance the rate or by the levy of a fresh charge.
The Parliament, through the medium of a Finance Act, may as much do the one as the other.
In McGregor and Balfour Ltd., Calcutta vs C.I.T., West Bengal(1), which was affirmed by this Court in Chakravartti C.J. delivering the judgment of a Division Bench observed that the Finance Acts though annual Acts are not necessarily temporary Act for they may and often do contain provisions of a general character which are of a permanent operation.
In Hari Krishna Bhargav vs Union of India and Anr.(2) an assessee challenged the scheme of Annuity Deposits of the ground that the Parliament has no competence to incorporate ill the Income tax Act a provision which was substantially one relating to borrowings by the Central Government from a class of tax payers.
That scheme was introduced by Finance Act 5 of 1964 which incorporated Chapter XXII A containing section 28 A to section 28 X in the Income tax Act, 1961.
The challenge was repelled by this Court on the ground that if the parliament had the legislative competence to pass an Act for collecting Annuity Deposits from tax payers, nothing contained in the Constitution disentitled it "as a matter of legislative arrangement to incorporate the provisions relating to borrowing from tax payers in the Income tax Act or any other statute".
This discussion became necessary in spite of the appellant 's concession on the Parliament 's legislative competence because for a proper understanding of the provisions of the Finance Act 1963, it is essential to appreciate that a Finance Act may not only prescribe rates but also introduce a new charge.
We will now proceed to consider the provisions of the Finance Act, 1963 under which the respondent has levied additional surcharge on the appellant 's residual income.
The question for consideration is whether clause (c) of the portion "Surcharges on Income Tax" occurring in Paragraph A of Part I introduces a new charge in the shape of additional surcharge so that the said charge, can be levied even on a part of the appellant 's income which is exempt from income tax and super tax under sections 81(i)(a) and 99(1)(v) of the Act of 1961.
The history of Indian income tax, according to appellant 's counsel, shows that surcharges by way of increase in the amount of income tax are nothing but income tax and therefore the expression "income tax" occurring in sections 4 and 81 of the Act of 1961 and in section 2 and the First Schedule of the Finance Act, 1963 includes surcharges.
To put it differently, the argument is that the exemption granted by section 81(i)(a) extends to surcharges also as a result whereof a co operative society engaged in the business of banking is neither liable to pay income tax nor any of the surcharges on its business income.
143 In C.I.T., Kerala vs K. Srinivasan(1) on which the appellant relies, this Court has traced the history of the concept of 'surcharge ' in tax laws of our country.
After considering the report of the Committee on Indian Constitutional Reforms, the provisions of the Government of India Act, 1935, the provisions of Articles 269, 270 and 271 of the Constitution and the various Finance Acts, this Court held, differing from the High Court, that the word "income tax" in section 2(2) of the Finance Act, 1964 includes surcharges and the additional surcharge.
This case does not touch the point before us.
In that case, the assessee 's income for the accounting year ending March 30, 1964 consisted mainly of his salary.
Section 2(2)(a) of the Finance Act, 1964 did not by itself refer to any surcharge but it provided that in making the assessment for the assessment year commencing on April 1, 1964 the "income tax" payable by the assessee on his salary income shall be an amount bearing to the total amount of "income tax" payable according to the rates applicable under the operation of the Finance Act, 1963 on his total income, the same proportion as the salary income bears t the total income.
The question which arose for consideration was under the total income.
The question which arose for consideration was whether the words "income tax payable according to the rates applicable under the operation of the Finance Act, 1963" included surcharges which were leviable under the Act of 1963.
The question was answered by this Court in the affirmative.
As the judgment shows, "the essential point for determination" was whether surcharge is an additional mode or rate for charging income tax" (p. 351).
The Court held that it was.
The question before us is whether, even if the surcharger is but an additional mode or rate for charging income tax, the Finance Act of 1963 authorises by its terms the levy of additional surcharge on income which is exempt from income tax under the Income tax Act, 1961 In K. Srinivasans case the Court declined to express any opinion on the distinction made by the High Court that surcharges are levied under the Finance Act while income tax was levied under the Income tax Act (p. 351).
In the instant case it is not disputed by the revenue that a surcharge partakes of the essential characteristics of income tax and is an increase in income tax.
What we have to determine is whether the Act of 1963 provides for the levy of additional surcharge.
Granting that the word "income tax" includes surcharges, it may be arguable that the exemption from the payment of income tax under section 81 (i) (a) of the 1961 Act would extend to surcharges.
But the matter does not rest with what section 81 (i)(a) says.
Even if that section were to grant an express exemption from surcharges on business income the Parliament could take away that exemption or curtail the benefit available under it by making an appropriate provision in the Finance Act.
If while legislating on a matter within its competence the Parliament can grant an exemption, it is surely competent to it to withdraw that exemption in exercise of the self same power.
The Finance Act, 1963, like its annual counterparts, contains provisions not only prescribing rates of taxation but making extensive and important modifications in the Income tax Act itself.
By sections 4 to 144 20 of the Act of 1963, various provisions of the income tax Act have been amended.
By these amendments, some of which are given retrospective effect, old provisions are deleted, new ones are added and indeed new concepts of taxation altogether are introduced.
Such innovations fall within the legitimate scope of Finance Acts.
Section 11 (14) of the Indian Finance Act, 1946 made in the amount of excess profits tax repaid under section 28 of the U.K. Finance Act, 1941, "income" for the purpose of the Indian Income tax Act and further provided that "income shall be treated for purposes of assessment to income tax and super tax as the income of the previous year.
It was held by this Court in McGregor and Balfour Ltd. vs C.I.T. West Bengal(1) that section 11(14) charged the amount with a liability to tax by its own force.
It was further held that the particular provision, framed as it was, applied to subsequent assessment years just as it applied to the assessment year 1946 47.
Having seen the nature and scope of Finance Acts, the specific question which we have to consider is whether, as contended by the appellant, section 2 read with Paragraph A, Part I of the First schedule of the Finance Act, 1963 merely lays down a method of computation in cases where income tax is in fact payable or whether, as contended by the revenue, the Finance Act provides for the levy of a new and independent charge.
According to the appellant, these provisions of the Finance Act do not, directly or indirectly, bring about any amendment to section 81(i)(a) of the Income tax Act but merely prescribe that in cases where the income tax is payable, "The amount of income tax. shall be increased by the aggregate of the surcharges".
The heading "Surcharges on income tax" under which provision is made in the Finance Act for the calculation of a surcharge, a special surcharge and an additional surcharge is also said to bear out the contention that the levy of additional surcharge on the residual income cannot be disassociated from the main charge of income tax.
We are unable to accept this contention Article 269(1) of the Constitution provides that the duties and taxes mentioned therein shall be levied and collected by the Government of India but shall be assigned to the States in the manner provided in clause (2).
Article 270(1) provides that Taxes on income other than agricultural income shall be levied and collected by the Government of India and distributed between the Union and the States in the manner provided in clause (2).
By Article 271, notwithstanding anything in Articles 269 and 270, Parliament may increase any of the duties or taxes referred to in those Articles by a surcharge for purposes of the Union.
Surcharges leviable under section 2(1) of the Finance Act.
1963 are relatable to Article 271 of the Constitution.
Section 2(1)(a)(ii) of that Act provides, in so far as relevant, that for the assessment year commencing on April 1, 1963 income tax shall be charged at the rates specified in Part I of First Schedule and in cases to which Paragraph A of Part I applies, the income tax shall further 145 be increased by an additional surcharge for purposes of the Union calculated in the manner provided in the First Schedule.
`Clause (c) of Paragraph prescribes the manner in which the additional surcharge is to be calculated.
It provides that additional surcharge for purposes of the Union shall be calculated "on the amount of the residual income '.
at the rates mentioned in that clause.
Thus both the purpose and concept of the additional surcharge are different from those of income tax.
The additional surcharge is leviable exclusively for purposes of the Union so that the entire proceeds of such surcharge may under Article 271 of the Constitution, from part of the Consolidated Fund of India.
taxes and duties mentioned in Article 269(1), though levied and collected by the Government, have to be assigned to the States in the manner provided in clause (2) of that Article.
Then again, the additional surcharge levied for purposes of the Union is to be calculated not on total income like the income tax but it is to be calculated on the residual income.
Section 2(8) of the Act of 1963 defines residual income as total income reduced by (a) capital gains, if any, included in that total income and (b) the amount of tax (exclusive of additional surcharge) which would have been chargeable on such reduced total income if it had been the total income no part of which had been exempt from tax and on no portion of which deduction of tax had been admissible.
In order that the exemption granted to co operative banks by section 81 (i) (a) may not lose its meaning and content, section 2(8) of the Finance Act introduces the concept of residual income on which alone the additional surcharge is payable.
The residual income is not the same as the business income of a co operative bank, which is exempt under section 81(i)(a) from income tax.
For ascertaining the residual income the total income is reduced by the amount of capital gains and further by the amount of tax (other than additional surcharge) which would have been charged on such reduced total income on the assumption that the whole of it was liable to be brought to tax.
Thus in the instant case the additional surcharge is not levied on the appellant 's business income of Rs. 9,48,335 which is exempt from income tax and super tax.
It is levied on the residual] income of Rs. 5,39,386 which is arrived at after deducting Gross taxes (exclusive of additional surcharge) amounting to Rs. 4,60,712 from the assessee 's gross income of Rs. 10,00,098.
By section 3 of the Finance Act of 1963 no account can be taken of the additional surcharge in calculating any relief, rebate or deduction in respect of income tax payable on the total income of an assessee which includes any income on which no income tax is payable or in respect of which a deduction of income tax is admissible.
Section 3, by its terms, has precedence over anything contained in Chapter VII or Chapter VIII A or in section 110 of the Income tax Act or section 2(5) of the Finance Act itself.
Additional surcharge is treated in this way as falling in a separate category.
Thus, additional surcharge is a district charge.
not dependent for its leviability on the assessee 's liability to pay income tax or super tax.
Such a qualification cannot be read into section 2(1)(a)(ii) of the Act of 1963 as argued by the appellant.
That section uses the language that "income tax. shall further be increased by an additional sur 146 charge", not for making the assessability to surcharge dependent upon Assessability to income tax but for the simple reason that if an assessee`s total income includes income on which no tax is payable, tax has all the same to be computed for purposes of rate Section 110 of the Income tax Act, 1961 provides that where there is included in the total income of an assessee any income on which no income tax is payable, the assessee shall be entitled to deduction, from the amount of income tax with which he is chargeable on his total income, of an amount equal to the income tax calculated at the average rate of income tax on the amount on which no income tax is payable.
The income tax computed at a certain rate is by section 2(1)(a)(ii) to be further increased by an additional surcharge for purposes of the Union.
This becomes clearer still from the language of Paragraph A, under the heading .
Surcharges on Income Tax".
It says: "The amount of income tax computed at the rate hereinbefore specified shall be increased by the aggregate of the surcharges,".
If the intention was to limit the liability to pay additional surcharge to income which can be brought to income tax, appropriate language could have been used to convey that simple sense.
The weakness of the appellant 's contention becomes manifest when it is realised that were the contention right, the appellant would not be liable to pay additional surcharge even on that portion of its non business income which is contained in the residual income.
By the definition in section 2(8) of the Act of 1963, residual income means the total income as reduced and therefore, the non business income which is chargeable to income tax must form a component of the residual income.
Concededly, the appellant is liable to pay additional surcharge on its non business income.
This is so not because additional surcharge is payable by law on non business income but because it is payable on residual income and residual income, by definition, includes non business income as reduced.
In fact, it consists of the amount of total income as reduced by the amounts mentioned in clauses (a) and (b) of section 2(8).
Relying on United Commercial Bank Ltd. vs Commissioner of Income tax, West Bengal(1), East India Housing and Land Development Trust Ltd. vs Commissioner of Income tax West Bengal(2), and K. V. Al.
M. Ramanathan Chettiar vs Commissioner of Income tax, Madras(3), the appellant 's counsel urged that income tax is a single levy, that it is one tax and not so many taxes separately levied on several heads of income.
This partly is the same argument in a different disguise that an assessee who is not liable to pay income tax cannot be made liable to pay additional surcharge under the Finance Act, 1963.
We have rejected that contention.
Partly, the argument is designed to establish correlation with section 146 of the income tax Act, 1961 by which, when any tax, interest, penalty, fine or any other sum is payable in consequence of any order passed under the Act, the Income tax office has to serve upon the assessee a notice of demand in the prescribed form specifying the sum so payable.
This provision presents no 147 difficulty for, if an assessee is liable to pay additional surcharge but no income tax or super tax, the notice of demand will mention the particular amount payable as tax due.
The appellant being liable to pay tax on its non business income and additional surcharge on its residual income, the demand notice will call for payment of the total amount due from the appellant by way of tax.
The interpretation put by us on the Finance Act, 1963 does no violence to section 4 of the Income tax Act, 1961 under which income tax at the rates prescribed by the Finance Act is to be charged "in accordance with, and subject to the provisions of." the Income tax Act.
The Income tax Act exempts the assessee 's business income from income tax and super tax.
The Finance Act brings to tax its residual income.
The decision of the Allahabad High Court in Allahabad District Co operative Bank Ltd. vs Union of India and Ors.(1) is directly in favour of the appellant and naturally, learned counsel for the appellant relies on it very strongly.
But that case, in our opinion, is incorrectly decided.
The learned Judges were in error in holding that section 2 of the Finance Act, 1963 does not provide for the levy of a tax other than income tax" and that therefore additional surcharge is not payable to the extent of the income which is exempt under section 81 of the Income tax Act.
One of the difficulties which the learned Judges felt in accepting the revenue 's contention was that if "the additional surcharge mentioned in the Finance Act of 1963 was not partake of the nature of income tax it will not be possible to demand and realise it under the provisions of the income tax Act, and the notice of demand and recovery proceedings would be vitiated on that account".
The very assumption of this observation is falacious because additional surcharge indubitably partakes of the nature and essential characteristics of income tax.
It is a tax on residual income and by reason of the definition contained in section 2(8) of the Act of 1963, "residual income" would include non business income which under the Income tax Act is charge able to income tax.
Thus, the additional surcharge, though levied by the Finance Act, 1963 independently of the Income tax Act, is but a mode of levying tax on a portion of the assessee 's income computed in accordance with the definition in section 2(8) of the Act of 1963.
Therefore, the notice of demand under section 156 of the Income tax Act can lawfully call for the payment of amount due from an assessee by way of additional surcharge.
For these reasons, we confirm the judgment of the High Court but in the circumstances there will be no order as to costs.
P.H.P. Appeal dismissed.
| The appellant is a Cooperative Society engaged in the business of banking According to section 8] (i) (a) of the Income 'Tax Act, 1961, a Cooperative Society engaged in the business of banking is not liable to pay income tax on its business income.
The Finance Act, 1963, however, by section 2(i) (a), 2(8), 3, paragraph A(ii) of Part I of the First Schedule and clause of that portion of Part I called surcharge on Income Tax provides for levy of additional surcharge for the purposes of the Union calculated on the amount of the residual income at the rates mentioned therein.
The total income of the appellant for the assessment year 1963 64 was Rs. 10,00,098.
Out of this Rs. 9,48,335 was its business income. 'The tax amounting to Rs. 23,845 was charged on Rs. 51,763 Applying the Finance Act of 1963, the residual income of the appellant was computed at Rs. 5.39,386 and a surcharge thereon was levied of Rs. 52,828 Thus, the total tax imposed on the appellant came to Rs. 76,674.
The assessment order passed by the Income Tax officer levying the tax as aforesaid was challenged by the appellant in the High Court by a Writ Petition.
The main grievance of the appellant before the High Court was that whereas its taxable income was only Rs. 51,763, a tax of Rs. 76,674 was imposed on it.
The relevant provisions of the Finance Act were challenged as invalid on the ground that(i) they imposed additional surcharge on income which was exempt from tax under the provisions of the Income Tax Act and that (ii) the additional surcharge was intended as additional levy on the income tax and had no independent existence apart from it The High Court rejected these contentions.
On an appeal by certificate, dismissing the appeal, ^ HELD : 1.
It is indisputable that the appellant is not required to pay income tax on the banking income.
In view of section 81.
It is also not liable to pay surcharge on its business income in view of section 99(1)(v).
[139C] 2.
The, grievance of the appellant that the tax levied upon it exceeds its taxable income can afford no true guide to the construction of the relevant provisions of the Income Tax Act or the Finance Act.
Harshness of a taxing statute, apart from a possible challenge to it under article 13 of the Constitution cannot be an invalidating circumstance.
But, the grievance on this score is misconceived.
It assumes what has to be examined that no part of the income exempted from Income Tax and Super Tax under the Income Tax Act can be brought to tax by a Finance Act, [140G H] 3.
The concession of the counsel for the appellant giving up challenge to the power.
of the Parliament to impose a new charge by Finance Act was Properly made.
Under article 246(11) of the Constitution, Parliament has the exclusive power to make laws with respect ' 'o any of the matters in List of the Seventh Schedule.
Entry 82 in List I relates to tax on income other than agricultural income.
The Income Tax Act, 1961 and the annual Finance Acts are enacted by the Parliament in exercise of the powers conferred by Art 246(1) read with entry 82 of List I.
Once the Parliament has the legislative competence to enact a law with respect to certain subject matter, the limits of 136 that competence cannot be judged further by the form or manner in which that power is exercised.
Exigencies of the Financial year determine the scope and nature of the provisions of the Finance Act.
The primary purpose of the Finance Act is to describe the rates at with the Income Tax will be charged under the Income Tax Act but that does not mean that new and distinct tax cannot be charged under Finance Act.
Therefore, what is not income under the Income Tax Act can be made income by the Finance Act.
An exemption granted by the Income Tax A, t can be withdrawn by the Finance Act or the efficacy of that exemption may be reduced by the imposition of a new charge.
[141D E; G H] 4.
The contention of the appellant that surcharges are nothing but income tax and, therefore, expression income tax occurring in Sec. 4 and 81 of the Act includes surcharges and AS such exempted cannot be accepted.
The case of the C.I.T. Kerala vs K. Srinivasan distinguished.
There the essential point for determination was whether surcharge is additional mode or rate for charging income tax.
The Court held there that it was so.
The question before us is whether even if the surcharge is an additional mode or rate for charging income to the Finance Act of 1963 authorises by its terms the levy of additional surcharge on income which is exempt from income tax under the Income Tax, Act, 1961.
The residual income as defined by the 1963 Finance Act is not the same as the business income of a Cooperative Bank which is exempted under see.
The additional surcharge is a distinct charge not dependent for its leviability on the assessee 's liability to pay income tax or Super Tax.
The decision of Allahabad High Court in Allahabad District Co operative Bank Ltd vs Union of India over ruled.
[143D E] 5.
The additional surcharge though levied by the Finance Act 1963 independently of the Income Tax Act is but a mode of levying tax on a portion of the assessee 's income computed in accordance with the definition in section 2(8) of the Finance Act 1963.
[147F] ARGUMENTS For The Appellant 1.
Under section 81 read with section 4 of the Income tax Act, 1961, income tax is not payable by the appellant.
a Co operative Society, in respect of its income from banking business.
Similarly super tax is not payable under section 99(i)(v) read with section 4. 2.
The primary purpose of the annual Finance Acts as envisaged by section 4 of the Income tax Act is to prescribe the rates of income tax on the total income of an assessee, and this function as contemplated by section 4 is to be "subject to the other provisions of this Act", namely, the Income tax Act, 1961, which would include, inter alia, section 81. 3.
The history of Indian income tax shows that surcharges by way of increase to the amount of income tax, which are added to the basic amount, in view of article 271 of the Constitution of India, are nothing other than income tax and a part of income tax alone.
Therefore the expression 'income tax ' in section 4 and 81 of the Income tax Act, 1961, and section and Schedule I, Part 1 of the Finance Act, 1953, includes surcharges.
Section 2 of the Finance Act, 1963, and Schedule I, Part I, Paragraph A all clearly contemplate that the surcharge.
special surcharge and additional surcharge are all only by way of increase of the amount of income tax and not only partake of the character of income tax but are actually a part of income tax.
They are merely rates of income tax.
The main part of section 2(1) (a) says that "Income tax shall be charged at the rates specified in Part I of the First Schedule" and clause (ii) of that section provides in the ease referred to therein that income tax "shall further be increased by an additional surcharge for the purpose of the Union calculated in the manner provided in the First Schedule.
Similarly in Paragraph A of Part I of the First Schedule the heading to the provisions prescribing rates of surcharge is "surcharges on income tax" in the plural.
The main part in the heading also provides that "the amount of 137 income tax. shall be increased by the aggregate of the surcharges calculated as under " Clause (c) thereafter provides for the additional surcharge for the purpose of the Union.
Paragraph A also therefore clearly indicates that the three surcharges are only of the same nature and that all the three surcharges are only by way of increase of the amount of income tax; in other words part of the income tax.
Is either section 2 nor paragraph A of Part I of the First Schedule can even remotely be said to contemplate any separate levy of additional surcharge other than income tax.
From the assessment order it is seen that the following have been charged only on the real taxable income of the appellant namely Rs. 51,763: (i) income tax (ii) surcharge on income tax (iii) special surcharge on income tax (iv) super tax and (v) surcharge on super tax.
These items have not been charged on the total income of Rs. 10,00,098, because income tax is not payable on the balance of the total income under section 81.
The Income tax officer has sought to impose only additional surcharge under clause (c) in respect to the total income of Rs. 10,00,098.
In view of section 81 no additional surcharge is payable on the total income of Rs. 10,00,098.
It is payable only on the taxable income of Rs. 51,763.
Section 2 read with Paragraph A Part I of Schedule I to the Finance Act merely purports to lay down the method of computation where income tax is payable.
It does not either dire thy or by implication make any amendment or modification in section 81. 7.
Section 3 of the Finance Act ]963 also applies to a stage of computation only and in regard to relief, rebate etc.
It does not impose any liability or any tax.
It operates only where additional surcharge is payable and not other wise, and where relief, rebate etc.
is to be given from the tax payable by the assessee, e.g. deduction of tax based on life insurance premia provident fund contribution.
donations to charitable institution etc.
Section 81 does not provide for any such relief or rebate.
Section 2(8) of the Finance Act, 1963, defining "residual income" which requires deduction from the total income of income tax, surcharge and special surcharge to ascertain residual income also does not have the effect of imposing any liability or any tax but merely provides for computation.
In a taxing Act one has to look merely at what is clearly said.
There is no room for any intendment.
There is no equity about a tax.
There is no presumption as to tax.
Nothing is to be read in, nothing is to be implied." "In a case of reasonable doubt.
the construction most beneficial to the subject is to be adopted.
" The court will be very slow in reading an implied amendment in a tax law because there is no intendment.
Income tax is one tax, not several taxes on several heads or several items of income: For the Respondent 1.
It is open to the Parliament to pass an Act relating to more than one topic or field of operation, covered by the Entries in List 1.
It is not as if there must be as many Enactments as the topics which the enactment covers.
The legislature has a wide range of selection and freedom in appraisal not only in the subjects of taxation and the manner of taxation but also in the determination of the rate or rates applicable.
If production were always to be taken into account there will have to be a settlement for every year and the tax will become a kind of income tax.
The burden of proving discrimination is always heavy and heavier still when a taxing statute is under attack.
The burden is on the person complaining of discrimination.
The burden is proving not possible 'inequality ' but hostile 'unequal ' treatment.
This is more so when uniform taxes are levied.
The State cannot be asked to demonstrate equality.
Income which is exempt from taxation is income which is assessable to tax and therefore liable to tax but tax is not imposed on account of the exemp 138 tion.
This exemption can by subsequent legislation be wholly or partially withdrawn both as regards items of income and levies imposed for the purpose of taxation.
Thus where the Income tax Act 1961 says that business income of a co operative society will be exempt from income tax it would be open to the Parliament by enactment of the Finance Act of 1963 to say that this exemption shall be partially withdrawn as regards residual income and this partial exemption will operate only for the purpose of income tax but not surcharge on residual income.
The net result of the partial withdrawn of the exemption would mean that though the business income of a co operative society will be exempt from tax the residual income which is only a part of the exempted business income could be subjected to surcharge on income tax only. 4.
Income tax and surcharge on income tax are two different levies though the computation of the latter is based upon a percentage of the former.
The to are inclusive for the purpose of imposing tax but they are not one levy only.
|
Civil Appeal No. 5415 of 1985 etc.
From the Order dated 7.1.1985 of the Presiding officer, Labour Court, Amritsar in Application No. 547 of 1979.
619 Jitendera Sharma, P. Gaur, D.K. Garg, K.K. Mohan and R.C. Kaushik for the Appellants.
S.C. Mohanta, Mahabir Singh and C.M. Nayar for the Respondents.
The Judgment of the Court was delivered by RANGANATH MISRA, J.
Each of these appeals is by special leave and is directed against the Award made in different disputes by the Labour Court.
The common justification for ignoring the High Court and approaching this Court directly by way of special leave, according to Mr. Jitendra Sharma for each of the appellants, is that there are a couple of Full Bench decisions of the Punjab and Haryana High Court holding that the Irrigation Department of the State Government of Punjab is not an 'industry ' and no useful purpose would have been served by routing the matters through the High Court as the Full Bench decision would have been followed.
The appellant in Civil Appeal No. 5415 of 1985 was a Foreman in the Mechanical Construction Division under the Irrigation Department and had applied under Section 33 C 2 of the , (hereinafter referred to as 'the ') before the Labour Court for recovery of arrears of annual increments.
The appellant in Civil Appeal No. 2168 of 1987 was a T. Mate in the P.W.D. Drainage Division.
When his services were terminated without complying with the requirements of the law, he challenged the termination before the Labour Court.
The appellant in the remaining appeal was an operator in the Mechanical Division, Rohtak under the Irrigation Department of Haryana State.
His services were terminated and thereupon he approached the Labour Court disputing the validity of the said order.
In each of these cases challenge was advanced by the governmental authority to the maintainability of the application before the Labour Court on the ground that the employer was not an 'industry ' and the did not apply.
The Labour Court by different orders made in each of these cases upheld the objection and declined relief to the employees.
The common question in these appeals, therefore, is as to whether the Irrigation Department of either Government is an 'industry '.
The definition of 'industry ' occurring in Section 2 of the has now to be seen.
The defines 'industry ' in Section 2(J) to mean: 620 "any business, trade undertaking, manufacturer or calling of employers and includes any calling service, employment, handicraft, or industrial occupation or avocation of workmen.
" By Section 2(c) of the Amending (46 of 1982), this definition has been amended but the amendment has not yet been brought into force.
The amended definition of "industry" is as follows: "Industry means any systematic activity carried on by co operation between an employer and his workmen (whether such workmen are employed by such employer directly or by or through any agency, including a contractor) for the production, supply or distribution of goods or services with a view to satisfy human wants or wishes (not being wants or wishes which are merely spiritual or religious in nature), whether or not, (i) any capital has been invested for the purpose of carrying on such activity; or (ii) such activity is carried on with a motive to make any gain or profit, and includes (a) any activity of the Dock Labour Board established under Section 5A of the ; (b) any activity relating to the promotion of sales or business or both carried on by an establishment, but does not include (1) any agricultural operation except where such agricultural operation is carried on in an integrated manner with any other activity (being any such activity as is referred to in the foregoing provisions of this clause) and such other activity is the predominant one, Explanation: For the purposes of this sub clause, 'agricultural operation ' does not include any activity carried on in a 621 plantation as defined in clause (f) of Section 2 of the ; or (2) hospitals or dispensaries; or (3) educational, scientific, research or training institutions; or (4) institutions owned or managed by organisation wholly or substantially engaged in any charitable, social or philanthropic service; or (5) khadi or village industries; or (6) any activity of the Government relatable to the sovereign functions of the Government including all the activities carried on by the departments of the Central Government dealing with defence research, atomic energy and space; or (7) any domestic service; or (8) any activity, being a profession practised by an individual or body of individuals, if the number of persons employed by the individual or body of individuals in relation to such profession is less than ten; or (9) any activity, being an activity carried on by a cooperative society or a club or any other like body of individuals, if the number of persons employed by the cooperative society, club or other like body of individuals in relation to such activity is less than ten;" Since the amended statutory definition is not yet in force, the parent definition and judicial pronouncements have to be referred to for finding the law.
The field is covered by pronouncements of this Court and it is not necessary to go beyond these precedents.
In case the Irrigation Department is accepted to be "industry", there is no dispute that each of the appellants would be a "workman" and each of the claims would constitute an "industrial dispute" as defined in Section 2(s) and (k) respectively.
A five Judge Bench in D.N. Banerji vs P.R. Mukherjee & Ors., 622 ; considered the scope of the definition of industry.
Chandrashekhara Aiyer, J. speaking for the Court stated: "It is therefore incumbent on us to ascertain what the statute means by industry and industrial dispute, leaving aside the original meaning attributed to the words in a simpler state of society, when we had only one employer perhaps, doing a particular trade or carrying on a particular business with the help of his own tools, material and skill and employing a few workmen in the process of production or manufacture, and when such disputes that occurred did not go behind individual levels into acute fights between rival organisations of workmen and employers; and when large scale strikes and lock outs throwing society into chaos and confusion were practically unknown.
Legislation had to keep pace with the march of times and to provide for new situations.
Social evolution is a process of constant growth, and the State cannot afford to stand still without taking adequate measures by means of legislation to solve large and momentous problems that arise in the industrial field from day to day almost .
When our came to be passed, labour disputes had already assumed big proportions, and there were clashes between workmen and employers in several instances.
We can assume therefore that it was to meet such a situation that the was enacted, and it is consequently necessary to give the terms employed in the referring to such disputes as wide an import as reasonably possible.
Do the definitions of industry, industrial dispute and workman take in the extended significance or exclude it? Though the word undertaking in the definition of industry is wedged in between business and trade on the one hand and manufacture on the other, and though therefore it might mean only a business or trade undertaking, still it must be remembered that if that were so, there was no need to use the word separately from business or trade.
The wider import is attracted even more clearly when we look at the latter part of the definition which refers to calling, service, employment or industrial occupation or avocation of workmen.
Undertaking in the first part of the definition and industrial occupation or avocation in the second part obviously mean much more than what is ordinarily understood by trade or business.
The definition was apparently intended to 623 include within its scope what might not strictly be called a trade or business venture.
" The ratio in Mukherjee 's case was relied upon by a three Judge Bench in State of Bombay & Ors.
vs The Hospital Mazdoor Sabha & Ors., ; and Gajendragadkar, J. who spoke for the Bench observed: "There is another point which cannot be ignored.
Section 2(j) does not define industry in the usual manner by prescribing what it means: the first clause of the definition gives the statutory meaning of industry and the second clause deliberately refers to several other items of industry and brings them in the definition in an inclusive way.
It is obvious that the words used in an inclusive definition denote extension and cannot be treated as restricted in any sense.
Where we are dealing with an inclusive definition it would be inappropriate to put a restrictive interpretation upon terms of wider denotation." "Besides, it would be relevant to point out that too much reliance cannot be placed on what are described as the essential attributes or features of trade or business as conventionally understood.
The conventional meaning attributed to the words trade and business has lost some of its validity for the purpose of industrial adjudication.
Industrial adjudication has necessarily to be aware of the current of socio economic thought around; it must recognise that in the modern welfare State healthy industrial relations are a matter of paramount importance and its essential function is to assist the State by helping a solution of industrial disputes which constitute a distinct and persistent phenomenon of modern industrialised States in attempting to solve industrial disputes, industrial adjudication does not and should not adopt a doctrinaire approach.
lt must evolve some working principles and should generally avoid formulating or adopting abstract generalisations.
Nevertheless it can 't harp back to old age notions about the relations between employer and the employee or to the doctrine of laissez faire which then governed the regulation of the said relations.
That is why, we think, in construing the wide words used in section 2(j) it would be erroneous to attach undue importance to the attributes 624 associated with business or trade in the popular mind in days gone by.
" The Bench thereafter adverted to the negative side and stated: "It would be possible to exclude some activities from section 2(j) without any difficulty.
Negatively stated the activities of the Government which can be properly described as regal or sovereign activities are outside the scope of section 2(j).
These are functions which a constitutional government can and must undertake for governance and which no private citizen can undertake.
This position is not in dispute.
An attempt is, however, made by the appellant to suggest that in view of the Directive Principles enunciated in of the Constitution and in view of the ideal of a welfare state which has been placed before the country, Governments, both at the level of States as well as at the Centre undertake several welfare activities; and the argument is that the field of governmental or regal activities which are excluded from the operation of section 2(j) should be extended to cover other activities undertaken by the Governments in pursuit of their welfare policies.
In our opinion, this contention cannot be accepted.
The activities which do not fall within section 2(j) and which are described as governmental or regal or sovereign have been pithily described by Lord Watson as 'the primary and inalienable functions of a constitutional Government '; and it is only these activities that are outside the scope of section 2(j).
It sounds incongruous and self contradictory to suggest that activities undertaken by the Government in the interests of socio economic progress of the country as beneficial measures should be exempted from the operation of the which in substance is a very important beneficial measure itself.
" Applying the stated principles, this Court in that case held that the J.J. Group of Hospitals came within the definition of industry.
Within a couple of weeks from the Hospital Mazdoor Sabha 's case (supra), the same Bench in the case of Corporation of the City of Nagpur vs Its Employees, ; , this time Subba Rao, J., as he then was, speaking for the Court examined the self same question.
Before the Court were available two precedents Mukherjee 's case 625 (supra) and Hospital Mazdoor Sabha 's case (supra) and it was stated: "Before considering the positive aspects of the definition, what is not an industry may be considered.
However wide the definition of industry may be, it cannot include the regal or soveriegn functions of State.
This is the agreed basis of the arguments at the Bar though the learned counsel differed on the ambit of such functions.
While the learned counsel for the Corporation would like to enlarge the scope of these functions so as to comprehend all the welfare activities of a modern State, the learned counsel for the respondents would seek to confine them to what are aptly termed the primary and inalienable functions of a constitutional Government " The Court analysed the activities of the various departments of the Corporation and observed: "We can also visualize different situations.
A particular activity of a municipality may be covered by the definition of industry.
If the financial and administrative departments are slowly in charge of that activity, there can be no difficulty in treating those two departments also as part of the industry.
But there may be cases where the said two departments may not only be in charge of a particular activity or service covered by the definition of industry but also in charge of other activity or activities falling outside the definition of industry.
In such cases a working rule may be evolved to advance social justice consistent with the principles of equity.
In such cases the solution to the problem depends upon the answer to the question whether such a department is primarily and predominantly concerned with industrial activity or incidentally connected therewith. " "The result of the discussion may be summarised thus: (1) the definition of industry in the is very comprehensive.
It is in two parts one part defines it from the stand point of the employer and the other from the stand point of the employee.
If an activity falls under either part of the definition it will be an industry within the meaning of the .
(2) The history of industrial disputes and the legislation recognises the basic concept that the activity shall be an orga 626 nised one and not that which pertains to private or personal A employment.
(3) The regal functions prescribed as primary and inalienable functions of State though statutorily delegated to a corporation or necessarily excluded from the purview of the definition.
Such regal functions shall be confined to legislative power, administration of law and judicial power.
(4) 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.
(5) If a service rendered by a corporation is an industry, the employees in the department connected with that service, whether financial, administrative or executive, would be entitled to the benefits of the .
(6) If a department of a municipality discharges many functions some pertaining to industry as defined in the and the other non industrial activities, the predominant functions of the department shall be the criterion for the purposes of the .
" Applying these tests, this Court examined as to whether the various departments of the Corporation came within the definition or not.
Then came the decision of a Constitution Bench in the case of Management of Safdarjung Hospital vs Kuldip Singh Sethi; , where Chief Justice Hidayatullah spoke for the Court.
Referring to the definition of industry.
the learned Chief Justice observed: "This definition is in two parts.
The first part says that it means any business, trade, undertaking, manufacture or calling of employers and then goes on to say that includes any calling, service, employment, handicraft or industrial occupation or avocation of workmen . ". "Therefore, an industry is to be found when the employers are carrying on any business, trade, undertaking, manufacture or calling of employers.
If they are not, there is no industry as such.
What is meant by these expressions was discussed in a large number of cases which have been considered elaborately in the Gymkhana Club case [1968] 1 SCR 742.
The conclusions in that case may be stated: 'Primarily, therefore, industrial disputes occur when operation undertaken rests upon cooperation between employer and employees with a view to production and distribution of material goods, in other 627 words, wealth, but they may arise also in cases where the cooperation is to produce material services.
The normal cases are those in which the production or distribution is of material goods or wealth and they will fall within the expressions trade, business or manufacture. ' " In Safdarjung Hospital 's case the decision in Hospital Mazdoor Sabha case was analysed and the Court came to the following conclusion: "In our judgment, the Hospital Mazdoor Sabha 's case took the extreme view of the matter which was not justified.
" Then came the case of Bangalore Water Supply and Sewerage Board vs A. Rajappa & Ors ; This time the same point was before a seven Judge Bench of this Court.
This judgment undertood a review of the entire law.
Krishna Iyer, J. spoke for himself, Bhagwati and Desai, JJ.
In paragraph 139 of the judgment it was stated: "Banerjee (supra) amplified by Corporation of Nagpur (supra), in effect met with its waterloo in Safdarjung (supra).
But in this latter case two voices could be herard and subsequent rulings zigzagged and conflicted precisely because of this built in ambivalence.
It behoves us, therefore, hopefully to abolish blurred edges, illumine penumbral areas and overrule what we regard as wrong.
Hesistency, half tones and hunting with the hounds and running with the hare can claim heavy penalty in the shape of industrial confusion, adjudicatory quandary and administrative perplexity at a time when the nation is striving to promote employment through diverse strategies which need, for their smooth fulfilment, less stress and distress, more mutual understanding and trust based on a dynamic rule of law which speaks clearly, firmly and humanely.
If the salt of law lose its savour of progressive certainty where with small it be stalled? So we proceed to formulate the principles, deducible from our discussion which are decisive, positively and negatively, of the identity of industry under the .
We speak, not exhaustively, but to the extent covered by the debate at the bar and, to that extent, authoritatively, until overruled by a larger bench or superseded by the legislative branch.
" 628 "Industry as defined in section 2(j) and explained in Banerjee (supra) has a wide import.
(a) Where (i) systematic activity, (ii) organised by cooperation between employer and employee (the direct and substantial element is chimerical) (iii) for the production and/or distribution of goods and services calculated to satisfy human wants and wishes (not spiritual or religious but inclusive of material things or services geared to celestial bliss e.g. making, on a large scale prasad or food), prima facie, there is an industry in that enterprise.
(b) Absence of profit motive or gainful objective is irrelevant, be the venture in the public, joint, private or other sector (c) The true focus is functional and the decisive test is the nature of the activity with special emphasis on the employer employee relations.
(d) If the organisation is a trade or business it does not cease to be one because of philanthropy animating the undertaking.
Although section 2(j) uses words of the widest amplitude in its two limbs, their meaning cannot be magnified to over reach itself.
Undertaking must suffer a contextual and associational shrinkage as explained in Banerjee and in this judgment; so also, service, calling and the like.
This yields the inference that all organized activities possessing the triple elements in I, although not trade or business, may still be industry provided the nature of the activity, viz. the employer employee basis, bears resemblance to what we find in trade or business.
This takes into the fold of industry undertakings, callings and services, adventures 'analogous to the carrying on of the trade or business '.
All features, other than the methodology of carrying on the activity viz. in organizing the cooperation between employer and employee, may be dissimilar.
It does not matter, if on the employment terms there is analogy.
629 Application of these guidelines should not stop short of their logical reach by invocation of creeds, cults or inner sense of incongruity or outer sense of motivation for or resultant of the economic operations.
The ideology of the being industrial peace, regulation and resolution of industrial disputes between employer and workmen, the range of this statutory ideology must inform the reach of the statutory definition.
Nothing less, nothing more.
(a) The consequences are (i) professions, (ii) clubs, (iii) educational institutions, (h) cooperatives, (v) research institutes, (vi) charitable projects and (vii) other kindred adventures, if they fulfil the triple tests listed in I cannot be exempted from the scope of section 2(j).
(b) A restricted category of professions, clubs, cooperatives and even gurukulas and little research labs, may qualify for exemption if, in simple ventures, substantial and, going by the dominant nature criterion, substantively, no employees are entertained but in minimal matters, marginal employees are hired without destroying the non employee character of the unit.
(c) If, in a pious or altruistic mission many employ themselves, free or for small honoraria or like return, mainly drawn by sharing in the purpose or case, such as lawyers volunteering to run a free legal services clinic or doctors serving in their spare hours in a free medical centre or ashramites working at the bidding of the holiness, divinity or like central personality, and the services are supplied free or at nominal cost and those who serve are not engaged for remuneration or on the basis of master and servant relationship, then, the institution is not an industry even if stray servants, manual or technical, are hired.
Such eleemosynary or like undertakings alone are exempt not other generosity, compassion, developmental passion or project.
The dominant nature test: (a) Where a complex of activities, some of which qualify for exemption others not, involves employees on the total undertaking, some of whom are not workmen as in 630 the University of Delhi vs
Ram Nath; , or A some departments are not productive of goods and services if isolated, even then, the predominant nature of the services and the integrated nature of the departments as explained in the Corporation of Nagpur, will be the true test.
The whole undertaking will be industry although those who are not workmen by definition may not benefit by the status.
(b) Notwithstanding the previous clauses, sovereign functions, strictly understood, (alone) qualify for exemption, not the welfare activities or economic adventures undertaken by government or statutory bodies.
(c) Even in departments discharging sovereign functions, if there are units which are industries and they are substantially severable, then they can be considered to come within section 2(j).
(d) Constitutional and competently enacted legislative provisions may well remove from the scope of the categories which otherwise may be covered thereby.
" Beg, CJ., wrote a separate judgment and prefaced it by saying: "I am in general agreement with the line of thinking adopted and the conclusions reached by my learned brother Krishna Iyer.
" In paragraph 149 of the judgment, the learned Chief Justice observed: "In his heroic efforts, my learned brother Krishna Iyer, if I may say so with great respect, has not discarded the tests of industry formulated in the past.
Indeed, he has actually restored the tests laid down by this Court in D.N. Banerjee 's case, and, after that, in Corporation of the City of Nagpur vs Its Employees, and State of Bombay vs The Hospital Mazdoor Sabha to their pristine glory.
" The learned Chief Justice again stated: "Each of us is likely to have a subjective notion about industry.
For objectivity, we have to look first to the words 631 used in the statutory provision defining industry in an attempt to find the meaning.
If that meaning is clear, we need proceed no further.
But, the trouble here is that the words found there do not yield a meaning so readily.
They refer to what employers or workers may do as parts of their ordinary avocation or business in life . " "Thus, in order to draw the circle of industry, to use the expression of my learned brother Iyer, we do not find even the term workman illuminating.
The definition only enables us to see that certain classes of persons employed in the service of the State are excluded from the purview of industrial dispute which the seeks to provide for in the interests of industrial peace and harmony between the employers and employees so that the welfare of the nation is secured.
The result is that we have then to turn to the preamble to find the object of the itself, to the legislative history of the , and to the socio economic ethos and aspirations and needs of the times in which the was passed.
" After quoting the definition of industry, the learned Chief Justice proceeded to say in paragraph 158 of the judgment: "It seems to me that the definition was not meant to provide more than a guide.
It raises doubts as to what could be meant by the calling of employers even if business, trade, undertaking or manufacture could be found capable of being more clearly delineated.
It is clear that there is no mention here of any profit motive.
Obviously, the work manufacture of employers could not be interpreted literally.
It merely means a process of manufacture in which the employers may be engaged.
It is, however, evident that the term employer necessarily postulates employees without whom there can be no employers . " In paragraph 165 of the judgment, the learned Chief Justice added: G "I have contended myself with a very brief and hurried outline of my line of thinking partly because I am in agreement with the conclusions of my learned brother Krishna Iyer and I also endorse his reasoning almost wholly, but even more because the opinion I have dictated 632 just now must be given today if I have to deliver it at all.
From tomorrow I cease to have any authority as a Judge to deliver it.
Therefore, I have really no time to discuss the large number of cases cited before us, including those what are known as sovereign functions.
" Chandrachud, J., as he then was, on behalf of himself Jaswant Singh and Tulzapurkar, JJ. added a note by saying: "We are in respectful agreement with the view expressed by Krishna Iyer, J. that the appeal should be dismissed.
We will give our reasons later indicating the area of concurrence and divergence, (underlining is ours) if any, on the various points in controversy on which our learned Brother has dwelt." On 7th of April, the reasonings were delivered by Chief Justice Chandrachud for himself as by then Jaswant Singh, J. delivered a separate set of reasonings for himself and Tulzapurkar, J.
The learned Chief Justice (because by then he had assumed that office) referred to several authorities and tests and in paragraph 181 of the judgment stated: ". .
These refinements are, with respect, are not warranted by the words of the definition, apart from the consideration that in practice they make the application of the definition to concrete cases dependent upon a factual assessment so highly subjective as to lead to confusion and uncertainty in the understanding of the true legal position.
Granting that the language of the definition is so wide that some limitation ought to be read into it, one must step at a point beyond which the definition will skid into a domain too rarefied to be realistic.
Whether the cooperation between the employer and the employee is the proximate cause of the ultimate product and bears direct nexus with it is a test which is almost impossible of application with any degree of assurance or certitude.
It will be as much true to say that the solicitor 's assistant, managing clerk, librarian and the typist do not directly contribute to the intellectual end product which is a creation of his personal professional skill as that, without their active assistance and cooperation it will be impossible for him to function effectively.
The unhappy state of affairs in which the law is marooned will 633 continue to baffle the skilled professional and his A employees alike as also the Judge who has to perform the unenviable task of sitting in judgment over the directness of the cooperation between the employer and the employee, until such time as the legislature decides to manifest its intention by the use of clear and indubious language.
Besides the fact that this Court has so held in National Union of Commercial Employees vs M.R. Meher, lndustrial Tribunal, Bombay, [1962] Supp.
3 SCR 157 the legislature will find a plausible case for exempting the learned and liberal professions of lawyers, solicitors, doctors, engineers, chartered accountants and the like from the operation of industrial laws.
But until that happens, I consider that in the present state of the law it is difficult by judicial interpretation to create exemptions in favour of any particular class.
" The remaining two learned Judges added their separate opinion and in the concluding part stated: "In view of the difficulty experienced by all of us in defining the true denotation of the term industry and divergence of opinion in regard thereto as has been the case with this Bench also we think, it is high time that the Legislature steps in with a comprehensive bill to clear up the fog and remove the doubts and set at rest once for all the controversy which crops up from time to time in relation to the meaning of the aforesaid term rendering it necessary for larger Benches of this Court to be constituted which are driven to the necessity of evolving a working formula to cover particular cases.
" The ultimate position available from the seven Judge Bench decision, therefore, is that while three learned Judges delivered their view through Krishna Iyer, J., Beg CJ spoke somewhat differently, yet agreed with the conclusion reached by Krishna Iyer J. Chandrachud, CJ.
also agreed with the majority while the remaining two learned Judges looked for legislative clarification to meet the situation.
Perhaps keeping in view the observations of the learned Judges constituting the seven Judge Bench, the definition of industry as occurring in section 2(j) of the was amended by 46 of 1982.
Though almost six years have elapsed since the amendment came on to 634 the Statute Book, it has not been enforced yet.
Bare Acts and Commentaries on the have, however, brought in the new definition by deleting the old one with a note that the new provision has yet to come into force.
This situation has further added to the confusion.
It is now time to turn to the facts of the case.
Judicial notice can be taken of the position that Haryana and Punjab originally constituted one State and Haryana has become separate from 1966.
The Irrigation Department of the erstwhile Punjab State was discharging the State 's obligations created under the .
The Administration Report of the year 1981 82 of the Public Works Department, Irrigation Branch, which really deals with the irrigation department has been produced before us with notice thereof to the appellants ' learned counsel.
We may extract a part of the Report: "The irrigation department which was set up more than 100 years ago is mainly responsible to provide water supplies for the substance and development of agriculture in the 30.36 hectare cultivable area of the State covered by canal command.
This requires harnessing of the surface and grounds water resources of the State and their equitable distribution to the beneficiaries, within Canal Command area.
This task involves construction of multipurposes, major, medium and minor irrigation projects, maintenance of net work of channels, regulation of canal supplies, enforcement of water laws etc.
and levying of crop wise water supply rates on the irrigators for recovery through the state Revenue Department.
Extension, improvement and modernisation of the age old canal system is also continued to be done simultaneously by the Department.
Besides the irrigation the department also provides water for drinking purposes to villages and towns in the State.
The canal water supplies are also being made available for the industrial development in areas where no other source for water supplies exists".
"The State of Punjab was reorganised in the year 1966 and a number of disputes on the sharing of water/powers with successor States croped up.
The issues regarding apportionment of Ravi Beas Waters over the preparation uses falling to the share of erstwhile Punjab, 635 apportionment of rights and liabilities of Bhakra Nangal Project, retention of control of Irrigation Head Works of Harike, Ropar and Ferozepur by Punjab, restoration of Bhakra Nangal Project and Beas Project to Punjab etc.
are also dealt with by the Department." "The Irrigation Department is also responsible to provide protection to the valuable irrigated lands and public property from flooding, river action and water logging.
This requires construction of flood protection, river training, drainage and anti waterlogging works and their maintenance. " "The Department has also to plan ahead for irrigation development in the State for which purpose proposal of irrigation schemes are investigated, surveyed and prepared in advance.
Feasibility of irrigation schemes for hydropower generation from the existing and proposed irrigation schemes is also investigated by the Department and their execution undertaken.
The execution of new irrigation schemes, extention and improvement of existing schemes requires preparation of detailed designs of channels and their necessary works.
This work is also done by the Department." "During designs, execution and maintenance of the irrigation, flood control and drainage projects, field problems arise for the solution of which research, model studies and laboratory experiments have to be conducted.
The Department undertakes this work as well." "Having shared with the neighbouring States almost entire water resources of the rivers flowing through the Punjab water has now become a constraint to keep the tempo of the development of irrigated agriculture in the State.
For this purpose it has not only become necessary to evaluate the total water resources of the State but also plan conjunctive use of surface and ground water for the optimum development of this precious resource.
Further it has become necessary to conserve irrigation supplies and propogate their use economically through innovative water distribution system like sprinklers, drip system, etc.
" 636 "The Irrigation Department plans and execute reclamation of salt or thur affected areas within cannal command.
Measurements of discharges in the Ravi, the Beas and the Sutlej desides the beings and drains in the State is also carried out by the irrigation department.
These observations which are being made for the last over 60 years have provided basic data to the design of multipurposes Bhakhra Nangal, Beas and Beas Sutlej Link projects which have transformed economies not only of the State of Punjab but also of the State of Haryana and Rajasthan.
The fact extracted from the Report apparently give a picture of the activities of the Irrigation Department.
There is a full Bench judgment of the Punjab and Haryana High Court in the case of Om Prakash vs M/s Executive Engineers, SYL, Kurukshetra & Ors.[1984] Current L.J. 349 where the question that came up for consideration before the full Bench was thus stated; whether the irrigation department of the State (of Punjab) comes within the ambit of industry in section 2(j) of the Industrial disputes Act, 1947? The Court took into account the judgment of another full Bench decision of the same Court in the case of State of Punjab vs Kuldip Singh & Anr., where the question for consideration was whether the Public Works Department of the State Government was an industry.
In Om Prakash 's case (supra), the full Bench barely took note of the decision of this Court in Bangalore Water Supply case (supra) but did not deal with it.
It also took into account the position of the Irrigation Department in Punjab keeping in the background the provisions of the of 1873 and stated: "The irrigation department is a branch of the public works department.
It provides a reasonably assured source of water for crops through the net work of canals.
The irrigation department also carries out schemes and takes measures for protecting crops from the menace of floods during the times of abnormal rainfall.
In the olden times when there was no canals, agriculture was very limited and cultivators depended solely on rainfall.
By the passage of time it was thought necessary to build irrigation and drain age works for the purpose of providing better water facilities to the farmers on whom depends the economy of this country.
These works could only be built by the Government.
637 The western Jamuna canal which serves the State of A Haryana was the first major irrigation work which was initially constructed by Feroze Shah Tuglaq in 1351.
It was reconditioned by Akbar in 1568 and was extended in 1626 in the reign of Shahjahan.
The canal was constructed in a reasonably serviceable form by the British during 1817 1823.
Then the Upper Bari doab canal, Sirhind canal, Lower Chinah canal and Lower Jhelum canal etc., were constructed.
Thereafter, many other projects have come up and the ones which need mention are Bhakra Nangal project with its network of Bhakra System and the Beas project.
All these projects have been carried out by the state at the state expense.
It is understandable that such projects could not at all be undertaken by private enterpreneurs or could be left in their hands for execution.
Further, water is a state subject as per entry 17 in List II of Seventh Schedule of the Constitution.
Even before coming into force of the Constitution, water of rivers and streams was considered to be belonging to the State . .
Thus it would be evident that the water has at all times been a State subject and the State can exercise full executive powers in all matters connected with the water.
The State supplies water to the farmers through the network of canals.
It is correct that water rates are realised from the farmers but they are not realised for the cost of the water.
In other words, the State does not sell water to the farmers.
As contended justifiably by the learned Advocate General, the water charges are not even sufficient to meet the establishment and maintenance expenses of the department.
Moreover, the water rates have never been realised on the basis of the quantity of the water supplied.
These rates are dependant upon the class of crops raised by the farmers and have been fixed in terms of per acre.
It may be noted that rates for crops, such as wheat, sugarcane, cotton, rice are higher than the other crops such as gram, oil seeds, bajra and maize etc.
In other words, the water charges have been linked on the principle of bearability, that is, paying capacity of the farmer dependant upon his income from the kind of crop raised by him.
The water is supplied on the basis of the holding of each farmer in terms of cultivable commanded area, that is, on the basis of uniform and equitable yardstick.
Again, the water charges are remitted when the crops are damaged by natural 638 calamities such as locust, hailstroms, floods or drought etc.
Further, the construction of canals, dams, barrages, and other projects cannot be entrusted to some private hands.
The construction of these works involves compulsory acquisition of land which can also be done by the State.
Merely this fact that water is supplied by charging certain rates cannot warrant a finding that the state is indulging in trade or business activity or an activity which is analogous to trade, business or economic venture.
From what has been stated above, there can be gainsaying that the functions of the irrigation department cannot at all be left to private enterprise.
The facts which weighed in holding that the construction and maintenance of national and state highways by the State does not come within the ambit of industry in Kuldip Singh 's case (supra) are present so far as the irrigation department is concerned .
In this view of the matter, I hold that the functions of the irrigation departments are essentially government functions and that these functions neither partake of the nature of trade and business nor are even remotely analogous thereto and that this department does not come within the ambit of industry as defined in section 2(j) of the Act." Mr. Shalma for the appellants placed before us some cases of different High Courts in support of his stand that the Irrigation Department should be considered as industry.
The first of these cases is that of Madhya Pradesh Irrigation Karamchari Sangh vs State of Madhya Pradesh & Anr., where the Madhya Pradesh High Court found the Chambal Hydel Irrigation Project to be an industry.
The facts of that case reveal that the Project therein was a multipurpose one which was used for generating electricity as also for irrigation purposes.
On the facts found therein, the High Court came to the conclusion that it came within the definition under section 2(j) of the Act.
In State of Rajasthan vs The Industrial Tribunal, Rajasthan, the question for consideration before the Rajasthan High Court was whether the Survey and Investigation Division of Irrigation Department was an industry.
In paragraph 26, the learned Judge came to the conclusion by saying: "In view of the aforesaid decisions of the Supreme Court, I find it difficult to hold that the activities of the 639 State Government by organising its Survey and Investigation.
Division in the Irrigation Department through which the State Government rendered services in the matter of supplying water by constructing canals and dams does not fall within the ambit of the sovereign or regal functions of the State.
Such service to the people at large, in my opinion, comes within the ambit of the expression industry as defined in section 2(i) of the Act.
" The finding runs contrary to the conclusion.
If in the opinion of the learned Judge, it was difficult to hold that the activities did not fall within the ambit of the sovereign or regal functions, then the conclusion should have been different.
In Dinesh Shanna & Ors.
vs State of Bihar & Ors.
, [1983] Bihar L.J.R. 207, a Division Bench of the Patna High Court was considering if the Public Health Engineering Department of the State of Bihar was an industry.
In paragraph 8 of the judgment, reliance was placed on the Bangalore Water Supply case (supra) and the Nagpur Corporation case (supra) and it was held that the said department of the State Government of Bihar was an industry.
In Chief Engineer, Irrigation, Orissa vs Harihar Patra & Anr., a Division Bench of the orissa High Court was considering whether the Salandi Irrigation Project in that State was an industry.
The High Court relied upon the earlier full Bench decision of its own Court and some of the decisions of this Court which we have referred to above, and came to hold that the irrigation project was an industry.
The Administrative Report of the facts found by the High Court in the instant case have attempted to draw out certain special features.
The legal position has been indicated in the earlier part of our judgment.
On the tests, as already laid down in the judgments, we do not think these facts found in this case can take out the Irrigation Department outside the purview of the definition of 'industry '.
We have already referred to the Dominant Nature test evolved by Krishna Iyer, J.
The main functions of the Irrigation Department where subjected to the Dominant Nature test clearly come within the ambit of industry.
We have not been able to gather as to why even six years after the amendment has been brought to the definition of industry in section 2(j) of the Act the same has not been brought into force.
This Court on more than one occasion has indicated that the position should be clarified by an appropriate amendment and when keeping in view the opinion of this Court, the law was sought to be amended, it is 640 appropriate that the same should be brought into force as such or with such further alterations as may be considered necessary, and the legislative view of the matter is made known and the confusion in the field is cleared up.
For the reasons we have indicated above, these appeals succeed.
We make it clear that in the event of the definition of industry being changed either by enforcement of the new definition of industry or by any other legislative change, it would always be open to the aggrieved Irrigation Department to raise the issue again and the present decision would not stand in the way of such an attempt in view of the altered situation.
The appeals are allowed without costs.
S.L. Appeals allowed.
| Each of these appeals by special leave was directed against the award made by the Labour Court.
The appellant in Civil Appeal No. 5415 of 1985, a foreman in the Mechanical Construction Division under the Irrigation Department, had filed an application under Section 33C 2 of the ( 'the ') before the Labour Court for the recovery of arrears of annual increments.
The appellant in Civil Appeal No. 2168 of 1987 was a T. Mate in the P.W.D. Drainage Division.
When his services were terminated without complying with the requirements of the law, he challenged the termination before the Labour Court.
The appellant in the remaining appeal was an operator in the Mechanical Division, under the Irrigation Department of Haryana State.
His services were terminated and thereupon he approached the Labour Court challenging the order of termination.
In each of these cases, challenge was advanced by the Governmental authority to the maintainability of the application before the Labour Court on the ground that the employer was not an 'industry ' and the did not apply.
The Labour Court upheld the objection and declined relief to the appellants.
Allowing the appeals with observations, the Court, ^ HELD: The common question in these appeals was whether the Irrigation Department was an 'industry '.
The definition of 'industry ' is given in Section 2(j) of the .
By Section 2(c) of the Amending (46 of 1982) this definition had been amended but the amendment has not 617 yet been brought into force.
Since the amended statutory definition was not yet in force, the parent definition and the judicial pronouncements thereon had to be referred to for finding the law.
The field is covered by pronouncements of this Court and is not necessary to go beyond the precedents such as decisions in D.N. Banerji vs P.R. Mukherjee & Ors., ; ; State of Bombay and Ors.
vs The Hospital Mazdoor Sabha & Ors ; ; Corporation of the City of Nagpur vs Its Employees, ; ; Management of Safdarjang Hospital vs Kuldip Singh Sethi, ; ; and the decision of a seven Judge Bench in Bangalore Water Supply and Sewerage Board vs A. Rajappa & Ors., ; [621F G] In case the Irrigation Department was accepted to be an "industry", there was no dispute that each of the appellants would be a 'workman ' and each of the claims would constitute an "industrial dispute" as defined in Section 2(s) and (k) of the , respectively .
[621G] Judicial notice could be taken of the position that Haryana and Punjab originally constituted one State and Haryana became separate from 1966.
The Irrigation Department of the erstwhile Punjab State was discharging the State 's obligations created under the .
The Administration Report of the year 1981 82 of the Public Works Department, Irrigation Branch, which really deals with the Irrigation Department, was produced before the Court.
[634B C] Counsel for the appellants placed before the Court some cases of different High Courts in support of his stand that the Irrigation Department should be considered as an industry, i.e. Madhya Pradesh Irrigation Karamchari Sangh vs State of Madhya Pradesh & Anr., ; State of Rajasthan vs The Industrial Tribunal, Rajasthan, ; Dinesh Sharma & Ors.
vs State of Bihar & Ors.
, [1983] Bihar L.J.R. 207 and Chief Engineer, Irrigations Orissa vs Harihar Patra & Anr., [638E F] On the tests, as already laid down in the judgments, the Court did not think the facts found in this case could take the Irrigation Department outside the purview of the definition of 'Industry '.
The main functions of the Irrigation Department where subjected to the Dominant Nature test evolved by Krishna Iyer J. in Bangalore Water Supply and Sewerage Board vs A. Rajappa & Ors., ; , decided by a seven Judges Bench, clearly come within the ambit of industry.
618 Perhaps keeping in view the observations of the learned Judges of the seven Judges Bench, the definition of industry as occurring in section 2(j) of the was amended by 46 of 1982.
However, the Court could not gather as to why even six years after the amendment to the definition of industry in section 2(j) of the came on the statute book, the same had not been brought into force.
The court on more than one occasion had indicated that the position should be clarified by an appropriate amendment, and, when keeping in view the opinion of this Court, the law was sought to be amended, it was appropriate that the same should be brought into force as such or with such further alterations as might be considered necessary and the legislative view of the matter, made known and the confusion in the field, cleared up.
Bare Acts and Commentaries on the had brought in the new definition, deleting the old one with a note that the new provision had yet to come into force.
This situation had further added to the confusion.
[639F H; 640A B] The appeals succeeded.
It was made clear that in the event of the definition of industry being changed either by enforcement of the new definition of industry or by any other legislative change, it would always be open to the aggrieved Irrigation Department to raise the issue again and the present decision would not stand in the way of such an attempt in view of the altered situation.
[640B C] D.N. Banerji vs P.R. Mukherjee & Ors., ; ; State of Bombay & Ors.
vs The Hospital Mazdoor Sabha & Ors., ; Corporation of the City of Nagpur vs Its Employees, ; ; Management of Safdarjang Hospital vs Kuldip Singh Sethi, ; ; Bangalore Water Supply and Sewerage Board vs A. Rajappa & Ors.
, ; ; om Prakash vs M/s Executive Engineer, SYL, Kurukshetra & Ors.
[1984] Current L.J. 349; State of Punjab vs Kuldip Singh & Anr., ; Madhya Pradesh Irrigation Karamchari Sangh vs State of Madhya Pradesh & Anr., ; State of Rajasthan vs The Industrial Tribunal, Rajasthan, ; Dinesh Sharrna & Ors.
vs State of Bihar & Ors.
, [1983] Bihar L.J.R. 207 and Chief Engineer, lrrigation, Orissa vs Harihar Patra & Anr., , referred to.
|
Appeal No. 624 of 1960.
Appeal by special leave from the judgment and order dated May 30, 1960 of the Mysore High Court in Civil Revision Petition No. 1098 of 1959.
K. R. Karanth and R. Gopalakrishnan, for the appellant.
A. V. Viswanatha Sastri, R. Ganapathy Iyer and G. Gopalakrishnan, for the respondent.
B. R. L. Iyengar and T. M. Sen, for the State of Mysore (On Notice issued by the Court).
February 27.
The Judgment, of the Court was delivered by SHAH, J. Smt.
Vimla hereinafter referred to as the plaintiff filed suit No. 73 of 1956 in the court of the Subordinate Judge, South Kanara, for a decree for 1016 possession of lands, buildings, house sites described in sch.
A and movable properties described in sch.
B and for mesne profits in respect of properties described in sch.
A and for a decree for possession and management and for account of the properties described in sch.
C and institutions alleged to be the private family religious endowments in sch.
D. The plaintiff claimed that on the death of her father Shri Dharmasthala Manjayya Heggade on August 31, 1955, she became entitled to the properties in suit but the defendant wrongfully possessed himself of those properties.
The plaintiff valued the properties in schs.
C and D under section 28 of the Madras Court fees and Suits Valuation Act, 1955 at Rs. 21,000/ and paid a court fee of Rs. 275/ .
She valued the lands in schedule A for purposes of jurisdiction at 30 times the assessment and separately valued the buildings and paid court fee on that footing.
On June 28, 1956, the Subordinate Judge ordered on an objection raised by his office that the amount of Rs. 34,577/ paid as court fee by the plaintiff was adequate.
Then followed a course of proceedings for which not many precedents may be found.
On September 9, 1950, the defendant filed his written statement raising an objection inter alia to the valuation of the properties in suit and the court fee exigible on the claim.
The trial court then raised an issue about the adequacy of the court fee, paid by the plaintiff.
On February 13, 1957, the defendant applied for the appointment of a Commissioner to value the properties.
The court dismissed the application and declared that the court fee paid was adequate.
In Revision Petition 272 of 1957 preferred by the defendant to the High Court of Judicature at Bangalore, the order passed by the Subordinate Judge was set aside and it was directed that the trial court do " ascertain the value of the properties for purposes of court fee in accordance with law after giving full opportunity to the parties and if need be by appointing a Commissioner to ascertain the present market value of the suit Schedule properties and decide the issue afresh on merits.
" Pursuart to this direction, a Commissioner was appointed by 1017 the Subordinate Judge.
The Commissioner submitted his report as to valuation of the properties.
Objections were raised by the defendant to that report and a further report was submitted by the Commissioner.
On the direction of the Subordinate Judge, a supplemental report was submitted by the Commissioner.
After hearing the parties, the Subordinate Judge held that the properties described in sch.
D were " extra commercial " and fixed court fee was exigible in respect of the claim for possession thereof, that pro perties described in sch.
D were " trust properties " and section 28 of the Madras Court fees and Suits Valuation Act applied thereto as the dispute related to the right of management between persons claiming to be rival trustees, that the houses built on revenue paying lands had to be valued according to their market value and not at 30 times the land assessment and that the lands in sch.
A were worth Rs. 7,74,665/ and the house sites were worth Rs. 27,625/ .
The plaintiff paid the additional court fee as directed by the court,.
Against the order passed by the Subordinate Judge, the plaintiff and the defendant applied by separate petitions in revision to the High Court of Mysore.
The High Court heard the Advocate General of the State and substantially confirmed the order passed by the Subordinate Judge except as to an institution described as " Nelliyadi Beedu ", in respect of which the High Court directed the trial court to determine whether the institution was " extra commercial " after giving an opportunity to both parties to put forth their contentions and to lead evidence in that behalf.
Against that order of the High Court, this appeal has been preferred by the defendant with special leave under article 136 of the Constitution.
The Court fees Act was enacted to collect revenue for the benefit of the State and not to arm a contesting party with a weapon of defence to obstruct the trial of an action.
By recognising that the defendant was entitled to contest the valuation of the properties in dispute as if it were a matter in issue between him and the plaintiff and by entertaining petitions preferred by the defendant to the High Court in exercise of 1018 its revisional jurisdiction against the order adjudging court fee payable on the plaint, all progress in the suit for the trial of the dispute on the merits has been effectively frustrated for nearly five years.
We fail to appreciate what grievance the defendant can make by seeking to invoke the revisional jurisdiction of the High Court on the question whether the plaintiff has paid adequate court fee on his plaint.
Whether proper court fee is paid on a plaint is primarily a question between the plaintiff and the State.
How by an order relating to the adequacy of the court fee paid by the plaintiff, the defendant may feel aggrieved, it is difficult to appreciate.
Again, the jurisdiction in revision exercised by the High Court under section 1 15 of the Code of Civil Procedure is strictly conditioned by cls.
(a) to (c) thereof and may be invoked on the ground of refusal to exercise jurisdiction vested in the Subordinate Court or assumption of jurisdiction which the court does not possess or on the ground that the court has acted illegally or with material irregularity in the exercise of its jurisdiction.
The defendant who may believe and even honestly that proper court fee has not been paid by the plaintiff has still no right to move the superior court by appeal or in revision against the order adjudging payment of court fee payable on the plaint.
But counsel for the defendant says that by Act 14 of 1955 enacted by the Madras Legislature which applied to the suit in question, the defendant has been invested with a right not only to contest in the trial court the issue whether adequate court fee has been paid by the plaintiff, but also to move the High Court in revision if an order contrary to his submission is passed by the court.
Reliance in support of that contention is placed upon sub section
(2) of section 12.
That sub section, in so far as it is material, provides: " Any defendant may, by his written statement filed before the first hearing of the suit or before evidence is recorded on the merits of the claim. plead that the subject matter of the suit has not been properly valued or that the fee paid is not sufficient.
All questions arising on such pleas shall 1019 be heard and decided before evidence is recorded affecting such defendant, on the merits of the claim.
If the court decides that the subject matter of the suit has not been properly valued or that the fee paid is not sufficient, the court shall fix a date before which the plaint shall be amended in accordance with the court 's decision and the deficit fee shall be paid. . " But this section only enables the defendant to raise a contention as to the proper court fee payable on a plaint and to assist the court in arriving at a just decision on that question.
Our attention has not been invited to any provision of the Madras Court fees Act or any other statute which enables the defendant to move the High Court in revision against the decision of the court of first instance on the matter of court fee payable on a plaint.
The Act, it is true by section 19, provides that for the purpose of deciding whether the subject matter of the suit or other proceeding has been properly valued or whether the fee paid is sufficient, the court may hold such enquiry as it considers proper and issue a commission to any other person directing him to make such local or other investigation as may be necessary and report thereon.
The anxiety of the Legislature to collect court fee due from the litigant is manifest from the detailed provisions made in ch.
III of the Act, but those provisions do not arm the defendant with a weapon of technicality to obstruct the progress of the suit by approaching the High Court in revision, against an order determining the court fee payable.
In our view, the High Court grievously erred in entertaining revision applications on questions of court fee at the instance of the defend.
ant, when no question of jurisdiction was involved.
The appeal therefore fails and is dismissed with costs.
Appeal dismissed.
| Section 51 of the Central Provinces Local Self Government Act, 1920 empowered a district council, subject to the previous sanction of the local Government, to impose "any tax, toll or rate, other than those specified in SS.
24, 48,49, and 50.
" On March 12, 1935, an Independent.
Mining Local Board functioning in the area in which the petitioners were working certain mines situated therein, and having vested in it all the powers of a district council, resolved to impose a tax on coal, coal dust and coke manufactured at the mines or sold within the territorial jurisdiction of the Board.
The petitioners who were served with notices of demand requiring them to pay certain sums of money as the tax due by them for despatches of coal from their mines, challenged the legality of the levy of the tax on the grounds, inter alia (1) that the Act which by section 51 authorised the imposition of the tax, had been passed by the local legislature without the previous sanction of the Governor General, thereby contravening section 80A(3) of the Government of India Act, 1915, and that even if it was found that the Act was validly passed before the coming into force of the Government of India Act, 1919, which introduced section 80A into the Act of r 1915, the power conferred by section 51 to levy tax was exercised only in 1935 and by that date S.80 A had been introduced into the Government of India Act,1915, and that thereafter there could be no legal imposition of a tax without the previous sanction of the Governor General being obtained, (2) that section 51 Of the Central Provinces Local Self Government Act, 1920, on its language and in the context of other provisions referred to in that section, did not authorise .the levy of a tax of the nature of the coal tax, and (3) that, in any case, the tax ceased to be legally leviable after the coming 2 into force of the Government of India Act, 1935, and of the Constitution of India, since a tax like that in question could be in posed only by the Central Government.
Held: (1) that the Central Provinces Local Self Government Act, 1920, having received the assent of the Governor General, its validity cannot be challenged in view of the saving clauses in the proviso to section 80A(3) and section 84(2) of the Government of India Act, 1915.
(2) that the validity of Central Provinces Local Self Government Act, 1920, when enacted, not being open to any objection under the Government of India Act, 1915, any subsequent amendments to the latter Act could not in any manner affect its continued validity and operation.
(3) that on the proper construction Of section 51 of the Act of 1920, the levy of a coal tax is not excluded from the purview of the local authority.
(4) that the continued levy of the tax in question even after the coming into force of the Government of India Act, 1935, and the Constitution of India, is valid in view of section 143 Of the Act of 1935 and article 227 of the Constitution.
|
ivil Appeal Nos.
1386 91 of 1977 Appeals by Special leave Petitions from the Judgment and Order dated 1st December, 1976 of the Karnataka High Court in S.T.R.P. Nos.
24 29 of 1975.) S.T. Desai, S.J. Chandran & Mrs. A.K. Verma for the Appellant.
S.S. Javali and Swaraj Kaushal for the Respondent.
The Judgement of the Court was delivered by: SABYASACHI MUKHARJI, J.
These appeals by special leave are from the judgment and decision of the High Court of Karnataka dated 1st December, 1976 involving the questions of assessability of the appellant Sales Tax, Central as well as State.
While granting leave, this Court excluded the question whether the sales effected in the canteen by the appellant were assessable to Sales Tax.
By the impugned judgment, the High Court of Karnataka had dismissed several Writ Petitions against several orders being S.T.R.Ps.
Nos. 28, 27 and 29 of 1985 under the Karnataka Sales Tax Act, for the year 1960 61, 1961 62 and 1962 63 respectively and also three others namely; S.T.R. Ps.
Nos. 25, 26 and 24 of 1975, under the Central Sale Tax Act for the corresponding years respectively, at the instance of the present appellant.
These involved common questions of law and facts and were disposed of by a common judgment.
We also propose to do the 252 same.
As stated, one of the questions was about the taxability of the turn over in respect of the sales made in the canteen of the appellant company.
This question is not before us.
Before the Tribunal, the two following questions relevant for appeals before us were agitated, namely; (i) Whether the turnover apportioned from the job works undertaken by the appellant related to the sales of materials by the appellant to the Indian Air Force or other private parties, as the case may be, and as such whether these were taxable as held by the ower appellate authority.
(ii) Whether, in the case of job works undertaken from the private parties mainly on quotation on inclusive price basis, the Sales Tax authorities were right in apportioning a portion of the turnover as attributable towards sales of materials.
In order to appreciate the controversy in these appeals, it is necessary to state certain facts.
The appellant is a manufacturer of spare parts and accessories of various aircrafts and has also established facilities for assembling, servicing, repairing, overhauling of aircrafts, their instruments and accessories.
The Sales Tax authorities sought to subject to tax that portion of the total turnover of the appellant for the relevant years in question which was equivalent to the money value of the spare parts to the aircrafts which the appellant supplied to the Indian Air Force as a result of their use in the process of repairing, servicing and overhauling of the aircrafts, their instruments and accessories which were sent to the appellant for the aforesaid purposes during the relevant years in question.
At the outset, it is important to emphasise that the jobs done by the appellant were servicing, assembling, repairing and overhauling 'Airforce Planes ' entrusted to the appellant.
In the second appeal being Civil Appeal No. 1387 (NT) of 1977, the main job done was assembling; sales tax was levied in respect of the turnover for doing the same job.
These works were done on the basis of contracts or job orders issued from time to time.
While no contract directly concerning the repairing, servicing and overhauling of a specified aircraft, instrument or accessary in which the spare parts had been used in the execution of service contracts was on record, there is, however, a specimen contract that was entered into between the appellant and 253 I.A.F. being agreement dated 23rd June, 1951, hereinafter referred to as '1951 ' Contract '.
The agreement is described as "Contract for the flight servicing and maintenance of the H.Q. Training Command I.A.F. Communication Flight".
The agreement was between Hindustan Aircraft Limited, described in the agreement as the 'Contractor ' and the President of India, described in the agreement as the 'Owner '.
It may be mentioned that the Hindustan Aircraft Limited has later on become the appellant i.e. M/s Hindustan Aeronautics Limited.
As the contentions of the parties in these appeals centered on the question whether the contracts in question, the income of which has been subjected to sales tax, were works contracts only or were agreements to sell spare parts, it would be relevant to refer in detail to some of the clauses of the "1951 Contract".
The agreement states that the 'contractor ' agrees to accomplish for the 'owner ' the servicing and maintenance of the H.Q. Training Command, I.A.F. Communication Flight, and works required on visiting aircrafts, to the standard as specified in the said agreement at Bangalore or at any other place required by the 'owner '.
Then the specifications according to which the works had to be done were mentioned thereafter.
The agreement also provides that the works would be carried out by the contractor, and payment made by the owner "at Cost plus 10% profit basis" or at the contractor 's standard fixed rates, where applicable.
Sub clause (b) of clause 2 provides that any additional works to those specified in clause I, items (a), (b) and (c), authorised by Air Headquarters should also be charged for separately as per sub clause (a) of clause 2 of the agreement.
As the question of the price of the spares and materials is involved, it is necessary to set out clause 3 which deals with spares and materials: "Generally, the owner will provide the contractor with all the necessary spares and materials (other than expendable materials such as paints, dopes, cleaning rages etc.).
Where, however, there is delay in the supply of essential items, the contractor will provide those wherever possible either by purchase or manufacture, within an expenditure authorised by the owner 's Deputy Financial Adviser at the Contractor 's request from time to time.
All items provisioned by the contractor will be the property of the owner, and will be issued on Contract Loan.
The owner agrees to pay the contractor for provision of spares at the following rates: 254 (a) for items manufactured by the contractor Cost plus 10% (b) for items purchased from indigenous and overseas sources actual invoice price plus all other charges the contractor is called upon to pay, such as packing and shipping etc.
plus 5%.
" Regarding Technical advice and publications, clause 4 of the 1951 agreement stipulated that all relevant service publications and manuals would be made available on loan to the contractor through I.A.F. Liaison Officer attached to the contractor 's Factory.
Regarding delivery, it was provided by clause 5 that subject to the owner 's compliance with clause 3, the contractor would keep ready for flight as many of the available planes as possible.
Clause 6 of 1951 agreement deals with terms of payment and stipulated that the contractor would submit to the owner monthly bills as per clause 2(a) supported by cost analysis showing, inter alia, of certain details and the details are set out in different sub clause mentioned in clause 6 of the agreement.
The other incidental provisions of clause 6 are not relevant for the controversy in question.
Clause 7 of the 1951 agreement dealt with indemnity for loss or damage which is not relevant for our purposes.
Clause 8 dealt with right to cancel the agreement, Clauses 9 and 10 provided for 'inspection".
Clause 11 prohibited the contractor, the appellant, from in any way assigning or transferring any rights or benefits under the agreement except with the previous consent of the owner in writing.
Clauses 12, 13 and 14 are also not relevant for our purpose.
We may mention that reliance was also placed on behalf of the appellant on an affidavit by one Shri section Krishna Murthy who was the Sales Officer of the Overhaul Division of the Appellant Company and which affidavit had been filed before the Sales Tax Tribunal in Mysore, Bangalore.
In the said affidavit, he had described the nature of the works done by the appellant in connection with repairs and had mentioned that two types of works were done; one was overhaul of Aircrafts, accessories and equipments thereof, and the other known as fixed quotation basis.
It is not necessary to refer to the said affidavit in detail.
He had mentioned in the said affidavit the procedure for preparing the bills and had stated that after the works were completed, a final inspection of the repairs done was checked by the Works Inspection Department, whereafter delivery orders were prepared and thereafter he described how bills were prepared thus: 255 "After the work is completed, a final Inspection of the repair done is checked by the Works Inspection Department, whereafter a delivery order is prepared and the billing section prepares the bill.
As it is required by the Defence Audit purposes, the labour charges and material charges are shown which is worked out on cost plus 10% basis.
In the case of private Aircraft owners and other airlines for a similar contract for repairs, we give a fixed price quotation unlike in the case of repairs to Defence Aircraft which by virtue of the contract is on cost plus 10% basis, wherein a break up had to be given as aforementioned for purposes of defence audit.
" The Sales Tax authorities sought to tax that portion of the total turnover of the appellant for the relevant years in question which was equivalent to the money value of the spare parts of the aircrafts which it had supplied to the Indian Air Force as a result of their use in the process of repairing, servicing and over hauling of the aircrafts, their instruments and accessories which were sent to the appellant for the said purpose during the relevant years in question.
The works undertaken and executed by the appellant in assembling, repairing, servicing and overhauling were on cost plus 10% profit basis as well as on fixed inclusive quotation basis.
The appellant with regard to the latter types of contracts succeeded before the Appellate Tribunal who held such contracts to be exclusively works contract.
The controversy before the High Court and before us in these appeals is only with regard to the first category of contracts, which the Appellate Tribunal held to be composite contracts.
The appellant contended that so far as the supply of spare parts to the Indian Air Force during the relevant period was concerned, there had been no sale of the spare parts to the I.A.F., for that spare parts in question were used during the course of and in the process of execution of the works contracts relating to the servicing, repairing and overhauling of the aircrafts, their instruments and accessories and that there was no sale contracts as such in pursuance whereof, the spare parts in question could be said to have been sold to the I.A.F.
The Tribunal had negatives the contention of the appellant and the appellant had gone up in revision before the High Court.
The High Court was of the view that whether the supply of the spare parts by the appellant would amount to sale or not would depend on the fact as to whether there was a sale contract between the appellant and the I.A.F. in that regard.
The High Court was of the view that, 256 in the light of certain documents which we would also incidentally note, it could not be said that supply of spare parts and other materials was not in contemplation of the contracting parties and the spare parts in question became the property of the owner i.e. I.A.F. only by way of accretion to the aircrafts for being used in the process of executing the contracts and not as a result of the agreement between the contracting parties.
The High Court referred to certain decision and came to the conclusion that in the present case what was sought to be brought within the purview of Sales Tax Act was the cost to the vendees of the spare parts supplied by the appellant.
In such a case, the High Court was of the view that the stage at which the property therein passed to the owner was not material.
What was material was as to whether the goods in question were the property of the assessee before the same became the property of the President of India under the contracts.
Dealing with the contention of the parties, the High Court was of the view that in providing separately the basis of payment of spare parts in the contracts, the intention of the parties was clear and unambiguous i.e. the parties clearly agreed to the sale of spare parts according to the contract.
Certain invoices were placed on record, namely, the Invoice dated 28.2.1962 being Invoice No. HT2/CAT.B/F 1 which indicated separately the labour charges being Rs. 26,837.69 and materials and spares used by the appellant as per schedule attached as Rs. 32,187.92, reference was also made to another Invoice dated 31.3.1962 which had also mentioned separately labour charges as well as the costs of the materials and spares.
To the same effect was another Invoice dated 28 2 1962.
The Tribunal was of the view that these Invoices supported the conclusion that the labour charges had been separately itemised from the price of the spare parts and whenever any spare parts had been provided by the I.A.F. authorities, the price thereof had been deducted indicating that the spare parts supplied by the appellant.
For the aforesaid reasons as indicated in the judgment of the High Court, the High Court was of the view that sale of spare parts was clearly in contemplation of the parties and the documents in question constituted composite contracts, one relating to the remuneration for the services rendered and the other for the sale of goods.
In that view of the matter, the High Court was of the view that the Tribunal was right in dismissing the appeals of the appellant on the particular turnover of the appellant.
The question before us, is, therefore, whether the payments made for spare parts in executing the contracts in question were also 257 sales contracts or were part of one contract of executing the works contracts.
On behalf of the appellant, it was urged before us referring to the terms of the contracts which are more or less in the form of "1951 contract" mentioned before that the contracts in question manifested the clear intention that in substance and reality these were agreements to carry out works of assembling, repairs, servicing and overhauling of the aircrafts being the property of the Indian Air Force.
We must emphasise that the property in such planes was and had all along continued to remain with the Air Force.
Relevant contracts and the whole transactions between the parties indicate that the materials used in the process of such assembling, repairs, servicing and overhauling were either supplied by the Indian Air Force or were of the appellant, the bulk was supplied by the Govt.
The question therefore is, was it the intention to do the works undertaken as one job or not.
Counsel on behalf, of the appellant contended that that was the intention and there was no intention whatever to pass any property in any chattel qua chattel.
It is well settled that the difference between contract of service and contract for sale of goods, is, that in the former, there is in the person performing work or rendering service no property in the things produced as a whole notwithstanding that a part or even the whole of materials used by him had been his property.
In the case of a contract for sale, the thing produced as a whole has individual existence as the sole property of the party who produced it some time before delivery and the property therein passed only under the contract relating thereto to the other party for price.
It is necessary, therefore, in every case for the courts to find out whether in essence there was any agreement to work for a stipulated consideration.
If that was so, it would not be a sale because even if some sale may be extracted that would not affect the true position.
Merely showing in the bills or invoice, it was contended on behalf of the appellant, the value of materials used in the job would not render the contract as one of sale.
The nature and type of the transactions are important and determinative factors.
What is necessary to find out, in our opinion, is the dominant object.
It was urged before us that contract of sale is one whose main object was to transfer property in and the delivery of the possession of a chattel to the buyer.
If the principal object of works undertaken by the party was a transfer of a chattle qua chattel, the contract would 258 be for sale.
It is necessary to find out whether the contract was primarily a contract for supply of materials at a price agreed to between the parties and the work or service rendered is only incidental to the execution of the contract.
Mere transfer of property in goods used in the performance of a contract was not sufficient.
To constitute a sale, there must be an agreement expressed or implied relating to the sale of goods and the performance of the agreement by passing of title in those very goods.
On behalf of the respondent, counsel contended that the spare parts in question had been supplied by the appellant against payment of price in pursuance of specific stipulations in the contracts.
He, therefore, urged that the transactions constituted sale which was liable to tax.
It was highlighted that the appellant manufactured and did business in the sale of materials in question.
The fact that the appellant was a dealer in the spare parts supplied to the I.A.F. and other parties, is undisputed.
It was emphasised that the appellant supplied the spare parts in question to I.A.F. against payment of price and it was submitted that it was not the case of the appellant nor there was any material on record, to suggest that the spare parts in question were either manufactured or supplied as being incidental to the work of servicing and maintenance entrusted to the appellant or were loaned to the I.A.F. It was urged on behalf of the revenue that the correspondence on record and bills and invoices clearly demonstrated the intention of the parties to incorporate a separate agreement for the sale of spare parts by the appellant in the agreement.
According to counsel, the contract of 1951 consisted of two separate agreements.
The parties had consciously treated the works and the supply of materials, separately and our attention was drawn to the clauses dealing with the same.
It was urged that the contract contained separate stipulation for the work and for the supply of spare parts.
It was also emphasised that the appellant was a regular manufacturer of the spare parts involved in the case of supply to the I.A.F. As has been clearly stated in the Halsbury 's Laws of England, Third Edition, Volume 34, a contract of sale of goods must be distinguished from a contract for work and labour.
The distinction is often a fine one.
A contract of sale is a contract whose main object is the transfer of the property in, and the delivery of the possession of, a chattel as a chattel to the buyer.
Where however the main object of work undertaken by the payee of the price was not the transfer of chattel qua chattel, the contract is one of work and labour.
The 259 test, is, whether or not the work and labour bestowed end in anything that can properly become the subject of sale neither the ownership of the materials, nor the value of the skill and labour as compared with the value of the materials, is conclusive, although such matters may be taken into consideration in determining, in the circumstances of a particular case, whether the contract was in substance one for work and labour and one for the sale of a chattel.
In the case of Sentinel Rolling Shutters & Engineering Company Pvt. Ltd. vs The Commissioner of Sales Tax,(1) this Court reiterated that tests indicated in several decisions of this Court to distinguish between a contract for sales and a contract for work and labour were not exhaustive and did not lay down any rigid or inflexible rule applicable alike to all transactions.
These did not give any magic formula by the application of which one could say in every case whether a contract was a contract for sale or a contract for work and labour.
These merely focused on one or the other aspect of the transaction and afforded some guidance in determining the question, but basically and primarily, whether a particular contract was one for sale of goods or for work and labour depended upon the main object of the parties gathered from the terms of the contract, the circumstances of the transactions and the custom of the trade.
In that case, the assessee who was carrying on business as engineers, contractors, manufacturers and fabricators had entered into a contract with a company for fabrication, supply, erection and installation of two rolling shutters in two sheds belonging to that company for a price which was inclusive of charges for "erection at site".
The contract provided, among others, that the delivery of the goods was to be ex works and once the delivery was effected, rejection claims would not be entertained.
All masonry works required before or after erection were to be carried out by the company at its own cost.
Payments were to be made on overall measurements which should be checked by the company before installation.
The actual transportation charges were to be in addition to the price stipulated in the contract and the terms of payment provided "25 per cent advance, 65 per cent against delivery and remaining after completion of erection and handing over of the shutters to the satisfaction" of the company.
The assessee had submitted the bill to the company after completion of the fabrication of the rolling shutters, but before they were erected and installed at the premises of the company.
On the question whether the contract was a contract for sale or a contract for work and labour, the High Court had held, 260 agreeing with the Sales Tax Tribunal, that the contract was a divisible contract, which essentially consisted of two contracts, one for the supply of rolling shutters for money and the other for service and labour and that the amount payable at the stage of delivery represented the sale price of rolling shutters and it was liable to sales tax.
On appeal, by special leave, this Court held that the contract was one single and indivisible contract and the erection and installation of the rolling shutters was as much a fundamental part of the contract as the fabrication and supply.
The contract was clearly and indisputably a contract for work and labour and not a contract for sale.
It cannot be said as a general proposition that in every case of works contract, there is necessarily implied the sale of the component parts which go to make up the repair.
That question would naturally depend upon the facts and circumstances of each case.
Mere passing of property in an article or commodity during the course of performance of the transaction in question does not render the transaction to be transaction of sale.
Even in a contract purely of works or service, it is possible that articles may have to be used by the person executing the work, and property in such articles or materials may pass to the other party.
That would not necessarily convert the contract into one of sale of those materials.
In every case, the Court would have to find out what was the primary object of the transaction and the intention of the parties while entering into it.
It may in some cases be that even while entering into the contract of work or even service, parties might enter into separate agreements, one of work and service and the other of sale and purchase of materials to be used in the course of executing the work or performing the service.
But, then in such cases the transaction would not be one and indivisible, but would fall into two separate agreements.
One of work or service and the other of sale.
These principles can be deduced from the decision of this Court in The State of Himachal Pradesh and Others vs Associated Hotels of India Ltd.(1) In the decision in the case of The State of Madras vs Gannon Dunkerley & Co. (Madras) Ltd.
,(2) this Court had stated that according to the law, both of England and of India, in order to constitute a sale, it is necessary that there should be an agreement between the parties for the purpose of transferring title to goods, which of course pre supposed capacity to contract, that it must be supported by money consideration that as a result of transaction the property must actually pass in the goods.
Unless all 261 these elements were present, there would be no sale.
In the instant case it is indisputable as we have referred to the "1951 Contract" and the substance of the invoices and, it is not disputed that the other works orders were on the basis of the principles agreed by the 1951 agreement set out hereinbefore, that the transactions were as a result of composite contracts involving the execution of works viz. overhauling, repairing, servicing and in one year assembling, air force planes, entrusted to the appellant.
The question, is, whether this composite contract was divisible into one exclusively for work and labour and another for sale of materials.
The fact that there is supply of materials for the purpose of execution of the work contracts undertaken by the appellant cannot be disputed.
But the question then arises whether that can be taken as pursuant to a distinct contract with a view to execute the work undertaken.
In this connection we have already mentioned the principles enunciated by the statement of Halsbury 's Laws of England, Third Edition Volume 34 pages 6 and 7 para 3.
It would be appropriate, in our opinion, because it clearly enunciates the principles, to refer to the statement of law in Benjamin 's Treatise on the Law of Sale of Personal Property with reference to the French Code and Civil Law,(1) where the learned Editor has deduced the principles that would be applicable in deciding the controversy before us.
These principles are: "1.
A contract whereby a chattel is to be made and affixed by the workman to land or to another chattel before the property therein is to pass, is not a contract of sale, but a contract for work, labour and materials, for the contract does not contemplate the delivery of a chattel as such.
When a chattel is to be made an ultimately delivered by a workman to his employer, the question whether the contract is one of sale or of a bailment for work to be done depends upon whether previously to the completion of the chattel the property in its materials was vested in the workman or in his employer.
If the intention and result of the contract is to transfer for a price property in which the transferee had no previous property then the contract is a contract of sale.
262 Where, however, the passing of property is merely ancillary to the contract for the performance of work such a contract does not thereby become a contract of sale.
Accordingly (i) Where the employer delivers to a workman either all or the principal materials of a chattel on which the workman agrees to do work, there is a bailment by the employer, and a contract for work and labour, or for work, labour and materials (as the case may be), by the workman.
Materials added by the workman, on being affixed to or blended with the employer 's materials thereupon vest in the employer by accession and not under any contract of sale.
(ii) Where the workman supplies either all or the principal materials, the contract is a contract for sale of the completed chattel, and any materials supplied by the employer when added to the workman 's materials vest in the workman by accession.
" The learned Editor has emphasised that where passing of property was merely ancillary to the contract for the purpose of the work, such a contract does not thereby become a contract for sale.
This principle can also be deduced from the observations of the decision of Robinson vs Graves.(1) Whether a given transaction is a works contract pure and simple or it involves sale of goods also is of course a mixed question of law and fact depending upon the facts of each case.
We have noted in the instant case the contracts in question.
It is true, as was emphasised on behalf of the respondent and has been emphasised by the Tribunal as well as the Karnataka High Court, that it cannot be said that parties did not contemplate and apply their minds to the question of spare parts and other materials necessary for the execution of the works.
It was emphasised on behalf of the respondent and on this aspect the decision of the High Court of Karnataka as well as the 263 decision of the Tribunal were relied upon to stress the point that the price separately provided as cost plus 10%.
The bills and the invoices were also made separately indicating the prices involved in these transactions.
But it is important to emphasise that clause I of the contract was to accomplish for the owner the servicing and maintenance of the Headquarters Training Command I.A.F. Communication Flight, and works required on visiting aircrafts according to the standard as specified hereunder as these air planes were necessary to be kept in readiness and that as there should be no delay in getting the materials, the contract in detail provided that the works would be carried out by the contractor and payment to be made by the owner at cost plus 10% profit or at the contractor 's standard fix rates.
The additional work that would be required as specified in clause 1 in the different sub clauses was also to be charged as in clause 2(a).
Regarding spares and materials, the idea was that the owner would provide to the contractor all the necessary spares and materials except expendable materials, such as paints, dopes, cleaning rages etc.
and it may be mentioned that these were necessary tools in carrying out the works entrusted to the appellant.
It also stipulated in order to ensure that there should be no delay in keeping the air planes ready at all times, that in cases of delay in supply of materials, the contractor would provide those from wherever possible, either by purchase or manufacture but the expenditure to be incurred for the same should be authorised by the owner 's Deputy Financial Adviser at the contractor 's request from time to time.
Therefore it emphasises that it was the expenditure limited not only for the jobs to be done but expenditure to be incurred for providing the materials for the jobs to be done were subject to the approval and sanction of the Government.
The expressions following thereafter in clause 3 are, in our opinion, significant and indicative of the real intention of the parties.
These expressions are "All items provisioned by the contractor will be the property of the owner, and will be issued on Contract Loan." (Emphasis supplied).
The expression "Contract Loan" is not an expression of article It has no generally accepted meaning in dictionary, legal or otherwise, as such.
There is no definition or meaning of this expression provided in the contract between the parties or in the correspondence between the parties in connection with the execution of the works.
But in our opinion, these expressions indicate that the 'provisions ' which would be required for carrying out the contracts, which could not be anticipated before the beginning or in execution of the contracts will be the property of the owner i.e. that though gathered and procured or 264 manufactured by the contractor, the contractor will have no property in the said goods or spares or materials and would not be able to either dispose of or deal with those but these will be treated for the purpose of there contracts to be the property of the owner and, then the contract stipulates that on fictional basis these will be lent out to the contractor for being used in the execution of the jobs entrusted to the contractor.
It was urged before us that the contractor in this case the appellant is also a dealer and manufacturer of these spares and materials, to emphasise that these materials were not prepared or produced or procured by the contractor on ad hoc basis for the purpose of execution of the jobs entrusted to the contractor.
This position is indisputably true.
But it has also to be emphasised that what spare parts or materials that would be required were not identified goods and it was submitted that these would be treated to be the goods of the owner, and given on 'Contract Loan '.
It appears to us that the idea was that the moment these spares and materials were required for the jobs entrusted to the appellant and there was delay in supplying these spare parts and materials, the contractor would be free to procure or obtain these spares and materials either by manufacturing or by purchase from the market local or foreign, these goods to be identified and would be treated by the operation of the contract to be the goods of the owner of the planes.
It is true as was emphasised that in order to be given out on loan by the 'owner ' to the contractor, the 'owner ' must have property in the spares and materials in question.
But the 'owner ', i.e. the Government, in our opinion, in the context of 1951 agreement, and it is indisputable that the transactions in this case were done on the basis of the agreement of 1951, became the owner of the property the moment the goods were identified and there was delay or inability on the part of the government in supplying spares and materials.
It was emphasised that not a consolidated price was contemplated but what was contemplated was separate price for the materials.
Indeed the invoices relied upon by the parties in the specific works orders indicated those were charged for separately.
The basis for this has been explained in the affidavit of Shri Krishna Murthy mentioned hereinbefore.
The affidavit was before the authorities below as also before the High Court of Karnataka and there is no dispute as to the correctness of the statements made in the said affidavit.
In the case of Commissioner of Commercial Taxes, Mysore, Bangalore vs Hindustan Aeronautics Ltd.,(1) this Court construed the 265 correspondence between Railway Board and the respondent assessee, which correspondence to our opinion has a ring of similarity to the terms and conditions of the present transaction, for the manufacture and supply of railway coaches, and the indemnity bond in respect of the contract.
It was held by this Court that the answer to the question whether a contract is a works contract or a contract of sale depends upon the construction of the terms of the contract in the light of surrounding circumstances.
It was held that when all the materials used in the construction of a coach belonged to the Railways there could not be any sale of the coach itself.
It was a pure works contract, and the difference between the price of a coach and the cost of materials being only the cost of service rendered by the assessee.
This Court emphasised that whether the wheel sets and under frames were supplied free of cost or not made no essential difference.
The material and wage escalator and adjustments regarding final price mentioned in the contract were neutral factors.
The facts which should be emphasised in transactions in question with which we are concerned, that the transactions related to the entrustment of the maintenance of the airplanes of the I.A.F. These had to be kept ready for all times to meet all situations.
All avoidable and conceivable delays were planned to be eliminated and in the background of this second factor, it is further to be emphasised that for the bulk of the materials, the Government undertook to supply the spares and materials and it is only in those cases where these materials could not be supplied or provided for by the Government or there was delay, that it was stipulated that these could be procured or manufactured by the contractor within the prices sanctioned by the Government.
and after being procured or manufactured by the contractor, these could not be used for any purpose except in the execution of the jobs entrusted to the contractor.
The contractor had no disposing power or property in these spares and materials.
The fact that these materials were separately placed at cost plus 10% profit were to ensure quick and proper execution of the works and were like the railway coaches ' case neutral factors.
This conclusion is strengthened by the expressions we have extracted from the 1951 Contract itself.
It is manifest in the instant case from the terms of the contracts and transactions, as in the railway coaches case and as was emphasised by Sikri, C.J. that the property in the materials which are used in the execution of the jobs entrusted to the contractor in this case became 266 the property of the Government before it was used.
It is also manifest that there was no possibility of any other materials, to be used for the construction as would be manifest from the affidavit and the correspondence and the invoices, and works orders in these transactions.
Emphasis was placed before the Tribunal as well as before the High Court of Karnataka on the case of State of Gujarat vs Variety Buildings(1) where the court was concerned with the 'bus bodies '.
In the 'bus bodies ' case, the assessee contractor had continued to have the ownership rights and it was held that the 'bus body ' had to be transferred from the contractor to the other party as a result of contract for sale but in the instant case it is manifest that the specified spares and materials were not the properties of the contractor, in the sense that the contractor never had any ownership over these.
The conclusion arrived at by us is in consonance with the principles laid down by this Court in the case of Ram Singh & Sons Engineering Works vs Commissioner of Sales Tax, U.P.(2) For the reasons aforesaid, we are of the opinion that the High Court of Karnataka was not right in its conclusion on the taxability of the turnover of the spares parts and materials supplied in execution of appellant 's job works.
As a result except for the item on canteen sales which is not in dispute before us, these appeals are allowed.
The necessary adjustments in the assessments should be made.
In the facts and circumstances of these cases, the parties will bear their own costs throughout.
S.R. Appeal allowed.
| The appellants being mother and son of one Jagmohan Swarup who was governed by the and who died intestate on June 15, 1967 filed Civil Suit No. 122 of 1970 on the file of the first Additional Civil Judge, Dehradun for a declaration to the effect that they were together entitled to 2/3rd share of the amount due and payable under the insurance policies though the deceased assured has nominated the respondent his widow as the person to whom the amounts were payable.
The respondent contested the suit claiming that she has the absolute right to the amounts to the exclusion of her son and her mother in law.
The suit was dismissed.
The First Appeal before the Dt.
Judge, Dehradun and the Second Appeal before the High Court were dismissed.
Hence the appeal after obtaining special leave of the Court.
Allowing the appeal, the Court, ^ HELD: 1.1 A mere nomination made under Section 39 of the does not have the effect of conferring on the nominee any beneficial interest in the amount payable under the life insurance policy on the death of the accused.
The nomination only indicates the hand which is authorised to receive the amount, on the payment of which the insurer gets a valid discharge of its liability under the policy.
The amount, however, can be claimed by the heirs of the assured in accordance with the law of succession governing them.
[1009G, 1004 B D] 1.2 An analysis of the provisions of Section 39 of the Act clearly established that the policy holder continues to hold interest in the policy during his life time and the nominee acquires no sort of interest in the policy during the life time of the holder.
If that is so, on the death of the policyholder the amount payable under the policy becomes part of his estate which is governed by the law of succession applicable to him.
such succession may be testamentary or intestate.
The tenuous character of the right of a nominee becomes more pronounced when one contrasts the provisions of Section 39 with that of 993 Section 38.
Section 39 of the Act was not intended to act as a third mode of succession provided by the stature and incorrectly styled as "statutory testament" by the Delhi High Court.
[998 C E] 1.3 The language of Section 39 of the Act is neither capable of altering the course of succession under law nor can be said to have equated a nominee to an heir or legatee.
[999F] section Fauza Singh vs Kuldip Singh & Ors.
AIR 1978 Delhi 276; Mrs. Uma Sehgal & Anr.
vs Dwarka Dass Sehgal and Ors.
AIR 1982 Delhi 36; overruled.
Rama Bhallav Dhandhania vs Gangadhar Nathmall AIR 1966 Cal.
275; D. Mohananardu Mudaliar and Anr.
vs Indian Insurance and Banking Corporation Ltd., Salem and Anr. ; Sarojini Amma vs Neelakanta Pillai AIR 1961 Kerala 126, Life Insurance Corporation of India vs United Bank of India Ltd. & Anr. ; Raja Ram vs Mata Prasad and Anr.
AIR 1972 All. 167; Mallidei and Anr.
vs Kanchan Prana Dei AIR 1973 Orissa 83; Lakshmi Amma and Anr.
vs Saguna Bhagathi & Ors.
ILR 1973 Karnataka 827; Atmaram Mohanlal Panchal vs Gunavantiben and Ors.
AIR 1977 Gujarat 134 approved.
Karuppa Gounder & Ors.
vs Palaniammal & Ors.
AIR 1963 Madras 245; B. M. Mundkur vs Life Insurance Corporation of India and Ors.
AIR 1977 Mad. 72, discussed and distinguished.
|
Civil Appeal No. 532 of 1986.
From the Judgment and Order dated 6.9.
1985 of the Punjab and Haryana High Court in R.S.A. No. 1786 of 1985.
B.R. Iyengar and N.K. Agarwala for the Appellants.
Ms. Lilfy Thomas for the Respondents.
The Judgment of the Court was delivered by KANIA, J.
The Appellants before us were the defendants and the two Respondents were the plaintiffs in the Civil Suits Nos. 294 of 1979 and 421 of 1979 respectively, in the court of the learned Sub Judge, Palwal.
Both these suits raised common questions of fact and law and were decided by a common judgment.
We shall refer to the parties by their original descriptions in the suit.
There is no controversy about most of the facts relevant for the disposal of this Appeal.
The plaintiffs are the owners of two houses adjacent to each other and also to the property of the defendants.
The defendants had a structure on their own property.
On the roof of that structure they had made three morries (narrow outlets for the outflow of dirty water).
These morries opened towards the property of the plaintiffs.
In an earlier suit, the defendants had obtained an injunction directing the plaintiffs not to block the flow of dirty water from the said three morries.
The defendants were, however, permitted to fix up pipe lines of a suitable size at their PG NO 738 own costs to receive the said water and carry it to a nali (drain) towards the East of their houses.
The plaintiffs complied with the terms of the decree granting the said injunction.
The defendants then raised the height of the first floor of their structure by three feet and on a part of the terrace over the first floor they constructed two additional storeys.
In raising the height of the roof over the first floor, the defendants blocked the three original morries and opened three new morries on the roof over the first floor and opened six more morries on the respective terraces over the second and third floor in the new construction.
They opened all the morries in such a way that the outflow of water from all the said morries was directed towards the properties of the plaintiffs.
The defendants also constructed new windows which opened towards the houses of the plaintiffs.
The plaintiffs blocked these new windows by raising the height of their respective walls and the defendants claimed the right to break these walls which obstructed the view from their new windows.
On these facts, the plaintiffs filed the said suits in the court of the learned Sub judge praying for a permanent injunction restraining the defendants from using the said new morries and from opening the said windows.
The plaintiffs claimed that the outflow of water from the said morries damaged their properties.
During the course of hearing the suits, there was a spot inspection by a learned Sub Judge in the end of May 1979.
In that inspection, it was noted that there were no signs of the of morries and that six now morries were opened by the defendants on the upper storeys newly constructed by the defendants and that six new windows were also constructed by the defendants on their upper storeys.
The plaintiffs claimed that by closing the old morries, the defendants had lost their right of easement to discharge water through their old morries and, in any event, as six more morries in all were constructed in their building by the defendants they had increased the burden of easement on the properties of the plaintiffs.
The defendants had no right to do this.
The plaintiffs further contended that they were entitled to block the new windows opened by the defendants by raising the height of their walls and that the newly constructed windows had affected their right of privacy.
The learned Sub Judge granted the injunction as prayed for by the plaintiffs.
The defendants filed an appeal which was disposed of by the learned Additional District Judge II, Faridabad.
The learned District Judge in the course of his judgment has pointed out that there is no street or narrow gali between the properties of the plaintiffs and the defendants as appears to have been in existence at the time when the earlier suits where the defendants had secured an injunction as stated earlier, was decided.
He has further pointed out that the nine new PG NO 739 morries opened by the defendants are causing heavy damage and loss to the respective houses of the plaintiffs.
The Second Appeal preferred by the defendants to the High Court of Punjab and Haryana was dismissed in limine.
The present Appeal has been preferred by the defendants against the judgment of the High Court by Special Leave granted under Article 136 of the Constitution.
Mr. Iyenger, learned Counsel for the Appellants, has made two submissions before us.
His first contention was that the owner of an easement was entitled to after the mode and place of enjoying the easement as laid down in Section 23 of the .
The second contention was that the right of privacy cannot be established except by pleading and proof of a customary right which has not been done by the plaintiffs in the present case.
Coming to the first submission, we propose to proceed on the assumption that the defendants had acquired the easement to discharge water from the original roof of his house through the three morries which were previously in existence.
The defendants have, however, not merely altered the position of the said three morries by raising the height of his first storey and the roof thereon but have opened six new morries so that in the place of three old morries, there are at present nine morries in existence.
Now, it is a matter of commonsense that the outflow of water from the nine morries would be larger than the outflow of water from the three old morries and hence, it must be held that the burden of the easement has been increased by the action of the defendants.
Section 23 of the on which reliance was placed by Mr. Iyenger, in terms, provides that the dominant owner may, from time to time, alter the mode and place of enjoying the easement provided that he does not thereby impose any additional burden on the servant heritage.
In the present Appeal before us, as additional burden on the property of the plaintiffs has been imposed by the action of the defendants, the provisions of the said section cannot come to the aid of the defendants.
It was then contended by learned Counsel that, in any event, three of these morries, namely, on the roof of the first floor, which has been raised by three feet should be directed to be unobstructed because the burden of the easement could not be said to be increased by the same.
There is no basis for granting such relief.
The original three morries are no longer in existence and out of nine morries opened by the defendants, it is not possible to earmark any three morries as exactly corresponding to the old morries, It was for the dafendants, if so advised, to have taken the plea that the three ,on the roof of the first storey merely constitute a change in the or place of enjoyment of the easement which the defendants PG NO 740 had.
The defendants have, however, not done any such thing and hence we find that the question, as to whether the three morries on the roof of the first floor would not add to the burden of easement and could be said to be only corresponding to the three old morries, has not been considered by the courts below.
It is not open to the defendants to raise such an issue at this stage.
Moreover, permitting the defendants to take up such a plea would involve remanding the case for further evidence.
In the present case, the conduct of the defendants in opening nine morries in the place of three morries and there by damaging the properties of the plaintiffs is such that no discretion need be exercised in their favour.
In fact, in our view, the conduct of the defendants is such that no interference is called for at their instance in an Appeal by Special Leave granted under Article 136 of the Constitution.
Apart from what we have stated earlier, as pointed out by the learned Additional District Judge in his judgment, when the defendants raised the height of the first floor and put up additional construction on a part of the terrace of the first floor, it was quite possible for them to make arrangements to take the water from their morries by pipe lines towards the East of their house so that it could be discharged in the drain or a nali on that side.
Instead of doing this, the defendants have opened nine morries as stated aforesaid towards the houses of the plaintiffs and caused damage to those houses.
There is, therefore, no reason why the discretionary jurisdiction under Article 136, should be exercised to help such parties Mr. Iyenger drew our attention to the decision in Harve vs Walters and two other decisions.
The ratio of these decisions are of no application to the present case before us because in these cases, it was found that by the alteration of the mode or place of enjoyment of easement, the burden on the servient heritage was not increased whereas, as pointed out earlier, that is not the situation in the case before us.
As far as the question of opening of new windows is concerned, it is open to the defendants to use their property in any manner permitted by law; and hence they cannot be restrained from opening new windows, as no customary right of privacy appears to have been pleaded or proved.
This position is not disputed by the plaintiffs.
It is, however, equally clear that, if the defendants open any new windows, the plaintiffs are fully entitled to block the same by raising the height of the walls and the defendants are not entitled to break or damage the said walls or any PG NO 741 portion thereof so as to remove the obstruction to their new windows.
In the result, the Appeal is dismissed, save and except, that the injuction against the defendants restraining them from opening new windows is vacated and is substituted by an injunction restraining the defendants from breaking or in any manner damaging or interfering with any of the walls put up by the plaintiffs or which may be put up here after by the plaintiffs on their respective properties to block the new windows opened by the defendants.
As far as the miscellaneous Petitions are concerned, there will be no order on the Contempt Petition.
The interim stay granted by this Court shall stand vacated.
There will be no order as to costs in these petitions.
The Appellants (defendants) shall Pay to the Respondents (plaintiffs) the costs of the Appeal.
R.S.S. Appeal dismissed.
| A dispute over the completion of construction work under a contract led to the litigation between the appellant and the respondent company.
However, during the pendency of the proceedings in the High Court, the parties agreed to settle the dispute through arbitration.
The Arbitrators gave their award in favour of the respondent company on the ground that the appellant had committed breach of contract and was also guilty of wrongful revocation of the agreement.
The award did not contain any reason as to why and how the Arbitrators had arrived at the sum awarded.
The appellant filed objection to the respondent 's application for making the award Rule of the Court on the ground inter alia that (i) no reasons had been given for the award, (ii) the award being ambiguous showed non application of mind, and (iii) the amount of interest awarded was unjustified.
The learned District Judge allowed the objection and set aside the award on the ground of ambiguity and non statement of reasons.
The High Court, however, allowed the respondent 's appeal and also directed payment of interest for the period during which the arbitration proceedings were pending.
Before this Court it was urged that, because the question whether on the ground of absence of reasons the award is bad per se is pending consideration by a Constitution Bench of this Court, the present case should await adjudication on this point by the Constitution Bench.
Disposing of the appeal, it was, HELD: (1) One of the cardinal principles of the administration of justice is to ensure quick disposal of PG NO 441 PG NO 442 disputes in accordance with law, justice and equity.
Justice between the parties in a particular case should not be in suspended animation.
[445B C, G] (2) Interests of justice and administration of justice would not be served by keeping at bay final adjudication of the controversy in this case on the plea that the question whether an unreasoned award is bad or not, is pending adjudication by a larger Bench.
[445E F] (3) It is not known whether the decision of this Court would have prospective application only in view of the long settled position of law on this aspect in this country or not.
[445G] (4) The law as it stands today is clear that unless there is an error of law apparent on the face of the award, the award cannot be challenged merely on the ground of absence of reasons.
This is settled law by a long series of decisions.
[445E] (5) An award is not invalid merely because by a process of inference and argument it may be demonstrated that the arbitrator had committed some mistake in arriving at some conclusion.
[446B] (6) It is not open to the Court to speculate, where no reasons are given by the arbitrator, as to what impelled the arbitrator to arrive at his conclusions.
[446C] Jivarajbhai Ujamshi Sheth vs Chintamanrao Balaji & Ors., ; , referred to.
(7) It is an error of law apparent on the face of it and not a mistake of fact which could be the ground for challenging the award.
[446F] Union of India vs Bungo Steel Furniture P. Ltd., ; and Allen Berry & Co. P. Ltd. vs Union of India, ; , referred to.
In the present case the arbitrator gave no reasons for the award.
There is no legal proposition which is the basis of the award, far less any legal proposition which is erroneous.
And there is no allegation of any misconduct in the proceedings.
[446E F] (9) The award of interest pendente lite in this case was in violation of the principles enunciated by this Court.
[447B] PG NO 443 Executive Engineer (Irrigation) Balimela vs Abhaduta Jena, [1988] 1 SCC 418, followed.
Food Corporation of India vs M/s. Surendra Devendra & Mohendra Transport Co., [1988] 1 SCC 57, explained.
|
iminal Appeal No. 51 of 1959.
Appeal by special leave from the judgment and order dated May 16, 1958, of the Calcutta High Court in Criminal Appeal No. 2 of 1958.
A. section B. Chari, K. C. Jain and B. P. Maheshwari, for the appellant.
N. C. Chatterjee, H. R. Khanna and D. Gupta, for respondent.
April 19.
The Judgment of the Court was delivered by RAGHUBAR DAYAL, J.
This appeal, by special leave, is from the order of the Calcutta High Court dated May 16, 1958, summarily dismissing the appeal of the appellant from the order of the learned Single Judge of the High Court convicting him on jury trial of offences under section 120 B read with section 471, Indian Penal Code, and on two counts under section 471 read with section 466, Indian Penal Code, with respect to two documents.
L. N. Kalyanam, who was also tried at the same trial and convicted of the offences under section 120 B read with section 471, Indian Penal Code, two counts under section 466, Indian Penal Code, and of the offence under section 109, read with section 471, Indian Penal Code, did not appeal against his conviction.
The brief facts of the prosecution case are that the appellant Purushottamdas Dalmia was one of the partners of the firm known as Laxminarayan Gourishankar which had its head office at Gaya and branch at Calcutta.
The Calcutta branch was located at 19, 103 Sambhu Mallick Lane.
On April 26, 1952, the appellant applied for a licence for importing rupees one crore worth of art silk yarn.
On May 2, 1952, the Joint Chief Controller of Imports, Calcutta, issued a provisional licence.
In accordance with the rules, this licence was to be got confirmed within two months by the Deputy or Chief Controller of Imports and on such confirmation it was to be valid for a period of one year.
The licence was to be treated as cancelled in case it was not got confirmed within two months of the date of issue.
This provisional licence was not confirmed within two months.
The appellant was duly informed of the refusal to confirm the licence.
The appellant 's appeal against the refusal to confirm the licence was dismissed in September 1952.
The provisional licences issued were returned to the appellant.
The letter communicating the dismissal of the appeal and the return of the licence was issued from the office of the Joint Chief Controller of Imports on September 26, 1952.
The letter dated September 29, 1952, from the office of the Chief Controller of Imports, New Delhi, informed the appellant with reference to the letter dated September 4, 1952, that instructions had been issued to the Joint Chief Controller of Imports and Exports, Calcutta, for re consideration of such cases and that he was advised to contact that authority for further action in the matter.
The appellant rightly, did not appear to take this letter to mean that the order of rejection of his appeal was still under further consideration.
He did not take any steps to contact the Joint Chief Controller of Imports and Exports on the basis of this letter.
Instead, he applied on October 7, 1952, for the return of correspondence.
That correspondence was returned to him on October 9, 1952.
Nothing happened up to March 31, 1953, on which date the appellant wrote to the Chief Controller of Imports, New Delhi, a long letter expressing his grievance at the action of the Joint Chief Controller of Imports and Exports, Calcutta, and requesting for a sympathetic decision.
The Chief Controller of Imports and Exports, by his letter dated April 20,1953, informed the 104 appellant that the order of the Joint Chief Controller of Imports and Exports could not be revised for the reasons mentioned in that letter.
This letter gave the wrong number of the appellant 's firm.
It mentioned its number as '16 ' instead of the correct number '19 '.
In other respects the address of this letter was correct.
The appellant states that he did not receive this letter.
In August 1953, the appellant met Kalyanam at Calcutta.
Kalyanam told the appellant that he could get the licence validated through the good offices of one of his acquaintances, Rajan by name, at Delhi.
Both these persons came to Delhi in August, 1953, and visited Rajan.
The appellant made over the file containing the licences to Kalyanam who in his turn made over the same to Rajan.
Two or three days later Kalyanam returned the licences containing the alleged forged endorsements to the appellant.
The forged endorsements related to the confirmation of the licence and its re validation till May 2, 1954.
The confirmation endorsement was purported to be dated July 2, 1952, and the re validating one purported to be dated April 25, 1953.
Thereafter, orders were placed on the basis of the re validated licence and when the goods arrived attempt was made to clear them at Madras.
The clearing office at Madras suspected the genuineness of the confirmation and re validating endorsements and finding the suspicion confirmed, made over the matter to the Police.
As a result of the investigation and preliminary enquiry, the appellant and Kalyanam were committed to the High Court for trial.
Eight charges were framed.
The first charge related to the criminal conspiracy between the two accused and was as follows: "That the said (1) Purushottamdas Dalmia and (2) L. N. Kalyanam along with the person or persons name or names unknown between the months of April and December one thousand nine hundred and fifty three at Calcutta, Howrah, Delhi, Madras and other places were parties to a criminal conspiracy to commit an offence punishable with rigorous imprisonment for two years or upwards, to wit, an 105 offence of forgery by certificate or endorsement of confirmation and an endorsement of validation of the Import Trade Control Licence being licence No. 331913/48 (the Exchange Control Copy whereof is Ext.
5 and the Customs Copy whereof is Ext.
6) purporting to be made by public servant, to wit, the officers and staff of the Chief Controller of Imports and Exports and/or the offence of fraudulently or dishonestly using the aforesaid licence containing the aforesaid forged certificates and endorsements as to the confirmation and validation thereof knowing or having reason to believe the same to be forged documents and thereby they the said (1) Purushottamdas Dalmia and (2) L. N. Kalyanam committed an offence punishable under Sectionl2O B read with section 466 and/or section 471 read with section 466 of the Indian Penal Code within the cognizance of this Court.
" Charges Nos. 2, 3 and 4 were with respect to the false endorsements on the copy of the licence Ext.
The second charge was under section 466, Indian Penal Code, against Kalyanam alone and charges Nos. 3 and 4 were against the appellant for abetting the offence of forgery by Kalyanam and of using the forged document as genuine.
Charges 5, 6 and 7 related to corresponding matters with respect to the licence copy Ext.
The eighth charge was against Kalyanam alone and was for his abetting the appellant in his committing the offence of fraudulently and dishonestly using as genuine the Customs Copy of the said licence, Ext.
The jury returned a verdict of 'not guilty ' with respect to charges Nos. 3 and 6 and also with respect to the charge of conspiracy under section 120 B read with section 466, Indian Penal Code.
The jury returned a verdict of 'guilty ' against the appellant on the charge of conspiracy under section 120 B read with section 471, Indian Penal Code and the other charges Nos. 4 and 7.
It is not disputed, and cannot be disputed, that forgeries were committed in the two documents Exts.
5 and 6.
The following points were raised by learned counsel for the appellant: 14 106 (i) The offences of using the forged documents as ,genuine were committed at Madras and therefore the Courts at Calcutta had no jurisdiction to try these offences under section 471 read with section 466, Indian Penal Code.
(ii) Alternative conspiracies could not be charged as they must be the result of different agreements between the conspirators.
(iii) The learned Judge misdirected the jury in putting certain matters before it in the form he had done.
The chief criticisms in this connection were that (a) the accused must have known from the ante dating of the confirmation endorsement that the re validation of the licence was a forgery; (b) even if the proper officer of the Department had signed the re validation, it would still be a forgery when it was ante dated; (c) the letter of the Chief Controller of Imports and Exports dated April 20, 1953, though wrongly addressed, must have reached the appellant; (d) the learned Judge expressed his opinions strongly and this could have unduly affected the mind of the jury and forced it to come to the same conclusions.
The jurisdiction of the Calcutta High Court to try an offence of criminal conspiracy under section 120 B, Indian Penal Code, is not disputed.
It is also not disputed that the overt acts committed in pursuance of the conspiracy were committed in the course of the same transaction which embraced the conspiracy and the acts done under it.
It is however contended for the appellant, in view of section 177 of the Code of Criminal Procedure, that the Court having jurisdiction to try the offence of conspiracy cannot try an offence constituted by such overt acts which are committed beyond its jurisdiction and reliance is placed on the decision in Jiban Banerjee vs State (1).
This case undoubtedly supports the appellant 's contention.
We have considered it carefully and are of Opinion that it has not been rightly decided.
The desirability of the trial, together, of an offence of criminal conspiracy and of all the overt acts committed in pursuance of it, is obvious.
To establish the offence of criminal conspiracy, evidence of the (1) A.I.R. 1959 Cal.
107 overt acts must be given by the prosecution.
Such evidence will be necessarily tested by cross examination on behalf of the accused.
The Court will have to come to a decision about the credibility of such evidence and, on the basis of such evidence, would determine, whether the offence of criminal conspiracy has been established or not.
Having done all this, the Court could also very conveniently record a finding of 'guilty ' or 'not guilty ' with respect to the accused said to have actually committed the various overt acts.
If some of the overt acts were committed outside the jurisdiction of the Court trying the offence of criminal conspiracy and if the law be that such overt acts could not be tried by that Court, it would mean that either the prosecution is forced to give up its right of prosecuting those accused for the commission of those overt acts or that both the prosecution and the accused are put to unnecessary trouble inasmuch as the prosecution will have to produce the same evidence a second time and the accused will have to test the credibility of that evidence a second time.
The time of another Court will be again spent a second time in determining the same question.
There would be the risk of the second Court coming to a different conclusion from that of the first Court.
It may also be possible to urge in the second Court that it is not competent to come to a different conclusion in view of what has been said by this Court in Pritam Singh vs The State of Punjab (1): "The acquittal of Pritam Singh Lohara of that charge was tantamount to a finding that the prosecution had failed to establish the possession of the revolver exhibit P 56 by him.
The possession of that revolver was a fact in issue which had to be established by the prosecution before he could be convicted of the offence with which he had been charged.
That fact was found against the prosecution and having regard to the observations of Lord Mac Dermoidal quoted above, could not be proved against Pritam Singh Lohara.
in any further proceedings between the Crown and him." (1) A.I.R. 1956 section C. 415, 422. 108 In these circumstances, unless the provisions of the Code of Criminal Procedure admit of no other construction than the one placed upon them by the Calcutta High Court, they should be construed to give jurisdiction to the Court trying the offence of criminal conspiracy to try all the overt acts committed in pursuance of that conspiracy.
We do not find any compelling reasons in support of the view expressed by the Calcutta High Court.
It is true that the Legislature treats with importance the jurisdiction of Courts for the trial of offences.
Jurisdiction of Courts is of two kinds.
One type of jurisdiction deals with respect to the power of the Courts to try particular kinds of offences.
That is a jurisdiction which goes to the root of the matter and if a Court not empowered to try a particular offence does try it, the entire trial is void.
The other jurisdiction is what may be called territorial jurisdiction.
Similar importance is not attached to it.
This is clear from the provisions of sections 178, 188, 197(2) and 531, Criminal Procedure Code.
Section 531 provides that: "No finding, sentence or order of any Criminal Court shall be set aside merely on the ground that the inquiry, trial or other proceeding in the course of which it was arrived at or passed, took place in a wrong sessions division, district, sub division or other local area, unless it appears that such error has in fact occasioned a failure of justice.
" The reason for such a difference in the result of a case being tried by a Court not competent to try the offence and by a Court competent to try the offence but having no territorial jurisdiction over the area where the offence was committed is understandable.
The power to try offences is conferred on all Courts according to the view the Legislature holds with respect to the capability and responsibility of those Courts.
The higher the capability and the sense of responsibility, the larger is the jurisdiction of those Courts over the various offences.
Territorial jurisdiction is provided just as a matter of convenience, keeping in mind the administrative point of view with respect to the work of a particular Court, the convenience of the accused 109 who will have to meet the charge levelled againt him and the convenience of the witnesses who have to appear before the Court.
It is therefore that it is provided in section 177 that an offence would ordinarily be tried by a Court within the local limits of whose jurisdiction it is committed.
It was said in Assistant Sessions Judge, North Arcot vs Ramaswami Asari (1): "The scheme of chapter XV, sub chapter (A) in which sections 177 to 189 appear, seems to me to be intended to enlarge as much as possible the ambit of the sites in which the trial of an offence might be held and to minimise as much as possible the inconvenience which would be caused to the prosecution, by the success of a technical plea that the offence was not committed within the local limits of the jurisdiction of the trying Court.
" It is further significant to notice the difference in the language of section 177 and section 233.
Section 177 simply says that ordinarily every offence would be tried by a Court within the local limits of whose jurisdiction it was committed.
It does not say that it would be tried by such Court except in the cases mentioned in sections 179 to 185 and 188 or in cases specially provided by any other provision of law.
It leaves the place of trial open.
Its provisions are not peremptory.
There is no reason why the provisions of sections 233 to 239 may not also provide exceptions to section 177, if they do permit the trial of a particular offence along with others in one Court.
On the other hand, section 233, dealing with the trial of offences, reads: "For every distinct offence of which any person is accused there shall be a separate charge, and every such charge shall be tried separately, except in the cases mentioned in sections 234, 235, 236 and 239.
" The language is very peremptory.
There is a clear direction that there should be a separate charge for every distinct offence and that any deviation from such a course would be only in cases mentioned in sections 234, 235, 236 and 239.
It is true that it is not stated in express terms (1) Mad, 779, 782, 110 either in section 235 or section 239, that their provisions would justify the joint trial of offences or of persons mentioned therein in a Court irrespective of the fact whether the offences to be tried were committed within the jurisdiction of that particular Court or not.
But such, in our opinion, should be the interpretation of the provisions in these two sections.
The sections do not expressly state that all such offences which can be charged and tried together or for which various per.
sons can be charged and tried together must take place within the jurisdiction of the Court trying them.
The provisions are in general terms.
Sub sections (1) to (3) of section 235 provide for the offences being charged with and tried at one trial and therefore provide for the trial of those offences at one trial in any Court which has jurisdiction over any of the offences committed in the course of the same transaction.
The illustrations to section 235 also make no reference to the places where the offences were committed.
In particular, illustration (c) can apply even when the offences referred to therein were committed at places within the territorial jurisdiction of different Courts.
Similarly, section 239 provides for the various persons being charged and tried together for the same offence com mitted in the course of the same transaction are accused of different offences committed in the course of the same transaction.
Such offences or persons would not be tried together if some of the offences are committed by some of them outside the jurisdiction of the Court which can try the other offences, if the contention for the appellant be accepted and that would amount to providing, by construction.
an exception for these sections.
As sections 235 and 239 of the Code are enabling sections, the legislature, rightly, did.
not use the expression which would have made it incumbent on the Court to try a person of the various offences at one trial or to try various persons for the different offences committed in the course of the same transaction together.
The omission to make such peremptory provision does not necessarily indicate the intention of the legislature that the Court having jurisdiction to try certain offences cannot try an offence committed 111 in the course of the same transaction, but beyond its jurisdiction.
No definite conclusion about the approval of the legislature to the interpretation put on the provisions of sections 235 and 239, Criminal Procedure Code, by the Calcutta High Court in Bisseswar vs Emperor (1) or by the Madras High Court in In re: Dani (2) and in Sachidanandam vs Gopala Ayyangar (3) can be arrived at when it is found that there had been some cases which expressed the contrary view.
The case law having a bearing on the question under determination is, however, meagre.
In Gurdit Singh vs Emperor (4) the conspiracy to murder a person was entered into in the district of Montgomery in Punjab and the attempt to murder that person in pursuance of that conspiracy was made within the jurisdiction of the Magistrate at Roorkee in the United Provinces.
Broadway,.
J., said: "It appears that, rightly or wrongly, an allegation has been made that the abetment by conspiracy or by instigation took place, in the Montgomery District, and that, therefore, the case can be tried either at Roorkee or in Montgomery.
Section 180, Criminal Procedure Code, is clear on this point and no further discussion is needed.
" In In re: Govindaswami (5) a person murdered A and B, one after the other, in the same night.
The houses of A and B were divided by a street which formed the boundary between two districts.
The accused was sent up for trial for the murders of A and B to the various Courts having Jurisdiction to try the offences of the murder of A and of the murder of B.
The learned Judges said: "There is a further aspect of the case on which we would like to make some observations.
These two cases of alleged murder by the same appellant one after the other that same night brought as they were into the same confession should obviously have been tried by one and the same (1) A I.R. (2) A.I.R. 1936 Mad.
(3) Mad.
991, 994.
(4) 517.
(5) A I. R. 1953 Mad 372, 373.
112 Sessions Judge.
The street between the houses of Govindan Servai and Malayappa Konan appears however to have been a boundary between the districts of Tiruchirapalli and Tanjore and one murder was committed in the jurisdiction of the Sessions division of Tiruchirapalli and the other in the jurisdiction of the Sessions division of Tanjore.
This appears to have been the only reason why two separate charge sheets were laid in respect of these murders.
The learned Public Prosecutor agrees that there was no impediment to the two murders being tried together under section 234(1), Cr. P. C., and it is indeed obvious that one Court should have dealt with both these murders.
" The two cases could not be tried by any one of the two Sessions Courts if the provisions of section 234, Criminal Procedure Code, were subject to the provisions of sections 177 to 188 with respect to the territorial jurisdiction of Criminal Courts.
In Sachidanandam vs Gopala Ayyangar (1) Odgers, J., relying on the case reported as Bisseswar vs Emperor (2) held that unless the abetment of an offence took place within its territorial jurisdiction, a Court could not avail itself of the provisions of section 239 to try such abetment along with the principal offers.
He observed: "I am doubtful about the matter, I must say; but giving the best consideration I can to it, and with this expression of opinion of the Calcutta High Court, I am inclined to think that jurisdiction, being the foundation of the charge, is to be imported or understood as present in all the subsequent procedure set out in the Code; and if that is so, it clearly must govern section 239." The approval of the Legislature of a particular construction put on the provisions of an Act on account of its making no alteration in those provisions is presumed only when there had been a consistent series of cases putting a certain construction on certain provisions.
(1) Mad.
991, 994 (2) A.I.R. 1924 Cal.
113 Lastly, an implied support to the view we are inclined to take is to be obtained from the observations of the Judicial Committee in Babulal Choukhani vs The King Emperor ( 1): "Nor is there any limit of number of offences specified in section 239(d).
The one and only limitation there is that the accusation should be of offences 'committed in the course of the same transaction '.
Whatever scope of connotation may be included in the words 'the same transaction ', it is enough for the present case to say that if several persons conspire to commit offences, and commit overt acts in pursuance of the conspiracy (a, circumstance which makes the act of one the act of each and all the conspirators), these acts are committed in the course of the same transaction, which embraces the conspiracy and the acts done under it.
The common concert and agreement which constitute the conspiracy serve to unify the acts done in pursuance of it.
,, This indicates that the only limitation on the jurisdiction of the court to charge and try together various persons in pursuance of the provisions of cl.
(a) of section 239, Criminal Procedure Code, is that the accusation against those persons should be of offences committed in the course of the same transaction.
It cannot be disputed that the accusation against the accused with respect to the overt acts committed by them in pursuance of a conspiracy is with respect to offences committed in the course of the same transaction and that therefore persons accused of these offences can be tried together at one trial in pursuance of the provisions of el.
(a) of section 239.
We therefore hold that the Calcutta Court had jurisdiction to try the appellant of the offences under section 471 read with section 466, Indian Penal Code, even though those offences, in pursuance of the conspiracy, were committed at Madras.
The second contention for the appellant is really to the effect that the appellant was charged with two conspiracies in the alternative and that such a charge (1) (1938) L.R. 65 I.A. 158,175, 176.
15 114 is unwarranted by law.
This, however, is not the correct interpretation of the charge of conspiracy framed against the appellant.
The charge was one of conspiracy, it being a conspiracy to commit an offence punishable with rigorous imprisonment for two years or upwards.
The particular offence to be committed was described in the alternative.
One was to commit an offence of forgery and to use the forged document and the other was the offence of fraudulently or dishonestly using the licence containing the forged certificates and endorsements.
The expression 'and/or ' in the first charge simply meant that the offences they had conspired to commit consisted either of the offence to commit forgery and subsequently to use the forged document as genuine or the object was merely to use the licence with forged endorsements even though there was not any conspiracy to commit forgeries in the licences.
In other words, the charge was that the appellant and Kalyanam entered into a conspiracy to commit offences punishable with rigorous imprisonment for two years or upwards and that the offences contemplated to include the offence of using the licence with forged endorsements and may also include the offence of forging the licence.
Thus there was no case of two alternative conspiracies.
The conspiracy was one and it being doubtful what the facts proved would establish about the nature of offences to be committed by the conspirators, the charge illustrated the offence in this form.
In his charge to the jury the learned Judge said at page 14: "In this case from the circumstances, it may not be very clear whether they actually made an agreement among themselves to do or cause to be done forgery of the document or whether they merely agreed to use it as a genuine document knowing that it was a forged document.
Therefore, the charge is in the alternative that either they agreed among themselves to do or cause to be done the forgery of this document or rather, the forgery of the endorsements of confirmation or revalidation; or in the alternative, they agreed among themselves regarding user of such a forged document knowing 115 that it is forged.
So both and/or ' is mentioned in the charge, either they agreed to commit forgery or they agreed to use it knowing it is forged or they agreed to do both, both to commit forgery and use it knowing it to be a forged document.
" Such a charge is justified by the provisions of section 236 of the Code.
We are therefore of the opinion that the charge of conspiracy does not suffer from any illegality.
We have carefully considered all that has been said in connection with the alleged misdirections in the charge to the jury and are of opinion that the charge does not suffer from this defect.
The Judge has at places expressed in unequivocal language what appears to him to be the effect of certain pieces of evidence.
But that, in our opinion, has not been in such a setting that it be held that the jury must have felt bound to find in accordance with that opinion.
The Judge has, at various places, stated that the jury was not bound by his opinion, that it had to come to its own conclusion on questions of fact and that it was the function of the jury to decide all questions of fact.
There is nothing wrong in telling the jury that even if the endorsements had been made by the proper departmental officer and they were ante dated, forgery would have been committed.
That is the correct proposition of law.
The ante dated document would be a false document.
Knowledge of ante dating the endorsements, naturally conveyed knowledge of the commission of forgery.
The mistake in the letter dated April 20, 1953, from the Chief Controller of Imports and Exports, is not such as to lead to the conclusion that the letter could not have been delivered to the proper addressee.
The appellant 's firm is located at 19, Sambhu Mallick Road and the address of this letter gave the number as 16.
Shop No. 16 could not have been at much distance from Shop No. 19.
The postman delivering letters at the two shops must be the same.
Postmen get to know the regular addressees by their names and ordinarily locate them even if there be some slight error or even omission in the address.
The letter 116 addressed to the appellant 's firm is not proved to have returned to the dead letter office or to the Chief Con troller of Imports and Exports.
If it was delivered by the postman at the Shop No. 16, ordinary courtesy requires that shop would have sent over the letter to the neighboring Shop No. 19.
The appellant 's conduct in not taking any action to find out what was the result of his representation to the Chief Controller of Imports and Exports is consistent with the view that he did receive the reply of the Chief Controller of Imports and Exports.
In the circumstances, an expression of opinion that the letter would have reached the appellant cannot be said to amount to a misdirection.
The learned Judge is perfectly justified to ask the jury to take into consideration the probabilities of a case, where no definite evidence, in connection with an incidental matter, exists.
We do not consider that the contentions raised do amount to misdirections.
In view of the above, we, see no force in this appeal and accordingly dismiss it.
Appeal dismissed.
| The petitioners, representing certain tile factories, challenged the validity of the , as also the notification issued by the Kerala Government prescribing minimum rates of wages in respect of employment in the tile industry on the report of a committee constituted under the Act and consisting of the representatives both of the employers and employees who agreed with its recommendations.
The case of the petitioners was that the notification had in effect fixed not minimum wages but fair wages and since neither the committee nor the Government in fixing them had considered the capacity of the employers to pay, the notification was void.
Held, that in view of the decisions of this Court the con stitutional validity of the Act could no longer be in doubt and any hardship that may be caused to employers by the wages fixed under the Act or their incapacity to pay the same are irrelevant considerations in fixing such wages.
947 The Edward Mills Co. Ltd. vs The State of Ajmer, ; , Bijay Cotton Mills Ltd. vs State of Ajmer, ; and M/s. Crown Aluminium Works vs Their Workmen; , , referred to.
While, therefore, in fixing the minimum wage nothing can be added to its components that may take it near the lower level of the fair wage, the minimum wage must ensure not only the sustenance of the employee and his family but also preserve his efficiency as a worker and that is what is contemplated by the Act.
It is an error to think that the minimum wage is just what a worker requires to cover his physical needs and to keep himself above starvation.
There can be no analogy between the which prescribes the economic and industrial minimum and a statute which prescribes its own minimum that approximates more or less to the fair wage standard and so makes it necessary to consider the employer 's capacity to pay.
Express Newspapers (P.) Ltd. vs The Union of India, , explained and distinguished.
This Court would ordinarily refuse to consider the merits of the wage structure set up by the Notification on the recommendations of the committee, agreed to by the representatives of the employers and the employees.
The fact that wages paid in other industries in the State or in other States in comparable concerns are lower does not necessarily show that the rates prescribed by the Notification are unduly high.
A notification under the Act must apply to all the factories in the State and the State cannot permit or be associated with a departure from it for that would amount to a contravention of SS. 22 and 25 of the Act.
If a departure is considered necessary, the proper course would be to withdraw the notification in respect of the area concerned or to reconsider and modify it if necessary.
|
Appeal No. 848 of 1971.
Appeal by special leave from the judgment and order dated December 7, 1970 of the Delhi High Court in S.A.O. No. 110 D of 1966, Hardev Singh, K. P. Kapur and H. L. Kapur, for the appel lant.
S.K. Mehta, K. L. Mehta and K. R. Nagaraja, for the res pondent.
936 The Judgment of the Court was delivered by Vaidialingam, J.
In this appeal, Mr. Hardev Singh, learned counsel on behalf of the tenant appellant, challenges the judgment and order dated December 7, 1970 of the Delhi High Court in S.A.O. No. 110 D of 1966.
Special leave has been granted by this Court limited to the question whether the High Court was justified, in view of section 39(2) of the Delhi Rent Control Act, 1958 (hereinafter called the Act) in setting aside the decisions of the two subordinate authorities, dismissing the application filed by the respondent landlord for evicting the appellant.
The facts leading up to this appeal may be briefly stated.
The appellant took on lease, the first floor of the premises in question from the respondent on January 22, 1964 on a monthly rent of Rs. 250.
The respondent who was the owner of the entire premises was then occupying the ground floor.
The landlord filed an application, before the Rent Controller on November 26.1964 for eviction of the appellant from the portion in his occupation as lessee, on two grounds; (a) that the tenant has sub let a part of the premises, and (b) that he required the premises bona fide for his occupation as a residence himself and his family members.
The latter claim was based under cl.
(e) of the proviso to sub section (1) of section 14 of the Act, which is as follows: "that the premises let for residential purposes are required bona fide by the landlord for occupation as a residence for himself or for any member of his family dependent on him, if he is the owner thereof, or for any person for whose benefit the premises are held and that the landlord or such person has no other reasonably suitable residential accommodation;" The tenant opposed the claim of the landlord on both the grounds.
He denied the allegation of sub letting.
He also contended that the landlord 's requirement for his occupation was not bonafide.
The tenant 's plea was that the portion of the premises in his occupation was sufficient for his purpose.
The Rent Controller accepted the plea of the tenant that there was no subletting.
He also accepted his plea that the requirement of the landlord for his occupation was not bona fide.
On these findings, the landlord 's application was dismissed.
These two findings were also confirmed in the appeal filed by the landlord before the Rent Control Tribunal.
The question.
regarding sub letting, having been decided against the landlord by both the Tribunals, no longer survives and it was also not agitated before the High Court.
It may be stated at this stage that the findings of both the tribunals on the question of bonafide requirement were recorded against the landlord, on the sole ground that the landlord must 937 have foreseen his requirement for additional accommodation even at the time when he let out a part of the premises on January 22, 1964 to the appellant and therefore he was not entitled to ask for eviction under cl.
(e) of the proviso to sub section (1) of section 14 of the Act.
It is the view of both the Tribunals that when eviction is asked for within about I I months of the letting, the claim of the landlord cannot be considered to be bonafide.
The landlord carried the matter in appeal before the High Court under section 39 of the Act.
That section runs as follows : "39(1) Subject to the provisions of sub section (2), an appeal shall lie to the High Court from an order made by the Tribunal within sixty days from the date of such order ; Provided that the High Court may entertain the appeal after the expiry of the said period of sixty days, if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal in time.
(2)No appeal shall lie under sub section (1), unless the appeal involves some substantial question of law.
Before the High Court, counsel for both parties made a representation that the Rent Control Tribunal has not recorded a finding on the question whether the premises avaiable with the landlord can be considered to be "reasonably suitable residential accommodation" as contemplated by cl.
(e) of the proviso to section 14 (1).
Hence they made a joint request to remand the case to the Tribunal for a finding on the said question on the basis of the evidence already on record.
Accepting this joint request, the learned Judge remanded the case to the Tribunal.
The latter, after a consideration of the materials on record as well as the extent of the premises in the occupation of the landlord and also having due regard to the number of family members living with the latter, held, in his report dated May 4, 1970, that the portion of the premises in the occupation of the landlord was not reaso nably sufficient for a family consisting of the landlord, his wife, his son, son 's wife and their children.
On this basis, he recorded a finding that the premises in the occupation of the respondent were not reasonably suitable for his residence.
So far as we could see, the correctness of these findings recorded by the Rent Control Tribunal, in favour of the landlord, do not appear to have been challenged by the tenant before the High Court when the appeal came up for final hearing.
On the other band, we find that the same contentions that were raised regarding the bonafide requirement of the landlord and which found 938 acceptance at the hands of the Rent Controller and the Tribunal before remand were again raised by the tenant appellant before the High Court.
That is, in short, the appellant herein was contesting before the High Court, the appeal of the landlord, ignoring the findings of the Tribunal dated May 4, 1970.
The main point that was urged by the appellant before the High Court was that as the two subordinate Tribunals have recorded concurrent findings negativing the claim of the landlord regarding his bonafide requirement of the premises, the appeal filed by the landlord did not involve any substantial question of law.
On this basis the appellant pressed for the dismissal of the landlord 's appeal.
On the other hand, the respondent urged that both the subordinate Tribunals have not properly considered the question of the landlord 's requirement; and that the findings recorded against him were on irrelevant consideration.
According to the landlord the various material factors which have to be taken into account for adjudicating upon such a claim, have not been properly borne in mind by both the Tribunals.
Quite naturally the landlord placed considerable reliance on the findings recorded on May 4, 1970 in his favour by the Tribunal.
The High Court rejected the contention of the appellant that it has no jurisdiction to consider the correctness of the findings.
recorded by the two subordinate authorities especially when the relevant matters to be taken into account for deciding such a question have not been borne in mind by those authorities.
The High Court is of the view that the rejection by the Rent Controller and the Tribunal of the claim of the landlord on the sole ground that he should have anticipated his requirement for the, next 10 or II months when he let out the premises on lease on January 22, 1964, was erroneous.
The High Court has further observed that none of the subordinate authorities have held that after letting out the premises on January 22, 1964 and before filing the application for eviction on November 26, 1964, the landlord has made any demand from the tenant for payment of higher rent.
Finally, the High Court having due regard to the above circumstances and the size of the family of the landlord and the findings recorded by the Tribunal on May 4, 1970 held that the, decision of the two subordinate authorities dismissing the landlord 's application was erroneous.
On the other hand, the learned Judge held that the landlord has made out his claim under cl.
(e) of the proviso to section 14(1) of the Act.
On this reasoning the learned Judge reversed the decision of the Rent Controller and the Tribunal and allowed the application of the landlord for eviction of the appellant.
The appellant was given six months ' time for vacating the premises.
Mr. Hardev Singh, learned counsel for the appellant, has very strenously urged that in view of the concurrent findings" 939 recorded by the two subordinate tribunals, there was no question of law, much less a substantial question of law arising for consideration before the High Court in the appeal filed by the landlord.
Hence he urged that the interference by the High Court with the concurrent findings so recorded was not justified.
Learned counsel further pointed out that the landlord has not made out his claim under cl.
(e) of the proviso to section 14(1) of the Act.
Mr. Hardev Singh referred us to certain decisions of this Court dealing with the question, under what circumstances it can be con sidered that a substantial question of law arises.
We do not think it necessary, in the circumstances of this case, to refer to those decisions, as in our opinion they have no bearing on the short question that arises for consideration before us, namely, the power of the High Court under section 39, to consider the correctness of a finding regarding bonafide requirement under cl.
(e) of the proviso to section 14(1) of the Act.
As we have already pointed out, the sole question that has to be decided by us is whether the High Court in reversing the decisions of the Rent Controller and the Tribunal, in the circumstances of this case, can be considered to have exceeded its jurisdiction under section 39(2).
We are satisfied that the High Court has not exceeded its jurisdiction in any manner.
The argument of Mr. Hardev Singh that the High Court has exceeded its jurisdiction under section 39(2) of the Act when it reversed the finding of the two subordinate authorities on the question of bonafide requirement has, in our opinion, no substance.
In Smt.
Kamla Soni vs Rup Lal Mehra(1), this Court observed as follows: ".
Whether on the facts proved the requirement of the landlord is bona fide, within the meaning of section 14(1)(e) is a finding on a mixed question of law and fact. .
From the above observations it is clear that an inference drawn by the subordinate authorities that the requirement of the respondent was not bonafide, could not be regarded as conclusive.
The High Court, in proper cases, has ample jurisdiction to interfere with that finding and record its own conclusions on the basis of the materials on record.
We may also point out that in the case before us the position is made worse for the appellant in view of the finding recorded by the Tribunal in favour of the landlord on May 4, 1970.
We have already pointed out the circumstances under which a finding was called for by the High, Court.
The High Court has accepted those findings and held in favour of the landlord that he has (1) C. A. No. 2150 of 1966 decided on 26 9 1969.
940 made out a case under cl.
(e) of the proviso to section 14(1) of the Act.
Mr. Hardev Singh referred us to the decision of this Court reported in Bhagwan Dass and another vs section Rajdev Singh and another(1), wherein it has been observed : "A second appeal lies to the High Court against the decision of the Rent Control Tribunal under Section 39(2) of the Delhi Rent Control Act, 1958, only if the appeal involves some substantial question of law.
The Rent Controller and the Rent Control Tribunal, on a consideration of the relevant terms of the agreement and oral evidence and the circumstances found that a clear case of sub letting was established.
On that finding no question of law, much less a substantial question of law, arose.
" The first part of the above extract lays down the nature of the jurisdiction exercised by the High Court under section 39(2) of the Act.
In that decision, on facts, it was found both by the Rent Controller and the Tribunal, on a relevant consideration of the materials on record, that a case of sub letting was established.
On such a finding concurrently arrived at by both the authorities, it was held by this Court that no question of law, much less a substantial question of law arose for consideration before the High Court.
But the facts in the case before us are entirely different.
We have already pointed out that the question that fell to be considered by the High Court was whether the claim made by the landlord under cl.
(e) of the proviso to section 14(1) of the Act was bonafide.
As already pointed out, this Court, in Smt.
Kamla Soni vs Rup Lal Mehra(1), has held that a finding on such an issue is not one of fact alone but is a finding of mixed question of law and fact, and that it was open to the High Court when exercising its jurisdiction under section 39(2) of the Act, to consider the correctness or otherwise of such, a finding.
The findings recorded on such an issue by the subordinate tribunals are not conclusive.
From the above discussion, it follows that the High Court has not exceeded its jurisdiction under section 39(2) of the Act.
In consequence, the appeal fails and is dismissed.
In the circumstances of the case, parties will bear their own costs.
V.P.S. Appeal dismissed.
(1) A. I. R. (2) C. A. No 2150 of 1966 decided on 26 9 1969.
| The respondent, who was the landlord of certain premises, filed an application under section 14(1)(e) of the Delhi Rent Control Act, 1958, for the eviction of the appellant, who was the lessee, on the ground inter alia, that the respondent required the premises bonafide for his occupation as a residence for himself and his family members.
The Rent Controller found that the requirement of the landlord was not bonafide and dismissed the application.
The order was confirmed in appeal by the Rent Control Tribunal.
The respondent filed an appeal to the High Court under section 39(2) of the Act.
Before the High Court both parties agreed that the case should be remanded to the Tribunal for a finding on the question whether the premises available with the respondent could be considered to be 'reasonably suitable residential accommodation ' as contemplated by section 14(1)(e).
On remand, the Tribunal reported that the premises in the occupation of the respondent were not reasonably sufficient for the respondent and his family.
The appellant however contended before the High Court, ignoring this finding of the Tribunal that on the concurrent findings of the two sub ordinate authorities that the landlord 's requirement was not bonafide, there was no question of law involved and so the High Court had no jurisdiction under section 39(2) to consider the correctness of those findings.
The High Court rejected the contention and held, that, in view of the finding on remand the decision of the subordinate authorities dismissing the respondent 's application was erroneous.
In appeal to this Court, HELD:This Court in Kamla Soni vs Rup Lal Mehra, C.A. No. 2150 of 1966 dated 26 9 1969 held that a finding on the issue whether the requirement of a landlord is bonafide is a finding on mixed questions of law and fact and not on facts only.
Therefore, it was open to the High Court, when exercising jurisdiction under section 39(2), to consider in proper cases the correctness of such a finding.
[939E G]
|
Appeal No. 788 of 1968.
Appeal under section 116 A of the Representation of the People.
1951 from the judgment and order dated October 17, 18; 1967 of the Gujarat High Court in Election Petition No. 5 of 1967.
98 Bishan Narain and B. Datta, for the appellant, S.V. Gupte, M.l.
Patel, R.P. Kapur, M.N. Shroff for l. N. Shroff, for the respondent.
The Judgment of the Court was delivered by Hidayatullah, C.J.
This is an appeal from the judgment dated 17/18 October, 1967 of the High Court of Gujarat in an election petition filed by the present appellant.
The election petition was dismissed by the judgment under appeal.
The matter concerns the Petlad constituency in Kaira District from which election was to be held to the State Legislative Assembly Gujarat at the 4th General Election.
The appellant was a candidate for the Swatantra Party and the respondent a .candidate for the Congress Party.
The poll was held on February 21, 1967 and the result of the election was declared .on
February 24, 1967.
The appellant secured 23,795 votes and the respondent 23,981 votes.
1806 votes were declared invalid.
The respondent was therefore declared elected to the seat.
The election petition set out a number of grounds on which the election of the returned candidate was challenged as void under the Representation of People Act.
We are concerned in this appeal with only one such ground.
There is also a prayer in the appeal that a general re count was wrongly disallowed by the learned Judge who decided the election petition and that it should be ordered here.
We shall come to the second ground in due course.
As regards the first ground, the contention was that a car No. GJH 1.08 was hired or procured by the returned candidate and on the day of poll, it was used for free conveyance of three ladies to the polling booth.
In the election petition, the election petitioner had stated that the returned candidate had made extensive use of hired and procured vehicles for the purpose of free conveyance of voters to and from the various polling stations.
Although another instance was cited in the election petition, no evidence was led to support that or any other instance of the user of this or other vehicle.
The whole of the case therefore rested on the use of vehicle No. 108 and also its use on one occasion only, namely, when three lady voters were said to have been brought to the polling booth in it.
According to the election petitioner, he was in the Sayagi Hospital compound wherein two polling booths Nos. 8 and 9 were situated.
He was then accompanied by Suryakant Manilal Shah and Somabhai Chhotabhai Kachhia.
At about 12.30 P.M., a taxi bearing No. GTG 9021 came to.
the gate of the hospital compound, and a lady got out of it.
The election petitioner alleges that he immediately asked Suryakant Manilal Shah to request the Presiding Officer of 99 one of the booths to come out.
Presiding Officer B.M. Bhatt came to the gate and saw the lady who had got out of the taxi.
The lady had in her hand a voter 's identity card with the congress symbol and her No. was Serial No. 535 of Electoral Unit 26/100 belonging to Ward No. 1 of Petlad.
This part of the allegation in the election petition was not used as evidence of free conveyance of voters.
This incident was recited as furnishing the immediate background of what followed.
The allegation in regard to car No. 108 starts from this point.
The ellegation is that while the election petitioner was complaining to the Presiding Officer Bhatt about the other car, car No. 108 came to the gate of the compound and the petitioner along with his companion and Bhatt were standing there.
Three ladies got out of this car bearing identity cards from the congress party and their numbers were 426, 424 and 386 of electoral unit 28/100.
Bhatt then told the election petitioner that these voters would go to the other both and that he was not concerned with that both.
The election petitioner says that he followed the three voters to the next booth and called out the presiding officer K.D. Trivedi and pointed out the three voters to him stating that they were brought by car No. 108.
He asked him to.
verify this from Bhatt.
The complaint of the election petitioner was then recorded by Trivedi and it appears from the evidence that he also questioned Bhatt who endorsed the statement of the election petitioner that he had seen them get out of the car.
In support of this case witnesses were examined.
The net result of the examination of these witnesses established the fact that the ladies came by this car and that a complaint followed.
However no attempt was made to establish that these ladies had come in the car free.
We need not traverse the entire evidence to establish the above conclusions which in our opinion.
are quite clearly demonstrable from the evidence.
There is evidence to show that the car did come, that the three ladies did get out of the same and went to polling booth No. 9 and also that they were holding identity cards issued by the Congress party.
Presumably therefore they were brought in this car for voting on behalf of the Congress.
Attempt was then made to establish connection between the returned candidate and this car.
On this part of the case testimony of the returned candidate was extremely unsatisfactory.
He first said that three cars were placed at his disposal by the congress party between January 15 and January 31, 1967.
In another place he said that he had been given only two cars.
Later he said that two of the cars were withdrawn from him and that after the withdrawal of the cars he had no other car from the congress party.
He denied the use of the cars contrary to 100 the evidence of the purchase of petrol and also denied any connection between himself and one person by name H.I. Pathan, who had written requisition for petrol.
It was however proved by cross examination that this H.I. Pathan is probably one of his nephews, a fact which he denied also.
It appears that before this car was used, the returned candidate opened a new account in the name of Mahendra Electric Company C/o Anwarbeg and petrol was bought for this car along with other cars right upto 21st February in the.
account of this Mahendra Electric Company and that was the returned candidate himself.
Since the requisitions for petrol were issued by H.I. Pathan, the returned candidate was at great pains to deny any connection with him and even went to the length of denying the real names of his own nephews.
However, this only proved that he had procured the car No. 108 from the Congress party or somebody else for his own use during the election propaganda and at the time of the poll.
It also proved that he had purchased petrol not only previously but also.
on the day of poll because entries in respect of this car existed in the accounts of the petrol dealer 's firm on 18, 19, 20 and 21 February.
The evidence also proved that the three ladies did travel by this car on the date of poll and got out of it at the gate of the hospital compound where the polling booth was situated.
The question is whether all this evidence even taken in favour of the election petitioner goes to satisfy the requirement of the law under section 123(5) of the Representation of the People Act.
That section contains many ingredients and to them we shall come presently; one such ingredient is that the car must be used for the free conveyance of the voters to the poll.
The learned Judge who heard the case gave a finding that the car was so used, that is to say, the three Indies were carried free to the booths in this car.
There is no evidence to establish this.
The owner of the car, the driver and the electors namely the three ladies were not examined and there is nothing to show whether they had travelled free or had paid for the privilege.
Mr. Bishan Narain argues in the alternative, firstly, that an inference arises in the present case that the ladies must have been taken free and he refers to the findings given by the High Court on this part of the case.
Next, he argues that this is not the requirement of section 123(5) and he interprets the section so as to save his case from the operation of that section.
As regards the finding of the High Court that the ladies must have travelled free, we can only say that it is a mere surmise because there is no evidence whatever on this part of the case.
Mr. Bishan Narain stated that the best evidence could come from the returned candidate and that his client was not required to prove 101 a negative.
In our opinion, the burden was upon the election petitioner to establish this fact, if it was a requirement of law.
We do not think that it was an utter impossibility because the owner of the car, the driver or one of the ladies could have been questioned about it and something would have then come in evidence.
Since no such attempt was made there is nothing on which we can say whether the ladies were brought free or on payment and regard being had to the strictness of the law on the subject of corrupt practice we must hold in favour of the returned candidate that the requirements of the section have not been met.
This brings us to the examination of section 123(5) with a view to finding out what are its requirements.
We have already indicated that in our opinion the election petitioner must prove in addition to the other ingredients of the section that the vehicle was used for free conveyance of voters which ingredient we have stated was not attempted to be established in the case.
Section 123(5) of the Representation of People Act reads as follows: "The hiring or procuring, whether on payment or otherwise, of any vehicle or vessel by a candidate or his agent or by any other person with the consent of a candidate of his election agent, or the use of such vehicle or vessel for the free conveyance of any elector (other than the candidate himself, the members of his family or his agent) to or from any polling station provided under section 25 or a place fixed under subsection (1 ) of section 29 for the poll: Provided that the hiring of a vehicle or vessel by an elector or by several electors at their joint costs for the purpose of conveying him or them to and from any such polling station or place fixed for the poll shall not be deemed to.
be a corrupt practice under this clause if the vehicle or vessel so hired is a vehicle or vessel not pro pelled by mechanical power: Provided further that the use of any public transport vehicle or vessel or any tramcar or railway carriage by any elector at his own cost for the purpose of going to or coming from any such polling station or place fixed for the poll shall not be deemed to be a corrupt practice under this clause.
Explanation: In this clause, the expression "vehicle" means any vehicle used or capable of being used for the purpose of road transport whether propelled by mechanical power or otherwise and whether used for drawing other vehicles or otherwise.
" 102 This section defines one of the corrupt practices and it consists of the hiring and procuring whether on payment or otherwise of any vehicle.
This hiring and procuring must be by a candidate or his agent or by any other person with the consent of the candidate or his election agent and the hiring according to the section must be for the free conveyance of any elector other than the candidate himself or members of his family or his agent to and from any polling station.
It will, therefore, appear that the section requires three things, (1 ) hiring or procuring of a vehicle; (2) by a candidate or his agent etc.
and (3) for the free conveyance of an elector.
It will be noticed that the section also speaks of the use but it speaks of the use of such vehicle which connects the two parts, namely, hiring or procuring of vehicle and the use.
The requirement of the law therefore is that in addition to proving the hiring or procuring and the carriage of electors to and from any polling station, should also be proved that the electors used the vehicle free of cost to themselves.
The contention of Mr. Bishan Narain that the requirement of free conveyance is not necessary is therefore not borne out by the words of the section.
The two provisos also.
prove the same thing.
The first proviso provides that it would not be a corrupt practice for any elector to hire a vehicle for himself or even a group of electors to join in hiring a vehicle and the second proviso lays down that the use of any public transport vehicle or vessel or any tramcar or railway carriage by any elector at his own cost is not a corrupt practice.
In order words the electors, if they have to perform the journey by hired vehicle must pay for its hire themselves.
They cannot be taken in a hired vehicle free of costs to themselves.
In the same way if a procured vehicle is used, it must not be used for free conveyance of voters.
The journey of the elector must be paid for by him.
If a candidate hires or procures a vehicle for free conveyance of the electors that also is perhaps a corrupt practice but that aspect need not be considered here.
The language seems capable of that interpretation though we express no final opinion.
In the present case there is proof that the vehicles were procured; whether they were supplied by the Congress party or were procured from private parties makes no difference.
There is also proof that the vehicle numbered 108 was, in fact, used for the conveyance of three lady voters.
What is not proved is that there was free conveyance of the ladies in that vehicle.
Mr. Bishan Narain contends that this is very difficult of proof but as we stated earlier it is not impossible of proof because the owner of the car or the driver or the ladies could have been examined to show that the ladies had travelled free in the vehicle.
This is not proved and therefore the ingredients of the section have not been established.
In our opinion therefore there is no room for 103 interference although, our reasons are slightly different from those of the High Court.
was next contended that a general recount was demanded in the case and has been wrongly refused.
We have scrutinized the pleadings on this point carefully and we find that no plea on which it could be rested was made although in the relief clause there is mention of a general recount.
The pleas concerned the votes cast by impersonators and rejected votes.
These have been considered already and therefore there is no room for further count.
On the whole therefore we are of opinion that the judgment under appeal cannot be interfered with.
The appeal fail and will be dismissed.
In view however, of the prevarications of the returned candidate which were not attempted to be explained by his learned counsel we are of opinion that we should not allow him any costs either here or m the High Court and we order accordingly.
R.K.P.S. Appeal dismissed.
| The appellant challenged the respondent 's election to the Gujarat State Legislative Assembly in February 1967, on the ground, inter alia, that he had committed corrupt practice under section 123(5) of the Representation of the People Act, 1951.
It was alleged that a car was hired or procured by the returned candidate and on the date of the poll it was used for free conveyance of three ladies to the polling booth.
The High Court dismissed the petition.
In the appeal to this Court it was contended that an inference arose in the present case that the ladies must have been taken free to the polling booth and reliance was placed in this respect on certain findings given by the High Court.
There was also a prayer that a general recount was wrongly disallowed by the High Court and that it should be ordered in the present appeal.
HELD: Dismissing the appeal: (i) section 123(5) requires three things, (1) hiring or procuring of a vehicle; (2) by a candidate or his agent etc. 'and (3) for the free conveyance of an elector.
[102 B C] In the present case there was proof that the vehicles were procured; there was also proof that a particular vehicle was in fact used for the conveyance of the three lady voters to the polling booth; what was not proved was that there was free conveyance of the ladies in that vehicle.
The burden of establishing that this fact was on the appellant petitioner and it was not impossible, of proof because the owner of the car or the driver or the ladies could have been examined to show that the, ladies had traveled free in the vehicle.
in the absence of this proof the ingredients of the section had not been established and there was therefore no room for interference with the High Court 's decision though based on slightly different reasons.
The High Court 's finding that the ladies must have travelled free was a mere surmise because there was no evidence whatever on this part of the case.
[100 H, 102 G, H] (2) A scrutiny of the pleadings showed that there was no plea on which the prayer for a recount could be rested though in the relief clause there was mention of a general recount.
The pleas concerned the votes caste by impersonators 'and rejected votes and as these had already been considered, there was no room for a further count.
[103 B]
|
Civil Appeal No. 570 of 1976.
Appeal by Certificate from the Judgment and Order dated 9.2.1976 of the Madras High Court in Tax Case No. 104 of 1969.
T.A. Ramachandran, P.N. Ramaligam and A.T.M. Sampath for the Appellant.
628 V.Gauri Shanker, Manoj Arora, section Rajappa and Ms.
A.Subhashini for the Respondent.
The Judgment of the Court was delivered by RANGANATHAN, J.
This is the assessee 's appeal form a judgment of the Madras High Court dated 10.1.1975 answering three questions referred to it by the Income tax Appellate Tribunal in favour of the Revenue and against the assessee.
The reference related to the assessment year 1961 62, the previous year in respect of which commenced on 13.4.1960.
The judgment of the High Court is reported as (1976) 102 I.T.R.622.
The appellant assessee is a partnership firm.
Since 1949, it was carrying on, in Malaya, a money lending business and, as part of and incidental to the said business, a business in the purchase and sale of house properties, gardens and estates.
It had been reconstituted under a deed dated 26.3.1960.
The firm 's accounts for the year 1960 61, which commenced on 13.4.60, would normally have come to a close on or about the 13th April, 1961.
However, the firm closed its accounts as on 13.3.1961 with effect from which date it was dissolved.
Along with its income tax return for the assessment year 1961 62 filed on 10th April 1962, the assessee filed a profit and loss account and certain other statements.
In the profit and loss account, a sum of $ 1,01,248 was shown as "difference on revaluation of estates, gardens and house properties" on the dissolution of the firm on 13.3.61, such difference being $ 70,500 in respect of "house properties" and $ 30,748 in respect of estates and gardens.
In the memo of adjustment for income tax purposes, however, the above sum was deducted on the ground that it was not assessable either as revenue or capital.
A statement was also made before the officer that partner Ramanathan Chettiar, forming one group and the other partners forming another group, were carrying on business separately with the assets and liabilities that fell to their shares on the dissolution of the firm.
The Income tax Officer (I.T.O.) issued a notice under section 23(2) on the same day (10.4.1962) posting the hearing for the same day and completed the assessment also on the same day, after making a petty addition of Rs. 2083 paid as property tax in Malaya, and recording the following note: "Audit assessment Lakshmanan appears return filed I.T. 86 acknowledged in list of books scrutinised order dictated".
629 For the subsequent assessment year 1962 63, the assessee filed a return showing nil income along with a letter pointing out that the firm had been dissolved on 13.3.1961.
Thereafter, on 3.9.63, the I.T.O. wrote a letter to the assessee to the effect that the revaluation difference of $ 1,01,248 should have been brought to tax in the assessment year 1961 62 in view of the decision of the Madras High Court in Ramachari & Co. vs C.I.T., He called for the basis for the valuation and also for the assessee 's objections.
The assessee sent a reply stating that no profit or loss could be assessed on a revaluation of assets.
Relying on a circular of the Central Board of Revenue dated 21.6.1956, it was urged that the assessee was gradually winding up its business in Malaya and that therefore, the surplus would only be capital gains.
It was urged that the revaluation had been at a market price prevalent since 1.1.1954 and that, therefore, no capital gains were chargeable to tax.
The I.T.O. followed up his letter by a notice under section 148 read with section 147(b).
The assessee objected to the reassessment on two grounds: (1) that the circumstances did not justify the initiation of proceedings under section 147(b); and (2) that no assessable profits arose to the firm on the revaluation of assets on the eve of the dissolution of the firm.
Overruling these objections, the I.T.O. completed a reassessment on the firm after adding back the sum of Rs.1,58,057 (the equivalent of $ 1,01,248) to the previously assessed income.
The assessee 's successive appeals to the Appellate Assistant Commissioner and the Appellate Tribunal and reference, at its instance, to the High Court having failed,the assessee is before us.
Three questions of law were referred to the High Court by the Tribunal.
These were: "1.
Whether, on the facts and circumstances of the case, the reassessment made on the assessee firm for the assessment year 1961 62 under section 147 of the Income tax Act is valid in Law? 2.
Whether, on the facts and circumstances of the case, assessment of the sum of $ 1,01,248 as revenue profit of the assessee firm chargeable to tax for the assessment year 1961 62 is justified in law? 3.
Whether, on the facts, and circumstances of the case, the Appellate Tribunal is right in law in sustaining the assessment of the sum of $ 1,01,348 after having found that the Department Officers are bound by the Circular of the Central Board of Revenue?" 630 We may deal at the outset with the third question.
Though the High Court has dealt with this question at some length, we do not think any answer to this question can or need be furnished by us for the following reasons.
First, the assessee has not been able to place before us the circular of the Board on which reliance is placed.
It is not clear whether it is a circular or a communication of some other nature.
Second, the circular, to judge from its purport set out in the High Court 's judgment, seems to have been to the effect that the surplus arising from the sale of properties acquired by a money lender in the course of his business would be in the nature of capital gains and not of income.
Obviously such a proposition could not have been intended as a broad or general proposition of law, for the nature of the surplus on sale of assets would depend on the nature of the asset sold and this, in turn, would depend on the facts and circumstances of each case.
In this case, no material was placed at any stage to show that the assets in question constituted the capital assets of the firm and not its stock in trade.
Third, the plea of the assessee which was in issue all through was that there was no sale of assets by the firm when its assets are distributed among its partners and that no profits whether capital or revenue could be said to arise to the firm merely because, at the time of the dissolution, the firm revalued its assets on the basis of market value or any other basis, for adjusting the mutual rights and liabilities of the partners on the dissolution of the firm.
The terms of the circular, as set out in the order of the High Court, cannot therefore be of any assistance to the assessee in answering the issues in this case.
We, therefore, do not answer the third question posed by the Tribunal.
Turning now to the first question, the relevant facts have already been noticed.
The following relevant and material facts viz. (i) the dissolution of the firm, (ii) the revaluation of its assets, (iii) the distribution thereof among two groups of its partners, and (iv) the division and crediting of the surplus on revaluation to the partner 's accounts were not only reflected in the balance sheet, the profit and loss account and the profit and loss adjustment account but were also mentioned in the statement filed before the I.T.O. along with the return.
Clearly, action u/s 148 read with clause (a) of s.147 could not be initiated in these circumstances but is action under clause (b) of that section also impermissible? That is the question.
We may now set out the provisions of clause (b) of section 147 for purposes of easy reference.
This clause which corresponds to section 34(1)(b) of the Indian Income tax Act, 1922 (`the 1922 Act ') permits initiation of reassessment of proceedings, "notwithstanding 631 that there has been no omission or failure as mentioned in clause (a) on the part of the assessee" provided "the Income tax Officer has, in consequence of information in his possession, reason to believe that income chargeable to tax has escaped assessment".
In the present case, on the information already on record and in view of the decision in Ramachari & Co. vs C.I.T., , there can be no doubt that the I.T.O. could reasonably come to the conclusion that income, profits and gains assessable for the assessment year 1961 62 had escaped assessment.
But is that belief reached "in consequence of information in his posession"? The assessee 's counsel says "no", for, says he, it is settled law that the "information" referred to in clause (b) above, should be "information" received by the I.T.O. after he had completed the original assessment.
Here it is pointed out that all the relevant facts as well as the decision in Ramachari (supra) had been available when the original assessment was completed on 10.4.1962.
Action cannot be taken under this clause merely because the I.T.O., who originally considered the surplus to be not assessable, has on the same facts and the same case law which had been available to him when he completed the assessment originally, changed his opinion and now thinks that the surplus should have been charged to tax.
The validity of the assessee 's argument has to be tested in the light of the decisions of this Court which have interpreted section 147(b) of the 1961 Act or its predecessor section 34(1)(b) of the 1922 Act and expounded its parameters.
We may start with the decision in Maharaj Kumar Kamal Singh vs I.T.O., S.C.
In this case it was held that the word "information" would include information as to the true and correct state of the law and would also cover information as to relevant judicial decisions.
In that case the I.T.O. had re opened the assessment on the basis of a subsequent decision of the Privy Council and this was upheld.
Referring to the use of the word "escape" in the section, the Court observed.
"In our opinion, even in a case where a return has been submitted, if the income tax Officer erroneously fails to tax a part of asessable income, it is a case where the said part of the income has escaped assessment.
The appellant 's attempt to put a very narrow and artificial limitation on the meaning of the word "escape" in section 34(1)(b) cannot, therefore, succeed." (underlining ours) 632 The meaning of the word "information" was again explained thus in C.I.T. vs A. Raman & Co., [1968] 67 I.T.R. 11 SC: "The expression `information ' in the context in which it occurs must, in our judgment, mean instruction or knowledge derived from an external source concerning facts or particulars, or as to law relating to a matter bearing on the assessment. .
Jurisdiction of the Income tax Officer to reassess income arises if he has in consequence of information in his possession reason to believe that income chargeable to tax has escaped assessment.
That information, must, it is true, have come into the possession of the Income tax Officer after the previous assessment, but even if the information be such that it could have been obtained during the previous assessment from an investigation of the materials on the record, or the facts disclosed thereby or from other enquiry or research into facts or law, but was not in fact obtained, the jurisdiction of the Income tax Officer is not affected." (underlining ours) We may next refer to Kalyanji Mavji & Co. vs C.I.T., [1976 102] I.T.R. 287.
It is unnecessary to set out the facts of this case.
It is sufficient to refer to the enunciation of the law regarding the scope of section 34(1)(b) as culled out from the earlier decisions of this Court on the subject.
At page 296 the Court observed: "On a combined review of the decisions of this Court the following tests and principles would apply to determine the applicability of section 34(1)(b) to the following categories of cases: (1) where the information is as to the true and correct state of the law derived from relevant judicial decisions; (2) where in the original assessment the income liable to tax has escaped assessment due to oversight, inadvertence or a mistake committed by the Income tax Officer.
This is obviously based on the principle that the taxpayer would not be allowed to take advantage of an oversight or mistake committed by the taxing authority; 633 (3) where the information is derived from an external source of any kind.
Such external source would include discovery of new and important matters or knowledge of fresh facts which were not present at the time of the original assessment; (4) where the information may be obtained even from the record of the original assessment from an investigation of the materials on the record, or the facts disclosed thereby or from other enquiry or research into facts or law." Before applying the above principles to the facts of the present case, we may refer to two earlier decisions of the Madras High Court which have been followed in the judgment under appeal.
In Salem Provident Fund Society Ltd. vs C.I.T., , the Income tax officer, in calculating the annual profits of an insurance company, had, under the statute to work out the difference between the deficiencies as shown in the actuarial valuation of the company in respect of two successive valuation periods.
At the time of original assessment, the Income tax Officer, by mistake, added the two deficiencies instead of subtracting one from the another.
This mistake he committed not in one assessment year but in two assessment years.
Subsequently, he discovered his mistake and initiated proceedings under section 34(1)(b).
The contention urged on behalf of the assessee was that all the statements, on the basis of which the re assessment proceedings were taken, were already on record and that, in such a case, there was no `information ' which would justify the reassessment.
An argument was also raised that the rectification, if any, could have been carried out only under section 35 and not under section 34.
These contentions were repelled.
In regard to the former objection, the High Court pointed out: "We are unable to accept the extreme proposition that nothing that can be found in the record of the assessment, which itself would show escape of assessment or under assessment, can be viewed as information which led to the belief that there has been escape from assessment or under assessment.
Suppose a mistake in the original order of assessment is not discovered by the Income tax Officer himself on further scrutiny but it is brought to this notice by another assessee or even by a subordinate or a superior officer, that would appear to be information disclosed to the Income tax Officer.
if the mistake itself is not extraneous 634 to the record and the informant gathered the information from the record, the immediate source of information to the Income tax Officer in such circumstances is in one sense extraneous to the record.
It is difficult to accept the position that while what is seen by another in the record is `information ' what is seen by the Income tax Officer himself is not information to him.
In the latter case he just informs himself.
It will be information in his possession within the meaning of section 34.
In such cases of obvious mistakes apparent on the face of the record of assessment that record itself can be a source of information, if that information leads to a discovery or belief that there has been an escape of assessment or under assessment.
A similar question arose in CIT vs Rathinasabapathy Mudaliar, In that case the assessee, who was a partner in a firm, did not include in his return the income of his minor son admitted to the benefits of the partnership as required by section 16(3) of the 1922 Act.
The minor son submitted a separate return and was assessed on this income.
Subsequently, the Income tax Officer "discovered" his error in not assessing the father thereon and started re assessment proceedings.
The re assessment was upheld by the Madras High Court on the same logic as had been applied in Salem Provident Fund Society Ltd. case (supra).
The above line of thinking has not only held the field for about thirty years now but has also received approval in Anandji Haridas and Co. (P) Ltd. vs S.P. Kushare, Sales Tax Officer, [1968] 21 S.T.C. 326.
This issue has further been considered in the decision of this Court in the case of Indian and Eastern Newspaper Society vs C.I.T. (the IENS case, for short) [1979] I.T.R. 996.
In this case the income of the assessee derived by letting out certain portions of the building owned by it to its members as well as to outsiders was being assessed as business income.
In the course of audit, an internal audit party expressed the view that the money realised by the assessee on account of the occupation of its conference hall and rooms should have been assessed under the head "income from property" and not as business income.
The Income tax Officer thereupon initiated re assessment proceedings and this was upheld by the Tribunal.
On a direct reference under s.257 of the Act, this Court held that the opinion of the audit party on a point of law could not be regarded as "information" and that the initiation of the reassessment proceedings was not justified.
It was contended for the Revenue, that the reassessment proceedings would 635 be valid even on this premise.
Dealing with this argument, the Court observed: "Now, in the case before us, the ITO had, when he made the original assessment, considered the provisions of sections 9 and 10.
Any different view taken by him afterwards on the application of those provisions would amount to a change of opinion on material already considered by him.
The revenue contends that it is open to him to do so, and on that basis to reopen the assessment under section 147(b).
Reliance is placed on Kalyanji Mavji & Co. vs CIT, , where a Bench of two learned, Judges of this Court observed that a case where income had escaped assessment due to the "oversight, inadvertence or mistake" of the ITO must fall within section 34(1)(b) of the Indian Income Tax Act, 1922.
It appears to us, with respect, that the proposition is stated too widely and travels farther than the statute warrants in so far as it can be said to lay down that if, on re appraising the material considered by him during the original assessment, the ITO discovers that he has committed an error inconsequence of which income has escaped assessment, it is open to him to reopen the assessment.
In our opinion, an error discovere on a reconsideration of the same material (and no more) does not give him that power.
That was the view taken by this Court in Maharaj Kumar Kamal Singh vs CIT, [1959] 35 I.T.R. 1; CIT vs A. Raman & Co., and Bankipur Club Ltd. vs CIT and we do not believe that the law has since taken a different course.
Any observation in Kalyanji Mavji & Co. vs CIT, suggesting the contrary do not, we say with respect, lay down the correct law." (underlining ours) The Court proceeded further to observe: "A further submission raised by the revenue on section 147(b) of the Act may be considered at this stage.
It is urged that the expression "information" in section 147(b) refers to the realisation by the ITO that he has committed an error when making the original assessment.
It is said that, when upon receipt of the audit note the ITO discovers or realizes that a mistake has been committed in the original 636 assessment, the discovery of the mistake would be "information" within the meaning of section 147(b).
The submission appears to us inconsistent with the terms of section 147(b) Plainly, the statutory provision envisages that the ITO must first have information in his possession, and then in consequence of such information he must have reason to believe that income has escaped assessment.
The realisation that income has escaped assessment is covered by the words "reason to believe", and it follows from the "information" received by the ITO.
The information is not the realisation, the information gives birth to the realisation.
" Sri Ramachandran submits that these decisions support his contention that reassessment proceeding can be validly initiated only if there is some information received by the I.T.O. from an external source after the completion of the original assessment but not in a case like the present where there is nothing more before the I.T.O. than what was available to him when the original assessment was completed.
He also submits that the observations in the IENS case have cast doubts on the propositions enunciated in Kalyanji Mavji 's case (supra) and reiterates the proposition that reassessment proceedings cannot be availed of to revise, on the same material, the opinion formed or conclusion arrived at earlier in favour of the assessee.
On the other hand, Dr. Gaurisankar, appearing for the Revenue, mentioned that the decision in the IENS case holding that the opinion of an audit party would not constitute `information ' and qualifying the principles enunciated in Kalyanji Mavji is pending consideration by a larger Bench of this Court.
He, however, submitted that the reassessment in this case would be valid even on the strength of the observations in the IENS case.
We shall proceed to consider the correctness of this submission.
We have pointed out earlier that Kalyanji Mavji (supra) outlines four situations in which action under S.34(1)(b) can be validly initiated.
The IENS case has only indicated that proposition (2) outlined in this case and extracted earlier may have been somewhat widely stated; it has not cast any doubt on the other three propositions set out in Kalyanji Mavji 's case.
The facts of the present case squarely fall within the scope of propositions 2 and 4 enunciated in Kalyanji Mavji 's case.
Proposition (2) may be briefly summarised as permitting action even on a "mere change of opinion".
This is what has been doubted in the IENS case (supra) and we shall discuss its application to this case a 637 little later.
But, even leaving this out of consideration, there can be no doubt that the present case is squarely covered by proposition (4) set out in Kalyanji Mavji & Co. (supra).
This proposition clearly envisages a formation of opinion by the Income tax Officer on the basis of material already on record provided the formation of such opinion is consequent on "information" in the shape of some light thrown on aspects of facts or law which the I.T.O. had not earlier been conscious of.
To give a couple of illustrations, suppose an I.T.O., in the original assessment, which is a voluminous one involving several contentions, accepts a plea of the assessee in regard to one of the items that the profits realised on the sale of a house is a capital realisation not chargeable to tax.
Subsequently he finds, in the forest of papers filed in connection with the assessment, several instances of earlier sales of house property by the assessee.
That would be a case where the I.T.O. derives information from the record on an investigation or enquiry into facts not originally undertaken.
Again, suppose if I.T.O. accepts the plea of an assessee that a particular receipt is not income liable to tax.
But, on further research into law he finds that there was a direct decision holding that category of receipt to be an income receipt.
He would be entitled to reopen the assessment under s.147(b) by virtue of proposition (4) of Kalyanji Mavji.
The fact that the details of sales of house properties were already in the file or that the decision subsequently come across by him was already there would not affect the position because the information that such facts or decision existed comes to him only much later.
What then, is the difference between the situations envisaged in propositions (2) and (4) of Kalyanji Mavji (supra)? The difference, if one keeps in mind the trend of the judicial decisions, is this.
Proposition (4) refers to a case where the I.T.O. initiates reassessment proceedings in the light of "information" obtained by him by an investigation into material already on record or by research into the law applicable thereto which has brought out an angle or aspect that had been missed earlier, for e.g., as in the two Madras decisions referred to earlier.
Proposition (2) no doubt covers this situation also but it is so widely expressed as to include also cases in which the I.T.O., having considered all the facts and law, arrives at a particular conclusion, but reinitiates proceedings because, on a reappraisal of the same material which had been considered earlier and in the light of the same legal aspects to which his attention had been drawn earlier, he comes to a conclusion that an item of income which he had earlier consciously left out from the earlier assessment should have been brought to tax.
In other words, as pointed out in IENS case, it also 638 ropes in cases of a "bare or mere change of opinion" where the I.T.O. (very often a successor officer) attempts to reopen the assessment because the opinion formed earlier by himself (or, more often, by a predecessor I.T.O.) was, in his opinion, incorrect.
Judicial decisions had consistently held that this could not be done and the IENS case (supra) has warned that this line of cases cannot be taken to have been overruled by Kalyanji Mavji (supra).
The second paragraph from the judgment in the IENS case earlier extracted has also reference only to this situation and insists upon the necessity of some information which make the ITO realise that he has committed an error in the earlier assessment.
This paragraph does not in any way affect the principle enumerated in the two Madras cases cited with approval in Anandji Haridas, [1986] 21 S.T.C. 326.
Even making allowances for this limitation placed on the observations in Kalyanji Mavji, the position as summarised by the High Court in the following words represents, in our view, the correct position in law: "The result of these decisions is that the statute does not require that the information must be extraneous to the record.
It is enough if the material, on the basis of which the reassessment proceedings are sought to be initiated, came to the notice of the Income tax Officer subsequent to the original assessment.
If the Income tax Officer had considered and formed an opinion on the said material in the original assessment itself, then he would be powerless to start the proceedings for the reassessment.
Where, however, the Income tax Officer had not considered the material and subsequently come by the material from the record itself, then such a case would fall within the scope of section 147(b) of the Act.
" Let us now examine the position in the present case keeping in mind the narrow but real distinction pointed out above.
On behalf of the assessee, it is emphasised (a) that the amount of surplus is a very substantial amount,(b) that full details of the manner in which it had resulted had been disclosed, (c) that the profit and loss account, the profit and loss adjustment account and statement made before the I.T.O. had brought into focus the question of taxability of the surplus and (d) that decision in Ramachari 's case had been reported by 10.4.1962.
No Income tax Officer can be presumed to have completed the assessment without looking at all this material and the said decision.
No doubt, some doubt had been thrown as to whether a statement had been given at the time of original assessment that the amount 639 of surplus was not taxable as an income or a capital gain but the case has proceeded on the footing that such a statement was there before the officer.
This, therefore, is nothing but a case of "change of opinion".
On the other hand, the authorities and the Tribunal have drawn attention to the fact that the return, the section 143(2) notice and assessment were all on the same day and counsel for the Revenue urged that obviously, in his haste, the I.T.O. had not looked into the facts at all.
It is urged that no Income tax Officer who had looked into the facts and the law could have failed to bring the surplus to tax in view of then recent pronouncement in Ramachari 's case.
Dr. Gaurishankar submitted that the Tribunal has found that the I.T.O. "had acted mechanically in accepting the return without bringing his mind to play upon the entry in the statement with reference to the distribution of the assets".
He pointed out that there is no evidence of any enquiry with reference to this aspect and that, the amount involved being sufficiently large, the I.T.O., if he had been aware of the existence of the entry would certainly have discussed it.
He urged that the question whether the I.T.O. had considered this matter at the time of the original assessment or not is purely a question of fact and the Tribunal 's conclusion thereon having been endorsed by the High Court, there is no justification to interfere with it at this stage.
We think there is force in the argument on behalf of the assessee that, in the face of all the details and statement placed before the I.T.O. at the time of the original assessment, it is difficult to take the view that the Income tax Officer had not at all applied his mind to the question whether the surplus is taxable or not.
It is true that the return was filed and the assessment was completed on the same date.
Nevertheless, it is opposed to normal human conduct that an officer would complete the assessment without looking at the material placed before him.
It is not as if the assessment record contained a large number of documents or the case raised complicated issues rendering it probable that the I.T.O. had missed these facts.
It is a case where there is only one contention raised before the I.T.O. and it is, we think, impossible to hold that the Income tax Officer did not at all look at the return filed by the assessee or the statements accompanying it.
The more reasonable view to take would, in our opinion, be that the Income tax Officer looked at the facts and accepted the assessee 's contention that the surplus was not taxable.
But, in doing so, he obviously missed to take note of the law laid down in Ramachari which there is nothing to show, had been brought to his notice.
When he subsequently became aware of the decision, he initiated proceedings under section 147(b).
The material which constituted information and on 640 the basis of which the assessment was reopened was the decision in Ramachari.
This material was not considered at the time of the original assessment.
Though it was a decision of 1961 and the I.T.O. could have known of it had he been diligent, the obvious fact is that he was not aware of the existence of the decision then and, when he came to know about it, he rightly initiated proceedings for assessment.
We may point out that the position here is more favorable to the Revenue than that which prevailed in the Madras cases referred to earlier.
There, what the I.T.O. had missed earlier was the true purport of the relevant statutory provisions.
It seems somewhat difficult to believe that the I.T.O. could have failed to read properly the statutory provisions applicable directly to facts before him (though that is what seems to have happened).
Perhaps an equally plausible view, on the facts, could have been taken that he had considered them and decided, in one case, not to apply them and, in the other, on a wrong construction thereof.
In the present case, on the other hand, the material on which the I.T.O. has taken action is a judicial decision.
This had been pronounced just a few months earlier to the original assessment and it is not difficult to see that the I.T.O. must have missed it or else he could not have completed the assessment as he did.
Indeed it has not been suggested that he was aware of it and yet chose not to apply it.
It is therefore much easier to see that the initiation of reassessment proceedings here is based on definite material not considered at the time of the original assessment.
In the above view of the matter, we uphold the High Court 's view on the first question.
The second question raises a more difficult problem.
There can be no doubt that the decision of the Madras High Court in Ramachari squarely covers the situation.
Ramachari holds that the principle of valuing the closing stock of a business at cost or market at the option of the assessee is a principle that would hold good only so long as there is a continuing business and that where a business is discontinued, whether on account of dissolution or closure or otherwise, by the assessee, then the profits cannot be ascertained except by taking the closing stock at market value.
Ramachari has subsequently been followed by the Kerala High Court in Popular Workshops vs Commissioner of Income Tax, and in Popular Automobiles vs Commissioner of Income Tax, Shri Ramachandran contends that the decision in Ramachari 641 does not lay down the correct law.
He submits than, while it is no doubt true that the closing stock has to be valued, the well settled principle is that it should be valued, at cost or market whichever is lower and there is no justification for laying down a different principle for valuation of the closing stock at the point of discontinuance of business unless the goods are actually sold by the assessee at the time of discontinuance.
Further, it has been held by a series of decisions of this Court that when a firm is dissolved and the assets are distributed among the partners, there is no sale or transfer of the assets of the firm to the various partners: vide, Addanki Narayanppa vs Bhaskara Krishnappa, ; ; CIT vs Dewas Cine Corporation, ; CIT vs 2Bankey Lal Vaidya, ; Malabar Fisheries Co. vs C.I.T., and in Sunil Siddharthbhai vs C.I.T., He submits that, in logical sequence, dissolution comes first and distribution of assets comes later.
Therefore, revaluation of the assets of a firm, which is only for the division of the assets among the partners on a real and not a notional basis, is part of the division of the assets and therefore logically, in point of time, subsequent to the dissolution of the firm.
Since the revaluation takes place after the dissolution no profits can be said to have accrued to the firm by the process of revaluation.
The revaluation of the assets is not in the course of business and is not an activity which can partake of the nature of trade.
Assuming but not conceding that it is possible to have a revaluation of the assets, for example, stock in trade before dissolution, any excess which arises on the revaluation is only an imaginary or notional profit and cannot be brought to tax for the following reasons: (i) As a result of such revaluation, there can be no profit, because the firm cannot make a profit out of itself: Vide Kikabhai Premchand vs C.I.T., (ii) The process of revaluation of stock by itself cannot bring in any real profits: vide C.I.T. vs K.A.R.K. Firm, [1934]2 I.T.R. 183; Chainrup Sampatram vs C.I.T., [1953) and C.I.T. V. Hind Construction ltd., [1972] 83 I.T.R. 211; and (iii) It is well settled that what is taxable under the income tax law is only real income vide C.I.T. vs M/s Shoorji Vallabhdas and Co., [1962] 46 I.T.R. 144 and C.I.T. vs Birla Gwalior (P) Ltd., There is, therefor, no principle by which the stock in trade can be valued at market price so as to bring to tax the notional profits which might in future be realised as a result of the sale of the stock in trade.
642 The question posed before us is a difficult one.
We think, however, that the High Court was right in pointing out that the several decisions relied upon for the assessee as to the nature of the transaction by which a firm, on dissolution, distributes its assets among its partners, have no relevance in the present case.
As the High Court rightly observed, those cases relate to what happens after or in consequence of the dissolution of a firm whereas we are here concerned with a question that arises before or at the time of dissolution.
What we have to decide is the basis on which, in making up the accounts of a firm upto the date of dissolution, the closing stock with the firm as at a point of time immediately prior to the dissolution is to be valued.
It is this principle that has been decided in Ramachari and the High Court decisions following it (including the one under appeal) and the question is whether they lay down the correct law.
In the first place, it is settled law that the true trading results of a business for an accounting period cannot be ascertained without taking into account the value of the stock in trade remaining at the end of the period.
Though, as pointed out by this Court in Chainrup Sempatram vs C.I.T., it is a misconception to think that any profit arises out of the valuation of closing stock, it is equally true that such valuation is a necessary element in the process of determining the trading results of the period.
This is true in respect of any method of accounting and in C.I.T. vs Krishnaswamy Mudaliar, this Court pointed out that, even where the assessee is following the cash system of accounting, the valuation of closing stock cannot be dispensed with.
In this decision, this Court quoted with approval the following observations in C.I.R. vs Cock, Russel & Co. Ltd. "There is no word in the statutes or rules which deals with this question of valuing stock in trade.
There is nothing in the relevant legislation which indicates that in computing the profits and gains of a commercial concern the stock in trade at the start of the accounting period should be taken in and that the amount of the stock in trade at the end of the period should also be taken in.
It would be fantastic not to do it: it would be utterly impossible accurately to assess profits and gains merely on a statement of receipts and payments or on the basis of turnover.
It has long been recognised that the right method of assessing profits and gains is to take into account the value of the stock in trade at the beginning and the value of the stock in trade at the 643 end as two of the items in the computation.
I need not cite authority for the general proposition, which is admitted at the Bar, that for the purposes of ascertaining profits and gains the ordinary principles of commercial accounting should be applied, so long as they do not conflict with any express provision of the relevant statutes.
" Next the principles as to the method of valuation of the closing stock are equally well settled.
Lord President Clyde set these out in Whimster & Co. vs C.I.R., in the following words: "In computing the balance of profits and gains for the purposes of income tax,. two general and fundamental commonplaces have always to be kept in mind.
In the first place, the profits of any particular year or accounting period must be taken to consist of the difference between the receipts from the trade or business during such year or accounting period and the expenditure laid out to earn those receipts.
In the second place, the account of profit and loss to be made up for the purpose of ascertaining that difference must be framed consistently with the ordinary principles of commercial accounting, so far as applicable, and in conformity with the rules of the Income tax Act, or of that Act as modified by the provisions and schedules of the Acts regulating excess profits duty, as the case may be.
For example, the ordinary principles of commercial accounting require that in the profit and loss account of a merchant 's manufacturer 's business the values of the stock in trade at the beginning and at the end of the period covered by the account should be entered at cost or market price, whichever is the lower; although there is nothing about this in the taxing statutes.
" The principle behind permitting the assessee to value the stock at cost is very simple.
In the words of Bose, J. In Kikabhai Premchand vs C.I.T., [1953] 24 I.T.R. 506 S.C. it is this: "The appellant 's method of book keeping reflects the true position.
As he makes his purchases he enters his stock at the cost price on one side of the accounts.
At the close of the year he enters the value of any unsold stock at cost on the other side of the accounts thus cancelling out the entries relating to the sum unsold stock earlier in the 644 accounts; and then that is carried forward as the opening balance in the next year 's account.
This cancelling out of the unsold stock from both sides of the accounts leaves only the transactions on which there have been actual sales and gives the true and actual profit or loss on his year 's dealings.
" As against this, the valuation of the closing stock at market value invariably will create a problem.
For if the market value is higher than cost, the accounts will reflect notional profits not actually realised.
On the other hand, if the market value is less, the assessee will get the benefit of a notional loss he has not incurred.
Nevertheless, as mentioned earlier, the ordinary principles of commercial accounting permit valuation "at cost or market, whichever is the lower".
The rationale behind this has been explained by Patanjali Sastri, C.J. in Chainrup Sampatram vs C.I.T., , S.C. where an attempt was made to value the closing stock at a market value higher than cost.
The learned Chief Justice observed: "It is wrong to assume that the valuation of the closing stock at market rate has, for its object, the bringing into charge any appreciation in the value of such stock.
The true purpose of crediting the value of unsold stock is to balance the cost of those goods entered on the other side of the account at the time of their purchase, so that the cancelling out of the entries relating to the same stock from both sides of the account would leave only the transactions on which there have been actual sales in the course of the year showing the profit or loss actually realised on the year 's trading.
As pointed out in paragraph 8 of the Report of the Committee on Financial Risks attaching to the holding of Trading Stocks, 1919, "As the entry for stock which appears in a trading account is merely intended to cancel the charge for the goods purchased which have not been sold, it should necessarily represent the cost of the goods.
If it is more or less than the cost, then the effect is to state the profit on the goods which actually have been sold at the incorrect figure. .
From this rigid doctrine one exception is very generally recognised on prudential grounds and is now fully sanctioned by custom, viz., the adoption of market value at the date of making up accounts, if that value is less, than cost.
It is of course an anticipation of the loss that may be made on those goods in 645 the following year, and may even have the effect, if prices rise again, of attributing to the following year 's results a greater amount of profit than the difference between the actual sale price and the actual cost price of the goods in question" (extracted in paragraph 281 of the Report of the Committee on the Taxation of Trading Profits presented to British Parliament in April 1951).
While anticipated loss is thus taken into account, anticipated profit in the shape of appreciated value of the closing stock is not brought into the account, as no prudent trader would care to show increased profit before its actual realisation.
This is the theory underlying the rule that the closing stock is to be valued at cost or market price whichever is the lower, and it is now generally accepted as an established rule of commercial practice and accountancy.
" From the above passage, it will be seen that the proper practice is to value the closing stock at cost.
That will eliminate entries relating to the same stock from both sides of the account.
To this rule custom recognises only one exception and that is to value the stock at market value if that is lower.
But on no principle can one justify the valuation of the closing stock at a market value higher than cost as that will result in the taxation of notional profits the assessee has not realised.
The High Court in Ramachari has, however, outlined another exception and seems to have rested this on two considerations.
The first is the observation of Lord Buckmaster in C.I.T. vs Ahmedabad New Cotton Mills Co. Ltd., [1930] L.R. 57 I.A. 21 to the following effect: "The method of introducing stock into each side of a profit and loss account for the purpose of determining the annual profits is a method well understood in commercial circles and does not necessarily depend upon exact trade valuations being given to each article of stock that is so introduced.
The one thing that is essential is that there should be a definite method of valuation adopted which should be carried through from year to year, so that in case of any division from strict market values in the entry of the stock at the close of one year it will be rectified by the accounts in the next year.
" From these observations, the High Court inferred: "It is obvious from the above that the privilege of valuing 646 the opening and closing stock in a consistent manner is available only to continuing business and that it cannot be adopted where the business comes to an end and the stock in trade has to be the disposed of in order to determine the exact position of the business on the date of closure. " The second consideration which prevailed with the High Court is reflected in the following passage from the judgment: "It seems to us that none of these cases has any application to the facts of the present case .
There is no authority directly in point dealing with this question, where a partnership concern dissolves its business in the course of the accounting year, what is the basis on which the stock in trade has to be valued as on the date of dissolution.
We have accordingly to deal with the matter on first principles.
The case of a firm which goes into liquidation forms a close parallel to the present case.
In such a case all the stock in trade and other assets of the business will have to be sold and their value realised.
It cannot be controverted that it is only by doing so that the true state of the profits or losses of the business can be arrived at.
The position is not very different when the partnership ceases to exist in the course of the accounting year.
The fact that Ramachari, one of the ex partners, took over the entire stock and continued to run the business on his own, is not relevant at all, when we consider the profits or losses of the partnership ' which has come to an end.
It should, therefore, follow that in order to arrive at the correct picture of the trading results of the partnership on the date when it ceases to function, the valuation of the stock in hand should be made on the basis of the prevailing market price.
" We are not quite sure that the first of the considerations that prevailed with the High Court is relevant in the present case.
Even in a continuing business, the valuation at market value is permissible only when it is less than cost; it is not quite certain whether the rules permit an assessee if he so desires to value closing stock at market value where it is higher than cost.
But, in either event, it is allowed to be done because its effect can be offset over a period of time.
But here, where the business comes to a close, no future adjustment of an over 647 or under valuation is possible, In this context, it is difficult to see how valuation, at other than cost, can be justified on the principle of Ahmedabad Advance Mills case (supra).
We, however, find substance in the second consideration that prevailed with the High Court.
The decision in Muhammad Hussain Sahib vs Abdul Gaffor Sahib, [1950] 1 M.L.J.81 correctly sets out the mode of taking accounts regarding the assets of a firm.
While the valuation of assets during the subsistence of the partnership would be immaterial and could even be notional, the position at the point of dissolution is totally different: "But the situation is totally different when the firm is dissolved or when a partner retires.
The settlement of his account must be not on a notional basis but on a real basis, that is every asset of the partnership should be converted into money and the account of each partner settled on that basis. .
The assets have to be valued, of course, on the basis of the market value on the date of the dissolution . " This applies equally well to assets which constitute stock in trade.
There can be no manner of doubt that, in taking accounts for purposes of dissolution, the firm and the partners, being commercial man, would value the assets only on a real basis and not at cost or at their other value appearing in the books.
A short passage from Pickles on Accountancy (Third Edn), p. 650 will make this clear: "In the event of the accounts being drawn up to the date of death or retirement, no departure from the normal procedure arises, but it will be necessary to see that every revaluation required by the terms of the partnership agreement is made.
It has been laid down judicially that, in the absence of contrary agreement, all assets and liabilities must be taken at a "fair value," not merely a "book value" basis, thus involving recording entries for both appreciation and depreciation of assets and liabilities.
This rule is applicable, notwithstanding the omission of a particular item from the books, e.g. investments, goodwill (Cruikshank vs Sutherland).
Obviously, the net effect of the revaluation will be a profit or loss divisible in the agreed profit or loss sharing ratios.
" 648 The real rights of the partners cannot be mutually adjusted on any other basis.
This is what happened in Ramachari.
Indeed, this is exactly what the partners in this case have done and, having done so, it is untenable for them to contend that the valuation should be on some other basis.
Once this principle is applied and the stock in trade is valued at market price, the surplus, if any, has to get reflected as the profits of the firm and has to be charged to tax.
The view taken by the High Court has held the field for about thirty years now and we see no reason to disagree even if a different view were possible.
For these reasons, we agree with the answer given by the High Court to the second question as well.
The appeal fails and is dismissed.
But we would make no order regarding costs.
R.N.J. Appeal dismissed.
| The appellants are high ranking officers in Rajasthan Administrative Service governed by the Rajasthan Administrative Service Rules, 1954.
Consequent upon the amendment caused to the said rules on July 17, 1987, they felt that the amendment had affected their further promotional chances.
They therefore filed writ petitions before the High court challenging the vires of the amendment dated 17.7.1987 contending that the creation of Super time scale did not have the automatic effect of creating highest post/posts to be filled by merit alone, and that the posts to which Super Time Scale was attracted remained `higher posts ' in contrast to `highest posts ' available to the members of the Rajasthan Administrative Service on the prescribed percentage of 50 per cent on merit and the remaining fifty per cent on seniority cum merit.
Their case was that section to the highest posts made under the amended rule solely on the basis of the merit was bad in law.
Before the High Court challenge to the vires of the amendment was abandoned and the High Court considered the question (i) whether the Super time scale is/are the highest post/posts in the service and (ii) if it is so, whether the post/posts is/are to be filled on the basis of seniority cum merit in the proportion of 50:50 or on merit alone in accordance with sub rule (7) of /Rule 28 B of the Rules: The High Court rejected the writ petitions opening that the Super Time Scale post/posts was/were the highest post/posts in the service and those are required to be filled on merit alone and not in the proportion of 50:50 on the basis of merit and seniority cum merit.
Hence these appeals by the appellants.
Dismissing the appeals this Court HELD: The terms `higher post ' and `highest post ' occurring in 580 Rules 28 B and 32 by all means are relative ones expected to be created in singular or plural terms under rule 6 whereunder the strength of posts in each grade was determinable by the government from time to time.
Sub rule (7) even before the amendment of 17.7.1987 postulated a highest post/post capable of being filled on the basis of merit alone.
[590 G H] Super Time Scale posts are the highest posts in the service and selection for promotion and appointment on that basis in the service has to be made on the basis of merit alone and not on the basis of seniority cum merit in the proportion of 50:50.[591 G] J.K. Cotton Spinning & Weaving Mills Co. Ltd. vs State of U. P. and Ors. ; ; Lt. Col. Prithi Pal Singh Bedi etc.
vs Union of India and Ors.
|
Appeal No. 75 & 76 of 1974.
Appeal by special leave from the Common Judgment and Order dated 27 /28 9 1973 of the Bombay High Court, Nagpur Bench, in Spl.
Civil Applications Nos.
826 of 1968 & 389 of 1971.
Sardar Bahadur Saharya and Vishnu Bahdur Saharya, for the appellants.
M.N. Phadke and A. G. Ratnaparkhi, for respondent No. 1 and 2 (in Appeal No. 75/74).
Niren De, Attorney General of India, M. N. Phadke and A. G. Ratnaparkhi, for respondent No. 1 (In Appeal No. 76/74).
K.L. Rathi and M. N. Shroff, for respondents Nos.
(In Appeal No. 75/74) and respondent No. 3 (in appeal No. 76/74).
The Judgment of P. N. Bhagwati and A. C. Gupta, JJ. was delivered by Bhagwati, J. N. L. Untwalia, J. gave a separate Opinion.
But we are writing a separate judgment as we feel that the discussion in the judgment of our learned brother Untwalia, J., in regard to delivery of 'symbolical ' and 'actual ' possession under rules 35, 36, 95 and 96 of Order XXI of the Code of Civil Procedure, is not necessary for the disposal of the present appeals and we do not wish to subscribe to what has been said by our learned brother Untwalia, J., in that connection, nor do we wish to express our assent with the discussion ' of the various authorities made by him in his judgment.
We think it is enough to state that when the Government proceeds to take possession of the land acquired by it under the Land Acquisition Act, 1894, it must take actual possession of the land, since all interests in the land are sought to be acquired by it.
Nor would possession merely on paper be enough.
How such possession may be taken would depend on the natureof the land.
Such possession would have to be taken as the natureof the land admits of.
There can be no hard and fast rule laying down what act would be sufficient to constitute taking of possession of land.
We should not, therefore, be taken as laying down an absolute and inviolable rule that merely going on the 'pot and making a declaration by beat of drum or otherwise would be sufficient to constitute taking of possession of land in every case.
It appears that the appellant was not present when this was done by the Tehsildar, but the presence of the owner or the occupant of the land is not necessary to effectuate the taking of possession.
It is also not strictly necessary as a matter of legal requirement that notice should be given to the owner or the occupant of the land that possession would be taken at a particular time, though it may be desirable where possible, to give such notice before possession is taken by the authorities, as that would eliminate the possibility of any fraudulent or collusive transaction of taking of mere paper possession, without the occupant or the owner ever coming to know of it.
We are of the view, on the facts and circumstances of the present case, that the Tehsildar took actual possession of that part of the land which was waste or arable and handed it over to the Principal of the Agricultural College.
It is true that the Special Land Acquisition Officer in his letter dated 13th December, 1961 to the Commissioner stated that possession of the entire land was still with the appellant and it was not actually taken possession of by the Principal, Agricultural College.
But it is obvious that this statement was made by the Special Land Acquisition Officer because he thought that actual possession of the land could not be regarded as having been taken, unless the appellant was excluded from the land and since the appellant immediately, without any obstruction, entered upon the land and continued in possession, "the land was not Actually taken possession of by the Principal, Agricultural College".
This was plainly erroneous view, for the legal position is clear that even if the appellant entered upon the land and resumed possession of it the very next moment after the land was actually taken possession of and became vested in the Government, such act on the part of the appellant did not have the effect of obliterating the consequences of vesting.
There can, therefore, be no doubt that actual possession of 19 acres 16 gunthas of waste and arable land was taken by the Tehsildar on 3rd April, 1959 and it became vested in the Government.
Neither the Government nor the Commissioner could thereafter withdraw from the acquisition of any portion of this land under section 48(1) of the Act.
There will be only one set of costs.
These two Civil Appeals filed by Shri Balwant Narayan Bhagde on grant of special leave by this Court arise out, of a common judgment of the Bombay High Court allowing Special Civil Application No. 826/1968 filed by Shri M. D. Bhagwat and Shri E. R. Mahajani, respondent Nos. 1 and 2 in Civil Appeal No.75 of 1974 and Special Civil Application No. 389/1971 filed by thePunjabrao Krishi Vidyapeeth (hereinafter called the AgriculturalCollege) to quash the order of the Commissioner 254 Nagpur purporting to give sanction for withdrawal of the acquisition by his letter dated 8 8 1968 in respect of a portion of the land comprised in Survey No. 30/2 in village Umari, District Akola.
The High Court has held that possession of the land in question was taken by the Collector, Akola and given to the Principal, Agricultural College.
It was, therefore, not open to the Commissioner to withdraw from the acquisition of the land under section 48(1) of the Land Acquisition Act, 1894 as it stands amended by the Land Acquisition (Maharashtra Extension and Amendment) Act hereinafter called the Act.
It is well settled and nothing to the contrary was canvassed before us, that after possession of the land forming the subject matter of acquisition has been taken in accordance with section 16 or section 17(1) of the Act, the land vests in the Government and the Government or any other authority is not at liberty to withdraw from the acquisition of any land of which possession has been taken; vide, State of Madhya Pradesh and Ors.
The controversy, therefore, centered round the question as to whether possession of the land which was released by the Commissioner under section 48(1) of the Act had been taken or not.
For the purpose of the Agricultural College a large area of land was acquired near Akola.
The total area of this plot is 20 acres 33 gunthas.
As the land was urgently required for the purpose of College, action under section 17 of the Act was taken dispensing with the following of the procedure under section 5A.
A notification under section 6 of the Act was issued on the 17th February, 1959.
A direction was given for taking possession of the land under section 17(1) on the expiration of 15 days from the publication of the notice under section 9(1).
Notice under section 9(1) of the Act was subsequently published on 6 3 1959.
After expiry of_15 days from the publication of the notice under section 9(1) on 24 3 1959 the land Acquisition Officer ordered the Tehsildar, Akola to deliver possession of the land to the Principal, Agricultural College or his nominee in the presence of the Sub Divisional Officer, P.W.D. Building and Roads Section, Akola and directed him to report compliance alongwith the possession receipt obtained from the Principal by 2 4 1959.
The Tehsildar took and handed over possession on 3 4 1959 and made a report.
An area of 19 acre 17 gunthas which contained a double storied house of the appellant and a well etc. was for the time being left and possession of the same was not taken.
It appears, just after the issuance of the notification under section 6 of the Act, the appellant who claimed to be the tenant of the land, the owners admittedly being respondents 1 and 2 in Civil Appeal No. 75 of 1974 made a representation to the Government that his field in Survey No. 30/2 should not be acquired and the acquisition should be withdrawn.
He seems to have filed an application to that effect before the State Government on 18 2 1959.
Some stay order thereupon is said to have been passed staying the proceeding in respect of the appellant 's land.
Following upon this correspondence took place and reports came to be made in April, 1959 and thereafter until the withdrawal from the acquisition of 12 acres and 23 gunthas of the land in Survey No. 30/2 was directed to be made by the Commissioner in the year 1968.
As already stated the withdrawal was challenged by filing two writ petitions in the Bombay High Court.
On behalf of the Governmental authorities two counters were filed in the two Writ Petitions.
In the owners ' petition the petitioners had stated that pursuant to the relevant notifications, Government took possession of 19 acres 16 gunthas of land on 3 4 1959 And gave possession of the same to the Principal, Agricultural College.
The Government in its return filed in the said case denied that possession as alleged was taken from the appellant and given to the Principal, Agricultural College.
In paragraph 3 of Special Civil Application No. 389/1971 it wasstated on behalf of the Agricultural College that the Tehsildar took possession only of 19 acres and 16 gunthas out of the field as the remaining area was found in the meantime on spot inspection not to be waste or arable to which the provision of section 17 of the Act could apply.
Actual possession of 19 acres 16 gunthas alongwith the other pieces of land measuring 200 acres and odd was delivered to the Principal, Agricultural College.
In the return filed on behalf of the Officers of the Government the contents of paragraph 3 of the petition were admitted.
But it was asserted that Government had taken only symbolical possession and the physical possession of the land remained with the appellant.
On consideration of the relevant materials placed before the High Court it has come to the conclusion that actual possession of the land in question was taken and handed over on 3 4 1959 on the spot ; and, even symbolical possession, if land is occupied by a person other than the owner.
would be good possession for the purpose of section 48 of the Act.
Mr. Sardar Bahadur Saharya, learned counsel for the appellant, submitted that possession of any portion of the land comprised in Survey No. 30/2 was not taken by the Government or given to the Principal, Agricultural College, it was all a paper delivery of possession, no notice was ever given to the appellant as to the date and time of taking possession of the land on the spot, and the sym bolical delivery of possession, even if any bad not the effect of divesting the appellant from the Actual possession over the land.
Counsel further submitted that the order of withdrawal which is confined to 256 an area of 12 acres 23 gunthas only out of Survey No. 30/2 leaving a further balance of 6 acres 33 gunthas to the College was valid.
Mr. Hathi appearing for the Government and its authorities struck to their stand that only symbolical possession was taken and actual possession remained with the appellant.
Learned Attorney General for the Agricultural College, followed by Mr. Phadke for the owners, submitted that no where the appellant had challenged the taking of possession of the land on the spot on 3 4 1959.
The effect of taking possession of the land was to vest it in the Government and no portion of it could be released under section 48(1) of the Act.
It was further submitted that there is no provision in the Act requiring the giving of any notice to the possessor of the land of the exact date and time of taking possession on the spot and notice published under section 9(1) is sufficient.
It may be stated at the outset that there does not seem to be any dispute as respects the fact that Bhagwat and Mahajani were the owners of the land at the time of the issuance of the notification under section 4 of the Act and the appellant was in its occupation or actual possession as a tenant.
There is no controversy that the Agricultural College not only needed the land in question but subsequently steps were taken for acquiring an additional area of 340 acres for the needs of the College.
The Commissioner in his order dated 17th February, 1959 had directed that the possession of the land may be taken on the expiration of 15 days from the publication of the notice mentioned in section 9 (1 ) of the Act.
The order recorded on 11 3 1959 shows that the notice in form 'D ' under section 9(1) of the Act was published on 6 3 1959, so the possession of the land could be taken on 21 3 1959 or there after.
On 24 3 1959 various other persons including the appellant appeared before the Land Acquisition Officer.
Appellant 's counsel prayed for time to file his written statement.
He was directed lo do so by 5.00 p.m. on 24 3 1959.
On this date the land Acquisition Officer recorded the order in presence of the parties including the appellant directing Tehsildar Akola to take possession of the land and hand it over to the Principal, Agricultural College, in the presence of S.D.O., P.W.D., Akola and to report compliance with possession receipt by 2 4 1959.
A written statement on behalf of the appellant was filed by 4.20 p.m. on 24 3 1959.
It is necessary to refer to the claim of the appellant made in the written statement aforesaid.
He stated that he was interested in the field as be was its protected lessee and as such 'he was entitled to receive compensation that may be granted.
But be said that he was entitled to the said amount.
Finally, the prayer in the written statement was to stay the delivery of possession of the bungalow at least for two months.
It would thus be seen that in his written statement filed on 24 3 1959 the appellant did not deny the publication of notice on the spot under section 9(1) nor did he propose to put any impediment in the taking of possession of the land comprised in Survey No. 30/2.
He merely wanted the stay of taking possession in respect of the house.
The total area mentioned in this letter is 234 acres 31 gunthas including 19 acres and 16 gunthas in Survey No. 30/2.
The Revenue Inspector endorsed "handed over as above." On the facts and in the circumstances of this case it is difficult to accept the argument put forward on behalf of the appellant that the taking and giving of possession on 3 4 1959 was only on paper and not on the spot.
The High Court in its judgment has referred to a letter dated 7 4 1959 by the Land Acquisition Officer to the Collector, Akola to say that the appellant represented before him that a stay order had been passed in respect of Survey No. 30/2 by the Minister for Agriculture and the proceedings for taking possession of this land may be deferred pending further instructions from the higher authorities ; but before any step could be taken on the representation of the appellant, the land Acquisition Officer got the information that possession had been taken and given but in spite of that in the letter dated 7 4 1959 a direction was given to the Tehsildar to withhold taking possession of the field in Survey No. 30/2 of village Umari temporarily.
Thereupon, the Tehsildar made a report dated 11 4 1959 stating therein "possession has already been delivered to the Principal, Agricultural College.
Akola and the possession receipt is enclosed.
In case possession of section No. 30/2 is still to be withheld, the Principal, Agricultural College, S.D.O., P.W.D. and the lessee of the field would be approached in this respect and necessary action would be taken accordingly.
" As a matter of fact it would appear from the letter dated 16 4 1959 written by the Assistant Secretary of the Government of Bombay to the appellant in reply to his letter addressed to the Minister for Agriculture a copy of which was forwarded to the Collector, Akola that for the first time in this letter he was requested to stay the proceedings until further orders.
Then comes the letter dated 4 5 1959 written by the Land Acquisition Officer to the Collector, Akola.
Reference was made to all these 258 documents on behalf of both the parties.
The S.D.O. and the Land Acquisition Officer sought instructions of the Collector as to what action was to be taken in respect of land measuring 19 acres 16 gunthas out of Survey No. 30/2 "the possession of which has already been delivered to the Agricultural Department".
The next letter is one from the Principal of the College to the Land, Acquisition Officer dated the 27th May, 1959 asking clarification of the stay order received in regard to Survey No. 30/2.
The reply is dated 4 6 1959 informing him that clarification will be made on receipt of further communication from the Collector.
The next letter is dated 18 7 1959 from the Principal of the College to the Director of Agriculture stating therein that possession of the whole field No. 30/2 excluding the area of 1 acre 16 gunthas which was also required for the purpose of the College, was delivered on 3 4 1959 but in view of the Government order contained in their letter dated 16 4 1959 the land was not being cultivated and was lying as a sort of no man 's land.
Then comes an important letter again referred at the Bar on behalf of both the parties written by the Special Land Acquisition Officer, Akola to the Commissioner, Nagpur on the 13th December, 1961.
The difficulty in releasing the land under section 48 (1) was pointed out and further, in this letter it is stated "Taking over possession of IA 15G of land to be acquired under urgency clause was deferred as on joint spot inspection made by the then Sub Divisional Officer, Principal Agricultural College and S.D.O. (P.W.D.) Akola, it was thought that acquisition of this portion which contains one double storied building, some converted land etc. would entail heavy expenditure.
" It Would thus be clear beyond any shadow of doubt that possession was taken on the spot.
On spot inspection the area of 1 acre and odd only was left out of possession.
But then in this very letter there is a statement "The Collector Akola was directed to stay the acquisition proceedings in respect of this field until further orders, though possession receipt for section No. 30/2 was passed on 3 4 1959, the possession (physical) of the entire field section No. 30/2 of Umari is still retained by the lessee of that field and the land was not actually taken possession of by the Principal, Agricultural College, Akola.
" Learned counsel for the appellant submitted that physical possession of the entire land comprised in Survey No. 30/2 remained with the appellant and the possession delivered was either on paper or merely symbolical ; it therefore, could not prevent the release of the land from acquisition under section 48(1) of the Act.
It is not necessary to refer to the further correspondence which ensued.
It may, however, be stated that because of the stay order and the dispute raised in respect of the land comprised in Survey No. 30 in the award prepared by the Collector on 30 1 1960 compensation for the said land was not determined.
And eventually in the year 1968 an area of 12 acres 23 gunthas was sought to be released from acquisition.
The question for consideration is was the release valid and proper ? 259 In order to appreciate what is meant by taking possession of the land under section 16 or 17(1) of the Act and what is the mode of taking such possession in regard to the waste or arable land with which we are concerned in this case, it is necessary to refer to certain provisions of the Code of Civil Procedure hereinafter called the Code, and some decisions thereon.
The Code does not prescribe that in respect of a particular property there can be two modes of giving possession either to a decree holder or to an auction purchaser one ,. symbolical" and the other "actual".
These Rules prescribe that if the property is in the occupation of the judgment debtor or some one on his behalf the possession shall be given if necessary by removing the judgment debtor and placing the decree holder or the auction purchaser in occupation of the same.
On the other band if the property is of such a nature that the judgment debtor cannot be in actual occupation of it, as for instance, property in the possession of a tenant, the only mode of giving possession is by proclaiming on the spot that the possession has been given to the decree holder or the auction purchaser.
In some decisions the former mode of possession has been called "actual '9 and the latter "symbolical".
Really speaking even the delivery of so called "symbolical" possession is delivery of "actual" possession of the right title and interest of the judgment debtor.
It completely dispossess him.
It does not affect the physical occupation of the property by a person who is not bound by the decree or whose interest is not affected by sale of the judgment debtor 's interest in execution of a decree.
If the property is land over which does not stand any building or structure, then delivery of possession over the judgment debtor 's property becomes complete and effective against him the moment the delivery is effected by going upon the land, or in case of resistance, by removing the person resisting unauthorisedly.
A different mode of delivery is prescribed in the Code in the rules aforesaid in regard to a building, with which we are not concerned in this case.
Sometimes the expression symbolical or formal delivery of possession has been used in decisions to connote the actual delivery of possession effective against the judgment debtor leading to his dispossession in the eye of law even though the duration of the dispossession may be momentary or temporary.
In the other, the delivery is effected by the officer of the Court by going through a certain process prescribed by section 224, and proclaiming to the occupants of the property that the plaintiff has recovered it from the defendant.
This is the only way in which the decree of the Court, awarding possession to the plaintiff, can be enforced ; and as, in contemplation of law, (1) I.L.R. 5 Calcutta 584.260
both parties must be considered as being present at the time when the delivery is made, we consider that, as against defendant, the delivery thus given must be deemed equivalent to actual possession."
As against third parties, of course, this symbolical possession (as it is called) would be of no ' avail ; because they are no parties to the proceeding.
But if the defendant should, after this, again dispossess the plaintiff by receiving the rents and profits, we think that the plaintiff would have twelve years from such dispossession to bring another suit."
Another Full Bench consisting again of live learned Judges of the Calcutta High Court presided over by Petheram, C.J., in the case of Joggobnudhu Mitter vs Purnanund Gossami and another (1) reaffirmed teh view taken in Juggobundhu Mukherjee 's case (I.L.R. 5, Calsutta,584)in the following words : "The Full Bench held that symbolic.
possession obtained by the plaintiff 's vendor was effective as against the judgment debtor, defendant, and that the suit brought against him within 12 years of that event was not barred by limitation.
The plaintiffs had filed a suit to recover possession of the said land.
The principal defendant who was the appellant before the Privy Council was an idol by shebiats who was in actual possession of the land by their tenants.
The predecessors of the defendants in the suit were parties to an earlier mortgage action.
In due course a decree was obtained.
The property which, according to the finding, included the disputed land was sold.
The mortgagee decree holders were the purchasers of the property.
"The land being in occupation by cultivating tenants under an apparently bona fide title they received formal possession as usual after due proclamation by beat of drum in 1898."(vide page 200 column 2).
Lord Sumner delivering the judgment of the Board said At the same page "This interruption, if such it was, of the defendants ' actual possession was not of long duration.
Hence the necessity for the present suit.
Hence also the defence of adverse possession for more than twelve years before suit began.
" It would thus be seen that formal possession of the land in actual occupation of the tenants, which in a sense was symbolical, was ' characterised as interruption of defendant 's actual possession.
And finally the ratio of the decision of the Full Bench of the Calcutta High Court in Juggobundhu Mukherjee 's case (I.L.R. 5, Calcutta, 584) was approved thus at page 201, column 1 : "In the High Court and before their Lordships it was further argued that symbolical possession would not avail against the defendants, but that only actual dispossession would interrupt their adverse possession.
The High Court (1) I.T.R. 16 Calcutta 530.(2) A.T.R. 1917 Privy Council 197 (2).261 following a decision of the Full Bench in Juggobundhu Mukherjee vs Ram Chandra Bysack (1880) 5 Calcutta, 584=5 C.L.R. 548 (F.B.) held that symbolical possession availed to dispossess the defendants sufficiently, because they were parties to the proceedings in which it was ordered and given.
This decision is one of long standing, and has been followed for many years.
Their Lordships see no reason to question it or to hold that this rule of procedure should now be altered.
" In the case of joint possession the decision of the Privy Council in Sri Radha Krishna Chanderji 's case [A.I.R. 1917 Privy Council, 197(2)] has been referred with approval by this Court in the case of M. V. section Manikayala Rao vs M. Narasimhaswami and others(1) in paragraph 7 at page 474 in the judgment of Sarkar, J, as he then was, as also in paragraph 20 at page 478 is that of Ramaswami, J. I may just quote a sentence from paragraph 7 which says : "By the delivery of symbolical possession under the order of November 6, 1939, the adverse possession of the defendants was interrupted." Mohammad Noor, J.,in the case of Ram Prasad Ojha and others vs Bakshi Bindeshwari Prasad and others(2) has considered the point in his separate but concurring judgment with 'reference to the relevant provisions of the Code at page 147.
In that case the question of defendants adverse possession arose with reference to a property which was not in occupation of any tenant.
The suit for possession after the mortgage sale and delivery was being resisted by a person who was in.
no better position than the mortgagor judgment debtor.
The learned Judge pointed out at pages 147 and 148 "When it is said that symbolical possession is not binding upon a third party but actual possession is, it is only meant that when a decree bolder or an auction purchaser has been put in actual occupation of the property every body else has been ousted from it, and consequently dispossessed.
This is an obvious fact and not a question of law.
On the other had if the Court simply proclaims that the decree holder or auction purchaser has been given possession but on account of the nature of the property they have not been placed in physical occupation of the property itself, such a delivery of possession can be binding only upon those who are parties to those proceedings or on those who claim through them.
The difference, as I have said, is due to the nature of the property and not on account of the difference in the nature of possession.
The question will always be not what was the mode of delivery of possession but who has in fact been ousted by it." (1) ; (2) A.I.R. 1932 Patna 145.
262 The same learnedJudge had the occasion to consider the question again in the case ofMahabir Singh and others vs Emperor(1).
And that too with reference to a property which was not in possession of any tenant but of the judgment debtor.
The question arose in a criminal case and the confusion arising out of the use of the expressions "the actual" and "symbolical" possession was again discussed at page 568.
The writ of delivery was issued in the previous litigation under Order 21, Rule 95 of the Code and in that connection the different modes of delivery of possession over a piece of land were discussed.
The momentary possession given to the purchaser was characterised as delivery of symbolical possession by the Additional Sessions Judge and not actual possession.
The learned Judge pointed out at page 569, column 1: "It issued its writ under Rule 95, and the peon formally put the auction purchaser in possession of the property.
It is wrong to think that there Are two kinds of delivery of possession ; one actual and the other symbolical independent of the nature of possession of the judgment debtor.
Even if the delivery of possession was symbolical, its effect against the judgment debtor was the same.
" The so called paper possession or possession on paper is no delivery of possession, actual, formal or symbolical.
A Bench of the Madras High Court consisting of Rajamannar, C.J. and Rajagopala Aiyangar, J. has stated at page 762 in the case of Pathaperumal Ambalam vs Chidambaram Chettiar(2) : .lm15 "The next question is whether it makes any difference in legal effect if possession is taken through court.
The Code contemplates no notice to the judgment debtor at that stage or any objection being raised by him to the delivery of possession under Rule 95, or Rule 96, and as the full title to the property has passed from the judgment debtor to the auction purchaser, he has no interest in the property to protect.
" It has further been pointed out "The characterisation of possession taken under Order 21 Rule 96, as "paper possession" is hardly justified and runs counter.
to the principle on which the provision is based.
Symbolical possession obtained under Order 21, Rule 96 is quite a different thing from paper possession, which might correctly describe only the possession obtained by a party who being entitled to actual possession, the judgment debtor himself being in possession, obtains delivery of possession on paper without actual possession ; or those cases where without complying with the requisites of the statute a false return is made as if they were complied with." (1)A.I.R. 1934 Patna 565.
(2) A.T.R. 1954 Madras 760. 263 It would thus be seen that a symbolical or formal delivery ' of possession as understood in law has the effect of dispossessing the judgment debtor from his right title or interest in the property.
It does not dispossess the person in ' actual possession in his own right not liable to be evicted under the decree or in pursuance of the auction sale.
A symbolical or formal delivery of possession against the judgment debtor is giving of actual possession of the property in the eye of law and has the effect of dispossessing him although as a matter of fact he may have succeeded in resuming back, possession as before shortly after dispossession.
In a proceeding under the Act for acquisition of land all interests are wiped out.
Actual possession of the land becomes necessary.
for its use for the public purpose for which it has been acquired.
Therefore, the taking of possession under the Act cannot be "symbolical" in the sense as generally understood in Civil Law. ' Surely it cannot be a possession merely on paper.
In the eye of law the taking of possession will have the effect of transferring possession from the owner or the occupant of the land to the Government.
Section 9(1) of the Act reads as follows "The Collector shall then cause public notice to be given at convenient places or near the land to be taken, stating that the Government intends to take possession of the land, and that claims to compensation for all interests in such land may be made to him.
" When a public notice is published at a convenient place or near the land to be taken stating that the Government intends to take possession of the land, then ordinarily and generally there would be no question of resisting or impeding the taking of possession.
Delivery or giving of possession by the owner or the occupant of the land is not required.
The Collector can enforce the surrender of the land to himself under section 47 of the Act if impeded in.
taking possession.
On publication of the notice under section (1) claims to compensation for all interests in the land has to be made ; be it the interest of the owner or of a person entitled to the occupation of the land.
On the taking of possession of the land under section 16 or 17 (1) it vests absolutely in the Government free from all incumbrances.
It is, therefore, clear that taking of possession within the meaningof section 16 or 17(1) means taking of possession on the spot.
It isneither a possession on paper nor a "symbolical" possession as generally understood in Civil Law.
But the question is what is the mode of taking possession ? The Act is silent on the point.
Unless possession is taken by the written agreement of the party concerned the mode of taking possession obviously would be for the authority to go upon the land and to do some act which would indicate that the authority has taken possession of the land.
It may be in the form of a declaration by beat of drum or otherwise or by hanging a written declaration on the spot that the authority 10 SC 75 18 264 has taken possession of the land.
The presence of the owner or the occupant of the land to effectuate the taking, of possession is not necessary.
No further notice beyond that under section 9(1) of the act: is required.
When possession has been taken, the owner or the occupant of the land is dispossessed.
Once possession has been taken the land vests in the Government.
In the instant case in agreement with the findings of the Court, I hold that the eye of law actual possession of the land in question was taken by the Tehsildar on the spot and the possession was handed over to the Principal of the Agricultural College.
It appears that the appellant on his part thought that he never gave up possession and claimed to continue in actual possession of the disputed land, because of the stay order passed by the Government on or about the 16th April, 1959.
Viewed in the light of the discussion of law I have made above, it would be noticed that possession of the land, in any event, was taken on the spot and it vested in the Government.
The appellant 's resuming possession of the land after once it was validly taken by the Government had not the effect of undoing the fact of the vesting of the land in the Government.
The Government or the Commissioner was not at liberty to withdraw from the acquisition of any portion of the land of which possession had been taken, under section 48(1) of the Act.
In the result the appeals fail and are dismissed with costs.
One set of hearing fee.
V.P.S. Appeals dismissed.
| For the purpose of acquiring land for an Agricultural College a notification was issued under section 4 of the Land Acquisition Act, 1894, in January 1959, with respect to several pieces of land one of which belonged to the res pondents and was in possession of the appellant as tenant.
After the issue of the notification under section 6, in February 1959, the Commissioner directed that possession of that land may be taken under section 17(1) on the expiry of 15 days from the publication of the notice under section 9(1).
On March 24, 1959, the appellant filed a statement before the Land Acquisition Officer.
In that statement, he did not deny the publication of notice on the spot under section 9(1) nor did he put any impediment to the taking of the land.
He merely wanted the compensation amount to be paid to him and wanted stay of the taking possession of his house on the land.
The Land Acquisition Officer passed orders in the presence of the appellant directing the Tahsildar to take possession of the land and hand it over to the Principal of the Agricultural College.
The Tahsildar went to the spot, inspected the land for the purpose of determining what part was waste and arable and should therefore be taken possession of and took possession of the land, leaving out the small portion containing the house of the appellant, and handed over possession of the land so taken over to the Principal of the Agricultural College.
The appellant was not present at the time when the Tahsildar took possession.
There was, thereafter, correspondence between the appellant and the Government.
and various reports had been made by the officers of the Government and on April 16, 1959, a stay order was passed by the Government.
On December 13, 1961, the Land Acquisition Officer wrote to the Commissioner that possession of the land was still with the appellant, and on August 8, 1968, withdrawal from the acquisition of that part of the land under section 48(1) of the Act, was directed by the Commissioner.
The respondents and the Agricultural College filed writ petitions in the High Court, challenging the release of the land.
The High Court allowed the petitions holing that possession of the land was taken (even though the Government took the stand that they had taken only 'symbolical ' possession) and given to the Principal of the College and that, therefore, it was not open to the Commissioner to withdraw from the acquisition under section 48(1) as amended by the Land Acquisition (Maharashtra Extension and Amendment) Act.
Dismissing the appeal to this Court, HELD : (Per Curiam) : Neither the Government nor the Commissioner could withdraw under section 48(1) from the acquisition of any portion of the land which had been taken over by and vested in the Government.
[253 F] (Per P. N. Bhagwati and A. C. Gupta JJ) : When Government proceeds to take possession of the land acquired by it under the Act.
it must take actual Possession since all interests in the land are sought to be acquired by it, and there is no question of taking 'symbolical ' possession as understood 251 under the C.P.C. Nor would possession merely on paper be enough.
How such actual possession may be taken would depend on the nature of land.
It is not an absolute and inviolable rule that merely going on the spot and making a declaration by beat of drum or otherwise would be sufficient to constitute taking possession of land in every case.
It is also not strictly necessary as a matter of legal requirement that notice should be given to the owner or occupant of the land that possession would be taken at a particular time, though it may be desirable to do so in order to eliminate the possibility of a fraudulent or collusive transaction of talking of mere paper possession, without the occupant or the owner ever knowing about it.
[252E H, 153A B] On the facts and circumstances of the present case, the Tahsildar had taken actual possession of that part of the land which was waste or arable and handed it over to the Principal of the College.
The Land Acquisition Officer thought that actual possession could not be regarded as having been taken unless the appellant was excluded from the land, and, since the appellant, without any obstruction entered on the land and continued in possession, he mistakenly stated that actual possession was not taken.
The legal position is that even if the appellant entered upon the land after actual possession had been taken by and the land vested in, the Government, the appellant 's possession would not obliterate the consequence of vesting in the Government.
[253 B E] [Discussion regarding delivery of 'symbolical ' and 'actual ' possession under the C.P.C. is not necessary for the disposal of the appeals], [252 D] (Per Untwalia J.) : (1) Under the C.P.C., a symbolical or formal delivery of possession has the effect, of dispossessing the judgment debtor from his right, title or interest in the property, although, as a matter of fact, he may have succeeded in resuming possession shortly after dispossession.
It does not, however, dispossess the person in actual possession in his own right not liable to be evicted under the decree or in pursuance of the auction sale.
[263A B] (2)When a public notice under section 9(1) of the Act is published at a convenient place or near the land to be taken that Government intends to take possession, ordinarily there would be no question of resisting or impeding the taking of possession.
Delivery of possession by the owner is not required and the Collector can enforce surrender under section 47 if impeded.
On taking possession either under section 16 or section 17(1), the land vests absolutely in the Government free from all encumbrances.
Therefore, in a proceeding under the Land Acquisition Act for acquisition of land all interests are wiped out, and hence, the taking of possession must be taking actual possession on the spot and not symbolical possession; and surely it cannot be a possession merely on paper.
[263E G] (3)As to the mode of taking possession, the Act is silent.
Unless possession is taken by the written agreement of the party concerned the mode of taking possession obviously would be for the authority to go upon the land and do some act which would indicate that the authority has taken possession of the land.
It may be in the form of a declaration by beat of drum or otherwise or by hanging a written declaration on the spot that possession has been taken.
The presence of the owner or the occupant is not necessary to effectuate the taking of possession.
[263H, 264A] (4)In the instant case, actual possession of the land was taken by the Tahsildar on the spot and the possession was handed over to the Principal of the College.
The Land Acquisition Officer 's statement that the land was not actually taken possession and the Government 's stand that, only symbolical possession was taken, should be viewed from the correct legal position.
So viewed, the appellant 's resuming possession after once the land was validly taken by the Government would not have the effect of undoing the fact (if vesting in the Government.
[264B, E F] 252
|
: Special Leave Petition (Crl. ) No. 419 of 1987.
From the Judgment and order dated 11.12.1986 of the Punjab and Haryana High Court in Criminal Miscellaneous No. 7421 M of 1 986 .
R.K. Garg, Ms. Suman Kapoor and R.P. Singh for the Petitioner.
P.N. Puri, R.S. Sodhi and R.S. Suri for the Respondents.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
This is a petition for leave to appeal under Article 136 of the Constitution against the judgment and order of the High Court of Punjab and Haryana dated 11th of December, 1986.
By the order the High Court has dismissed the applica 452 tion under section 482 of the Code of Criminal Procedure praying that further that proceedings be stayed in Sessions Case No. 1 of 25th of March, 1985 under sections 148/302/325/323/149/120 B of the I.P.C.
The High Court dismissed this petition because it found no merit in the same.
The petitioner, herein alongwith 14 more persons were charged by an order dated 30th of May, 1986 under sections 148/302/149/325/149 and under sections 323/149 of the I.P.C. for allegedly causing death of one Ajit Singh and for causing hurt to Smt.
Gurmej Kaur, the complainant.
The case was committed to the Court of Sessions by the Judicial Magistrate 1st Class, Kapurthala vide order dated 20.2.1985.
As per the case set up by the complainant Smt.
Gujmej Kaur, her son Ajit Singh since deceased was involved in a murder case pertaining to the murder of head constable Bagga Singh of Police Station Dhilwan.
That case was registered in police station Bhogpur, District Jalandhar and Ajit Singh was tried alongwith other persons and was sentenced by the Additional Sessions Judge but he was acquitted by the High Court.
The complainant further states that Ajit Singh was also involved by the police in a case of dacoity of police station Kotwali Kapurthala and police station Dhilwan during investigation of the murder case in question.
Ajit Singh was also convicted in those cases but acquitted by the High Court.
It is the case of the complainant that Ajit Singh was allegedly involved in some other murder and dacoity case by the police which was tried in Himachal Pradesh and Ajit Singh was acquitted by the Himachal Pradesh High Court.
Mohinder Singh and Des Raj also co accused in this case allegedly investigated cases of Kapurthala and Ajit Singh was tortured by Des Raj and the leg of Ajit Singh was broken.
Ajit Singh then filed complaint against Des Raj (also accused in this case) and he was summoned by the Judicial Magistrate 1st p Class, Kapurthala and thus the relation between Ajit Singh and Kapurthala Police Station had become very strained.
Ajit Singh had then settled in U.P., according to the allegations in the complaint, out of fear of the police.
It is stated that on or about 7th of April, 1983 at about 3 p.m. all the accused including present petitioner went to village Bhandal Bet.
They went to the house of the complaint where she was present alongwith her sons Ajit Singh and Manjit Singh and other members of the family.
Manjit Singh and Ajit Singh, it was alleged, were surrounded by the police officials and Manjit Singh and Ajit Singh protested against this.
Then Bakshish Singh accused, petitioner, directed his companions to arrest Ajit Singh and Manjit Singh and tie them with ropes and put them in the truck for the purpose of throwing them in the river Beas.
It was further alleged that Manjit 453 Singh and Ajit Singh ran to save themselves but they were attacked by the police officials.
The complainant also received injuries in the A course of this occurrence when she was given dang blows.
Ajit Singh and Manjit Singh were given blows by the police officals on the asking of the appellant herein Bakhshish Singh Brar, who is the Deputy Superintendent of Police.
A hue and cry was raised.
Other persons came, Ajit Singh and Manjit Singh became unconscious and then they were taken away in the truck for the purpose of throwing them in the river, according to the complaint.
The case of the complainant further was that Ajit Singh and Manjit Singh were then got admitted by the police in Civil Hospital, Kapurthala as indoor patients and Ajit Singh died as a result of injuries on 8th of March, 1983.
It was further alleged that the accused who are the police officials fabricated false evidence in order to make out a defence and registered two false cases one under section 61(1)(a) of the Punjab Excise Act, F.I.R. No. 70 dated 7th of April 1983 and the other under section 307, I.P.C. F.I.R. No. l 1 dated 7th April, 1983.
On the other hand, the case of the respondents was that the police party headed by the petitioner including 13 of his subordinates went to the Haveli of Jit Singh alias Jita, situated in village Bhandel Bet in connection with raid on secret information to the effect that he is indulging in illicit liquor and unlicenced arms.
There were two First Information Reports one under section 61(1)(14) of the Punjab Excise Act and the other under section 25(54)(59) of the Arms act were recorded in Police Station Dhilwan.
That on the same date the police party raided the Haveli of Jit Singh alias Jita, where Manjit Singh, Jasbir Singh, Balwant Singh, Chhinda and Majwi, residence of village Bullowal and Gurdev Singh resident of village Ucha were present there.
It is further alleged that seeing the police party, Jasbir Singh fired at Ajit Singh, who saved himself by hiding himself behind a wall.
The other persons armed with dangs and dhope attacked the police party.
There are rival versions involved in this case.
The question was whether without the sanction under section 197 of the Code of Criminal Procedure the proceedings could go on.
It is quite apparent that as a result of the alleged search and raid, which was conducted by the petitioner in discharge of his official duties certain injuries, which are described as grievous, injuries had been inflicted on the complainant and one of the alleged offenders had died.
In this case, admittedly, the petitioner is a Government servant.
Admittedly, there was no sanction under section 197 of the Cr.
P.C. had been taken.
The trial in this case H 454 is one of the offences mentioned under section 196 of the Cr.
The A contention of the petitioner was that under section 196 of the Cr.
P.C. the cognizance of the offence could not be taken nor the trial proceeded without the sanction of the appropriate authorities.
The learned Additional Sessions Judge, Kapurthala after consideration of the facts and circumstances of the case in view of the observations of this Court in Pukhraj vs State of Rajasthan and another, that unless cognizance is taken and the facts and in the circumstances and the nature of the allegations involved in this case are gone into the question whether the raiding party exceeded its limits or power while acting in the official duties cannot be determined.
The learned Judge observed after gathering the materials and some evidence, it would be possible to determine whether the petitioner while acting in the discharge of his duties as a police officer had exceeded the limit of his official capacity in inflicting grievous injuries on the accused and causing death to the other accused.
This Court in the aforesaid decision had occasion to consider this aspect.
The case is instructive and illustrative how a balance has to be struck between the need for speedier trial of criminal offenders and at the same time protecting public servants or police officials in the discharge of their duties without obstructions.
There the appellant had filed a complaint against his superior officer, in the Postal Department under sections 323 and 502 of I.P.C. alleging that when the appellant went with a certain complaint to the second respondent, the said respondent kicked him in his abdomen and absued him by saying "Sale, gunde, badmash . " The said respondent filed an application under section 197 of the Cr.
P.C. praying that the Court should not take cognizance of the offence without the sanction of the Government, as required by section 197 of the Cr.
It was further contended that the alleged acts, if at all done by the accused were done while discharging his duties as a public servant.
The trial Magistrate dismissed the application.
The High Court allowed the revision application of the said respondent.
This Court on appeal held that at that stage, the Court was concerned only with one point, viz., whether on facts alleged in the complaint, it could be said that the acts were done in purported exercise of his duties.
Applying the test laid down in the decisions of the Federal Court and this Court to acts complained of, viz., kicking the complainant and abusing, could not be said to have been done in the course of the performance of the duty by the said respondent.
The facts subsequently coming to light during the course of the judicial enquiry or during the course of the prosecution evidence at the trial might establish the necessity for sanction, it was observed.
This Court noted that it might be possible for the said respondent to 455 place materials on record during the course of the trial for showing what his duties were and also that the acts complained of were so interrelated with his official duty, so as to attract the protection afforded by section 197 of the Cr.
This Court reiterated that the question whether sanction was necessary or not might have to depend upon from stage to stage having regard to the facts and circumstances of the case.
This Court allowed the appeal and allowed the trial to proceed without the sanction.
In the instant case, it is alleged that grievous injuries were inflicted upon the complainant and as a result of injuries one of the alleged accused had died.
The question is while investigating and performing his duties as a police officer was it necessary for the petitioner to conduct himself in such a manner which would result in such consequences.
It is necessary to protect the public servant in the discharge of their duties.
They must be made immune from being harassed in criminal proceedings and prosecution, that is the rationale behind section 196 and section 197 of the Cr.
But it is equally important to emphasise that rights of the citizens should be protected and no excesses should be permitted.
"Encounter death" has become too common.
In the facts and circumstance of each case protection of public officers and public servants functioning in discharge of official duties and protection of private citizens have to be balanced by finding out as to what extent and how far is a public servant working in discharge of his duties or purported discharge of his duties, and whether the public servant has exceeded his limit.
It is true that section 196 states that no cognizance can be taken and even after cognizance having been taken if facts come to light that the acts complained of were done in the discharge of the official duties then the trial may have to be stayed unless sanction is obtained.
But at the same time it has to be emphasised that criminal trials should not be stayed in all cases at the preliminary stage because that will cause great damage to the evidence.
In that view of the matter we are of the opinion that the order passed by the learned Additional Sessions Judge, Kapurthala, in the facts of this case, was proper and the High Court was right in not interfering with the same.
We, therefore, dismiss this petition.
G We, however, direct that the trial should proceed as expeditiously as possible.
We further record that if necessary the question of sanction under section 197 of the Cr.
P.C. may be agitated after some evidence have been noted by the learned Additional Sessions Judge.
P.S.S. Petition dismissed.
| % In a writ petition, the petitioner challenged the price fixation on the ground; that the State Government had not taken into consideration the guidelines in built in sub section 3C of section 3 of the , that the levy order was unreasonable or excessive restriction on the fundamental rights guaranteed under Articles 19(1)(g) and 14 of the Constitution, and that the levy was a colourable exercise of the power as the State Government sold the levy sugar by public auction realising large profit.
Dismissing the Writ Petition, ^ HELD: 1.1 The Court does not act like a Chartered Accountant nor acts like an Income Tax officer.
The Court is not concerned with any individual case of any particular problem.
The Court only examines whether the price determined was with due regard to considerations provided by the statute, and whether extraneous matters have been excluded from determination.
[580D E] Union of India vs Cynamide India Ltd. AIR 1987 Sept. SC 180 ' at 1805.
followed.
1.2 The primary consideration in the fixation of price would be 578 the interest of consumers rather than that of producers.
[581F] Since the petitioners in the instant case, are allowed to sell freely at any rate they like, the remaining 50% of the Sugar (after excluding the 50% which they have to give for levy) as also the produce by the second and third process, the loss if any caused to the petitioners would be minimal.
[581Gl New India Sugar Works vs State of Uttar Pradesh & Ors., ; , relied.
1.3 It is clear from the Preamble, that the primary object of the was to control production, supply, and distribution of essential commodities, and to make such commodities available at a reasonable price.
The exercise provided under the Act was intended ultimately to serve the interest of consumers.
It is fundamental in the entire scheme of the Act.
But then, the interest of the industry as a whole cannot be left out.
It is also required to be borne in mind.
The levy price of sugar should ensure reasonable return to the industry.
That is one of the guidelines provided under sub section 3C of section 3 of the Act.
But that does not mean that the interest of producers should outweigh the interest of consumers.
It would be tilting the balance too much.
[582C F] 1.4 There is no colourable exercise of power.
There was every justification for the sale by public auction.
The petitioner and some other producers delivered inferior quality of Khandsari, which was found to be unacceptable to consumers at Fair Price Shops.
The State officers accordingly reported to the Government, which issued instructions to distribute the levy sugar liberally through permits for marriages and religious functions.
The consumers, however, could not come forward.
The Government then directed the disposal of levy sugar by public auction.
It was not with a view to earn profit, although incidentally the Government made some profit.
The levy sugar was brought to public sale only to prevent deterioration when the consumers refused to accept it.
[583A C] The Panipat Co operative Sugar mills vs Union of India [197312 SCR 860 and Anakapalle Coop.
& Industrial Society Ltd. vs Union of India & Ors.
, ; , referred to.
|
Appeal No. 419 of 1973.
From the Judgement and Order dated the 22nd December 1972 of the Punjab and Haryana High Court at Chandigarh in Election Petition No. 2 of 1972.
Hardyal Hardy, V. P. Chaudhry, Jitendra Sharma and Sharma Chaudhury and Rathi, for the appellant.
M. N. Phadke, Bakhtawar Singh, D. N. Misra, and J. B. Dadachanji, for respondent No. 1.
The Judgment of P. JAGANMOHAN REDDY and P. K. GOSWAMI, JJ. was delivered by Goswami, J. section N. Dwivedi, J. gave a separate Opinion.
GOSWAMI, J.
This appeal under section 116A of the Representation of the People Act, 1951 (briefly the Act, is directed against the judgment and order passed by the High Court of Punjab and Haryana in Election Petition No. 2 of 1972 dismissing it on the preliminary ground that the appellant had failed to comply with the mandatory requirement of section 81(3) of the Act inasmuch as the requisite number of spare copies of the petition for the respondents were not filed along With the petition in the High Court.
It was further held by the High Court that the said defect could not be cured subsequently even within the period of limitation prescribed for filing the election petition.
The High Court further held that the spare copies were actually filed beyond the period of limitation.
The facts may be briefly stated.
In the general election to the Haryana Legislative Assembly held on March 11, 1972, the appellant and the four respondents were the contesting candidates for the Safidon Assembly Constituency No. 30; two candidates having already withdrawn from the contest.
The counting of votes took place on March 12, 1972 and on the following day.
The counting disclosed that the first respondent obtained 19570 votes as against 19462 votes secured by the appellant.
The first respondent was, therefore, declared elected on March 13,1972.
The appellant filed an election petition in the High Court challenging the election of the first respondent on several grounds of corrupt practice within the meaning of section 123 of the Act.
It is not necessary for the purpose of this case even to detail these.
The election petition was presented by Mr. R. section Mittal, Advocate incharge, to the Deputy Registrar (Judicial) of the High Court on April 18, 1972.
The same was ordered to be put up for scrutiny on April 24, 1972.
It is admitted that the application was filed on April 18, 1972, without the requisite spare copies and was, therefore, incomplete on the date of presentation.
No schedules were also filed along with the petition but that point is not pressed before us by the respondent 's counsel.
It is also admitted that the limitation for filing the election petition was up to April 27, 1972.
According to the appellant the spare copies were filed with the Superintendent of the Election Branch in the afternoon of April 24, 1972, well within the period ' of limitation.
22 It may be necessary to briefly note the sequence of events for the purpose of appreciating the controversy raised between the parties as noted earlier, the election petition was presented personally by Mr. Mittal without the spare copies on April 18, 1972, and the Deputy Registrar had ordered it to be put up on April 24, 1972, for scrutiny according to the rules of the High Court.
When the petition came up for scrutiny before the Deputy Registrar on April 24, 1972, Mr. Mittal appeared and requested for time to remove the defects pointed out by the office.
It may be appropriate to extract that particular order : "Present: Shri R. section Mittal, Advocate.
He has requested time to remove the defects pointed out by the office.
Let it be refixed on 28 4 72, after the defects had been removed as agreed to by the counsel.
Sd/. D. D. Khanna 24 4 72" The next order passed by the Deputy Registrar on April 29, 1972, runs as follows: "Shri R. section Mittal has informed me on the phone that he is indisposed and as such the case may not be taken up for scrutiny to day.
Put up tomorrow, the 29th April, 1972 for orders.
Counsel may be informed.
Sd/ D. D. Khanna 28 ' 4 72" .
The High Court has observed that it is common case of both side that by the time the case was placed before the Deputy Registrar on April 29, 1972, the spare copies of the petition had been filed by the petitioner and the other defects had also been removed.
The final order of scrutiny passed by the Deputy Registrar on April 29, 1972, is in the following terms: "Present Shri R. section Mittal.
, Advocate for petitioner.
The petition was filed on 18 4 72 and the result in this case was declared on 13 3 72; hence it is within time.
The petition is accompanied with the security receipt in the sum of Rs. 2,000/ deposited in this Court before filing of the petition under the rules.
The petition was scrutinised and as the defects pointed out on the previous date have been removed, it is now prima facie in order.
Issue notice for scrutiny of service for 22nd May, 1972, and for settlement of issues for 26th May, 1972.
Sd/ D. D. Khanna 29 4 72".
23 The matter ultimately came up for hearing before the learned single Judge to whom this election petition was assigned.
Several preliminary objections were taken by the sole contesting first respondent.
The other respondents did not enter appearance ' We are concerned with only one preliminary objection, namely, that the petition was not in conformity with section 81(3) of the Act inasmuch as the requisite spare copies thereof were not enclosed with the petition when it was originally presented on April 18, 1972, and that the election petition was liable to be dismissed.
The learned counsel for the appellant, Mr. Hardyal Hardy, has made only the following two submissions before us : (1) The requirement under section 81(3) of Representation of the People Act, 1951 that spare copies of an election petition shall accompany the petition, is directory and not mandatory (2) It is substantial compliance with the said directory provision if the spare copies of an election petition, inst ead of accompanying the petition, are filed before the petition is laid before the Judge for orders or even within the time that may be granted by the Judge for the purpose.
Before the High Court both sides examined witnesses.
To establish his case, the appellant examined himself as PW 6, the Election Assistant, Shri O. P. Popli (PW 3), Deputy Registrar, Shri D. D. Khanna (PW 4), Shri R. section Mittal, Advocate (PW 5), Shri Adish Chand Jain, Advocate (PW 7), Shri Jai Singh Dhillon, Advocate (PW 9) and Shri Jaswant Rai, Advocate (PW 10).
All the Advocates except Shri Mittal were from Jind.
Shri Mittal is an Advocate practicing in the High Court.
Although the appellant summoned Shri Harsukh Rai Hantroo, Superintendent of the Election Branch, and was present ' in court on 20th July, 1972, when the first four witnesses were also examined, Shri Mittal, who was conducting the case on behalf of the appellant, made a statement before the court that he gave up Shri Harsukh Rai Hantroo 'as unnecessary '.
The respondent 's counsel, however, submitted that he should be examined as a court witness and the court ordered for his examination on that very day observing that "in the interest of justice that the Superintendent of the Election Branch who was the only other official working between the Deputy Registrar (Judicial) on the one side and P.W. 3 on the other, should also be examined to clarify the matters so far as possible.
" The respondent examined himself and R. W. Ch.
Hari Ram, Senior subordinate Judge cum Chief Judicial Magistrate, Jind.
The appellant sought to establish before the High Court that the spare copies were submitted on April 24, 1972, by relying upon the endorsement of Shri Mittal, "objections removed, R. section Mittal" (Ext PW 5/1) below the order of the Deputy Registrar of April 24, 1972, which we have already set out.
There is no date given by Shri Mittal when her made his endorsement in the order sheet of the Registry.
PW 3, who had initially scrutinised the petition and found the defects, was on leave 24 on April, 24, 1972, and the Superintendent (CW 1) was only present.
According to Shri Mittal, he.
went to the Election Office along with the appellant and his Clerk, Manphool Sharma, and filed these papers at 2 00 P M. on April 24,1972, and made also the above ' endorsement (Ext.
PW 511.) Although, however, Shri Mittal was conscious that the papers had to be filed within time to save the defective petition from being dismissed, curiously enough, he did not take the necessary care to get any official endorsement in the order sheet by the Deputy Registrar or even by the Superintendent of the Election Branch to the effect that the documents were filed and defects were removed on that day, namely, on 24th April, 1972, notwithstanding the further fact that he had earlier at 11.00 A.M. on the same day requested the Deputy Registrar for time to remove the defects and the next date was fixed on April 28, 1972.
In face of the order of the Deputy Registrar of 24th April, Shri Mittal 's responsibility as counsel was greater than he seemed to have thought.
On April 28, 1972, Shri Mittal informed the Deputy Registrar over the phone that he was indisposed and requested for time till the next day which was given.
He deposed that he had even informed the Deputy Registrar that scrutiny could be made in his absence since the defects had already been removed.
On this particular aspect of the matter, the Deputy Registrar was silent in his evidence and although it was Shri Mittal again who personally examined the Deputy Registrar in court, he never put this question to him with regard to his informing him over the phone about removal of defects on 24th April.
Again, from Shri Mittal 's evidence it. appears that, although he was feverish, he actually came to the Election Office on April 28, 1972, in connection with Election case No. 3 of 1972 (Sagar Ram vs Banarsi Das & Ors.) and removed certain defects in that case on that day, namely ' 28th April, 1972 although that case was set down for April, 29, 1972, which date had been fixed by the Deputy Registrar in his presence on April 24, 1972.
There is an endorsement in that case by Shri Mittal, this time, with date 28h April, 1972, below the order of the Deputy Registrar dated April 24, 1972, to the effect "objections removed".
The records of that case were also called for in the High Court and were also shown to us here.
It is pointed out that the endorsement in that case with date and the endorsement in Ext.
PW 5/1 of Shri Mittal are with the same pen and ink as is even admitted by Shri Mittal.
The respondent, therefore attaches great significance on the omission of the date in Ext.
PW 511 and describes the endorsement as a suspicious entry.
it is strenuously submitted by the respondent that the papers were not submitted on April 24, 1972, as alleged.
Since Shri Mittal asserted in his evidence that he along with the appellant filed the spare copies of the petition in the afternoon of April, 24, 1972, the respondent by examining the Subordinate Judge (RW 1) sought to establish that the appellant as advocate actually appeared in his court at Jind on April, 24, 1972, in a contested civil suit (Kati Ram vs Ram Tirath, etc.
Civil Suit No. 422 of 1967 on behalf of the plaintiff where the defendent was cross examined by him.
The appellant denied this and stated that his junior, Shri Jai Singh Dhillon (PW 9) actually conducted the case on that day.
This point, was also sought to be supported by examining two other Advocates appearing 25 on behalf of the defendant in that suit, namely, Adish Chand Jain (PW 7) and Jaswant Rai (PW 10).
It appears that Shri Dhillon even did not file his vakalatnama in that suit and at one stage when he had appeared on behalf of the appellant in that suit, it was recorded in the ,order sheet, as was the practice of that court that he was appearing as proxy for the original counsel.
There was, however, no such entry in the order sheet that he appeared on behalf of the appellant on April 24, 1972.
From the evidence of RW 1, who deposed from the records of the suit produced in the court and gave some convincing reasons, the High Court was reasonably and, in our opinion, rightly satisfied that the appellant appeared in the court of the subordinate Judge, Jind, on April 24, 1972.
The High Court has also rightly held that PWs 7 and 1 0 gave hazy evidence from their memory with regard to the appearance of the appellant in the suit on April 24,1972.
The High Court also found several infirmities and contradictions in the evidence of Shri Mittal.
It is nobody 's case that if the appellant appeared in the suit at Jind on 24th April he could be present in the Election Branch at Chandigarh at2.00 P.M. on that day.
PW3 has correctly deposed that" the words (objections removed ' in the handwriting of Shri R.S. Mittal, Advocate and the signature of Shri R. section Mittal thereunder were not there when he made the endorsement 'informed ' (Ext PW 3/1) on April 28, 1972".
Even the Deputy Registrar has admitted in his evidence that the endorsement "objections removed" in the handwriting of and above the signature of Mr. R. section Mittal was not made in his presence.
He also stated that "I do not recollect having seen this endorsement at the time I passed my order, dated April 28, 1972".
The evidence of the Deputy Registrar consistent with that of PW 3 is rightly preferred by the High Court to the evidence of Shri Mittal, of the appellant and even of the Superintendent of the Election Branch who also deposed from memory.
After again carefully examining the evidence of all the witnesses on this point, we have no reason to differ from the conclusion of the High Court that the requisite spare copies of the election petition were not submitted by the appellant on April 24, 1972.
We will, therefore, have to decide the first submission of the learned counsel for the appellant on the basis that the spare copies were not filed within the period of limitation.
The short question is whether section 81(3) of the Act is mandatory and, if so, whether non compliance with the same will visit the election ' petitioner with the penalty of dismissal of his petition under section 86(1 of the Act.
This question was mooted in Jagat Kishore Prasad Narain Singh vs Rajindra Kumar Poddar and Others(1) but the Court did not find it necessary to decide the same.
Whether a particular provision in a statute is mandatory or directory has to be construed from the scheme and object of the provisions [1971] (1) SCR 821.
26 This Court observed in Raza Buland Sugar Co. Ltd. vs Municipal Board, Rampur(1) as follows: "The question whether a particular provision of a statute which on the face of it appears mandatory, inasmuch as it uses 'the word 'shall as in the present case is merely directory cannot be resolved by laying down any general rule and depends upon the facts of each case and for that purpose the object of the statute in making the provision is the determining factor.
The purpose for which the provision has been made and its nature, the intention of the legislature in making the provision, the serious general inconvenience or injustice to persons resulting from whether the provision is read one way or the other, the relation of the particular provision to other provisions dealing with the same subject and other considerations which may arise on the facts of a particular case including the language of the provision, have all to be taken into account in arriving at the conclusion whether a particular provision is mandatory or directory".
The Privy Council also in Montreal Street Railway Company Normandin,(2) observed to the same effect: 'The question whether provisions in a statute are directory or imperative has very frequently arisen in this country but it has been said that no general rule can be laid down, and that in every case the object of the statute must be looked at. .
Now there are two parts in section 81(3).
The first part 'provides that "every election petition shall be accompanied by as many copies thereof as there are respondents mentioned in the petition.
The second part relates to the manner in which "such copy shall be attested by the petitioner under his own signature to be a true copy of the petition".
We are concerned only with the first part in this appeal.
Part VI of the Act deals with disputes regarding election.
Chapter 11 therein provides for presentation of election petitions while chapter III for trial of election petitions.
The right to challenge an election is conferred under the Act which is made in conformity with the provisions of Article 329(B) of the Constitution.
It is well settled that it is a special right conferred under a self contained special law and the court will have to seek answer to the questions raised within the four corners of the Act and the powers of the court are circumscribed by its provisions.
it is not a common law right and an election petition cannot be equated with a plaint in a civil suit.
We may, therefore, immediately read the material sections 80, 81(1) 84(3) and 86(1) which run as follows (1) ; , 975.
(2) ; (quoted in 1965 (1) S.C.R. at pages 975 976.) 27 Section 80 No election shall be called in question except by 'an election petition presented in accordance with the provisions of this Part." Section 81(1)"An election petition calling in question any election may be presented on one or more of the grounds specified in sub section (1) of section 100 and section 101 to the High Court by any candidate at such election or any elector within fortyfive days from, but not later than, the date of election of the returned candidate, or if there are more than one returned candidate at the election and the dates of their election are different, the later of those two date section" Section 81(3)"Every election petition shall be accompanied by as many copies thereof ' as there are respondents mentioned in the petition. , and every such copy shall be attested by the petitioner under his own signature to be a true of the petition".
Section 86(1)"The High Court shall dismiss an election petition which does not comply with the provisions of section 81 or section 82 or section 117.
Explanation : An order of the High Court dismissing an election petition under this sub section shall be deemed to be an order made under clause (a) of section 98".
Section 86 (1) refers to three sections, namely, section 81, section 82, which deals with parties to the petition and section 117 of the Act providing for security for costs.
While dealing with section 117 of the Act this Court spoke through one of us (Reddy, J) in Charan Lal Salhu vs Nandkishore Bhatt and others(1), and held as follows : "The right to challenge an election is a right provided by Article 329(b) of the Constitution of India, which provides that no election to either House of Parliament or to the House or either House of the Legislature of a State shall be called in question except by an election petition presented to such authority and in such manner as may be provided for by or under any law made by the appropriate Legislature.
The right conferred being a 'statutory right, the terms of that statute had to be (1) ; ,533.
28 complied with.
There is no question of any common law right to challenge an election.
Any discretion to condone the delay in presentation of the petition or to absolve the petitioner from payment of security for costs can only be provided under the statute governing election disputes.
If no discretion is conferred in respect of any of these matters, none can be exercised under any general law or on any principle of equity.
This court has held that the right to vote or stand as a candidate for election is not a civil right but is a creature of statute or special law 'and must be subject to the limitations imposed by it.
In N. P.Ponnuswami vs Returning Officer Namakkal Constituency and Others (1) it was pointed out that strictly speaking, it is the sole right of the legislature to examine and determine all matters relating to the election of its own members, and if the Legislature takes it out of its own hands and vests in a special tribunal an entirely new and unknown jurisdiction, that special jurisdiction should be exercised in accordance with the law which creates it". 'Similarly in Krishan Chander vs Ram Lal (2) dealing with section 82(b) of the Act and examining the scheme and the object of the pro ' visions this Court again held the same as mandatory.
This Court observed: "The provisions of sec.
82(b) would avoid any such delay as they make obligatory for a person filing an election petition when he makes an allegation of corrupt practice against any candidate to make him a party on pain of the petition being dismissed under section 86(1) if he omits to do. .
This then is the rationale underlying the mandatory requirements of section 82(b)".
It is true in Ch.
Subba Rao vs Member Election Tribunal, Hyderabad(3) reiterating two earlier decisions viz. Kamaraj Nadar vs Kunju Thevar(4) and Murarka vs Roop Sing(5), the Court in ' view of the peculiar facts ,add circumstances of that case and the nature of the defects held ,that section 81(3) was substantially complied with and left open the ,wider question whether section 81(3) or any part thereof is mandatory or directory.
In a later decision in Dr. Anup Singh vs Shri Abdul Ghani and another(6), which followed Subba Rao 's case (supra), ,this Court observed : "An exactly similar matter came to be considered by this Court in Ch.
Subba Rao vs Member, Election Tribunal (3).
In that case also the copies were signed by the petitioner but there was no attestation in the sense that the words "true copy" were omitted above the signature of the petitioner.
This Court held that as the signature in original was there in the copy, the presence of such original signature in the copy was sufficient (1) ; (2) ; ,769.
(3) ; (5) ; ,41. 29 to indicate that the copy was attested as true copy, even though the words "true copy" were not written above the signature in the copies.
This Court further held that there was substantial compliance with section 81(3) of the Act and the petition could not be dismissed under section 90(3)".
Keeping in the forefront the proper functioning of democracy, the principal object of the Act is purity of elections.
When therefore, an election of a returned candidate is challenged under the Act, expeditious trial of the election dispute is sought to be enforced by the legislature making all safeguards against delay.
Trial has to be necessarily expedited to rid the candidate as well as the constituency interested in the result of the election, of any taint or suspicion of corrupt practices which are again clearly enumerated in the Act.
To take, therefore, another important object of the Act, viz., expeditious, disposal of an election petition, by section 86(6) "the trial of an election petition shall, so far as is practicable consistently with the interests of justice in respect of the trial, be continued from day to day until its conclusion, unless the High Court finds the adjournment of the trial beyond the following day to be necessary for reasons, to be recorded".
Again under section 86(7), " every election petition shall be tried as expeditiously as possible and endeavour shall be made to conclude the trial within six months from the date on which the election petition is presented to the High Court for trial".
Further section 87(1) introduces the Civil Procedure Code only subject to the provisions of the Act and of any rules made thereunder.
Section 87(2) makes a deeming provision for application of the Evidence, Act only subject to the Act.
Therefore, there is no scope for free play in the application of the provisions of those two Acts.
The very object of expeditious trial will be defeated if the presentation of ' the election petition should be treated casualty and lightly permitting, all kinds of devices to delay the ultimate trial.
The purpose of enclosing the copies of the election petition for all the respondents is to enable quick despatch of the notice with the contents of the allegations for service on the respondent or respondents so that there is no delay in the trial at this very initial stage when the election petition is presented.
If there is any halt or arrest in progress of the case, the object of the Act will be completely frustrated.
We are, therefore, clearly of opinion that the 1st part of section 81(3) with which we are mainly concerned in this appeal is a peremptory provision and total, non compliance with the same will entail dismissal of the election petition under section 86 of the Act.
We are, therefore, not required to consider the second submission, of the learned counsel for the appellant with regard to substantial compliance made on the basis of the provisions of section 81(3) being, directory.
We may only add here that, in the absence of any provision under the Act or the rules made thereunder, the High Court Rules cannot confer upon the Registrar or the Deputy Registrar any power to permit correction or removal of defects in an election petition presented in the High Court beyond the period of limitation 30 provided for under the Act.
It may be noted that section 169 of the Act provides that the Central Government is the authority to make rules after consulting the Election Commission and in sub section (3) thereof the rules have to be laid before each House of Parliament in the manner provided therein.
The only reference to the High Court Rules is found in section 117 of the Act.
At any rate, we do not feel called upon to pass on the High Court Rules referred to in the judgment of the High Court in this case, In the result we find no reason to interfere with the decision of the High Court dismissing the election petition.
The appeal is dismissed with costs.
DWIVEDI, J.
I agree with my brethren that the requisite copies of the election petition were not filed in Court within the period of limitation by the appellant.
I am constrained also to agree that for this procedural fault his election petition is liable to be dismissed in view of the decision of the Court in Jagat Kishore Prasad Narain Singh vs Rajindra Kumar Poddar and others(1).
In that case Hegde J. said: "The law requires that a true copy of the election petition should be served on the respondents.
That requirement has not been either fully or substantially complied with.
Therefore we have no doubt in our mind that the election petition is liable to be dismissed under s.86 of the Act.
" It makes me sad to read this requiem for this election petition.
Over a century ago a slip in procedure by a litigant meant denial of justice to him.
" Right down to the nineteenth century the choice of the wrong writ involved the loss of the action, even though all the merits were with the plaintiff.
"(2) Gradually, however, courts subordinated procedure to the claims of justice.
In Ma Shwe Mva vs Maung Mo Maung, (3) Lord Buckmaster said : "All rules of court are nothing but provisions intended to secure proper adminis tration of justice.
It is therefore essential that they should be made to serve and be subordinate to that purpose.
Speaking in the same vein, Justice Ameer Ali said : "Rules of procedure are not made for the purpose of hindering justice." (See (Raja) Indrajit Pratap Bahadur Sahi vs Amar Singh) (4) Our decision restores that primacy of procedure over justice.
It makes section 86(1) a tyrannical master.
The rigidity of the rule of precedent ties me to its chains.
My only hope now is that Parliament would make a just choice between the social interest in the supply of copies by the election petitioner along with his election petition and the social interest in the purity of election by excluding section 81(3) from the purview of section 96(1) of the Act.
Appeal dismissed.
V.P.S. (1) [1971] 1 section C. R. 821.
(2) Holdsworth: A History of English Law, 9, 248.
(3) A.I.R. 1922 P. C. 249 at p. 250.
(4) A.I.R. 1923 P. C. 128 at P. 135.
| The match industry in India has grown over the decades.
From the point of view of manufacturing techniques the safety match industry comprises of two distinct categories: the machanised sector occupied by a few big manufacturers and the non mechanised sector comprising varying sizes of production units.
The Government classified the safety match manufacturers into four categories depending on the quantity turn out and other relevant factors.
But the Tariff commission recommended the abolition of sub classification for the purpose of levying excise duty and suggested separate scales of excise duty to be levied for four classes of units, namely, A, D, C and D. Based on these recommendations the slab system of excise duty was abandoned by the Government and the category wise rate was adopted.
As a result of the adoption of the differential duty scheme the advantages offered to the 'C ' group went to the 'B ' group which in turn resulted in fall in production.
It also generated pseudo C category producers from out of the erstwhile B category which ultimately eliminated C category producers.
The Government, therefore, withdrew the tax concession to C category and equated it with B category.
The Government of India had from time to time issued notifications under section 37 of the Central Excise and Salt Act, 1944.
The notification issued in 1967 levied excise duty on the basis of manufacture of matches of which "any process is ordinarily carried on with the aid of power".
As a result of this notification the B and C categories of old were now treated equally.
The change in classification of the manufacturers was based on the use of power which in turn had a rational relation to the techniques and processes of production and their ability to bear the burden of the levy.
This was done on the basis of recommendations of the Central Excise Re organisation Committee.
The High Court refused to strike down the notification.
it was contended in this Court that this unsocialistic step had left the small producers in the cold and virtually compelled them to retire from the industry and is thus discriminatory.
Dismissing the appeals to this Court, HELD This is a criticism of legislative judgment, not a ground of judicial review.
The Court is being invited to compel the legislative and executive wings to classify but from the judicial inspection tower the court may only search for arbitrary and irrational classification and its obverse, namely, capricious uniformity of treatment where a crying dissimilarity exists in reality.
Unconstitutionality and not unwisdom of a legislation is the narrow area of judicial review.
[129 E] The question of classification is primarily for legislative judgment and ordinarily does not become a judicial question.
The power to classify being extremely broad and based on diverse considerations of executive pragmatism the judicature cannot rush in where even the legislature warily treads.
All these operational restraints on judicial power must weigh more emphatically where the subject is taxation.
[130 E] It is equally well settled that merely because there is room for classification it does not follow that legislation without classification is always unconstitutional.
The court cannot strike down a law because it has not made the classification which commends to the court as proper.
Nor can the legislative power be said to have been unconstitutionally exercised because within the class a sub classification was reasonable but has not been made.
[130 H] 122 In the present cage, a pertinent principle of differentiation, which is visibly linked to production prowess, has been adopted in the broad classification of power users .and manual manufacturers.
It is irrational to castigate this basis as unreal.
[131 C] K.T. Moopil Nair vs State of Kerala, ; , State of Kerala vs Haji K. Hail Kutty Naha.
As Nos 1052 etc.
of 1968; judgment dated August 13, 1968 and Khandige Sham Bhat vs The Agricultural Income Tax Officer, ; , 817, followed.
|
(Crl.) No. 116 of 1990.
(Under Article 32 of the Constitution of India).
R.K. Garg, N.D. Garg, Rajiv Kr.
Garg and P.C. Choudhary for the Petitioner.
U.R. Lalit and Ms. Kamini Jaiswal for the Respondents.
The Judgment of the Court was delivered by VERMA, J.
The short question arising for decision by us is the true meaning of Sub section (2) of Section 427 of the Code of Criminal Procedure, 1973 and its effect.
For an Offence of murder committed on 17.9.1978 the petitioner, Ranjit Singh, was convicted under Section 302 I.P.C. by the Sessions Judge on 6. 3.1979 and sentenced to life imprisonment which was confirmed by the High Court of Punjab & Haryana.
While the petitioner was on parole after his conviction and sentence for first murder, he was tried for the second murder committed On October 25, 1980 and convicted under Section 303 I.P.C.
This conviction was altered to one under Section 302 I.P.C. and for the second murder, also the petitioner was sentenced by this Court on 30.9.
1983 to life imprisonment instead of death sentence.
This Court while disposing of the.
petitioner 's appeal, in this manner, directed as under: 746 "We feel that life imprisonment would be the proper sentence that should be imposed upon the appellant.
We accordingly reduce the sentence of death imposed upon him and, sen tence him to suffer rigorous imprisonment for life.
However, since the present murder was committed by him within a span of one year of his earlier conviction and that too when he was released .on parole we are clearly of the view that the instant sentence of imprisonment for life awarded to him should not run concur rently with his earlier sentence Of life imprisonment.
We therefore, direct that in case any remission or commutation in respect of his earlier sentence is granted to him the present sentence should .commence thereafter.
" The petitioner has now filed this Writ Petition under Arti cle 32 of the Constitution for issuance of a suitable writ or direction to correct,the above direction given in the 0order dated September 30, 1983 to bring it in consonance with Section 427(2) Cr. P.C. and consequently for his re lease on the ground that both life sentences had to run concurrently in accordance with Section 427(2) Cr.
P.C. and he is entitled to relief because he has undergone fourteen years sentence of imprisonment with remissions at the time of filing the Writ Petition on February 19, 1990.
This is how the question of construction of Section 427(2) Cr.
P.C. arises in the present case.
Section 427 of the Code of Criminal Procedure, 1973 is as under: "427.
Sentence on offender already sentenced for another offence (1) When a person already undergoing a sentence of im prisonment is sentenced on a subsequent con viction to imprisonment or imprisonment for life, such imprisonment ' or imprisonment for life shall commence at the expiration of the imprisonment to which he has been previously sentenced, unless the Court directs that the subsequent sentence shall run concurrently with such previous sentence: Provided that where a person, who has, been sentenced to imprisonment by an order under Section 122 in default of furnishing security is, whilst undergoing such sentence, sentenced to imprisonment for an offence committed prior to the making of such order, the latter sen tence shall commence immediately.
747 (2) When a person already undergoing a sentence of imprisonment for life is sen tenced on a subsequent conviction to.
impris onment for a term or imprisonment for life, the subsequent sentence shall run concurrently with such previous Sentence . ' ' Shri R.K. Garg, learned counsel for the petitioner strenu ously urged that this Court 's above quoted direction in the judgment dated 30.9.1983 passed in Criminal Appeal No. 418 of 1982 while affirming the conviction under Section 302 I.P.C. for the second murder and imposing the punishment of life imprisonment for it 'also amounts to directing that the two sentences of life imprisonment are tO run consecutively and not concurrently which is in direct conflict with Sub section (2) of Section 427 Cr.
P.C. He ,urged that the life 'span of a person Could be only one and therefore ,any subsequent life sentence must run concurrently and not consecutively which is the clear mandate :of Section 427(2).
On this basis, it was, urged that this Court 's direction in the above manner on the petitioner 'S conviction for the second offence of murder is contrary to Section 427(2) of the Code 01 Criminal Procedure, 1973.
This is the basis of the reliefs claimed on behalf of the .petitioner.
In reply, Shri U.R. Lalit.
appearing.
on behalf of respondents, con tended that the direction of this Court properly construed is not contrary to Section 427(2) Cr.
P.C. and, therefore, the question of issuing any writ or directions claimed by the petitioner does not arise.
We may straightaway mention that the question of grant of relief under Article 32 of the Constitution does not arise on the above facts.
The petitioner 's incarceration is the result of a valid judicial order and, therefore, ' there can be no valid claim to the infringement of any fundamental right which alone can be the foundation for a writ under Article 32 of the COnstitution.
The only question, it ap pears, therefore, is about the correct construction of the direction given by this Court in its judgment dated 30.9.1983 in Criminal Appeal No. 418 of 1982 in the fight of the true meaning of Section427(2) Cr.
The meaning of a sentence of imprisonment for life is no longer res integra; It was held by a Constitution Bench in Gopal Vinayak Godse vs The State of Maharashtra and Others, ; that a sentence of transportation for life or imprisonment for life must prima facie be treated as transportation Or imprisonment for the whole of the remain ing period of the convicted person 's natural life.
It was further held: 748 "Unless the said sentence is commut ed or remitted by appropriate authority under the relevant provisions of the Indian Penal Code or the Code of Criminal Procedure, a prisoner sentenced to life imprisonment is bound in law to serve the life term in prison.
" The contention that a sentence of life imprisonment was to be treated as a sentence of imprisonment for a fixed term was expressly rejected.
This view was followed and reiterat ed in Maru Ram vs Union of India & Ant., [1981] 1 S.C.R. 1196 while considering the effect of Section 433A introduced in the Code of Criminal Procedure, 1973 with effect from 18.12.1978.
The Constitution Bench in Maru Ram summarised one of its conclusions as under: "We follow Godse 's case (supra) to hold that imprisonment for life lasts until the last breath, and whatever the length of remissions earned, the prisoner can claim release only if the remaining sentence is remitted by Govern ment.
" Another conclusion in Maru Ram was that the mandatory mini mum of 14 years ' actual imprisonment prescribed by Section 433A which has supremacy over the Remission Rules and short sentencing statutes made by the various States will not operate against those whose cases were decided by the trial court before the 18th December, 1978 when Section 433A came 'into force but Section 433A would apply to those sentenced 'by the trial court after 18.12.1978 even though the offence was committed prior to that date.
From these decisions it is obvious that the mandatory minimum of 14 years '.
actual imprisonment prescribed by Section 433A is applicable to petitioner in respect of both sentences of life imprisonment since the conviction by the trial court even for the first murder was after 18.12.1.978, the second offence itself being committed after '18.12.1978.
There is no dispute that the mandatory minimum of 14 years ' actual imprisonment, as required by Section 433A even for the first sentence of life imprisonment, has not been served out by the petitioner and, therefore, irrespective of the points raised in this petition on the basis of Section 427(2) Cr.
P.C. the petitioner cannot claim relief much less a writ under Article 32 of the Constitution in the absence of the remaining sentence being remitted by the Government.
This alone is sufficient to refuse any relief under Article 32 of the Constitution.
The question now is of the meaning of Section 472(2) Cr. P.C, and its effect, in the present case, in view of the above quoted direc 749 tion Of this Court in its judgment dated 30.9.1983.
Sub section (1) of Section 427Cr.
P.C. provides for the situation when a person already undergoing a sentence of imprisonment is sentenced on a subsequent conviction to imprisonment or life imprisonment.
In other words, Sub section (1) of Section 427 Cr.
P.C. deals with an offender who while undergoing sentence for a fixed term is ' subse quently convicted to imprisonment for a fixed term or for life.
In such a situation, the first sentence, being for a fixed term, expires on a definite date which is known when the subsequent conviction is made.
, Sub section (1) says that in ' such a situation, the date of expiry of the first sentence which the offender is undergoing being known, ordinarily the subsequent sentence would commence at the expiration of the first term of imprisonment unless the Court .directs the subsequent sentence to run concurrently with the previous sentence.
Obviously, in cases ' covered by Sub section (1)where the sentence is for a fixed ' term, the subsequent sentence Can be consecutive unless directed to run concurrently.
Sub section (2), on the other hand, pro vides for an offender "alreadly undergoing sentence of imprisonment for life" who is sentenced on a subsequent conviction to imprisonment for a term or for life.
It is well settled since the decision of this Court in Gopal Vinayaka Godse and reiterated in Maru Ram that imprisonment for life is a sentence for the remainder or the life of the offender unless the remaining sentence is commuted or remit ted by the appropriate authority.
This being so at the.stage of sentencing by the Court On a subsequent conviction, the earlier sentence of imprisonment for life must be understood in this manner and, therefore, there can be no question of a subsequent sentence of.
impriosnment for a term or for life running consecutively which is the general rule laid down in Sub .
section (1) of Section 427.
As rightly contended 'by Shri Garg, and not disputed by Shri Lalit, the earlier sentence of imprisonment for life being understood to mean as sentence to serve the remainder of life in prison unless commuted or remitted by the appropriate authority and a person having only one life ' span, the sentence on a subse quent conviction of imprisonment for a term or imprisonment for life can only be superimposed to the earlier life sen tence and certainly not added to it since extending the life span of the offender or for that 'matter anyone is beyond .human might.
It is this obvious situation which is stated in sub section (2) of Section 427 since the general ' rule enunciated in sub section (1) thereof is that without the Court 's direction the subse .
quent sentence will.
not run concurrently, but consecutively.
The only situation in which no direction of the Court is needed to make the subse quent sentence run concurrently with the previous sentence is 750 provided for in Sub section (2) which has been enacted to avoid any possible controversy based on Sub section.
(1) if there be no express direction of the Court to that effect.
Sub section (2) is in the nature of anexCeption to the general rule enacted in Sub section (1) of Section 427 that 'a sentence on subsequent conviction commences on expiry of the first sentence unless the Court directs it to run concurrently.
The meaning and purpose of Sub sections (1) & (2)of Section 427 and the object of en,acting Sub section ?)is, therefore, Clear.
We are not required to say anything regarding the practical.
effect of remission or commutation of the sentences since that question does not arise in the present case.
The limited controversy before us has been indicated.
The only question now is of 'the meaning and effect of the above quoted direction in this Court 's judgment dated 30.9.1983 It is obvious that the direction .of this Court must be con strued to harmonise with Section 427(2) Cr.
P.C. which is the statutory mandate apart from being the obvious truth.
The subsequent sentence of imprisonment for life has, there fore, to run concurrently with the read as sentenceof imprisonment for life awarded to the petitioner.
Thed exercise is to construe the last sentence in the direction which re under: "We, therefore, direct that in case any remission or commutation .in respect of his earlier sentence is grant ed to him the present sentence should commence thereafter.
" It is in the background of this ultimate direction that the proceeding portion has to be read.
This last sentence in the direction means that in case, any remission or commutation is granted in respect of the earlier.
sentence.
of life imprisonment alone then the benefit of that remission or .commutation will not ipso facto be available in respect of the sub.
sequent sentence of life imprisonment which would continue to be unaffected by the remission or commuta tion in respect of the earlier sentence alone.
In other WordS, the operation of the superimposed subsequent sen tence, of life imprisonment shall not be wiped out .merely because in respect of the corresponding earlier sentence of life imprisonment any remission or commutation has been granted by the appropriate authority.
The consequence is that the petitioner would not 'get any practical 'benefit of any remission or commutation respect of his earlier sentence because of the superimposed subsequent life sen tence unless the same corresponding benefit in respect of the subsequent sentence.
is also .granted tO the petitioner.
It is in this manner that the direction is given for the, two Sentences of life impri 751 sonment not to run concurrently.
The ultimate direction contained in the last sentence is obviously for this purpose.
So construed the direction of this Court in the judgment dated 30.9.1983 in Criminal Appeal No. 418 of 1982 fully harmonises with Section 427(2) Cr.
P.C. This is the clarification we make of this Court 's judgment dated 30.9.
1983 in Criminal Appeal No. 4 18 of 1982.
We have already stated that this petition 'for the issuance of a writ Under Article 32 of the Constitution is untenable.
We have, there ' fore, treated it as a petition for clarification of the judgment dated 30.9.1983 in Criminal Appeal No. 418 of 1982.
Accordingly, the petition is disposed of with this clarifi cation.
R.P. Petition disposed of.
| The petitioner who was convicted under section 302 IPC on 6.3.1979 and sentenced to life imprisonment; was also tried for a second murder committed while he was on parole after his conviction and sentence for the first murder, and was convicted under section '303 IPC.
Altering the conviction to one under section 302 IPC, for the second murder this Court sentenced him to life imprisonment instead of death sentence and by its judgment dated 30.9.1983 directed that in case any remission and commutation in respect of his earlier sentence 'was granted, the latter sentence should commence thereafter.
The petitioner filed a writ petition under Article 32 of the Constitution.
praying for his release on the ground that both the life sentences had to run concurrently in accord ance with section 1427(2) Cr. P.C., and as he had undergone 14 years sentence of imprisonment with remissions at the time of filing the writ petition on .February 19, 1990, he was entitled to be released. 'It was contended that this Court 's direc, tion dated 30.9.83 was .contrary to section 427(2) of the Code of Criminal 743 Procedure, 1973 since it amounted to directing that the two sentences of life imprisonment were to run consecutively and not concurrently.
On behalf of the respondents it was contended that the direction of this Court, properly construed, was not contrary to.s.
427(2) Cr.
P.C. and, therefore, the question of issuing any writ or directions as claimed by the peti tioners did not arise.
Disposing of the petition treating it as one for clari fication of the judgment dated 30.9.1983 this Court, HELD: 1.1 A sentence of transportation for life or imprisonment for life must prima facie be treated as trans portation or imprisonment for the whole of the remaining period of the convicted person 's natural life unless the remaining sentence is 'commuted or remitted by the appropri ate authority.
This being so at the stage of sentencing by the Court on a subsequent conviction, the earlier sentence of imprisonment for life must be understood in this manner and, therefore, there can b no question of a subsequent sentence of imprisonment for a term or for life running consecutively which is the general rule laid down in sub s (1) ors.
427, Cr.
P.C. [747G; 749D E] 1.2 The earlier sentence of imprisonment for life being under stood to mean as sentence to serve the remainder of life in prison unless commuted or remitted by the appropri ate authority and a person having only one life span, the sentence on a subsequent conviction of imprisonment for a term or imprisonment for life as envisaged by section 427(2) of the Cr.
P.C., can only be superimposed to the earlier life sentence and certainly not added to it since extending the life span of the offender or for that matter anyone is beyond human might.
[749F G] It cannot be said that a sentence of life imprisonment is to b treated asasentence of imprisonment for a fixed term.
[748B] Gopal Vinayak Godse vs The Stateof Maharashtra & Ors., ; and MaruRam vs Union of India & Anr., ; , followed.
2.1 The operation of the superimposed subsequent sen tence of Iife imprisonment should not be wiped out merely because in respect of to correspondingI earlier sentence of life imprisonment any remission or commutation was granted by the appropriate.authority.
[75lF G] 744 2.2 In the instant case, the last sentence in the direc tion meant that in case, any remission or commutation was granted in.
respect.
of the earlier sentence of life impris onment alone then the benefit of that remission or commuta tion would not ipso facto be available in respect of the subsequent sentence of life imprisonment which would contin ue to be unaffected by the remission or commutation in respect of the earlier sentence alone.
The consequence would be that the petitioner would not get any practical benefit of any remission or commutation in respect of his earlier sentence because of the superimposed subsequent life sen tence unless the same corresponding benefit in respect of the subsequent sentence was also granted to the petitioner.
It was in this manner that the direction 'was given for the two sentences of life imprisonment not to run concurrently.
[750E H; 751A] The subsequent sentence of imprisonment for life had, therefore, to run concurrently with the earlier sentence of imprisonment for life awarded to the petitioner.
[750C D] 3.
The general rule enunciated in sub,section (1) of section 427 Cr.
P.C. is that without the Court 's direction the subsequent sentence will not run concurrently but consecu tively.
[749G] The only situation in which no direction of the Court is needed to make the subsequent sentence run concurrently with the previous sentence iS provided for in sub,section (2) which has been enacted to avoid any possible controversy based on sub,section (1) if there being no express direction of the Court to that effect.
[749G H; 750A] Sub,section (2) is in the nature of an exception to the general rule enacted under sub section (1) of section 427 0Cr.
P.C. [T50A] 4.1 The mandatory minimum of 14 years ' actual imprison ment prescribed by section 433A Cr.
P.C. which has supremacy over the Remission Rules and short sentencing statutes made by the various States would not operate against those whose cases were decided by the trial court before the 18th Decem ber, 1978 when section 433A Cr.
P.C. 'came into force but the section would apply to those sentenced by the trial court after 18.12.1978 even though the offence was committed prior to that date.
[748D E] Maru Ram vs Union of India & Anr., ; , followed.
745 4.2 In the instant case, section 433A Cr.
P.C. was applicable to petitioner in respect of both sentences of life imprison ment since the conviction by the trial court even for the first murder was after 18.12.1978, the second offence itself being committed after 18.12.1978.
The mandatory minimum of 14years ' actual imprisonment as required by section 433A even for the first sentence of life imprisonment was not served out by the petitioner, and, therefore, irrespective of the points raised in the instant petition on the basis of section 427(2) Cr.
P.C. the petitioner could not claim relief much less a writ under Article 32 of the Constitution in the absence of the remaining sentence being remitted by the Government.
[748E G] 5.
The petitioner 's incarceration was the result of a valid judicial order and, therefore, there could be no valid claim to the infringement of any fundamental right which alone could be the foundation for a writ under Article 32 of the Constitution.
[747E F]
|
MINAL APPEAL No. 193 of 1962.
Appeal from the judgment and order dated March 12,1962 of the Allahabad High Court (Lucknow Bench) at Lucknow in Criminal Reference No. 21 of 1961.
O. P. Rana, Atiqur Rehman and C. P. Lal, for the appellant.
The respondent did not appear.
March 24, 1964.
The Judgment of the Court was delivered by HIDAYATULLAH, J.
This is an appeal by certificate granted by the High Court of Allahabad (Lucknow Bench) against its order dated March 12, 1962 quashing the trial of the respondents for an offence under section 15(1) of the Uttar Pradesh Private Forests Act (VI of 1949).
This trial com menced on February 11, 1959 on a complaint by the District Magistrate Bahraich.
The charge against the first respondent was that he sold one tamarind tree to respondent No. 2 for the purpose of felling and removing it without obtaining permission from the competent authority and that against respondent No. 2 was that he felled the tree and removed it.
The complaint was transferred from one Magistrate to another 437 till it came on the file of Mr. T. B. Upadhaya who was a Magistrate of the Second Class.
After Mr. Upadhaya had re corded all the evidence and examined the two respondents the powers of Magistrate, First Class were conferred on him.
Thereafter he pronounced judgment in the case and finding respondents guilty he sentenced them to pay a fine of Rs. 501 each or to, undergo simple imprisonment for one month.
The respondents filed an appeal before the Additional Sessions Judge, Bahraich which was later converted into a revision.
The learned Additional Sessions Judge made a reference to the High Court recommending that the trial before the Magistrate, First Class be quashed as he had no jurisdiction to try the offence.
This reference was heard by Mulla, J. who did not agree with the opinion of Beg, J. In Jaddu and others vs State,(1) on which the Additional Sessions Judge had relied.
Beg, J. had taken the same view in a subsequent case also Harbans Singh and others vs State.(2) Mulla, J. was of the opinion that the trial was proper, but as these rulings stood in his way, he made a reference of the case to a larger Bench.
The case was heard by a Division Bench consisting of B. N. Nigam and section D. Singh, JJ.
The learned Judges differed amongst themselves: Mr. Justice Nigam was of the view that the trial was valid but Mr. Justice Singh did not agree with him.
The case was then placed before Mr. Justice Verma who agreed with Mr. Justice Singh.
As a result, the conviction and sentence passed on the respondents were set aside.
The case was, however, certified by the High Court as fit for appeal and the present appeal has been filed.
Which of the two views is the right one is the short question in this appeal.
Section 15(2) of the Uttar Pradesh Private Forests Act confers jurisdiction to try offences under the first sub section on Magistrates of the Second and the Third Class.
The trial in the present case was by a Magistrate of the First Class, and if there was no jurisdiction in him to try the offence then the proceedings were rightly declared void under section 530(p) of the Code of Criminal Procedure.
According to the opinion of Mr. Justice Nigam which finds support from the order of reference made by Mulla, J., there is nothing to prevent the First Class Magistrate from trying an offence under section 15(1) of the Act, because under Schedule III of the Code of Criminal Procedure the ordinary powers of a Magistrate, First Class include the ordinary powers of a Magistrate of the Second Class.
According to the other view, the Forests Act confers jurisdiction on Magistrates of the Second and the Third Class and this excludes jurisdiction of any superior Magistrate.
(1) A.I.R. 1952 All.873.
(2) A.I.R. 1953 All.179.
438 Section 15 of the Forests Act reads as follows "15, Offences under this Chapter and trial of such offences and penalties thereof: (1) Any person who contravenes any of the provisions of this Chapter or deviates from the prescriptions of a sanctioned working plan without the previous sanction of the Forest Officer shall be punishable with fine not exceeding one hundred rupees for the first offence and with fine not exceeding one thousand rupees or simple imprisonment not exceeding three months or both for the second or any subsequent offence.
(2) Offences under this section shall be triable by a Magistrate of the Second or Third Class, and proceedings under this section may be instituted on a complaint made by the landlord of the notified area or forest in respect of which the offence is alleged to have been committed or by any right holder of such a notified area or forest or by the Forest Officer or by any officer specially empowered by the Provincial Government in this behalf.
(3) (4) The question is one of interpretation of the first part of sub section
(2) which says that offences under section 15 shall be triable by a Magistrate of the Second or Third Class.
It does riot use the phrase "any Magistrate" nor does it specify "a Magistrate of the First Class".
The question is whether the words of the sub section exclude a First Class Magistrate.
The answer to this, in our opinion, is furnished by sections 28 and 29 of the Code of Criminal Procedure.
They provide as follows: "28.
Offences under Penal Code Subject to the other provisions of this Code any offence under the Indian Penal Code may be tried (a) by the High Court, or (b) by the Court of Session, or (c) by any other Court by which such offence is shown in the eighth column of the second schedule to be triable".
Offences under other laws (1) Subject to the other provisions of this Code, any offence under any other law shall, when any Court is mentioned in this behalf in such law, be tried by such court.
439 (2) When no Court is mentioned, it may be tried by the High Court or subject as aforesaid by any Court constituted under this Code by which such offence is shown in the eighth column of Second Schedule to be triable".
The scheme of the Criminal Procedure Code is that it Provides separately for trial of offences under the Penal Code and for offences under any other law.
The court which is to try them is indicated in the Code in the eighth column of the Second Schedule.
The first part deals with offences under the Penal Code and the second part with offences under any other law.
The last entry in the Second Schedule provides for the trial for offences under any other law which are punishable with imprisonment for less than one year or with fine only and they are made triable by "any Magistrate".
If the matter were governed by the Second Schedule, the last entry would undoubtedly have comprehended a Magistrate, First Class.
But section 29 says that offences under any other law shall be tried by that court which that law mentions and it is only when no court is mentioned that the eighth column of the Second Schedule is applicable.
Here sub section
(2) of section 15 mentions the courts by which offences under section 15(1) are triable and section 29(1) excludes the application of the second part of the Second Schedule.
The words of sub section
(1) of section 29 are peremptory.
There is no escape from them.
They say that 'subject to the other provisions of the, Code ' any offence under any other law shall be tried by the court when such court is mentioned in that law.
A case under section 15(1) therefore, is triable only by the two courts named therein, namely, Magistrates of the Second and the Third classes and not by any other Magistrate.
The appellant relies upon the words 'subject to the other provisions of the Code ' and refers to the Third Schedule.
But that Schedule deals with the ordinary powers of the Magistrates under the Criminal Procedure Code.
The words of the second sub section of section 15 are not rendered ineffective by the prescription of the ordinary powers of the Magistrates.
To call in aid Schedule III would render the provisions of section 29 redundant and useless at least in those cases where the second part of the Second Schedule applies.
What section 15(2)) does is to prescribe a particular court and in view of the words of section 29(1) no other court can try offences under section 15(1) even though the powers of those courts may be superior to those of Magistrates of the Second and the Third Class.
If the Second Schedule itself, which prescribes the courts for the trial of offences under laws other than the Penal Code, is excluded, the Third Schedule cannot bring about the same result indirectly.
The provisions of the Third Schedule must 440 therefore be taken to define general powers and not to create jurisdictions to try offences which the Second Schedule does.
It was argued before us that there is no point in prescrib ing that the Magistrates of the Second and the Third Class can try subsequent offences because their powers under section 32 do not extend as far as the punishment prescribed by section 15(1).
This question does not arise directly but it may be said that two views are possible: one is that by implication the powers of these Magistrates are extended beyond what is prescribed under section 32.
The other is that in a case where the Magistrate feels that a heavier punishment should be imposed he can take recourse to the provisions of section 349 of the Code and make a recommendation to a Magistrate who can impose adequate punishment in the case.
The words "subject to the other provisions of the Code" would enable this to be done.
In our opinion, therefore, the scheme of the Code read with the provisions of section 15 of the Forests Act clearly show that offences under section 15 are not triable by any Magistrate as it would be if the Second Schedule were applicable.
They are therefore triable by such Magistrates as have been named in the second sub section.
There is good reason for holding this, because a conviction by a Magistrate of the Second or the Third Class, as the case may be, is open to an appeal whereas a conviction by a Magistrate of the First Class and a sentence of fine of Rs. 501 or under or a fine of Rs. 200/ after a summary trial is not appealable.
It is possible that it was intended that a right of appeal should be conferred and therefore the trial of these offences was restricted to Magistrates of the Second and the Third Class.
This was pointed out by Mr. Justice Beg in Harbans Singh and others vs State(1) and was also referred to by Mr. Justice Verma in the opinion in the present case.
In our opinion, it is a circumstance which may be taken into account.
It is forcefully illustrated in this case.
An appeal would have lain against the same decision if the Magistrate had not been given the powers of a First Class Magistrate during the trial.
The respondents were robbed of a right of appeal.
In any event, in view of the clear words of section 29(1), the trial of these cases ought to have been before a court designated in section 15(2) and as the trial was before a Magistrate who was not empowered to try the offence the proceedings were rightly declared void under section 530(p) of the Code of Criminal Procedure.
We accordingly hold that the decision under appeal was correct.
The appeal fails and is dismissed.
Appeal dismissed.
(1) A.I.R. 1953 All.
| The respondent was assessed to income tax for the years, 1953 54 and 1954 55 on estimated incomes of Rs. 61,000/ and Rs. 1,21,000/ respectively and notices of demand under section 29 of the Indian Income tax Act, 1922, were served on him by the Income tax Officer for the tax due.
On the respondent failing to comply with the notices of demand within the period specified, the Income tax Officer issued certificates under section 46(2) of the Act and sent them to the Collector for recovery of the tax, treating the respondent as in default.
In appeals filed by the respondent against the orders of assessment, the Appellate Assistant Commissioner reduced the income assessed for the year 1953 54 to Rs. 28,000 and for the year 1954 55 to Rs. 46,000.
The Income tax Officer did not issue fresh notices of demand pursuant to the modification in the orders of assessment made by the Appellate Assistant Commissioner, but by a letter informed the respondent that he had to pay tax as reduced by the appellate order, The respondent did not pay the amount of tax demanded, but applied to the High Court of Mysore under article 226 of the Constitution of India for quashing the certificates issued by the Income tax Officer.
The High Court held that the Income tax Officer could not, without issuing fresh notices of demand, after the Appellate Assistant Commissioner of Income tax reduced the taxable income, treat the respondent as a defaulter and that the proceedings of the Collector based on the certificates issued by the Income tax Officer were illegal.
Held:(per Sarkar and Hidayatullah, JJ.).
The decision of the High Court was right.
Per Sarkar, J. On the Income tax Officer 's order being revised in appeal, the default based on it and all consequential proceedings must be taken to have been superseded and fresh proceedings have to be started to realise the dues as found by the revised order.
Per Hidayatullah, J.
In view of the terms of section 29 of the Act, where an order is passed in appeal and the amount of tax reduced, the Income tax Officer must intimate to the assessee the reduced amount of tax and make a demand and give him an opportunity to pay before treating him as a defaulter.
Per Shah, J. (dissenting) In the absence of any provision imposing an obligation upon the Income tax Officer to issue successive notice , of demand from time to time for recovery of the amount due during the process of assessment, it must be held that the notices of demand issued by the Income tax Officer in exercise of the power under section 29 must be enforced in the manner provided by section 46 and within the period of limitation 149 provide in cl.
(7) of section 46, even after the appeal against the order of assessment by the Income tax Officer is disposed of, subject to adjustment of the amount to be recovered in the light of the order of the Appellate Assistant Commissioner.
|
Civil Appeals Nos.
308 313 Of 1977 Appeals by Special leave from the Judgment and Order dated the 8th September, 1975 of the Patna High Court in C.W.J.C. Nos.
1419/73, 467/74 and 522 of 1974.
L.N. Sinha, R.P. Singh, R.K. Jain, Suman Kapur, for the Appellant in CA.No. 308 of 1977.
R.K. Garg.
R.P. Singh, R.K. Jain & Suman Kapur, for the Appellant in CA.
309 of 1977.
600 R.K.Jain for the Appellant in CA.
310/77.
L.N. Singh and D.Gourdhan for the Appellant in CAs.
311 13 L.N. Sinha, D. Goburdhan for Respondents 3 7 in CA.
308/77 and for Respondents Nos. 2 6 in CA.
309/77 & for Respondents 2 to 4 in CA No. 310/77.
M.K. Ramamurthi D.P. Mukherjee for Respondents 12 13 in CA.
No. 308/77 & RR 9 10 in CA.
310/77.
U.S. Prasad for Respondent No. 4 in CA.
309/77.
G.L. Sanghi, Radha Mohan & M.L. Verma for RR.
1, 2 & 16 in CA.
309/77 & for R 11 in CA.
310 of 1977.
Jaynarain, R.P. Singh, R.K.Jain & Suman Kapoor for Respondents in CA.
311 313 of 1977.
A.K. Sen, Radha Mohan Prasad & M.L. Verma for RR.
1 & 2 in CA.
313 of 1977.
The Judgment of the Court was delivered by MISRA, J.
This bunch of appeals is directed against a common judgment and order of the Patna High Court dated 8th September, 1975 allowing three petitions under article 226 of the Constitution in part.
The material facts to bring out the points for consideration in these appeals lie in a narrow compass.
The Public Works Department in Bihar had a very small mechanical organisation.
In 1962, however, it undertook the execution of a World Bank project.
In that connection a number of mechanical overseers were needed.
As the project had to be executed on an emergency basis within a short time and 601 `there being dearth of qualified overseers, persons who were working only as sub overseers or persons who had appeared at the diploma examination in engineering, but had not passed the same, were appointed against the sanctioned posts on a provisional basis.
There were some others who were also appointed as mechanical overseers on temporary basis in the World Bank project, a wing of the Public Works Department, after appearing before a selection committee duly constituted according to r.1, Appendix II of the Bihar Public Works Department Code, Ist Edn., 1958, Vol.
This rule reads: "All permanent appointments to the Bihar Subordinate Engineering Service either by absorption of temporary or work charged Overseers and Estimators, or by direct recruitment, will be made by the Chief Engineer, provided that in the case of direct recruitment (permanent or temporary) appointment will be made on the advice of the committee of senior officers constituted for the purpose.
The committee will constituted for the purpose.
The committee will consist of three members including the Chief Engineer, who will be the Chair man of the committee.
The other two members will be nominated by him with the approval of the Government in the Public Works Department from time to time".
The Chief Engineer by orders dated 18th August and 26th September, 1964 appointed among others the following persons, already working as sub overseers in the department as temporary overseers against the sanctioned posts on their passing the diploma examination from the date of publication of their results of the diploma in mechanical/electrical engineering examination: 1.
Ramendra Singh 2.
Keshav Singh 3.
Bhola Nath Chaudhary 4.
Awadesh Kumar Singh 5.
Rajeshwar Sinha 6.
Ram Chandra Prasad 7.
Udai Narain Singh 8.
Sunil Kumar 9.
Rajnandan Pd.
Singh 10.
Gopal Ram 11.
Sidh Nath Singh 602 12.
Prem Chand Prasad, and many others who are not parties here.
It appears that a provisional gradation list of overseers was prepared.
Certain overseers who felt aggrieved by the provisional list made various representations and eventually a revised gradation list dated 17th November, 1973 was prepared, Some of the aforesaid twelve persons were promoted as Mechanical Sub Divisional officers by an order dated 13th March, 1974.
The revised gradation list dated 17th November, 1973 and the two orders dated 18th August and 26th September, 1964 appointing the aforesaid twelve persons as temporary overseers with retrospective effect and the order dated 13th March, 1974 promoting some of them as Mechanical Sub Divisional Offers were challenged by three separate writ petitions: (1) writ No. 1419 of 1973 filed by Shyam Dayal Pandey, (2) writ No. 467 of 1974 filed by Ful Chand, and (3) writ No. 522 of 1974 filed by Jagdish Prasad and Mohammad Shamsuddin.
The respondents in the three petitions including the aforesaid twelve persons were common, though differently numbered.
It would be convenient to identify the parties with reference to the writ petitions.
The writ petitioners therein will be referred to herein after as the petitioners and the above mentioned twelve persons, whose retrospective appointment has been challenged, as the contesting respondents.
The case of the petitioners in the three petitions has been that they were appointed as mechanical overseers on temporary basis in the World Bank project, a unit of the Public Works Department after appearing before a selection committee duly constituted according to r. 1 referred to above.
The appointment of the contesting respondents by orders dated 18th August and 26th September, 1964 with retrospective effect has been challenged on the ground that they were temporary mechanical sub overseers and had not got the requisite qualification for being appointed as overseers nor did they appear before committee as required by r. 1 of the PWD Code and in any case they could not be appointed with retrospective effect.
It was further pleaded that the contesting respondents were junior to the petitioners but in 603 the revised gradation list the contesting respondents were shown above the petitioners on the basis of the aforesaid two orders dated 18th August and 26th September, 1964.
The promotion of some of the contesting respondents as mechanical sub divisional officers was also bad on that account.
The contesting respondents as well as the State of Bihar filed a return justifying the appointment of the contesting respondents as well as the promotion given to some of the contesting respondents as mechanical sub divisional officer.
On the contentions of the parties, the High Court formulated the following points for consideration: 1.
Whether the impugned gradation list had been prepared in accordance with law? 2.
Whether the promotion of various respondents on the basis of the said gradation list is justified? 3.
Whether the appointment of the respondents was bad as they had not appeared before the selection committee? 4.
Whether the orders dated 18th August and 26th September, 1964 appointing the respondents and some of the petitioners as temporary overseers from the date of publication of their result of diploma in mechanical/electrical Engineering examination, are justified and in accordance with law and whether the same could have been made the basis for preparing the gradation list? While supporting the appointment of contesting respondents on merits two preliminary objections were raised on behalf of the contesting respondents about the maintainability of the writ petitions: 1.
None of the requisites of r. 1 of the PWD Code was complied with while constituting the selection committee and this being the position the petitioners themselves were not selected by 604 a duly constituted committee, and, therefore, they had no right to assail the gradation list and to challenge the appointment of the contesting respondents under article 226 of the Constitution.
The petitioners could not challenge the gradation list without assailing the orders dated 18th August and 26th September, 1964 on which the gradation list was based, and the petitioners could not be allowed to assail those orders after a lapse of about 10 years and if they were allowed to challenge the gradation list that would virtually amount to permitting the petitioners to challenge those orders.
The High Court overruled both the preliminary objections.
The first preliminary objection was overruled on the ground that the requirements of r. I of the PWD Code are not mandatory, they are merely departmental instructions which had not acquired the statutory force and the petitioners could not be non suited merely because there was no compliance of r. 1 of the Code.
The second preliminary objection was also overruled on the grounds: (a) that the petitioners had not prayed for the quashing of the entire orders but they were aggrieved only with that portion of the orders by which the contesting respondents were appointed retrospectively from the date of the publication of the results of diploma in mechanical/electrical engineering examination, which affected the seniority of the petitioners in the revised gradation list:(b) that the petitioners came to know of the two orders after the preparation of the revised gradation list on 17th November, 1973 wherein the contesting respondents were placed above the petitioners; (c) that the Court was mainly concerned with the revised gradation list, but with a view to find out the basis for preparation of the revised gradation list, the Court had to examine as to whether the retrospective appointment of the contesting respondents by the aforesaid two orders in the circumstances was valid.
If the Court holds that they could not have been appointed retrospectively that would simply change their position in the revised gradation list and that would not affect the appointment of the contesting respondents; and (d) that ignoring the claim of the petitioners on the ground of laches or delay is not a rule of law but a rule of practice.
Coming to the merits, the appointment of the contesting respon 605 dents was challenged by the petitioners on the ground that they had not appeared before the selection committee as required by r. 1 and therefore their appointment was illegal and at any rate they could not have been placed higher than the Petitioners in the revised gradation list.
The High Court negatived the contention on the self same ground on which the preliminary objection No. 1 was overruled.
Rule I of the PWD Code was merely a departmental instruction and it had not acquired.
the statutory force therefore, the appointment of the contesting respondents could not be held to be invalid merely because they had not appeared before the selection committee.
Besides, there was no such stipulation in their initial order of appointment nor were they called for appearing before the selection committee.
Keshav Singh and Sunil Kumar, two of the contesting respondents and one Shyam Dayal Pandey, one of the petitioners in one of the writ petitions, who were placed in similar situation as the contesting respondents who were placed in similar situation as the contesting respondents appeared before the selection committee but it was due to some misunderstanding on the part of the Executive Engineer (Workshop Division) under whom they happened to be posted although their original letter of appointment contained no such stipulation that they would have to appear before the selection committee.
On the crucial point Whether the two orders dated 18th August and 26th September 1964 making retrospective appointments were the various authorities cited before it.
The Court further held that the petitioners were initially appointed provisionally but after they appeared before the selection committee they were appointed temporally and, therefore, the services of the petitioners from the date of their appointment could be counted while fixing their seniority, whereas those of the contesting respondents, who were provisionally appointed could not have been counted for fixing their seniority.
It also held that the revised gradation list showing the contesting respondents above the petitioners on the basis of the two orders dated 18th August and 26th September 1964 was bad in law.
Consequently, the High Court quashed only that part ofeth 606 two orders which had fixed the date of publication of the result of diploma in mechanical/electrical engineering examination as the date of commencement of length of services of temporary overseers.
The seniority list prepared in pursuance of the order dated 17th November 1973, insofar as it relates to the contesting respondents vis a vis the petitioners in the three petitions was also quashed.
The order of promotion of some of the contesting respondents, namely, Ramendra Singh, Bhola Nath Choudhary, Rajeshwar Sinha, Ramchandra Prasad and Udai Narain Singh was also quashed.
The contesting respondents have now come to challenge the order of the High Court by special leave under article 136 of the Constitution.
The State of Bihar has also filed three separate appeals against the same order and for the same relief.
The crucial question for consideration in this case is whether the appointment of the contesting respondents, arrayed as appellants in the first batch of three appeals, by the two orders dated 18th August and 26th September, 1964, with retrospective effect is bad in law.
Shri A.K. Sen along with Shri G.L. Sanghi appearing for the petitioners, now arrayed as respondents in these appeals supported the judgment of the High Court.
Their main contention was that the contesting respondents had not acquired the requisite qualification on the date of their appointment and, therefore, their appointment by orders dated 16th August and 26th September, 1964, with retrospective effect was in the teeth of r. 1 of the PWD Code, and in any case there can be no retrospective appointment of the contesting respondents from the date of passing their diploma examination inasmuch as it affected the seniority of the petitioners in the revised gradation list.
Shri Lal Narain Sinha assisted by She R.K. Garg appearing for the (petitioners) contesting respondent appellants, raised the following three contentions: 1.
The impugned orders are about ten years old and the petitioners could not be permitted to challenge those orders after the lapse of such a long time.
607 2.
The High Court itself had made a discrimination inasmuch as the writ petitions against Keshav Singh and Awadesh Kumar Singh have already been dismissed.
In the absence of any statutory rule or rules framed under article 309 of the Constitution, it was open to the Government to make appointments to suit the exigencies of the situation.
The High Court has given detailed reasons for not accepting the contention of undue deal in filing the writ petitions.
It is not necessary to repeat those grounds over again.
We fully agree with the view taken by the High Court that the writ petitions filed by the petitioners could not be dismissed on the ground of laches.
As regards the second contention of Shri Lal Narain Singh, we are of the view that the mere fact that the writ petitions have been dismissed against Keshav Singh and Awadesh Kumar Singh, will not be a ground for setting aside the impugned order of the High Court.
The contesting respondents have to show that the two orders dated 18th August and 26th September, 1964 making retrospective appointments were valid one.
As regards the third contention, Shri Lal Narain Sinha submits that the executive power of the State is co extensive with its legislative power and therefore if the State can pass an enactment so also it can pass orders in exercise of its executive power, as contemplated by article 162 of the Constitution to suit the exigencies of a particular situation.
In the instant case, as stated earlier, the World Bank project was undertaken by the PWD in 1962.
A large number of mechanical overseers were needed as the project had to be executed on emergency basis within a short time and there being dearth of qualified hands persons who were working only as sub overseers or who had appeared at the diploma examination but had not passed were appointed against sanctioned posts and were permitted to draw the pay scale of overseers from the date of the passing of the diploma examination.
There is no denying the fact that the executive power of the 608 State is in no way narrower than the legislative power.
But the question is whether in exercise of that power the State in violation of article 16 of the Constitution could make retrospective appointment of the contesting respondents in the instant case so as to affect seniority of the petitioners.
For the respondents reliance was placed on State of Punjab vs Kishan Dass.
In that case pursuant to certain charges against a police constable his entire service with permanent effect was forfeited, which meant reducing his salary to the starting point in the time scale for constables.
The constable challenged the order by filing a regular suit.
The two courts below decreed the suit holding that there was flagrant violation of article 311 (2) of the Constitution as the impugned order amounted to reduction in rank.
This Court interpreted the expression 'reduction in rank ' and held: "The expression 'reduction in rank ' in the article, therefore means reduction from a higher to a lower rank or post when imposed as a penalty.
Therefore, an order forfeiting the past service which has earned a government servant increments in the post or rank he holds, however adverse it is to him, affecting his seniority within the rank to which he belongs, or his future chances of promotion does not attract the article.
His remedy, therefore, is confined to the rules of service governing his post.
" The impugned orders in the instant case may not have resulted in reduction of rank but all the same they affected the seniority of the petitioners which eventually might result in reducing their chances for promotion.
Reliance was next placed on B.N. Nagarajan & Ors.
vs State of Mysore & Ors.
One of the arguments advanced in that case was that till the rules are made in that behalf no recruitment could be made to any service.
This argument was, however, repelled by this Court, firstly because, it was not obligatory under proviso to article 309 to make rules of recruitment, etc.
before a service could be constituted or a 609 post created or filled; secondly the State Government had executive power in relation to all matters with respect to which the legislature of the State has power to make rules; and it follows from this that the State Government will have executive power in respect of List II, Entry 41, State public Services.
Relying on Ram Jawaya Kapoor vs State of Punjab.
Ram was held that it was not necessary that there should be a law already in existence before the executive is enabled to function and that the powers of the executive were limited merely to the carrying out of these laws.
There was nothing in the terms of article 309 of the Constitution which abridges the power of the executive to act under article 162 of the Constitution without a law.
The Court, however, put a word of caution in mentioning that if there is statuary rule or an Act on the matter, the Executive must abide by that Act or rule and it could not in exercise of executive power under article 162 of the Constitution ignore or act contrary to that rule or Act.
The second contention in the above case was that the Executive could not frame rules retrospectively unless the Act specifically empowers it to do so.
This Court, however, refrained from deciding this point because in their opinion the appeal could be disposed of on another ground.
This Court observed that assuming for the sake of argument that the Mysore State Government could not make rules retrospectively and that the rules were thus void so far as they operated retrospectively, proceeded to ignore those rules and to examine whether the appointments made on October 31, 1961 could be upheld.
The Court came to the conclusion that those appointments could be considered to have been validly made in exercise of the executive power of the State under article 162 of the Constitution.
For the appellants strong reliance was also placed upon Rajendra Narain Singh & Ors.
vs State of Bihar & Ors.
It was laid down in that case that in the absence of any legislation on the subject or a rule framed under the proviso to article 309 of the Constitution, the State Government could regulate its public services in the exercise of its executive power.
In the above case there was no statute or any rule framed under the provision to article 309 to determine the seniority as between the direct recruits and the promotees.
The determination of the seniority on the 610 basis of continuous officiation was held to be valid on the basis of the decision in S.B. Patwardhan 's case.
There is no gainsaying the fact that the executive power of the State is co extensive with the legislative power, but whether the exercise of the power can be in such a way as to offend article 16 of the Constitution.
The retrospective appointment of the respondents in the aforesaid writ petitions affected the seniority of the respondents.
This question, however, need not detain us as the point in question is covered by R.N. Nanjundappa vs T. Thimmiah & Anr.
In that case the respondent Thimmiah was appointed through the Public Service Commission as an Assistant Geologist in the Department of Geology in the Mysore Government in 1951 in the grade of Rs. 125 10 175.
When the Kolar Gold Fields School of Mines was set up in July 1957 the respondent was sent on deputation for two years as Vice principal of the School of Mines.
When the then Principal of the School of Mines, who was employed on a part time basis on an allowance of Rs. 200/ left on 22nd July 1958, the respondent who was Vice Principal and was also doing the duties of Principal since 15th February 1958, was appointed as officiating Principal with effect from 22nd July, 1958 in the grade of Rs. 500 30 800 by an order dated 25th September, 1958.
On 3rd April, 1959 the State Government in modification of the notification dated 25th September, 1958 appointed the respondent as temporary officiating Principal with effect from 15th February, 1958.
The Mysore Education Department Service Rules 1967 regularised the appointment of the respondent.
The relevant portion of the Rules reads: "Notwithstanding any rule made under the proviso to article 309 of the Constitution of India, or any other rules or Order in force at any time, Dr. T. Thimmiah, B.Sc. (Hons.) Ph.D. (Lond.) F.G.S. shall be deemed to have been regularly appointed as Principal, School of Mines, Oragaum, Kolar Gold Fields, with effect from 15 2 1958.
" This rule was challenged by the appellants on various grounds: 611 (a) That the respondent was governed by the Mysore Service Regulations, 1943, the Mysore State Civil Services General Recruitment) Rules, 1957 as well as the Mysore Education Department Services (Technical Education Department) (Recruitment) Rules, 1964.
(b) That the respondent was in Class III service and his appointment by the impugned regulation amounted to his promotion from Class III service to Class I.
If so, it is hedged by two limitations as contemplated by sub clauses (a) and (b) of rule 4 (3) of the Mysore State Civil Services Rules, 1957, i.e. (1) it has to be on the basis of merit and suitability with due regard to seniority from among persons eligible for promotion, and (2) it has to be on the basis of seniority cum merit from among persons eligible for promotion.
The stand of the respondent, however, was that (1) he was a local candidate in service and, therefore, the aforesaid rules did not apply to him and the regularisation of his appointment was valid; (2) under article 162 of the Constitution regularisation would in itself be a mode of exercise of power of appointment of the Executive Government.
Such an appointment even if made in the shape of rules under article 309 could not be attacked on the ground of being made for one person just as a piece of legislation could not be attacked on the ground of being made for a particular person or entity.
The High Court came to the conclusion that the appointment of the respondent could be regularised with effect from any date as he was a local candidate within the meaning of the Mysore Government Seniority Rules, 1957.
This Court in appeal, however, reversed the judgment of the High Court and observed: "No one can deny the power of the Government to appoint.
If it were a case of direct appointment or if it were a case of appointment of a candidate by competitive examination or if it were a case of appointment by selection recourse to rule under Article 309 for regularisation would not be necessary.
Assume that rules under Article 309 could be made in respect of appointment of one man but there are two limitations.
Article 309 speaks of 612 rules for appointment and general conditions of service.
Regularisation of appointment by stating that notwithstanding any rules the appointment is regularised strikes at the root of the rules and if the effect of the regularisation is to nullify the operation and effectiveness of the rules, the rule itself is open to criticism on the ground that it is in violation of current rules.
Therefore the relevant rules at the material time as to promotion and appointment are infringed and the impeached rule cannot be permitted to stand to operate as a regularisation of appointment of one person in utter defiance of rules requiring consideration of seniority and merit in the case of promotion and consideration of appointment by selection or by competitive examination".
The Court gave further reasons for holding the regularisation to be bad in law.
It observed: "This regularisation is bad for the following reasons, First, regularisation is not itself a mode of appointment.
Secondly, the modes of appointment are direct recruitment or selection or promotion or appointing for reasons to be recorded in writing an officer holding a post of an equivalent grade, by transfer, from any other service of the State.
The Government did not contend it to be a case of promotion.
If it were a case of promotion it would not be valid because it would be a promotion not on the basis of seniority cum merit but a promotion of some one who was in Class III to Class I. Even with regard to appointment under rule 16 by transfer of a person holding an equivalent grade the appointment would be offending the rules because it would not be transfer from an equivalent grade.
Again, merit and seniority could not be disregarded because the respondent was not in the same class as the Principal of the School of Mines.
The pay of the Principal was Rs. 500 800 where as the respondent was getting a salary of Rs. 165 in the grade of Rs. 125 165 plus an allowance of Rs. 75".
The Court also brought out the distinction between the scope of article 309 and article 162 of the Constitution.
It observed: 613 "There were 1957 rules which spoke of appointment by competitive examination or by selection or by promotion.
Even if specific rules of recruitment for such services were not made the rule as to appointment by competitive examination or Selection or by promotion was there.
Article 162 does not confer power of regularisation.
Article 162 does not confer ' power on the Government to make rules for the recruitment or conditions of service.
Rules are not for the purpose of validating an illegal appointment or for making appointments or promotions or transfer.
Rules under Article 309 are for the purpose of laying down the conditions of service and recruitment.
Therefore, regularisation by the way of rules under Article 309 in the present case by stating that notwithstanding anything in the rules the appointment of the respondent was being regularised was in itself violation of the rules as to appointment and as to cadre and also as to the proper selection".
In view of this clear authority, it cannot be argued for the appellants that they could be appointed with retrospective effect so as to affect the seniority of the respondents.
The orders dated 18th August and 26th September, 1964 which purported to appoint the sub overseers named therein as temporary overseers from the date of Publication of their result of diploma examination are clearly violative of articles 14 and 16 of the Constitution inasmuch as the petitioners had already been appointed as overseers by selection committee constituted under the rules contained in P.W.D. Code.
The order of temporary appointment by the impugned orders dated 18th August and 26th September, 1964 conferred national seniority on the contesting respondents for the period while they were actually working as sub overseers in the lower scale outside the cadre of overseers.
The High Court in our opinion was fully justified in allowing the writ petitions in part.
For the reasons given above the appeals must fail.
They are accordingly dismissed.
In the circumstances of the case, however, we allow the parties to bear their own costs.
P.B.R. Appeals dismissed.
| In connection with the execution of a World Bank Project on an emergency basis, which was required to be completed within a short time, the Public Works Department of the State needed a number of mechanical overseers.
Since at that time there was acute shortage of qualified overseers the Department had appointed, as overseers on provisional basis against the sanctioned posts, certain persons who were working in the department as sub overseers even though they had only appeared in the diploma examination in engineering but had not yet passed it.
In the meantime, the respondents (petitioners before the High Court) were selected by a Selection Committee constituted in accordance with he procedure laid down in Bihar Public Works Department Code.
After they passed the diploma examination the Chief Engineer had in 1964 appointed the appellants (contesting respondents before the High Court) as temporary overseers against the sanctioned posts from the date of publication of results of the diploma examination.
In 1973, a gradation list was prepared and some of the appellants were subsequently promoted to higher posts.
The respondents in a writ petition filed in the High Court had impugned the order of the Chief Engineer appointing the appellants reproductively as overseers on the ground that while they were appointed after following the procedure prescribed under the rules, the appellants at the time of their appointment as overseers were neither qualified to be appointed as overseers nor were they selected by a Selection Committee constituted under the rules and that in any event the appellants could not be appointed with retrospective effect.
Secondly, though the appellants shown as seniors to the respondents by the Chief Engineer 's orders of 1964, the appellants were in fact junior to them and that their later promotion was improper.
The High Court held that the Public Works Department Code in accordances with which the respondents were recruited directly contained merely departmental instructions and had not acquitted statutory force and that, therefore, the appointment of the appellants could not be held to be invalid on the ground that the department had no power to make retrospective appointments.
It however held that the revised gradation list, showing the appellants above the respondents, on the basis of the 1964 orders was bad in law.
Consequently, the High Court quashed that part of the two orders which had fixed the date of publication of the result of diploma examination as the commencement of length of service of temporary overseers.
599 In appeal to this Court is was contended on behalf of the appellants that since the executive power of the State is co extensive with its legislative power, in the absence of a statutory rule framed under Article 309 of the Constitution, it was open to the executive, in exercise of its executive power under article 162 of the Constitution, to make appointment to meet the exigencies of a situation.
Dismissing the appeal, ^ HELD: The impugned order of 1964 which purported to appoint the sub overseers as temporary overseers from the date of publication of their result of diploma examination are clearly violative of Articles 14 and 16 of the Constitution inasmuch as the respondents had already been appointed as overhears by a Selection Committee constituted under the rules contained in the public Works Department Code.
The 1964 order making the temporary appointments conferred national seniority on the appellants for the period they are actually working as sub overseers in the lower scales outside the cadre of overseers.
The impugned orders may not have resulted in reduction of rank but yet they did affect the seniority of the respondents which eventually might result in reducing their chances for promotion.
[613 D F] There is no gain saying the fact that the executive power of the State is co extensive with the legislative power and that it is not necessary that there should be a law in existence before the executive is enabled to function and the power of the executive is limited merely to the carrying out of the laws.
There is nothing in terms of Article 309 which abridges the powers of the executive to act under Article 162 of the Constitution without a law but yet if there is a statutory rule or an Act on a matter the exercise of its executive power under article 162, ignore or act contrary to that Rule or Act. [609 B C] B.N. Nagarajan & Ors.
vs State of Mysore & Ors.
; Ram Jawaya Kapur vs State of Punjab ; Rajendra Narain Singh & Ors.
vs State of Bihar & Ors.
; ; S.B. Patwardhan 's case ; and R.N. Nanjundappa vs T. Thimmiah & Anr.[1972] 2 SCR 799, referred to.
|
Civil Appeal No. 1926 of1969.
(From the Judgment and Decree dated S 2 68 of the Bombay High Court in First Appeal No. 4S1 of 1964).
Shaukat Hussain and Mohd. Mian for the appellant.
R. H. Dhebar and M. N. Shroff for the respondent.
The Judgment of the Court was delivered by SEN, J.
This appeal by certificate is directed against a judgment of the Bombay High Court, and it involves an important question namely, whether a court in dealing with a reference under s.14, Sub section
(1) of the Hyderabad Land Acquisition Act, 1309 Fasli, corresponding to section 18, sub section
(1) of the Land Acquisition Act, 1894, can go behind the reference made by the Collector if the application on which the reference has been made is beyond the period of limitation prescribed therein.
The material facts giving rise to this appeal are as follows: The case arises from that part of the erstwhile princely State of Hyderabad, known as Marathwada, which merged in the State of Bombay under the States Re organisation Act, l956.
The land belonging to the appellant admeasuring 2057 sq. yards in the city of Aurangabad, has been acquired by the State Government under s.5 of the Hyderabad Land Acquisition Act for the construction of a building for the medical college at Aurangabad.
The Government published a Notification under section 3 (1) on the 28th of February, 1958.
On the 13th of January, 1962 the Land Acquisition officer, Aurangabad made an award directing payment of Rs. 1,318.11 P. inclusive of 15 per cent solatium as compensation to the appellant at the rate of 37 np.
per sq. yard, as against his claim for payment of compensation at the rate of Rs. 10/ per sq. yard.
The said award was communicated to the appellant on the 20th of January, 1962.
The appellant instead of making an application for reference under section 14, sub section
(1) of the Act, filed an application for review before .he
Land Acquisition officer on the 5th of February, 1962 requesting him 'to revise the award ' stating further that in case it was not revised he would seek his remedy in a court of law '.
The Land Acquisition 268 officer obviously felt that the amount fixed by him was too low and accordingly on the 17th of February, 1962 made a recommendation, through the Collector, to the Secretary to the State Government that the award be reconsidered.
But, the Collector by his order dated the 23rd of March, 1962 declined to forward the same and informed the appellant that he must seek his remedy in! a court of law.
Eventually, on the 14th of May, 1962 the appellant made an application for reference under section 14, sub section
(1) of the Act and prayed that the period spent in the proceedings for the review before the Land Acquisition Officer subsequent to the date of the award be excluded while considering the question of limitation under section 14 of the Limitation Act.
A reference was made under section 14, sub section
(1) of the Act to the District Court of Aurangabad.
The Assistant Collector, Aurangabad, who was the Land Acquisition officer, while making a reference made no expression of his opinion whether the application was time barred or not, evidently taking the view that the point should be left for the decision of the court.
He, however, while making the reference gave a complete narration of facts and left the question open.
A preliminary objection was raised by the Government that the reference was incompetent, the application being time barred.
This objection prevailed and the contention of the appellant based on1 section 14 of the Limitation Act was negatived both by the Civil Judge, Senior Division Aurangabad by his order dated the 28th of June, 1962, and by the High Court of Bombay by its order dated the 5th of February, 1968 holding that the time taken between the 5th of February, 1962 and the 23rd of March, 1962 could not be excluded while computing the period of limitation prescribed under section 14, sub section
(1) of the Act inasmuch as section 14 of the Limitation Act was not applicable to the proceedings, and further, that even if it applied the appellant was not entitled to the benefit of section 14 of the Limitation Act, stating that good faith, which is also a necessary ingredient under section 14, was not established.
The learned Civil Judge raised an issue whether the application for reference was barred by limitation under section 14, sub section
(1) of the Act, and he answered that issue in the affirmative, and we have no doubt, whatever that his decision on that point, as well as that of the High Court affirming it, was right.
The application was clearly out of time.
Section 14, Sub section
(1) of the Hyderabad Land Acquisition Act, 1309 Fasli provides that: "Every person interested, who is displeased with the Taluqdar 's award may, within two months from the date of receiving notice of the award, apply to the Taluqdar in writing to refer 269 the case to the court for determination, whether his objection be to the measurement of the land, or to the amount of the compensation, or to the persons to whom it is payable or to the apportionment of the compensation among the persons interested.
" Section 15, sub section (1) enjoins that the Taluqdar in making the reference shall forward to the Court a statement in writing, containing certain particulars.
Sub section (2) there of provides that to the said statement shall be attached a schedule giving the particulars of the notices served upon, and of the statements in writing made or delivered by the parties interested respectively.
It is conceded for our present purposes that section 14, sub section
(1) of the Hyderabad Land Acquisition Act is in pari materia with the provisions of section 18 of the Land Acquisition Act, 1894.
Hence hereinafter reference will be made only to the provisions contained in the Land Acquisition Act, 1894, 'the Act '.
Learned counsel for the appellant rested his submission on the .ground that the court while dealing with a reference under section 14, sub section
(1) of the Act, cannot go behind the reference and decline to answer it.
The point regarding applicability of section 14 of the Limitation Act was rightly not pressed before us.
Nor was any contention raised by him that the application for review made by the appellant before the Land Acquisition officer on the 9th of February, 1962, asking him to revise the award should, in law, be regarded as an application under section 14, sub section
(1) of the Act.
The short question that falls for determination in the appeal is whether the court can go into a question that the application for reference was not made to the Collector within the time prescribed in section 18, sub section
(2) of the Land Acquisition Act; and if so, can it refuse to entertain the reference if it finds it to be barred by time.
There was at one time a great divergence of judicial opinion on the question.
But almost all the High Courts have now veered round to the view that the court has the power to go into the question of limitation.
It not only has the power but also the duty to examine whether the application for reference was in accordance with law i.e., whether it was made within time prescribed under the proviso to sub section
(2) of section 18 of the Act or not.
The view taken by them is that a Collector 's jurisdiction is circumscribed by the conditions laid down in section 18, sub section
(1), that if he makes a reference even though the application for reference was not in accord 270 ance with the provisions of section 18, the court acquires no jurisdiction to hear the reference and that it can refuse to hear it if it was made on a time barred application.
The matter came up twice before this Court in State of Punjab vs Mst.
Qaiser Jehan Begum & Anr.(1) and the State of U.P. vs Abdul Karim(2) in which the conflict of judicial opinion in the High Courts was noticed but not resolved as the Court in both the case,s rested its decision on a narrower ground namely that the application for a reference was not barred by time.
In Mst.
Qaiser Jehan Begum 's case (supra) it was observed: "In the view which We have taken on the question of limitation, it is unnecessary for us to decide the other question as to whether the civil court, on a reference under section 18 of the Act, can go into the question of limitation.
We have al ready stated that there is a conflict of judicial opinion on that question.
There is no one side a line of decisions following the decision of the Bombay High Court in re.
Land Acquisition Act, which have held that the civil court is not debarred from satisfying itself that the reference which it is called upon to hear is a valid reference.
There is, on the other side, a line of decisions which say that the jurisdiction of the civil court is confined to considering and pronouncing upon any one of the four different objections to an award under the Act which may have been raised in the written application for the reference.
The decision of the Allahabad High Court in Secretary of State vs Bhagwan Prasad is typical of this line of decisions.
There is thus a marked conflict of judicial opinion on the question 'This conflict, we think, must be resolved in a more appropriate case on a future occasion".
In the case before us the question doe6 not really arise and is merely academic and we prefer not to decide the question in the present case.
That question now directly arises.
It is contended on behalf of the appellant that a reference to the Court having been made by the Collector, the court had no jurisdiction to question the validity of that reference and was bound to decide the matter on merits.
In support of this contention certain authorities have been cited to us, in which it has been laid down that it is for the Collector, and the Collec tor alone, to determine whether to make a reference under section 18, sub section
(1), and if he decides to make a reference, it is not (1) ; (2) Civi] Appeal No. 2434 of 1966 decided on 23 9 1969.
271 open to the court to go behind the decision of the Collector, and hold the reference to be out of time.
Illustrative of this line of decisions is that of Allahabad High Court in Secretary of State vs Bhagwan Prasad(1).
That view has been reiterated by the Full Bench of the same High Court in the State of U.P. vs Abdul Karim(2) and in its earlier decision in Panna Lal vs The Collector of Etah(3), and the decisions in Venkateswaraswami vs Sub Collector, Bezwada(4), Hari Kishan Khosla vs State of Pepsu(5).
Chandravarkar J. in re Land Acquisition Act(6) held that it is clear from section 18 that the formalities are matters of substance and their observance is a condition precedent to be Collector 's power of reference.
He held that the court is bound to go into the question whether the reference under section 18 was within time.
He also held that the court was not only entitled, but bound, to satisfy itself that the conditions laid down in section 18 have been complied with.
In stating the principle, Chandravarkar J. Observed: "These are the conditions prescribed by the Act for the right of the party to a reference by the Collector to come into existence.
They are the conditions to which the power of the Collector to make the reference is subject.
They are also the conditions which must be fulfilled before the court can have jurisdiction to entertain the reference.
" The principle laid down by him in that case was acted upon in Sukhbir Singh vs Secretary of State(7).
In that case the Collector had made a reference, although there was no application before him as required by section 18 and the Division Bench held that being so, there was no valid reference.
But in a latter case which came before another Division Bench in Secretary of State vs Bhagwan Prasad (supra), it was held that it was not open to the court under section 18 to go behind the reference, that it was for the Collector to decide whether the conditions justifying reference have been complied with and if he thought that they had been, the court was bound to answer the reference.
This view found favour with a Single Judge of the Madras High Court in Venkateswaraswami vs Sub Collector Bezwada (supra) and a Single Judge of the Punjab High Court in Hari Krishan Khosla vs State of Pepsu (supra).
All these decisions clearly do not lay down good law.
(1) ILR 52 All.
(2) AIR.
1963 All.
(3) ILR [1959] 1 All.
(4) AIR 1943 Mad.
(5) ILR [1958] 1 Punj.
(6) I.L.R. , 285, All. 212.
272 In State of U.P. vs Abdul Karim (supra) the Full Bench of the Allahabad High Court, on its view of the scheme of the Act, declined to follow the decision of Chandavarkar, J. in re Land Acquisition Act (supra) and the long line of decisions taking the same view.
It preferred to rest its decision on the earlier view of its Full Bench in Panna Lal vs The Collector of Etah (supra) and that in Secretary of State vs Bhagwan prasad (supra).
In the light of these decisions, it held that the Collector 's jurisdiction to make a reference is not circumscribed by the conditions laid down in section 18, sub section
(1) and (2), that if he makes a reference even though the application for reference was not in accordance with the provisions of section 18, the court acquires jurisdiction to hear the reference, and that it cannot refuse to hear it even if it was made or.
a time barred application.
Upon its view, it held that the court has no power to determine or consider a question of limitation as its jurisdiction is strictly limited by the terms of the section as laid down by the Privy Council in Pramatha Nath vs Secretary of State(1).
It further held that the legislature having contemplated the Collector to be an agent of the Government, as that is the position assigned to him by the Privy council in Ezra vs Secretary of State for India(2), his status is certainly not changed by the mere fact that he is required to make a reference under section 18 if the application is within prescribed time and complies with certain conditions.
That being so, even if the Collector wrongly decides that an application is within time or satisfies other conditions, the Government as its principal, may have a remedy against him but was bound by his act so long as it remains.
The act being of the agent is their own and they are bound by it.
The Government cannot, therefore, be permitted to contend at the hearing of the reference before the court that it was illegally made.
In view of all this, the Full Bench was of the view that this class of case does not fall within the class of cases where the jurisdiction of an inferior authority depends upon the existence of a certain state of facts, as indicated by Lord Eshar, M. R. in The Queen vs Commissioners for Special Purposes of the Income tax(1).
On principle, apart from authority, it is difficult to accept the line of reasoning of the Allahabad High Court, namely, whatever might be the defects and imperfections in the reference made, once it is before the court, the court is debarred from enquiring into its validity or otherwise.
The decision in Abdul Karim 's case (supra) proceeds on a com (1) ILR (2) ILR (3) 273 plete misunderstanding of the decision of the Privy Council in Pramatha Nath vs Secretary of State (supra), where the Judicial Committee interpreting section 21 observed: "Their Lordships have no doubt that the jurisdiction of the Courts under this Act is a special one and is strictly limited by the terms of these sections.
It only arises when a specific objection has been taken to the Collector 's award, and it is confined to a consideration of that objection.
Once therefore it is ascertained that the only objection taken, is to the amount of compensation, that alone is the "matter" referred, and the Court has no power to determine or consider anything beyond it.
" All that the Privy Council intended to lay down was that the jurisdiction of the court in dealing with a reference under section 18 is restricted by the terms of the section, as enjoined by section 21.
That decision cannot be interpreted to mean that the court while, hearing a reference under section 18 cannot enquire into competency or otherwise of the reference made by the Collector, i.e., whether the conditions precedent to the exercise of power by the Collector, and, therefore, of the court, and in particular the condition regarding limitation, are fulfilled or not.
In Ezra vs Secretary of State for India (supra) the Privy Council, while dealing with the functions of the Collector in making an award under section 11 laid down that the functions of the Collector are not judicial but administrative and all that he does is to make an offer to the claimants with regard to the, valuation of the property to be acquired.
In that context, it did not think it necessary to repeat the reasoning of the judgment under appeal where the sections and the questions as a whole were very satisfactorily stated, and observed: "The proceedings of the Collector resulting in the 'award ' are administrative and not judicial.
The award in which the enquiry results is merely a decision (binding only on the collector) as to what sum I shall be tendered to the owner of the lands and if a judicial ascertainment is decided by the owner, he can obtain it by requiring the matter to be referred by the Collector to the Court.
" These observations, however, related to proceedings under Part II of the Act and not under Part III.
Ameer Ali and Stephen JJ.
, in delivering the judgment under appeal, explained the functions of the Collector under section 11 in Ezra vs Secretary of State for India(1) where they said: (1) ILR 274 "throughout the proceedings the Collector acts as the agents of Government for the purposes of acquisition.
He is in a sense of the term, a judicial officer, nor is the proceeding before him a judicial proceeding. he is not a Court.
The Government . at whose instance the land is being taken up is not entitled to demand a reference.
The reason of this is plain.
The Collector acts as the agent of the Government. and they are accordingly bound by the award of their agent.
. the Collector acts in the matter of the enquiry and the valuation of the land only as an agent of the Government and not as a judicial officer; and . consequently, although the Government . is bound by his proceedings, the persons interested are not concluded by his finding regarding the value of the land or the compensation to be awarded.
" On the basis of the Privy Council decision in Ezra 's case (supra), this Court in Harish Chandra vs Deputy Land Acquisition officer(1) held that the Collector in making an award acts as an agent of the Government, and that the legal character of the award made by the Collector was that of a tender or offer by him on behalf of the Government.
The Allahabad High Court has read more into the decision of the Privy Council in Ezra 's case (supra) than is there.
Merely because the Collector while making an award under section 11 or in serving a notice of the owner of the land under section 12, acts as an agent of the Government, it does not necessarily imply that while making a reference to the court under section 18, he acts in the capacity of an agent of the Government.
While it is true that the Collector in making the award under section 11 acts as an agent of the Government, he in making a reference to the court under section 18 acts as a statutory authority.
Section 18, sub section
(1) of the Act entrusts to the Collector the statutory duty of making a reference on the fulfilment of the conditions laid down therein.
The Collector, therefore, acting under section 18, is nothing but a statutory authority exercising his own powers under the section.
In the context, we may advert to the controversy that had arisen as a result of the Privy Council 's decision in Ezra 's case (supra) holding.
that the Legislature had assigned to the Collector the position of an: (1) [1962] 1 S.C.R. 676.
275 agent of the Government while making an award under section 11.
The problem that arose was that the claimants were left with no remedy where the Collector improperly declines to make a reference although the application fulfilled the requirements of section 18.
In The Administrator General of Bengal vs The Land Acquisition Collector, 24 Parganas(1) the Calcutta High Court while dealing with the question tried to draw a distinction between the functions of the Collector under Part Il of the Act land that under Part III, and observed: "It is admitted that up to and including the time of making his award the Collector was in no sense a judicial officer and that the proceedings before him were not judicial proceedings(Ezra vs Secretary of State) and however irregular his proceedings were, we cannot interfere with his award made under section 11 of the Act.
But when an application is made to the Collector requiring him to refer the matter to the Civil Court, the Collector may have to determine and, it seems to us, determine judicially whether the person making the application was represented or not when the award was made, or whether a notice had been served upon the applicant under sec.
12(2) and what period of limitation applies and whether the application is under the circumstances made within time.
The Collector 's functions under Part III of the Act are clearly distinguishable from those under Part II.
Part III of the.
Act relates to proceedings in Court.
In our opinion the Collector in rejecting the application was a Court and acting judicially and his order is subject to revision by this Court.
To hold otherwise would be to give finality to an award under sec.
11 even in cases in which the Collector acts irregularly and contrary to law and then refuses on insufficient grounds to make a reference under Part III of the Act.
The party aggrieved may be left without remedy which is implied by a judicial trial before the Judge.
" These observations were no doubt made in a different context but they bear some relevance to the point at issue.
The question at issue was whether the Collector 's order refusing to make a reference could be interfered with by the High Court under section 115 of the Code of Civil Procedure or section 107 of the Government of India Act, 1919.
The Calcutta High Court 's view that the Collector 's power was a judicial power and that the Collector was a Court subordinate to the High Court was obviously wrong but it persisted in taking (1) 276 that view to obviate injustice: Krishna Das Roy vs Land Acquisition Collector, Pabna;(1) Upendra Nath Roy vs Province of Bengal,(2) Leeth Elias Joseph Solomon vs H. C. Stork(3).
The Calcutta High Court tried to exercise its supervisory jurisdiction to provide the subject with a remedy.
The power of the Collector to make an order under section 18 was not judicial in nature, nor was the Collector a court subordinate to the High Court.
The other High Court, therefore, expressly dissented from the view of the Calcutta High Court: Abdul Sattar Sahib vs Special Deputy Collector, Vizagapatnam Harbour Acquisition, (4) Balkrishna Daji Gupta vs The Collector, Bombay Suburban,(5) Jagarnath Lall vs Land Acquisition Deputy Collector, Patna,(6) section G. Sapra vs Collector, Saugar;(7) Amar Nath Bhardwaj vs The Governor General in Council,(8) Kashi Pershad vs Notified Area of Mahoba.(9).
Even the Calcutta High Court later changed its view: Bhagwan Das Shah vs First Land Acquisition Collector,(10) Gopi Nath Shah vs First Land Acquisition Collector.(11) It was held that the functions of the Collector under section 18 were statutory or quasi judicial in nature.
The construction placed by the Allahabad High Court on section 18 of the Act is not borne out either by the plain language of the section itself or by accepted principles.
The following observations appear in Abdul Karim 's case (supra): "There is no support for the proposition that the necessary sine qua non of a reference is an application for Reference made in accordance with the provisions of section 18." "There is no provision.
which bars the Collector 's power to make a reference, if he is inclined to make one on a time barred application.
"If the Collector decides to make a reference the Land Acquisition Court cannot go behind the reference.
" "A Collector and a Collector alone has jurisdiction to make a reference and a reference by him is not a nullity merely because it is based on a time barred application.
" (1) (2) (3) (4) I.L.R. (5) ILR (6) I.L.R. Pat. 321.
(7) ILR (8) ILR (9) ILR 54 All. 282.
(10) (11) 277 "The facts regarding limitation of an application for reference are not required to be stated by the Collector in his reference, and indeed he is not bound to send the application along with the reference.
All that the Court has to do on receipt of the reference or can do is to hear it after giving notice of the date.
The word 'thereupon ' in Section 19 must be interpreted to mean "as soon as the collector makes a reference and states for the information of the Court various matters set out in Section 19." "A District Judge gets jurisdiction not from the Collector but from the receipt of a reference from him.
It is the receipt of the reference that confers jurisdiction upon him and not any finding of the Collector." "The Court has to perform a ministerial act of causing a notice to he given to the objector.
There is no provision entitling it to examine the question whether the Collector 's order was correct on the question of the application having been made within the prescribed time.
" The jurisdiction of the Court under the Act is a special one and strictly limited by the terms of section 18 to 21.
It only arises when a specific objection has been taken to the Collector 's award, and it is confined to a consideration of that objection.
A Court undoubtedly has certain jurisdiction over the reference, but it does not include any appellate jurisdiction over the Collector in respect of the reference made by him without statutory sanction.
" It is difficult to subscribe to these propositions which are not warranted by law.
In his celebrated judgment in The Queen vs Commissioners for Special Purposes of the Income Tax (supra) Lord Esher, M.R., while dealing with statutory Tribunals, divided them into two categories, namely: (i) "When an inferior court or tribunal or body which has to exercise the power of deciding facts, is first established by Act of Parliament, the Legislatures has to consider what powers it will give that tribunals or body.
It may in effect say that, if a certain state of facts exists and is shown to such tribunal or body before it proceeds to do certain things, it shall have jurisdiction to do such things, but not otherwise.
There it is not for them conclusively to decide 278 whether that state of facts exists, and if they exercise the jurisdiction without its existence, what they do may be questioned, and it will be held that they have acted without jurisdiction.
(ii) The legislature may intrust the tribunal or body with a jurisdiction, which includes the jurisdiction to determine whether the preliminary state of facts exists as well as the jurisdiction, on finding that it does exist, to proceed further or do something more.
When the legislature are establishing such a tribunal or body with limited jurisdiction, they also have to consider, whatever jurisdiction they give them, whether there shall be any appeal from their decision, for other wise there will be none.
" The law as enunciated by Lord Eshar has been accepted by this Court as laying down the true principle in Jagdish Prasad vs Ganga Prasad (1) The word "require" in section 18 of the Act implies.
It carries with it the idea that the written application makes it incumbent on the Collector to make a reference.
The Collector is required to make a reference under section 18 on the fulfilment of certain conditions.
The first condition is that there shall be a written application by a person interested who has not accepted the award.
The second condition is as to the nature of the objection is which may be taken, and the third condition is as to the time within which the application shall be made.
The power of the Collector to make a reference under section 18 is thus circumscribed by the conditions laid down therein, and one condition is the condition regarding limitation to be found in the proviso.
The conditions laid down in section 18 are 'matters of substance and their observance is a condition precedent to the Collector 's power of reference ', as rightly observed by Chandavarkar J. in re Land Acquisition Act (supra).
We are inclined to the view that the fulfilment of the conditions, particularly the one regarding limitation, are the conditions subject to which the power of the Collector to make the reference exists.
It must accordingly be held that the making of an application for reference within the time prescribed by proviso to section 18.
Sub section
(2) is a sine qua non for a valid reference by the Collector.
From these considerations, it follows that the court functioning under the Act being a tribunal of special jurisdiction, it is its duty to see that the reference made to it by the Collector under section 18 complies with the conditions laid down therein so as to give the court jurisdiction (1) [1959] Supp. 1 S.C.R. 733. 279 to hear the reference.
In view of these principles, we would be extremely reluctant to accept the statement of law laid down by the Allahabad High Court in Abdul Karim 's case (supra).
Every tribunal of limited jurisdiction is not only entitled but bound to determine whether the matter in which it is asked to exercise its jurisdiction comes within the limits of its special jurisdiction and whether the jurisdiction of such tribunal is dependent on the existence of certain facts or circumstances.
Its obvious duty is to see that these facts and circumstances exist to invest it with jurisdiction, and where a tribunal derives its jurisdiction from the statute that creates it and that statute also defines the conditions under which the tribunal can function, it goes without saying that before that tribunal assumes jurisdiction in a matter, it must be satisfied that the conditions requisite for its acquiring seisin of that matter have in fact arisen.
As observed by the Privy Council in Nusserwanjee Pestonjee vs Meer Mynoodeen Khan,(1) wherever jurisdiction is given to a court by an Act of Parliament and such jurisdiction is only given upon certain specified terms contained in that Act it is a universal principle that these terms must be complied with, in order to create and raise the jurisdiction for if they be not complied with the jurisdiction does not arise.
If an application is made which is not within time, the Collector will not have the power to make a reference.
In order to determine the limits of his own power, it is clear that the Collector will have to decide whether the application presented by the claimant is or is not within time, and satisfies the conditions laid down in section 18.
Even if a reference is wrongly made by the Collector the court will still have to determine the validity of the reference because the very jurisdiction of the court to hear a reference depends on a proper reference being made under section 18, and if the reference is not proper, there is no jurisdiction in the court to hear the reference.
It follows that it is the duty of the court to see that the statutory conditions laid down in section 18 have been complied with, and it is not debarred from satisfying itself that the reference which it is called upon to hear is a valid reference It is ` only a valid reference which gives jurisdiction to the court, and, therefore, the court has to ask itself the question whether it has jurisdiction to entertain the reference.
In deciding the question of jurisdiction in a case of reference under section 18 by the Collector to the court, the court is certainly not acting as a court of appeal; it is only discharging the elementary duty of satisfying itself that a reference which it is called upon to decide is a valid and (1) LR (1855) 6 M.I.A. 134.
280 proper reference according to the provisions of the Act under which it is made.
That is a basic and preliminary duty which no tribunal can possibly avoid.
The court has, therefore, jurisdiction to decide whether the reference was made beyond the period prescribed by the, proviso to sub section
(2) of section 18 of the Act, and if it finds that it was so made, decline to answer reference Beaumont C. J., delivering the judgment of the Division Bench in Mahadeo Krishna vs Mamlatdar of Alibag,(1) agreed with the view of Chandavarkar J. and observed: "It seems to me that the Court is bound to satisfy itself that the reference made by the Collector complies with the specified conditions, so as to give the Court jurisdiction to hear the reference.
It is not a question of the Court sitting in appeal or revision on the decision of the Collector; it is a question of the Court satisfying itself that the reference made under the Act is one which it is required to hear.
If the reference does not comply with the terms of the Act, then the Court cannot entertain it.
I have myself some difficulty in seeing on what principle the Court is to be debarred from satisfying itself mat the reference, which it is called upon to hear, is a valid reference.
I am in entire agreement with the view expressed by Chandavarkar J. that it is the duty of the Court to see that the statutory conditions have been complied with.
" The same view has been reiterated by almost all the High Courts except the Allahabad High Court :G. J. Desai vs Abdul Mazid Kadri(2) A. R. Banerjee vs Secretary of State,(3) K. N. Narayanappa Naidu vs Revenue Divisional Officer, Sivakasi;(4) State of Rajasthan vs L. D 'Silva,(5) Sheikh Mohommad vs Director of Agriculture, Madhya Pradesh;(6) Ramdeval Singh vs State of Bihar,(7) Anthony D 'Silva vs Kerala State;(8) Swatantra L. & F. Pct.
Ltd. vs State of Haryana,(9) and Swami Sukhanand vs Samaj Sudhar Samiti.(10) This is also the (1) TLR (2) AIR ' 1951 Bom 156.
(3) A.I.R. 1937 Cal.
(4) A.I.R. 1955 Mad.
(5) I.L.R. (6) (7) A.I.R. 1969 Pat.
(8) A.I.R. 1971 Ker. 51.
(9) I.L.R. (1974) 2 Punj.
(10) A.I.R. 1962 J. & K. 59 281 view expressed by a Full Bench of the Lahore High Court in Abdul Sattar vs Mt. Hamida Bibi.(1) The view to a contrary effect taken by the Allahabad High court in Secretary of State vs Bhagwan Prasad (supra), Panna Lal vs The Collector of Etah (supra) and State of U.P. vs Abdul Karim (supra) and by a Single Judge of the Madras High Court in Venkateswaraswami vs Sub Collector, Bezwada (supra) and by a Single Judge of the Punjab High Court in Hari Krishan Khosla vs State of Pepsu (supra) clearly do not lay down good law and these decisions are" therefore, over ruled.
It is impossible not to feel sorry for the appellant in this case, who was guilty of almost incredible folly by not filing an application for reference under section 14, sub section
(1) of the Hyderabad Land Acquisition Act, 1309 Fasli within the time prescribed therein, and is thus precluded from claiming what may be legitimately due to him by way of compensation.
But, the decision must depend upon the construction of the section and the law must take its course.
We trust that, as assured by its counsel, the State Government of Maharashtra will be generous enough to consider whether it should make an ex gratia payment to the appellant of a sufficient amount by way of compensation which will be Commensurate with the market value of the land acquired as on the 28th of February, 1958.
It certainly was a piece of land of some value as it was situate in the city of Aurangabad.
The result, therefore, is that the appeal must fail and is dismissed.
There shall be no order as to costs of this appeal and of the courts below.
M. R. Appeal dismissed.
| The appellant 's land was acquired by the State Government under section 5 of the Hyderabad Land Acquisition Act, A notification under section 3(1) was published on the 28th February, l958 and on the 13th of January, 1962 the Land Acquisition officer, Aurangabad, made an award directing payment of compensation inclusive of 15% solatium to the appellant at the rate of 37 n.p.
per sq. yard as against his claim for payment of compensation at the rate of RS.10/ per sq. yard.
the award was communicated to the appellant on the 20th of January, 1962 and on the 5th February, 1962 he filed an application for review before the Land Acquisition officer who made a recommendation through the Collector to the Secretary to the State Government that the award be reconsidered.
But, the Collector by his order dated the 23rd of March, 1962 declined to forward the same.
On the 14th of May, 1962 the appellant applied for reference under section 14(1) of the Hyderabad Land Acquisition Act which is in pari materia with section 18 of the Land Acquisition Act, 1894, praying that the period spent in the proceedings for the review be excluded while computing the period of limitation prescribed under section 14 of the Limitation Act.
The Assistant Collector, Aurangabad, who was the Land Acquisition officer, made a reference to the District Court of Aurangabad, .without opining Whether the application was time barred or not.
The Government raised a preliminary objection the application being time barred.
the reference was incompetent.
The objection prevailed, both the District Court and the High Court.
The appellant contended that while dealing with a reference under section 14(1) of the Hyderabad Act, the court cannot go into the question that the application was time barred under section 18(2) of the and Acquisition Act, 1894 and tbereby refuse to entertain the reference.
Dismissing the appeal, the Court ^ HELD: (1) The power of the Collector to make a reference under section 18 is circumscribed by the conditions laid down therein.
These conditions are matters of substance and their observance is a condition precedent to the Collector 's power of reference.
The fulfilment of these conditions, particularly the one regarding limitation are the conditions, subject to which the power of the Collector to make the reference exists.
Therefore, the making of are application for reference within the time prescribed by proviso to section 18(2) is a sine qua non for a valid reference by the Collector.
[269G H, Z71B, 278FGl Abdul Sattar `Sahib vs Special Dy.
Collector, Vizagapatam Harbour Acquisition, ILR ; BalKrishna Daji Gupta vs The Collector,Bom 18 817SCI 79 266 bay Suburban, ILR ; Jagarnath Lall vs Land Acquisition Dy.
Collector Patna, ILR Pat. 321; section G. Sapre vs Collector Saugar, ILR ; Amar Nath Bhardwaj vs The Governor General in Council, ILR ; Kashi Parshad vs Notified Area of Mahoba, ILR 54 All 282, Bhagwan Dass Shall vs First Land Acquisition Collector, , and Gopi Nath Shah vs first Land Acquisition Collector, ; approved.
Of State vs Bhagwan Prasad, ILR 51 All. 96; State of U.P. vs Abdul Karim, AIR 1963 All.
556; Panna Lal vs The Collector of Etah, ILR [l959] 1 All.
628; Venkateshwarasawami vs Sub Collector, Bezwada, AIR 1943 Mad. 327 and Hari Krishan Khosla vs State of Pepsu, ILR [19S8] 1 Punj.
844; over ruled.
Krishna Das Roy vs Land Acquisition Collector Pabna, ; Upendra Nath Roy vs Province of Bengal, ; Leath Elias Joseph Solomon vs H. C. Stork, ; disapproved.
Pramatha Nath vs Secretary of State, ILR ; Ezra vs Secretary of State for India ILR and ILR ; Harish Chandra vs Deputy Land Acquisition officer, [1962] 1 SCR 676; and The Administrator General of Bengal vs The Land Acquisition Collector, 24 Parganas, ; referred to.
Where the tribunal derives its jurisdiction from the statute that creates it and that statute also defines the condition under which the tribunal can function, it is bound to see that such statutory conditions have been complied with.
The court functioning under the Act, being a tribunal of special juris diction, it us its duty to see that the reference made to it by the Collector under section 18 complies with the conditions laid down therein.
[279B C, D] Even if a reference is wrongly made by the Collector the court will still have to determine its validity, because the very jurisdiction of the court to hear a reference depends on a proper reference being made under section l8 and if the reference is not proper, there is no jurisdiction in the court.
to hear the reference.
The court has jurisdiction to decide whether the reference was made beyond the period prescribed by the proviso to sub section
(2) of section 18 of he Act, and if it finds that it was so made, deoline to answer reference.
[279EG] The Queen vs Commissioner for Special Purposes of the Income Tax, LR ; Jagdish Prasad vs Ganga Prasad, [1959] Supp. 1 SCR 733 and Nusserwanfee Pestonjee vs Meer Mynoodeen Khan, LR [1855] 6 M.I.A. 134; applied.
Land Acquisition Act, ILR ; Sukhbir Singh vs Secretary of State, ILR 49 All. 212; Mahadeo Krishna vs Mamlatdar of Alibag, ILR ; G. J. Desai vs Abdul Mazid Kadri, AIR l951 Bom.
156; A. R. Banerjee vs Secy.
of State, AIR 1937 Cal.
680, K. N. Narayanappa Naidu vs Revenue Divisional officer Sivakasi, AIR 195S Mad. 20; State of Rajasthan vs L. D. Silva, ILR [19S6] ; Sheikh Mohommad vs Director of Agri culture; M.P., ; Ramdeval Singh vs State of Bihar AIR 1969 Pat. 131; Anthony D ' Silva vs Kerala State, AIR l971 Ker. 51; Swatantra L. & F. Pvt. Ltd., vs State of Haryana, ILR [1974] 2 Punj.
7S; Swami Sukhanand vs Samaj Sudhar Samiti, AIR 1962 J & K 59; and Abdul Sattar vs Mt. Hamida Bibi Pak.
L.R. l95O Lah.
568 (FB); approved.
267 State of Punjab vs Cst.
Qaisar Jahan Begam & Anr. ; , and A State of U.P. vs Abdul Karim, [CA No. 2434/1966 decided on .
3 9 1969] referred to.
Secretary of State vs Bhagwan Prasad, ILR 52 All. 96; State of U.P. vs Abdul Karim, AIR 1963 All. 556; Pannalal vs True Collector of Etah, ILR 11959] 1 All.
628; Venkateswaraswami vs Sub Collector, Bezwada, AIR 1943 Mad. 327; and Hari Krishna Khosla vs State of Pepsu, ILR [1958] 1 Punj. 8S4; over ruled.
|
Civil Appeal No. 573 of 1988 From the Judgment and order dated 13.2.1987 of the Bombay High Court in W.P. No. 613 of 1984.
33 A.M. Khanwilkar and A.S. Bhasme for the Appellant.
B.N. Singhvi and A.K. Gupta for the Respondent.
The Judgment of the Court was delivered by SINGH, J.
Special leave granted.
This appeal raises an important question of law whether a Government servant after his retirement on attaining the age of superannuation is liable to be dealt with departmentally for any misconduct, negligence or financial irregularities committed by him during the period of his service.
Necessary facts giving rise to this appeal are that M.H. Mazumdar, the Respondent was in the service of the State of Maharashtra as Supply Inspector and he retired from service on attaining the age of superannuation on September 1, 1977.
After his retirement the respondent was served with a charge sheet on October 16, 1978 containing allegations of misconduct and negligence against him for the period he was in service.
Enquiry into those charges was held and the respondent was afforded full opportunity to defend himself.
On the conclusion of the enquiry the State Government issued orders on December 4, 1982 reducing the amount of pension payable to the respondent by 50 per cent permanently under Rule 188 of the Bombay Civil Services Rules.
The respondent challenged the validity of the Government 's order by means of a writ petition under Article 226 of the Constitution before the High Court of Bombay.
A Division Bench of that Court allowed the writ petition and quashed the State Government 's order dated December 4, 1982 on the ground that the State Government had no authority in law to take any disciplinary proceedings against the respondent as he had already retired from service.
Placing reliance on a decision of this Court in B.J. Shelet vs State of Gujarat & Ors. ; the High Court held that the initiation of disciplinary enquiry and the order of punishment was unauthorised and illegal.
The State of Maharashtra has preferred this appeal against the judgment of the High Court.
There is no dispute that the respondent had retired from service on attaining the age of superannuation on September 1, 1977 and charges were served on him on October 16, 1978 after about a year of his retirement.
Undisputably the proceedings against the respondent were initiated after the respondent ceased to be in service of the State 34 Government.
The proceedings culminated into an order of the State Government reducing the respondent 's pension by 50 per cent.
The question is whether the State Government was competent to take action against the respondent by reducing his pension.
Conditions for grant of pension to a Government servant of the State of Maharashtra are regulated by the Bombay Civil Services Rules (hereinafter referred to as the Rules).
Rule 184 provides for grant of pension admissible under the rules to Government servant who is borne on its establishment.
Rules 188 and 189 relevant for our purpose are as under: "188.
Government may make such reduction as it may think fit in the amount of the pension of a Government servant whose service has not been thoroughly satisfactory." "189.
Good conduct is an implied condition of every grant of pension.
Government may withhold or withdraw a pension or any part of it if the pensioner be convicted of serious crime or be found to have been guilty of grave misconduct either during or after the completion of his service, provided that before any order to this effect is issued, the procedure referred to in Note I to Rule 33 of Bombay Civil Services Conduct, Discipline and Appeal Rules shall be followed.
" The aforesaid two Rules empower Government to reduce or withdraw a pension.
Rule 189 contemplates withholding or withdrawing of a pension or any part of it if the pensioner is found guilty of grave misconduct while he was in service or after the completion of his service.
Grant of pension and its continuance to a Government servant depend upon the good conduct of the Government servant.
Rendering satisfactory service maintaining good conduct is a necessary condition for the grant and continuance of pension.
Rule 189 expressly confers power on the Government to withhold or withdraw any part of the pension payable to a Government servant for misconduct which he may have committed while in service.
This Rule further provides that before any order reducing or withdrawing any part of the pension is made by the competent authority the pensioner must be given opportunity of defence in accordance to the procedure specified in Note I to Rule 33 of the Bombay Civil Services Conduct, Discipline and Appeal Rules.
The State Government 's power to reduce or withhold pension by taking proceedings against a Government servant even after his retirement is expressly preserved by the aforesaid Rules.
35 The validity of the Rules was not challenged either before the High Court or before this Court.
In this view, the Government has power to reduce the amount of pension payable to the respondent.
In M. Narasimhachar vs The State of Mysore, [1960] 1 SCR 981 and State of Uttar Pradesh vs Brahm Datt Sharma & Anr., [1987] 2 SCC 179 similar Rules authorising the Government to withhold or reduce the pension granted to the Government servant were interpreted and this Court held that merely because a Government servant retired from service on attaining the age of superannuation he could not escape the liability for misconduct and negligence or financial irregularities which he may have committed during the period of his service and the Government was entitled to withhold or reduce the pension granted to a Government servant.
The High Court in our view committed serious error in holding that the State Government had no authority to initiate any proceedings against the respondent.
In B. J. Shelat vs State of Gujarat & Ors.
disciplinary proceedings had been initiated against the Government Servant for purpose of awarding punishment to him after he had retired from service.
The ratio of that decision is not applicable to the instant case as in the present case the purpose of the enquiry was not to inflict any punishment; instead the proceedings were initiated for determining the respondent 's pension.
The proceedings were taken in accordance with Rules 188 and 189 of the Rules.
It appears that the attention of the High Court was not drawn to these Rules.
The State Government had power to reduce the pension payable to respondent but having regard to the facts and circumstances, of the case we are of the opinion that the reduction of pension by 50 per cent was disproportionate to the charges proved against the respondent.
Two charges were framed against the respondent which are as under: "Charge No. 1.
He has made a farce of an enquiry, collected 6 permits from the Kolhapur Central Co operative Consumers Stores including the permit No. 007314 issued to Shri K.P. Khatavane with malafide intention after passing a receipt thereof to the Godown Keeper, of the said stores on 12.6.1974 and thereby tried to shield Shri K.P. Khatavane and his sons Baban Khatavane from criminal prosecution.
Charge No. 2.
He has deliberately and intentionally denied to have made 36 any enquiry regarding unauthorisedly lifting of 10 bags of Sugar on bogus or forged permit by Shri Baban Khatavane even though he was deputed for such enquiry by Shri A.R. Mane District Supply officer, Kolhapur and he had actually recorded the statement of Shri S.L. More, Godown Keeper of the said stores and Shri Hari Santu Pande, Cart driver and also collected above mentioned 6 permits from Shri More after passing a receipt thereof.
By denying the above fact he has helped Shri A.R. Mane, District Supply officer, Kolhapur for suppressing the case.
His failure in this regard leads to belief that he has conspired with Shri K.P. Khatavane and his son Shri Baban Khatavane with some ulterior motive and abatted them in the disposal of sugar in black market.
" On conclusion of the enquiry charge No. 1 was found to have been established while charge No. 2 was partially proved.
In his report to the State Government the Collector of Kolhapur held that the respondent 's action was helpful to Shri Khatavane to sell the sugar in the black market, and it amounted to a serious default on his part as a Government servant.
He recommended that since the respondent had already retired from service a lenient view should be taken and reduction in pension to the extent of Re. 1 per month be made The State Government accepted the findings and passed the impugned order reducing the pension by 50 per cent In our view the reduction of pension 50 per cent was too harsh and disproportionate to the misconduct proved against the respondent.
The State Government should have taken into consideration the fact that the respondent had retired from service and the reduction of pension by 50 per cent would seriously affect his living.
Accordingly, we allow the appeal partly, and set aside the order of the High Court dated February 13, 1987, and the State Government 's order dated December 4, 1982 and direct the State Government to reconsider the question of reduction of respondent 's pension.
There will be no order regarding costs.
N.P.V. Appeal allowed.
| % The respondent retired from State Government service on September 1, 1987, on attaining the age of superannuation.
About a year after his retirement, the respondent was served with a chargesheet containing allegations of misconduct and negligence for the period he was in service.
Enquiry into the charges was held and respondent was afforded full opportunity to defend himself.
On the conclusion of the enquiry a report was submitted by the Collector, holding that one of the two charges was established while the other charge was partly proved, and that the respondent 's action was helpful to one of the parties which amounted to a serious default on his part as a Government servant, and it was recommended that since the respondent has already retired from service, a lenient view should be taken and reduction in pension to the extent of Re. 1 per month be made.
The State Government accepted the findings and issued orders reducing the amount of pension payable to the respondent by 50% permanently under Rule 188 of the Bombay Civil Services Rules.
The respondent challenged the validity of the Government order before the High Court.
A Division Bench of the High Court allowed the writ petition and quashed State Government 's order on the ground that the State Government had no authority in law to take any disciplinary proceedings against respondent as he had already retired from service and the initiation of disciplinary enquiry and the order of punishment were unauthorised and illegal.
Allowing the appeal by the State.
partly, 32 ^ HELD: 1.1 Rule 188 of the Bombay Civil Services Rules empowers the Government to reduce the amount of pension of a Government servant whose service has not been thoroughly satisfactory.
Rule 189 expressly confers power on the Government to withhold or withdraw any part of the pension payable to Government servant for misconduct which he may have committed while in service, after giving opportunity of defence in accordance with the procedure specified in Note I of Rule 33 of the Bombay Civil Services Conduct Discipline and Appeal Rules.
The State Government 's power to reduce or withhold pension by taking proceedings against Government servant even after retirement is thus expressly preserved by the aforesaid rules.
[34C, F H] 1.2 The High Court committed a serious error in holding that the State Government had no authority to initiate any proceedings against the respondent.
The purpose of the enquiry was not to inflict any punishment, and the proceedings were initiated for determining respondent 's pension.
The proceedings were taken in accordance with the Rules 188 and 189 of the Rules.
[35C E] 1.3 The Government had power to reduce the pension payable to the respondent but having regard to the facts and circumstances of the case, the reduction of pension by 50% was too harsh and disproportion ate to the misconduct proved against the respondent.
The State Government should have taken into consideration the fact that the respondent had retired from service and the reduction of pension by 50% would seriously affect his living.
The order of the High Court and the State Government 's order reducing pension by 50% are set aside and the State Government is directed to reconsider the question of reduction of respondent 's pension.
[35E F; 36E G] B. J. Shelet vs State of Gujarat & ors.
; , , distinguished.
M. Narasimhachar vs The State of Mysore, [1960] 1 SCR 981 and State of Uttar Pradesh vs Brahm Datt Sharma & Anr., [1987] 2 SCC 179, referred to.
|
ivil Appeal Nos.
313 315 1974.
From the Judgment and Order dated 8 8 1972 of the Jammu and Kashmir High Court in Civil First Appeals Nos. 46 to 48 of 1972.
Naunit Lal, for the Appellant.
V.C. Mahajan and R.N. Sachthey, for the Respondent.
The Judgment of the Court was delivered by BEG, J.
These are three appeals by certification against the judgment of a Division Bench of the High Court of Jammu & Kashmir, allowing appeals from the judgment of a learned single Judge.
938 Jammu and Kashmir Government had filed three applications under section 20 of .the
Jammu & Kashmir Arbitration Act, 2002, to refer disputes arising out of three agreements between it and the appellant Company to arbitration under the arbitration clauses of agreements between the parties.
The applications had been dismissed by the learned single Judge on the ground that the arbitration clause was, in each case, a part of an agreement which was not duly executed in accordance with the provisions of Section 122(1) of the Constitution of Jammu & Kashmir which correspond to those of Article 199(1) of the Constitution of India.
The Division Bench had allowed the appeals of the Conservator of Forests, Jammu Circle, after holding that the provisions of section 122(1) of the Constitution of Jammu & Kashmir could not be said to have been infringed if contracts were signed by the Conservator of Forests in compliance with an order of the Government.
The main stay of the case of the appellant company was an instruction or rule contained in "The book of the Finan cial Powers" which reads as follows: " 'section 13.
The power to sanction or cancel the terms of instruments, leases, agreements is delegated in the follow ing cases: section Nature of power To whom delgated.
Extent No. 1 2 3 4 X X X X X X 9.
To sell forest produce Chief Conser Upto Rs. 7000/ and to enter into con vator of forest in value in tract for the same each case provided the highest tender conservators of upto Rs.3000/ in forests each case provided the highest tender is accepted.
Divisional upto Rs.1000/in each forest case provided the officer highest tender is accepted.
The Division Bench observed that this rule existed prior to the coming into force of the Constitution of Jammu and Kashmir.
It may also be pointed out that this rule deals with the power to "sanction or cancel" leases, agreements and other instruments which was delegated to the officers mentioned there with limitation on their powers specified there.
But, the Constitutional provision, relied upon on behalf of the appellant, relates to the manner of the execu tion of the formal 939 document containing the contract after its sanction.
It is true that the contract could not be executed without the sanction.
Nevertheless, if the sanction could be either expressly or impliedly given by or on behalf of the Govern ment, as we think it could, and, if some acts of the Govern ment could fasten some obligations upon the Government, the lessee could also be estopped from questioning the terms of the grant of the sanction even where there is no written contract executed to bind the lessee.
In the case before us, we have agreements from which the appellant company has derived benefits.
And, there are contracts validly executed on behalf of the Government of Jammu & Kashmir by the Conservator of Forests.
It is true that, if the appellant could take up the legal plea that the contracts were not duly executed, in accordance with section 122(1) of the Constitution of Jammu & Kashmir, it could urge that they did not have any effect at all as contracts whatever other legal consequences its acts or conduct may have had.
But, this does not mean that, if a party obtains benefits on the understanding that it would abide by certain conditions, as the appellant company had done, it could not be compelled to observe those conditions, such as the condi tion to refer disputes to arbitration.
However, in the instant case, we need not go into that question because the plea of a violation of Section 122(1) of the Jammu & Kashmir Constitution is itself not sustainable for the reasons indicated below.
As the Division Bench of the High Court had pointed out, there was a Government order and notification of 23rd February, 1957 which reads as follows: In exercise of the powers conferred by sub section (1) of Section 122 of the Consti tution, the Sadar i Riyasat is pleased to direct that the under mentioned contracts and assurances of property made in the exercise of the executive powers of the State may be executed on his behalf by various Officers subject to any limit fixed by Government rules and orders as follows: VI.
In the Department of Development: (1) Agreements relating to Forest Leases and appropriation of forest products: By the secretary to Government, Chief Conser vator, Conservators of Forests and Divisional Forest Officers".
The three leases, containing the arbitration clauses which the appellant wants to avoid, were executed on 27th Febru ary, 1963, and 28th February, 1963, and 19th March, 1963, after the notification mentioned above.
The leases were duly signed by Conservators of Forests, who were expressly authorised, without any limits imposed on the valuation of the leases, to sign and execute them on behalf of the Gov ernment.
The delegation of power made prior to the Jammu 10 1338SCI/76 940 and Kashmir Constitution related to grants of sanction and their cancellation.
It did not expressly refer to powers to execute leases which is a separate matter.
The notification of 1957, however, is specifically related to the execution of formal documents including leases.
Hence, it will cover the three leases before us even if the former rules relating to the limits of the authority of Forest Officers to give or cancel certain sanctions could be said to be in existence at all after the enactment of the new Constitution of Jammu & Kashmir and the notification of 23rd February, 1957, cited above.
We may mention that, as has been indicated in the separate judgment of the learned Chief Justice of the High Court, the Jammu & Kashmir Government had tried to remove the doubts it entertained about the validity of past leases executed by the Conservator of Forests.
It, therefore, passed two orders: one of 14th April, 1965, and the other of 29th April, 1971.
The order of 14th April, 1965, ran as follows: "In supersession of previous orders regarding signing of lease agreement it is ordered that the Conservator of Forests will sign agreements relating to all cases of For ests leases and appropriation of forest products and Chief Conservator of Forests will act as the arbitrator as provided under C1.
44 of the Agreement.
By order of the Government of Jammu & Kashmir.
Sd/ Bharat Bhushan Secre tary to Govt.
Forests Department".
The order of 29th April, 1971, runs as fol lows: "Government Order No. FST 31 dated 14 4 65 shall bedeemed to have taken effect from 29 1 63 and all actions taken by the Conser vators of Forests in executing the lease agreements by virtue of the said order are hereby regularised.
By order of the Government of Jammu & Kashmir.
Sd/ R.C. Bhargava, Secretary to Government, Agricultural Department".
The learned Chief Justice had observed that these orders, purporting to ratify the leases which were valid, did not have any legal effect whatsoever and were unneces sary.
If there had been any question to be decided as to whether the Government had sanctioned the leases, its ac tions, apart from the execution of leases, could be consid ered.
But, once there has been a valid execution of leases by duly authorised officers, the documents would be the best evidence of sanction also.
That was one of the objects of.
prescribing a formal mode of execution of instruments on behalf of the Government apart from the need to protect its interests against mala fide and other unauthorised acts of its servants or agents as indicated by this Court in Mulam Chand vs State of Madhya Pradesh(1) 1) [1968] 3S.C.R. 214.
941 In the cases before us the only question which needed decision was whether formal execution of the leases by duly authorised officers had been proved.
We are of opinion that the Conservator of Forests was, for the reasons given by us, duly authorised to execute the leases.
Accordingly, we affirm the orders of the Division Bench so that matters in dispute between the parties could be validly referred to Arbitration under the appropriate clauses of the agreements.
These appeals are, therefore, dismissed with costs.
Civil Miscellaneous Petition No. 8573 of 1975 for interim orders is also dismissed as infructuous.
S.R. Appeals dismissed.
| All the three applications filed by the respondent state for a reference to an arbitrator under section 20 of the Jammu & Kashmir Arbitration Act, 2002 were dismissed by a single judge of the Jammu & Kashmir High Court on the ground that the arbitration clause was, in each case, a part of an agreement which was not duly exercised in accordance with the provisions of action 122(1) of the J&K constitution which correspond to those of article 299(1) of the Constitution of India.
But the Division Bench allowed the appeals hold ing that if contracts were signed by the Conservator of Forests in compliance with an order of the Government, the provisions of Section 122(1) of J&K constitution could not be said to have been infringed.
" Dismissing the appeals of the appellant company by certifi cates the Court.
HELD : It is true that the contract could not be execut ed without the sanction.
Nevertheless, if the sanction could be either expressly or impliedly given by or on behalf of the Government, as it.could, and, if some acts of the Government could fasten some obligations upon the Govern ment, the lessee could also be estopped from questioning the terms of the grant of the sanction even where there is no written contract executed to bind the lessee.
[938 G H, 939 A] But, once there had been a valid execution of lessee by duly authorised officers, the documents would be the best evidence of sanction also.
That was one of the objects of prescribing a formal mode of execution of instruments on behalf of the Government apart from the need to protect its interest against mala fide and other unauthorised acts of its servants or agents.
[940 G H] Mulamchand vs State of Madhya Pradesh, ; , applied.
In this case the contracts were executed by duly autho rised officials under Government 's orders.
|
Appeal No. 507 of 1961.
Appeal from the judgment and order dated February 18, 1959 of the Rajasthan High Court in Civil Misc.
Case No. 10 of 1959.
section K. Kapur and B. R. G. K. Achar, for the appellant.
The respondent did not appear.
February 26, 1964.
The Judgment of the Court was delivered by SIKRI J.
This is an appeal directed against the judgment of the Rajasthan High Court, which granted a certificate under article 133(1)(c).
One Mukanchand, respondent No. 1 in this appeal (hereinafter referred to as the decree holder) obtained a mortgage decree on February 12, 1954, for Rs. 1,14,581 14 6, with future interest at 6 per cent per annum, against one Rao Raja Inder Singh (hereinafter referred to as the judgment debtor).
The mortgage money was advanced under three mortgages, and the mortgaged properties consisted of 2 Jagirs and some non jagir immovable property.
The latter property was sold in execution and Rs. 33,750/ paid to the decree holder in partial satisfaction of the decree.
On December 14, 1956, the decree holder filed an execution petition in the Court of the District Judge, Jodhpur, for Rs. 99,965 3 6, praying for attachment of the amount of compensation and rehabili tation grant which would be paid to the judgment debtor on account of resumption of his jagir.
This case was registered 906 as Execution Case No. 12/57.
On July 29, 1957, the judg ment debtor made an application before the District Judge, Jodhpur, to the effect that the decretal amount should be reduced in accordance with section 5 of the Rajasthan Jagirdars ' Debt Reduction Act (Rajasthan Act IX of 1957).
On July 31, 1957, the judgment debtor submitted another application claiming that only half of his total jagir compensation and rehabilitation grant money was liable to attachment under section 7 of the said Act.
The decree holder, in his reply to those petitions, urged that the provisions relied on were ultra vires the Constitution of India being in contravention of articles 14, 19 and 31 of the Constitution.
On December 3, 1957, the decree holder filed a petition under article 228 of the Constitution, praying that the execution case No. 12 of 1957, pending in the Court of the District Judge, Jodhpur, be withdrawn from that Court to the Rajasthan High Court.
The High Court transferred the case to its file, and thereafter issued notice to the State of Rajasthan, as the constitutionality of the said Act had been challenged.
By its judgment, the High Court held that apart from the latter part of section 2(e) excluding certain debts hereinafter referred to as the impugned part and section 7(2) of the Act, the rest of the Act was valid.
The State applied for leave to appeal to the Supreme Court, and so did the decree holder.
On the certificates being granted, two appeals were filed in this Court.
The appeal of Mukhanchand (Civil Appeal No. 508/61) was, by order dated April 23, 1962, of this Court, held to have abated.
Therefore, we are not concerned with the validity of the other provisions of the Act.
Although the validity of the other provisions is not now in question, it is necessary to set out the relevant provisions of the Act, because they have a bearing on the question of the validity of the impugned part of section 2 (e) and section 7 (2) of the Act; and these are reproduced below: "Preamble To provide for the scaling down of debts of jagirdars whose jagir lands have been resumed under the provisions of the Rajasthan Land Reforms and Resumption of Jagirs Act, 1952. . 907 section 2(e) "debt" means an advance in cash or in kind and includes any transaction which is in substance a debt but does not include an advance as aforesaid made on or after the first day of January.
1949 or a debt due to: (i) the Central Government or Government of any State; (ii) a local authority; (iii) a scheduled bank; (iv) a co operative society; and (v) a waqf, trust or endowment for a charitable or religious purpose only; or (vi) a person, where the debt was advanced on his behalf by the Court of Wards. section 3.
Reduction of secured debt at the time of passing of decree. (1) Nothwithstanding anything in any law, agreement or document, in any suit to which this Act applies relating to a secured debt, the court shall, after the amount due has been ascertained, but before passing a decree, proceed as hereinafter stated.
(2)(a) Where the mortgaged property consists exclusively of jagir lands and such lands have been resumed under the provisions of the Act, the court shall first ascertain whether the mortgagor had the right, under the jagir law in force at the time the mortgage deed was executed, to mortgage the jagir lands, or failing that, whether specific permission for effecting the mortgage was obtained from the competent authority, and whether the mortgage was validly subsisting on the date of resumption of the jagir lands.
(b) if the mortgage was legally and properly made and was validly subsisting on the aforesaid date, the court shall reduce the amount due in accordance with the formula given in Schedule 1. 908 (3) Where the mortgaged property consists partly of jagir lands as aforesaid and partly of property other than such lands, the court shall after taking action in accordance with the provisions of subclause (a) of sub section (2), proceed to distribute.
the amount due on the two properties separately in accordance with the principles contained in section 82 of the (IV of 1882) as if they had been properties belonging separately to two persons with separate: and distinct rights of ownership; and after the amount due has been so distributed, reduce the amount due on the jagir lands in accordance with the formula given in Schedule 1.
section 4 Powers to reduce secured debt after passing of decree. (1) Nothwithstanding anything in the Code of Civil Procedure, 1908 (V of 1908) or any other law, the court which passed a decree to which this Act applies relating to a secured debt shall, on the application either of the decree holder or judgment debtor, proceed as hereinafter stated.
(2) Where the mortgaged property charged under the decree consists exclusively of jagir lands and such lands have been resumed under the provisions of the Act, the court shall reduce the amount due in accordance with the formula given in Schedule 1.
(3) Where the mortgaged property charged under the decree consists partly of jagir lands and partly of property other than jagir lands, the court shall determine the amount due on the first day of January, 1949, and distribute the same on the two properties separately in accordance with the principles contained in section 82 of the (IV of 1882), as if they had been properties belonging to two persons with separate and distinct rights of ownership and after the 909 amount due as respect the jagir lands has been so calculated.
reduce it in accordance with the formula given in Schedule 1.
section 6 Satisfaction of the decree after the amount due has been reduced under and in accordance with the provisions of section 4, the decree shall, to the extent of the reduction so effected, be deemed, for all purposes and on all occasions, to have been duly satisfied.
section 7(2) Notwithstanding anything in any law, the reduced amount found in the case of a mortgagor or judgment debtor as the case may be, under section 3 or section 4 as respects mortgaged jagir lands shall not be legally recoverable otherwise than out of the compensation and rehabilitation grant payable to such mortgagor or judgment debtor in respect of such jagir lands.
" We may mention that respondent No. 1 has not entered appearance in this Court.
The learned counsel for the State, Mr. section K. Kapur, has urged that the High Court erred in holding that these two provisions, i.e. impugned part of section 2(e) and section 7(2), were void.
Regarding the impugned part of section 2(e), he contended that the debts mentioned in sub cls.
(i) to (vi) of section 2(e) have been placed on a different footing from debts due to other creditors, because the bodies and the authorities mentioned therein serve a public purpose or a public cause.
He urged that this provided a reasonable basis for differentiating between private creditors and creditors mentioned in cls.
(i) to (vi) above.
Regarding section 7(2), he urged that it imposed reasonable restrictions, in the interest of general public, on the creditors.
Before examining the validity of the impugned provisions, it is necessary to examine the scheme of the Act.
As the preamble states in plain terms, the object of the Act is to scale down debts of Jagirdars whose jagir lands have been resumed under the provisions of the Rajasthan Land Reforms and Resumption of Jagirs Act.
Clause (e) of section 2 defines 'debt ' to mean an advance in cash or in kind.
The definition ,does not embrace dues of Government or a local authority 910 in respect of taxes, land revenue, etc.
The definition then excludes from the purview of the Act debts due to Central Government and other authorities and bodies mentioned in the clause.
We shall advert to them later when discussing the validity of this exclusion.
Section 3 provides for reduction of secured debts in accordance with the formula given in Schedule 1 at the time of passing a decree, and their apportionment where necessary, between jagir and non jagir property.
Section 4 provides for reduction of secured debts after a decree has been passed.
Section 5 directs a court to pass a fresh decree after reduction of the secured debts.
Section 6 provides that after reduction of the secured debt in accordance with the provisions of section 4, the decree shall, to the extent of the reduction so effected, be deemed for all purposes and on all occasions to have been duly satisfied.
Clause (1) of section 7 provides for the execution of the decree against the compensation and rehabilitation grant payable in respect of the jagir lands of the judgment debtor.
Clause (2) of section 7, which has been struck down by the High Court, prohibits the recovery of the reduced amount with respect to jagir property from any property other than the compensation and rehabilitation grant payable to a jagirdar.
The effect of this provision is that the other properties of the jagirdar, existing or which 'he may acquire hereafter, are immune from being proceeded against in execution or otherwise.
We think that the High Court was right in holding that the impugned part of section 2(e) infringes article 14 of the Consti tution.
It is now well settled that in order to pass the test of permissible classification, two conditions must be fulfilled, namely, (1) that the classification must be founded on an intelligible differentiation which distinguishes persons or things that are to be put together from others left out of the group, and (2) that the differentia must have a rational relationship to the object sought to be achieved by the statute in question.
In our opinion, condition No. 2 above has clearly not been satisfied in this case.
The object sought to be achieved by the impugned Act was to reduce the debts secured on jagir lands which had been resumed under the provisions of the 'Rajasthan Land Reforms and Resumption of 911 Jagirs Act.
The Jagirdar 's capacity to pay debts had been reduced by the resumption of his lands and the object of the Act was to ameliorate his condition.
The fact that the debts are owed to a government or local authority or other bodies mentioned in the impugned part of section 2(e) has no rational relationship with the object sought to be achieved by the Act.
Further, no intelligible principle underlies the exempted categories of debts.
The reason why a debt advanced on behalf of a person by the Court of Wards is clubbed with a debt due to a State or a scheduled bank and why a debt due to a non scheduled bank is not excluded from the purview of the Act is not discernible.
In this connection, Mr. Kapur has relied on the decision of this Court in Manna Lal vs Collector of Jhalwar (1).
This case is clearly distinguishable because there a law giving special facility for the recovery of dues to a bank owned by the Government was held not to offend article 14 of the Con stitution.
It is clear that the government can be legitimately put in a separate category for the purpose of laying down the procedure for the recovery of its dues.
Mr. Kapur further relied on Nand Ram Chhotey Lal vs Kishore Raman Singh (2).
The judgment of the High Court undoubtedly supports him, but, with respect, we are unable to agree with the ratio of the case.
The High Court was concerned with.
the U.P. Zamindars Debt Reduction Act (U.P. Act XV of 1953), which is substantially similar to the impugned Act The ratio of the High Court is: "It appears to us that the legislature had to make a distinction between debts due from the ex zamindars to private individuals and the debts due to scheduled banks or to Government or semi Government authorities.
The obvious reason appears to be that the private money lenders were considered to be a bane to rural economy and perpetrating agricultural indebtedness.
It was to save the cultivators from such unscrupulous moneylenders that such laws had to be enacted, the last in series being the Zamindars Debt Reduction Act.
" We consider there is no force in these observations.
No such reason is apparent from the terms of the Act.
Non scheduled banks (1) ; (2) AIR (1962) All.
912 and all other private creditors cannot be said to be a bane to rural economy.
The third case relied on by Mr. Kapur Jamnalal Ramlal Kimtee vs Kishendas and State of Hyderabad(1) does not contain any discussion.
The High Court supported the exclusion on the ground that "exclusion of certain class of debts under section 3 of the impugned Act also is not without substantial justification for public demands do not stand in the same position as ordinary demands." Apart from the fact that all the exempted categories are not public demands, the High Court does not seem to have considered whether the differentia had any rational relationship sought to be achieved by the Act.
In conclusion, agreeing with the High Court, we hold that no reasonable classification is disclosed for the purpose of sustaining the impugned part of section 2(e).
Now, coming to the question of the validity of section 7(2), we consider that this sub section is valid as it imposes reasonable restrictions, in the interest of general public, on the rights of a secured creditor.
A secured creditor, when he advanced money on the security of jagir property, primarily looked to that property for the realisation of his dues.
Further, this sub section has been designed with the object of rehabilitating a jagirdar whose jagir properties have been taken over by the State for a public purpose at a low valuation.
If this provision was not made, the jagirdar would find it difficult to start life afresh and look to other avocations, for not only his existing non jagir property but his future income and acquired properties would be liable to attachment and sale for the purpose of satisfying the demands of such secured creditors.
Accordingly, we hold that section 7(2) imposes reasonable restrictions in the interest of general public.
The appeal is accordingly partly accepted, the decision of the High Court in regard to section 2(e) is confirmed and that in regard to section 7(2) is reversed.
As the respondent was not represented and that appeal has only partly succeeded, we order the parties to bear their own costs in this Court.
Appeal partly allowed.
(1)AIR (1955) Hyd. 194.
| The appellants as workmen of respondent No. 1 in all the three respondent concerns were getting free medical benefits of a very high order in a well furnished hospital maintained by respondent No. 1.
Respondent No. 3.
the Union of India issued a notification under section 1(3) of the Employees State Insurance Act appointing 28th August, 1960 as the date on which some provisions of the Act should come into force in certain areas of the State of Bihar and the area in which the appellants were working came within the scope of the Act.
In pursuance of the said notification, the Chief Executive Officer of Respondent No. 1 issued notices to the appellants that the medical benefits upto the extent admissible under the Act will cease to be provided to insurable persons from the appointed day and the medical benefits would thereafter be governed by the relevant provisions of the Act.
The appellants in a writ petition to the High Court challenged the validity of section 1(3) of the Act and legality of the notifications issued under it, inter alia, on the ground that it contravened article 14 of the Constitution and suffers from the vice of excessive delegation.
The High Court rejected the plea and dismissed the writ petitions.
On appeal by special leave the appellants contended that section 1(3) of the Act suffers from excessive delegation and is, therefore, invalid.
Held: (i) section 1(3) of the Act is not an illustration of delegated legislation at all, it can be described as conditional legislation.
It purports to authorise the Central Government to establish a corporation for the administration of the scheme of Employees ' State Insurance by a notification.
As to when the notification should be issued and in respect of what factories it should be issued, has been left to the discretion of the Central Government and that is precisely what is usually done by conditional legislation.
Queen vs Burah, 5.
I.A. 178, relied on.
(ii) Assuming there is an element of delegation, the plea is equally unsustainable, because there is enough guidance given by the relevant provisions of the Act and the very scheme of the Act itself.
In the very nature of things, it would have been impossible for the legislature to decide in what areas and in respect of which factories the Employees ' State Insurance Corporation should be established.
It is obvious that a scheme of this kind, though very beneficent, could not be introduced 34 159 S.C. 58 914 in the whole of the country all at once.
Such beneficial measures which need careful experimentation have sometimes to be adopted by stages and in different phases, and so, inevitably, the question of extending the statutory benefits contemplated by the Act has to be left to the discretion of the appropriate Government.
That cannot amount to excessive delegation.
Edward Mills Co. Ltd. Beawar vs The State of Ajmer, ; , M/s Bhikusa Yamasa Kshatriya vs Sangamner Akola Taluka Bidi Kamgar Union, [1963] Supp.
1 S.C.R. 524 and Bhikusa Yamasa Kahtriva vs Union of India, ; followed:
|
ivil Appeal No. 2377 of 1987.
From the Judgment and Order dated 29.10.1986 of the Allahabad High Court in F.A. No. 493 of 1984.
J.P. Goyal, Rajesh and V.K. Verma for the Appellant.
Mrs. Rani Chhabra for the Respondent.
The Judgment of the Court was delivered by VENKATACHALIAH, J.
This appeal, in a matrimonial cause, is by the husband, and is directed against the Judgment and Decree, dated 29.10.1986, of High Court of Allahabad in First Appeal No. 493 of 1984, allowing the Respondent wife 's appeal and reversing the decree of dissolution of marriage dated 31.7.1984 granted by the Second Additional District Judge, Jhansi, in Original Suit No. 34 of 1983 of his file.
Appellant 's suit for a decree of dissolution of his marriage with the respondent on the ground envisaged in Section 13(1)(iii) of the (Act) that respondent suffered from a mental disorder of such a kind that rendered Respondent unfit for married life and that petitioner could not reasonably be expected to live with her had been decreed by the Court of first instance but dismissed by the High Court in appeal.
Appellant husband has come up by Special Leave.
The marriage between appellant, Ram Narain Gupta, and respondent, Rameshwari Gupta, was solemnised on 17.6.1979 at Jhansi.
The suit for the dissolution of the marriage was filed on 14.7.1983 on the allegation that the wife was a schizophrenic.
The High Court, while holding it probable that the wife did suffer from some such mental disorder, however, was persuaded to the view that appellant had not established the requisite extent and degree of the mental disorder recognised by law as constituting a legal justification for the dissolution of the marriage.
In the suit appellant had also alleged that the respondent was of PG NO 916 unsound mind even before the marriage and that this fact had been concealed from him at the time of the marriage.
This alternative case that the marriage was itself induced by the suppression of the material facts pertaining to the mental state of the bride and that, accordingly, the marriage required to be annuled was, however, not pressed before the High Court.
In his suit appellant pleaded that the respondent suffered from a mental disorder, psychiatrically recognised as `schizophrenia ', which was of such severeity as to render Respondent unsociable and given to violent propensities, that the wife had been treated by the doctors at the Department of Psychiatry at the Medical College, Jhansi, and that despite competent professional treatment the mental condition of respondent continued to deteriorate to the point of making manifest in her suicidal tendencies and aggressive violent behaviour towards others.
Appellant, therefore, averred that the mental disorder of the respondent was of such a kind and to such extent that appellant could not reasonably be expected to live with respondent as man and wife.
Respondent in her written statement denied the imputation of insanity and commission of several overt acts indicative of mental disorder alleged against her and contended that appellant 's determination to get rid of her was attributable to the domestic discord between her on the one side and the mother and sisters of the appellant on the other.
Indeed, she also entered the witness box to testify to and substantiate her defence.
She was subjected to searching cross examination .
The Trial Court framed the necessary and material issues stemming from the pleadings.
On his side, appellant called a certain Dr. Ganesh Datt Shukla, (PW.
l) Head of the Diptt.
of Psychiatry.
Maharani Laxmi Bai Medical College to support his version.
Appellant himself tendered evidence as PW 2.
He also examined a certain Gyasi Ram (PW 3) said to be an artisan who claimed that during one of his visits to appellant 's house for some odd job.
he had seen respondent beating up small children and conducting herself in a disorderly manner.
Appellant also called a certain Janki Prasad (PW 4) said to be the private home teacher of appellant 's nephews.
PW 4 spoke to what, according to him, were oddities in the behaviour of the respondent and of her violent propensities.
Appellant in order to show that Respondent was a violent lunatic relied upon the medical certificates at Exhibits P3, P4 and A2, the first two issued by PW 1 and the third by a certain Dr.
S.A. Khan.
PG NO 917 Appellant also relied upon certain incidents which occurred on 1.7.1983 in which the respondent is alleged to have exhibited unprovoked violence towards appellant 's sisters and inflicted injuries on their person.
The respondent wife, as stated earlier, tendered evidence as D W 1.
She also produced a copy of the order passed by the Magistrate in proceedings under the Lunacy Act initiated by the appellant for her committal to a mental asylum.
In those proceedings, it would appear, the Magistrate, after examining the respondent, is stated have found no abnormality in her, requiring institutionalised treatment.
The trial court on an appreciation of the evidence accepted appellant 's case and recorded a finding that respondent was afflicted with schizophrenia which was dangerous for her as well as for those who lived with her and granted a decree for the dissolution of the marriage.
This decree, as stated earlier, has been reversed by the High Court.
The point that commended itself to the High Court was that though the evidence indicated the possibility of some mental disorder, however, the requirement of the law as to the existence of the requisite degree and the nature of the disorder that could alone justify a reasonable apprehension in the mind of the appellant that he could not live with the respondent wife had not been established.
This implied that the High Court partly accepted the appellant s case that respondent did suffer from a mental disorder which in this case was described as schizophrenia.
The High Court stated: "The case of the plaintiff is that the defendant remained under the treatment of the psychiatrist Dr. G.D Shukla, in Maharani Laxmi Bai Medical College, Jhansi.
1 and 2 are the prescription and discharge certificates issued by Dr. G.D. Shukla, Ext.
4. is the medical certificate dated 18.5.1983, which was issued by Dr. Shukla, in which he certified that the defendant suffered from schizophrenia since 26th March, 1983.
There is no counter certificate of any expert from the side of the defendant.
I, therefore, do not see any cogent reason to brush aside this certificate of Dr. G.D. Shukla, who examined himself as P.W.1.
" The High Court proceeded to refer to certain medical literature on 'schizophrenia ' and felt pursuaded to the view PG NO 918 that having regard to the various kinds of schizophrenia or rather the various ways in which that mental illness is known to manifest itself, it would be necessary for the appellant to go further and establish the degree and severity of the mental illness which would alone satisfy the requirement of the ground for dissolution of marriage envisaged in Section 13(1)(iii) of the Act.
In substance, the High Court held that appellant had not shown that the mental illness of the wife was of such a kind and intensity as to justify a reasonable apprehension that it would not be possible or safe for appellant to live with the respondent.
The High Court posited the proposition which required its consideration thus: "So it is only when the schizophrenia is of the third variety i.e. catatonia, that the patient is in a state of wild excitement destructive violent and abusive.
Let us see whether the defendant suffers from schizophrenia and whether there is any unassailable and cogent evidence to establish that the schizophrenia is of third variety, namely, catatonia, when the patient becomes destructive, wild and abusive.
" Dealing with this, High Court noticed what according to it were certain shifts in emphasis in the two certificates Exhibit 4 dated noticed 18.5.1983 and Exhibit 3 dated 2.7.1983 issued by P.W. 1.
High Court that while the earlier certificate dated 18.5.1983 did not contain any specific reference to the severity of the disease or to the violent propensities attributed to respondent which tended to endanger safety of others, the later certificate dated 2.7.1983, how ever, sought to supply this element.
The High Court allow noticed certain events of 1.7.1983, in the wake of which the certificate Exhibit 3 dated 2.7.1983 came into existence.
High Court referred to the evidence on record which disclosed that at 11.45 AM on 1.7.
1983, respondent wife had lodged the first information, as per Exhibit 11, with the jurisdictional police complaining that she had been assaulted, first, by her husband 's nephew and then by the members of the family of the appellant.
She also had occasion to complain that appellant 's mother, sisters etc.
had threatened to extinguish respondent 's life by setting her ablaze.
The attempt on the part of the appellant, the High Court noticed, to commit her to an asylum was made on the PG NO 919 very next day viz., 2.7.83.
The medical certificate ex.
3 is also of that date.
The Magistrate who was moved by the appellant under the provisions of the Lunacy Act rejected the application observing that respondent whom he had occasion to examine talked "in a sensible manner and is not at all hostile.
" Referring to the setting in which Dr. Shukla 's (PW. 1) certificate dated 2.7.1983 was required to be appreciated the High Court observed: ". .The second certificate (Ext. 3) by Dr. G.D. Shukla dated 2nd July, 1983, has to be seen in the sequence of the above events.
There is nothing on record to show that the defendant lodged false report with the police in the morning of 1st July, 1983, against the plaintiff inter alia.
It is after the said report was lodged the plaintiff made efforts to collect all the evidence with the aim of sending the defendant to the mental asylum and filed the suit for dissolution of marriage by the decree of divorce.
The above evidence were collected in quick succession.
Keeping in view the above events, the reliability of the second medical certificate (ext. 3) dated 2.7.1983 has to be tested . " ". .
Neither in the first certificate (Ext. 4) nor in the second certificate (Ext. 3) Dr. G.D. Shukla stated that the schizophrenia, the defendant is suffering from, was of the third variety, namely, Catatona, when the patient becomes wild, destructive and violent.
In this statement also, Dr. G .
Shukla (PW. 1) does not state that the schizophrenia was of Catatonia variety.
He does not say even a word about the danger, arising from the mental disorder of the defendant.
The certificate Ext.
3 does not bear the thumb impression or signature of the defendant and, therefore, it cannot be said with certainty that the said certificate was issued by Dr. G.D. Shukla after having examined the defendant.
The High Court also evaluated the evidence of PW 3 & 4 and pointed out the intrinsic improbabilities of the evidence and the consequent unacceptability of their versions.
The High Court, in particular, noticed that PW 4 in his cross examination "expressed total inability to give description of the defendant 's Physique i.e. her complexion, height etc.
" The High Court observed: PG NO 920 " .
The inability of this witness in giving the physical description of the defendant shows that his entire statement is tutored one.
This is the state of affairs of the evidence of the plaintiff.
The High Court also referred to the respondent 's grievance that the environment of hostility and harassment to which she was subjected by appellant 's parent and sisters etc.
had taken its toll and rendered her apprehensive and irritable.
High Court observed: ". .
Cruelty inflicted by the in laws culminated in the first information report which the defendant lodged in the morning of 1st July, 1983, for which no convincing evidence has been given by the plaintiff that the said report was false and that was filed by the defendant without any grave provocation.
The case of the defendant is that the ill treatment extended to her by her in laws throughout right from the time of marriage told upon her mental state and she became very irritable and apprehensive.
The case of the defendant has to be seen in this background.
" Concluding the High Court said: . . . .
I accept the contention of learned counsel for the defendant appellant that the decree of the divorce cannot be sustained, as the plaintiff failed to adduce any evidence that could prove beyond reasonable doubt that the mental disorder of the defendant was of such a kind and to such an extent that the plaintiff cannot live safely with the defendant." 8.
Shri Goel, learned senior counsel appearing in support of the appeal, assailed the correctness of the approach of and the conclusions reached by the High Court.
Learned counsel submitted that the High Court having, on the basis of overwhelming medical evidence, rightly accepted that part of the appellant 's case that the respondent did suffer from 'schizophrenia ', however, fell into an error in weighing the possible manifestation of that insidious disease in golden scales and in its conclusion that appellant could yet live with her.
Learned counsel submitted that if the evidence of the conduct of the respondent is assessed in the background of the fact that she was a confirmed 'schizophrenic ', there would be no room for any PG NO 921 speculative allowance to be made for any possibility of any alternative hypothesis for that behaviour.
Learned counsel submitted that in assessing the reasonableness of the apprehension of the husband that he could not be expected to spend the rest of his life with a 'schizophrenic ', due acknowledgment had to be made to the subjective susceptibilities of the husband also.
Rani Chhabra for the respondent, however, soughtto support the judgment under appeal.
The point, however, to note is that Section 13(1)(iii) does not make the mere existence of a mental disorder of any degree sufficient in law to justify the dissolution of a marriage.
Section 13(1)(iii) provides: "Sec. 13.
Divorce: (1) Any marriage solemnised, whether before or after the commencement of this Act, may, on a petition presented by either the husband or the wife, be dissolved by a decree of divorce on the ground that the other party (i) ] (ii) ] Omitted as unnecessary (iii) has been incurably of unsound mind, or has been suffering continuously or intermittently from mental disorder of such a kind and to such an extent that the petitioner cannot reasonably be expected to live with the respondent.
Explanation: In this clause, (a) the expression mental disorder means mental illness, arrested or incomplete development of mind, psychopathic disorder or any other disorder or disability of mind and includes schizophrenia;" (b) Omitted as unnecessary.
(Emphasis Supplied) 10.
The context in which the ideas of unsoundness of 'mind ' and 'mental disorder ' occur in the section as grounds for dissolution of a marriage, require the assessment of the degree of the 'mental dis order.
Its degree must be such as PG NO 922 that the spouse seeking relief cannot reasonably be expected to live with the other.
All mental abnormalities are not recognised as grounds for grant of Decree.
If the mere existence of any degree of mental abnormality could justify dissolution of a marriage few marriages would, indeed, survive in law.
The answer to the apparently simple and perhaps misleading question as to "who is normal?" runs inevitably into philosophical thickets of the concept of mental normalcy and as involved therein, of the 'mind ' itself.
These concepts of 'mind ', 'mental phenomena ' etc., are more known than understood and the theories of "mind" and "ment~on" do not indicate any internal consistency, let alone validity, of their basic ideas.
Theories of 'mind ' with cognate ideas of 'perception ' and 'consciousness ' encompass a wide range of thoughts, more ontological than epistemological.
Theories of mental phenomena are diverse and include the dualist concept shared by Descartes and Sigmund Freud of the separateness of the existence of the physical or the material world as distinguished from the non material mental world with its existence only spatially and not temporally.
There is, again, the theory which stresses the neurological basis of the 'mental phenomenon ' by asserting the functional correlation of the neuronal arrangements of the brain with mental phenomena.
The 'behaviourist ' tradition, on the other hand, interprets all reference to mind as 'constructs ' out of behaviour.
"Functionalism", however, seems to assert that mind is the logical or functional state of physical systems.
But all theories seem to recognise, in varying degrees, that the psychometric control over the mind operates at a level not yet fully taught to science.
When a person is oppressed by intense and seemingly insoluble moral dilemmas, or when grief of loss of dear ones etch away all the bright colours of life, or where a broken marriage brings with it the loss of emotional security what standards of normalcy of behaviour could be formulated and applied? The arcane infallibility of science has not fully pervaded the study of the non material dimensions of 'being '.
Speaking of the indisposition of science towards this study, a learned author says: ".
We have inherited cultural resistence to treating the conscious mind as a biological phenomenon like any other.
This goes back to Descartes in the seventeenth century.
Descartes divided th,e world into two kinds of sub stances; mental substances and physical substances.
Physical PG NO 923 substances were the proper domain of science and mental substances were the property of religion.
Something of an acceptance of this division exists even to the present day.
So, for example, consciousness and subjectivity are often regarded as unsuitable topics for science.
And this reluctance to deal with consciousness and subjectivity is part of a persistent objectifying tendency.
People think science must be about objectively observable phenomena.
On occasions when I have lectured to audiences of biologists and neurophysiologists, I have found many of them very reluctant to treat the mind in general and consciousness in particular as a proper domain of scientific investigation. " . the use of the noun mind ' is dangerously inhabited by the ghosts of old philosophical theories.
It is very difficult to resist the idea that the mind is a kind of a thing, or at least an arena, or at least some kind of black box in which all of these mental processes occur." (See: John Searle Minds, Brains And Science 1984 Reith Lectures, p. 10 & l l) Lord Wilberforce, referring to the psychological basis of physical illness said that the area of ignorance of the body mind relation seems to expand with that of knowledge.
In McLoughlin vs O 'Brian, [ 1983] 1 Law Reports 410 at 418 the learned Lord said, though in a different context: ". .
Whatever is unknown about the mind body relationship (and the area of ignorance seems to expand with that of knowledge), it is now accepted by medical science that recognisable and severe physical damage to the human body and system may be caused by the impact, through the senses, of external events on the mind.
There may thus be produced what is as identifiable an illness as any that may be caused by direct physical impact.
It is safe to say that this, in general terms, is understood by the ordinary man or woman who is hypothesised by the courts But the illnesses that are called mental ' are kept distinguished from those that ail the 'body ' in a fundamental way.
In Philosophy and Medicine", Vol. 5 at PG NO 924 page X the learned Editor refers to what distinguishes the two qualitatively: ".
Undoubtedly, mental illness is so disvalued because it strikes at the very roots of our personhood.
It visits us with uncontrollable fears, obsessions, compulsions, and anxieties . " " .
This is captured in part by the language we use in describing the mentally ill.
One is an hysteric, is a neurotic, is an obsessive, is a schizophrenic, is a manic depressive.
On the other hand, one has heart disease, has cancer, has the flu, has malaria, has smallpox . " (emphasis supplied) 12. 'Schizophrenia ', it is true, is said to be difficult mental affliction.
It is said to be insidious in its onset and has hereditary pre disposing factor.
It is characterized by the shallowness of emotions and is marked by a detachment from reality.
In paranoid states, the victim responds even to fleeting expressions of disapproval from others by disproportionate reactions generated by hallucinations of persecution.
Even well meant acts of kindness and of expression of sympathy appear to the victim as insidious traps.
In its worst manifes tation, this illness produces a crude wrench from reality and brings about a lowering of the higher mental functions.
"Schizophrenia" is described thus: "A severe mental disorder (or group of disorders) charac terized by a disintegration of the process of thinking, of contact with reality, and of emotional responsiveness.
Delusions and hallucinations (especially of voices) are usual features, and the patient usually feels that his thoughts, sensations, and actions are controlled by, or shared with, others.
He becomes socially withdrawn and loses energy and initiative.
The main types of schizophrenia are simple, in which increasing social withdrawal and personal ineffectiveness are the major changes; hebephrenic, which starts in adolescence or young adulthood (see hebephrenia); paranoid; characterized by prominent delusion; and catatonic, with marked motor disturbances (See catatonia).
PG NO 925 Schizophrenia commonly but not inevitably runs a progressive course.
The prognosis has been improved in recent years with drugs such as phenothiazines and by vigorous psychological and social management and rehabilitation.
There are strong genetic factors in the causation, and environmental stress can precipitate illness." (See Concise Medical Dictionary at page 566: Oxford Medical Publications, 1980) But the point to note and emphasise is that the personality disintegration that characterises this illness may be of varying degrees.
Not all schzophrenics are characterised by the same intensity of the disease.
F.C. Redlich & Daniel X. Freedman in "The Theory and Practice of Psychiatry" ( 1966 Edn.) say: ". . .
Some schizophrenic reactions, which we call psychoses, may be relatively mild and transient; others may not interfere too seriously with many aspects of everyday living . ." (p. 252) "Are the characteristic remissions and relapses expressions of endogenous processes, or are they responses to psychosocial variables, or both? Some patients recover, apparently completely, when such recovery occurs without treatment we speak of spontaneous remission.
The term need not imply an indpendent endogenous process; it is just as likely that the spontaneous remission is a response to nondeliberate but none the less favourable psychosocial stimuli other than specific therapeutic activity . ." (p. 465) (Emphasis Supplied) 13.
The reasoning of the High Court is that the requisite degree of the mental disorder which alone would justify dissolution of the marriage has not been established.
This, it seems to us, to be not an unreasonable assessment of the situation strong arguments of the Sri Goel to the contrary notwithstanding.
The High Court referred to and relied upon the decision of the Calcutta High Court in Smt.
Rita Roy vs Sitesh Chandra, AIR 1982 (Cal.) 138.
In; that case the Division Bench of the Calcutta High Court observed: PG NO 926 " . each case of schizophrenia has to be considered on its own merits . " ". .
According to the aforesaid clause (iii), two elements are necessary to get a decree.
The party concerned must be of unsound mind or intermittently suffering from schizophrenia or mental disorder.
At the same time that disease must be of such a kind and of such an extent that the other party cannot reasonably be expected to live with her.
So only one element of that clause is insufficient to grant a decree .
" Considering the evidence in that case, the High Court reached the conclusion: " .
We are clearly of the opinion that she only has slight mental disorder and she has been suffering intermittently from the same.
But after considering the totality of the evidence and the impact on the husband, we must hold that such mental disorder is not of such a kind and to such an extent that the husband cannot reasonably be expected to live with her, within the meaning of the second portion of clause (iii) of Sec.
13(1) of the Act . " We approve this approach of the High Court of Calcutta.
Indeed, the following observations of Ormrod J. in Bennett vs Bennett, with reference to 'mental disorder ' in Section 4 of the Mental Health Act, 1959, are opposite in the context of Sec.
13(1)(iii) of the` Act ': " . .
Now, the definition of `mental disorder ' in sec.
4 of the Mental Health Act, 1959, is in very wide language indeed.
It includes mental illness, arrested or incomplete development of mind, psychopathic disorder, and any other disorder or disability of mind and so, for the moment to turn to medical language it clearly includes, or one would suppose it clearly includes, not only psychotic illness but neurotic illnesses as well and thus begins by enormously enlarging the field.
The way in which this very large field is cut down in the Act of 1965, section 9(1)(b), is by the use of this phrase "of such a kind or to such an extent as to be unfitted for marriage and the procreation of children.
" PG NO 927 The burden of proof of the existence of the requisite degree of mental disorder is on the spouse basing the claim on that state of facts.
Indeed the caution of a learned author against too readily giving a name to a thing is worth recalling: "Giving something a name seems to have a deadening influence upon all our relations to it.
It brings matter to a finality.
Nothing further seems to need to be done.
The disease has been identified.
The necessity for further understanding of it has ceased to exist.
" (See "The Auto biography of a purpose": William Alanson White New York: Double day & Co., 1938, p. 53) It is precisely for this reason that a learned authority on mental health saw wisdom in eschewing the mere choice of words and the hollowness they would bring with them.
He said: "I do not use the word 'schizophrenia ' because I do not think any such disease exists .
I know it means widely different things to different people.
With a number of other psychiatrists, I hold that the words 'neurosis ', 'psychoneurosis ', 'psychopathic personality ', and the like, are similarly valueless.
I do not use them, and I try to prevent my students from using them, although the latter effort is almost futile once the psychiatrist discovers how conveniently ambiguous these terms really are . " "In general, we hold that mental illness should be thought and spoken of less in terms of disease entities than in terms of personality disorganization.
We can precisely define organization and disorganization; we cannot precisely define disease . ." "Of course, one can describe a 'manic ' or a 'depressed ' or a 'schizophrenic ' constellation of symptoms, but what is most important about this constellation in each case? Not, we think, its curious external form, but rather what it indicates in regard to the process of disorganization and reorganization of a personality which is in a fluctuant state of attempted adjustment to environmental reality.
Is the imbalance increasing or decreasing? To what is the stress related? What psychological factors are accessible to external modification? What latent capacities for PG NO 928 satisfaction in work, play, love, creativity, are discoverable for therapeutic planning? And this is language that can be understood.
It is practical language and not language of incantation and exorcism. " (Emphasis Supplied) (See Karl Menninger, "Communication and Mental Health", "The Menninger Quarterly (1962) p. 1 Readings in Law and Psychiatry: Richard C. Allen, Elyce Zenott Ferster, Jessee C. Rubin: Revised & Expanded Edn. 1975: page 38).
This medical concern against too readily reducing a human being into a functional non entity and as a negative unit in family or society is law 's concern also and is reflected, at least partially, in the requirements of Section 13(1)(iii).
In the last analysis, the mere branding of a person as schizophrenic will not suffice.
For purposes of Section 13(1)(iii) 'schizophrenia ' is what Schizophrenia does.
The appeal is dismissed.
There will be no order as to costs.
G.N. Appeal dismissed.
| Section 14(2) of the enjoins the arbitrator or the umpire to give notice to the parties of filing of the award.
Under clause (b) of Article 119 of the , the time for making an application for setting aside an award or getting an award remitted for reconsideration is thirty days from the date of service of the notice of the filing of the award.
The award was filed in the court on 4th February, 1977.
The respondent affirmed an affidavit on 29th November, 1977 to that effect and prayed that a notice be issued and served on the appellant.
Thereafter a Master 's Summons was taken out by the respondent on 10th January, 1978 using the said affidavit as the ground for the prayers.
On 4th February, 1978 the appellant filed an affidavit stating that the award had been wrongly filed in the High Court and it should be taken off the file.
On 3rd May, 1978 an order was passed as prayed in the affidavit and the Master 's Summons, and on July 30, 1981 a notice under section 14(2) of the Act was served on the appellant.
The appellant applied for certified copy of the award on 18th August, 1981 and received the same on lst September, 1981.
It made an application under section 30 of the Act on 8th September, 1981 for setting aside of the award.
The High Court held that the notice was served prior to 30th July, 1981 and as such the application was barred by lapse of time.
PG NO 232 Dismissing the appeal by special leave, HELD: In order to be effective both for the purpose of the judgment in terms of an award and for setting aside the award, the award must be filed in the proper court.
There must be service of notice or intimation or communication of the filing of the said award by the court to the parties.
If all these factors are established or are present, the mode of service of the notice would be irrelevant.
It need not necessarily be in writing.
If the substance is clear the form of the notice is irrelevant but the notice of award having been filed in the court, is necessary.
The filing in the court is necessary and the intimation thereof by the Registry of the court to the parties concerned is essential.
Beyond this there is no statutory requirement of any technical nature under section 14(2) of the .
[234D] It is upon the date of service of such notice that the period of limitation begins and as at present under clause (b) of article 119 of the the limitation expires on the expiry of the thirty days of the service of that notice for an application for setting aside of the award.
l236F] In the instant case, on 4th February, 1978 an affidavit had been filed in the High Court, stating on behalf of the appellant that the award had been wrongly filed in that Court.
The appellant had, therefore, acknowledged that it had notice of the said filing communicated to it by the Court.
The notice can thus be attributed to have been served on the appellant either on 3rd or 4th February, I978, prior to 30th July, 1981.
If that is the position then the application for setting, aside of the award was clearly barred by lapse of time.
[234C, 236B H, 237A] Nilkantha Shidramappa Ningashetti vs Kashinath Somanna Ningashetti & Ors., and Dewan Singh vs Champat Singh & Ors., ; referred to.
|
iminal Appeal No.122 of 1965.
Appeal from the judgment and order dated December 1, 1964 of the Allahabad High Court in Government Appeal No.785 of 1963.
P. Rana, for the appellant.
J. P. Goyal and Sobhag Mal Jain, for the respondents.
The Judgment of the Court was delivered by Hegde, J.
In this appeal by certificate, the only question that arises for decision is as to the true scope of the expression "time requisite for obtaining a copy of the decree, sentence or order appealed from" found in sub section
2 of section 12 of the Indian Limitation Act 1908 which wilt be hereinafter referred to as the Act.
The said question arose for decision under the following circumstances: The respondents were tried for various offences before the learned assistant sessions judge, Farrukhabad.
The said learned judge acquitted them.
Against the order of acquittal the State went up in appeal to the High Court of Allahabad.
The said appeal was dismissed as being barred by limitation.
The correctness of that decision is in issue in this appeal.
Item 157 of the first schedule to the Act prescribes that the period of limitation for an appeal under the Code of Criminal Procedure 1898, from an order of acuittal is three months from the date of the order appealed from.
But sub section 2 of section 12 provides that in computing the period of limitation prescribed for an appeal the day on which the judgment complained of was pronounced and the time requisite for obtaining a copy of the order appealed from shall be excluded.
The memorandum of appeal was filed into court on March 29, 1963.
The order appealed from bad been delivered on Novem ber 10, 1962.
According to the information contained in the copy of the order produced along with the said memorandum the appeal was within time.
It showed that that copy was, applied for on November 15, 1962 and the same was ready on January 3, 1963.
It was contended on behalf of the respondents that the appeal was out of time in view of the fact that the appellant had applied for and obtained two other copies of the order appealed from and if time is calculated on the basis of those copies the appeal was beyond time.
In addition to the copy referred to earlier, the 844 appellant had applied for another copy of the order appealed from on December 3, 1962 and that copy was ready for delivery on December 20, 1962.
The appellant also applied for yet another copy of the same order on December 21, 1962 and that copy was made ready on the same day.
There is no dispute that if the period of limitation is computed on the basis of those copies the appeal was barred by limitation.
But the point for consideration is whether the obtaining of those copies has any relevance in the matter of computing the period of limitation for the appeal.
The High Court of Allahabad accepted the contention of the respondents that in determining the time requisite for obtaining a copy of the order appealed from, it had to take into consideration the copies made available to, the appellant on the 20th and 21st December, 1962.
It opined that the expression 'requisite ' found in section 12(2) means "properly required", and hence the limitation has to be computed on the basis of the copy made available to the appellant in December, 1962.
It was not disputed on behalf of the respondents that it was not necessary for the appellant to apply for a copy of the order appealed from immediately after the order was pronounced.
The appellant could have, if it chose to take the risk, waited till the ninety days period allowed to it by the statute was almost exhausted.
Even then the time required for obaining a copy of the order would have been deducted in calculating the period of limitation for filing the appeal.
Hence the expression 'time requisite ' cannot be understood as the time absolutely necessary for obtaining the copy of the order.
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.
It must be, remembered that sub section 2 of section 12 enlarges the period of limitation prescribed under entry 157 of Schedule 1.
That section permits the appellant to deduct from the time taken for filing the appeal, the time required for obtaining the copy of the order appealed from and not any lesser period which might have been occupied if the application for copy had been filed at some other date.
That section lays no obligation on the appellant to be prompt in his application for a copy of the order.
A plain reading of section 12(2) shows that in computing the period of limitation prescribed for an appeal, the day on which the judgment or order complained of was pronounced and the time taken by the court to make available the copy applied for, have to be excluded.
There is no justification for restricting the scope of that provision.
If the appellate courts are required to find out in every appeal filed before them the minimum time required for obtaining a copy of the order appealed from, it would be unworkable.
In that event every time an appeal is filed, the court not only will have to see 84 5 whether the appeal is in time on the basis of the information available from the copy of the order filed along with the memorandum of appeal but it must go further and hold an enquiry whether any other copy had been made available to the appellant and if so what was the time taken by the court to make available that copy.
This would lead to a great deal of confusion and enquiries into the alleged laches or dilatoriness in respect not of copies produced with the memorandum of appeal but about other copies which he might have got and used for other purposes with which the court has nothing to do.
The High Court in arriving at the decision that the appeal is barred by time relied on the decision of the Lahore High Court in Mathela and Others vs Sher Mohammad(1).
It also sought support from the decisions of the Judicial Committee in Pramatha Nath Roy vs Lee( ) and J. N. Surty vs T. section Chettyar(3).
The Lahore decision undoubtedly supports the view taken by the High Court.
It lays down that the words "time requisite" mean simply time required by the appellant to obtain a copy of the decree assuming that he acted with the reasonable promptitude and diligence.
It further lays down that the time requisite for obtaining a copy is the shortest time during which the copy would have been obtained by the appellant, and it has nothing to do with the amount of time spent by him in obtaining the copy which he chooses to tile with the memorandum of appeal.
With respect to the learned judges who decided that case we are unable to spell out from the language of section 12(2) the requirement that the appellant should act with reasonable promptitude and diligence and the further condition that the time requisite for obtaining a copy should be the shortest time during which a copy could have been obtained by the appellant.
We are of the opinion that the said decision does not lay down the law correctly.
Now we shall proceed to consider the decisions of the Judicial Committee relied on 'by the High Court.
In Pramatha Nath Roy vs Lee (2) the appellant was found to be guilty of laches.
The Judicial Committee held that he was not entitled to deduct the time lost due to his laches.
It is in that context the Board observed that the time which need not have elapsed if the appellant had taken reasonable and proper steps to obtain a copy of the decree or order could not be regarded as 'requisite ' within sub section 2 of section 12.
That decision does not bear on the question under consideration.
In J. N. Surty vs T. section Chettyar 3 the question that fell for decision by the Judicial Committee was whether in reckoning the time for presenting an appeal, the time required for obtaining (1) A.I.R. 1935 Lah. 682.
L3Sup.
CI/68 10 (3) 55 [.A. 161.
(2) 49 I.A. 3 7. 846 a copy of the decree or judgment must be excluded even though by the rules of the court it was not necessary to produce with the memorandum of appeal the copy of the decree or judgment.
Their Lordships answered that question in the affirmative.
While deciding that question, their Lordships considered some of the observations made by the High Court relating to the dilatoriness of some Indian practitioners.
In that context they observed "There is force no doubt in the observation made in the High Court that the elimination of the requirement to obtain copies of the documents was part of an effort to combat the dilatoriness of some Indian practitioner; and their Lordships would be unwilling to discourage any such effort.
All, however, that can be done, as the law stands, is for the High Courts to be strict in applying the provision of exclusion.
The word 'requisite ' is a strong word; it may be regarded as meaning something more than the word ` required '.
It means 'properly required ' and it throws upon the pleader or counsel for the appellant the necessity of showing that no part of the delay beyond the prescribed period is due to his fault.
" In other words, what their Lordships said was that any delay due to the default of the pleader of the appellant cannot be deducted.
There can be no question of any default if the steps taken by the appellant are in accordance with law.
Hence, the above quoted observations of the Judicial Committee can have no application to the point under consideraion.
Preponderance of judicial opinion is in favour of the con clusion reached by us earlier.
The leading case on the subject is the decision of the full bench of the Madras High Court in Panjamv.
Trimala Reddy(1), wherein the court laid down that in section 12 the words 'time requisite for obtaining a copy of the decree ' mean the time beyond the party 's control occupied in obtaining the copy which is filed with the memorandum of appeal and not an ideal lesser period which might have been occupied if the application for the copy had been filed on some other date.
This decision was followed by the Travancore Cochin High Court in Kunju Kesavan vs M. M. Philip(2), by the Allahabad High Court in B. Govind Rai Sewak Singh and Another vs Behuti Narain Singh(3) and by the Madhya Pradesh High Court in K. U. Singh vs M. R. Kachhi (4) .
From the above discussion it follows that the decision under appeal does not lay down the law correctly.
But yet we are of (1) I.L.R. (3) A.I.R. 1950 All. 486.
(2) A.I.R. 1953 T.C. 552.
(4) A.I.R. 1960 M.P. 140.
847 the opinion that this is not a fit case to interfere with the order of the High Court dismissing the appeal.
The respondents were acquitted by the assistant sessions judge, Farrukhabad on November 10, 1962.
We were informed by learned counsel for the State that this appeal was brought to this court mainly with a view to settle an important question of law, and under instructions from the State government he told us that he does not press the appeal on merits.
Accordingly this appeal is dismissed.
R.K.P.S. Appeal dismissed.
| The appellant State filed an appeal in the High Court on March 29, 1963 against the order made by the trial court on November 10, 1962 acquitting the respondents.
According to the information contained in the copy of the order produced along with the Memorandum of Appeal, the appeal was filed within time.
It Showed that the copy was applied for on November 15, 1962 and it was ready on January 3, 1963.
It was contended on behalf of the respondents that the appeal was out of time in view of the fact that the appellant had applied for and obtained two other copies of the order appealed from and if time was calculated on the basis of those copies the appeal was beyond time.
In addition to the copy referred to earlier, the appellant had applied for another copy of the order appealed from on December 3, 1962, and that copy was ready for delivery on December 20, 1962.
The appellant also applied for yet another copy of the same order on December 21, 1962 and that copy was made ready on the same day.
It was not disputed that if the, period of limitation was computed on the basis of the two later copies, the appeal was barred by limitation.
The High Court accepted the respondent 's contention and dismissed the appeal.
On appeal to this Court.
HELD : That the decision of the High Court under appeal did not lay down the law correctly.
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.
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.
It must be remembered that section 12(2) enlarges the period of limitation prescribed under entry 157 of Schedule 1.
That section permits the appellant to deduct from the time taken for filing the appeal, the time required for obtaining the copy of the order appealed from and not any lesser period which might have been occupied if the application for copy had been filed at some other date.
That section lays no obligation on the appellant to be prompt in his application for a copy of the order.
A plain reading of section 12(2) shows that in computing the period of limitation prescribed for an appeal, the day on which the judgment or order complained of was pronounced and the time taken by the court to make available the copy applied for.
have to be excluded.
There is no justification for restricting the scope of that provision.
[844 E H] Mathela.
and others vs Sher Mohammad, A.I.R. 1935, Lah. 682; disapproved.
Pramatha Nath Roy V. Lee, 49 I.A. 307 and J. N. Surty vs T. section Chettyar, 55 I.A. 161; distinguished.
84 3 Panjam vs Trimala Reddy, I.L.R. ; Kunju Kesavan vs M.M. Philip, A.I.R. 1953 T.C. 552; B. Govind Rai Sewak Singh and Anr.
vs Behuti Narain Singh.
A.I.R. 1950, All. 486 and K. U. Singh vs M. R.Kachhi, A.I.R. 1960 M.P. 140; referred to.
|
vil Appeal No. 215052 of 1980.
From the Judgment and Order dated 28.8.1980 of the Delhi High Court in S.A.O. No. 138 of 1979.
R.F. Nariman, P.H. Parekh and Suhail Dutt for the Appel lants.
Ashok Grover for the Respondent.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
These appeals by special leave are from the judgment and order dated 28th of August, 1980 of the High Court of Delhi.
Three appellants, Jai Bhagwan, Pearey Lal and Ganpat Ram, were inducted into premises No. 3240, Kucha Tara Chand, Daryaganj, Delhi by the then land lord, Shri Dina Nath.
The families of the appellants con sisted of about 7 or 8 members per family living in one room each on the ground floor of the said premises.
Shri Pearey Lal, one of the appellants, had one side store room along with the room and Shri Jai Bhagwan had one small tin shed on the first floor.
The appellants were also sharing the ter race.
In 1952 the land and building situated at No. A 6;25, at Krishna Nagar, Delhi was purchased by one Nathu Ram, father of the appellant Ganpat Ram and Pearey Lal together with the appellant Jai Bhagwan, his son in law.
The building consist ed of two room, two kitchens and a Barsati.
Three applications were made by the appellants under Order 41 Rule 2 of C.P.C. on or about 4th of August, 1980.
The High Court pronounced its judgment without disposing of these applications on or about 27th of August, 1980 and proceeded to hold against the appellants on the basis of an adverse inference that the three appellants had built the house in Krishna Nagar, whereas a copy of the sale deed 543 would show that the said house was bought and not built that by Nathu Ram and Jai Bhagwan, and were not by the two of the three appellants.
In 1958 Ganpat Ram was allotted a D.D.A. Quarter No. 3 7 at Village Seelampur, Shahdara.
By a notification dated 28th of May, 1966.
Village Seelampur, Shahdara was declared to be an urban area.
By Notification dated 27th March, 1979 issued under section 1(2) of the Delhi Rent Act (hereinafter called 'the Act ') this village was subjected to the provisions of the said Act.
During 1967 68 one Mrs. Sushila Devi was inducted into the quarter at Seelampur, consisting of a room, a kitchen and a bath room.
This lady had applied for the allotment of the said quarter in her name sometime in 1974.
On 20th of July.
the authorities, in fact, allotted the said quarter to her.
In 1965 70 Ms. Dev Karan and Kul Bhushan being the sons of Pearey Lal had been occu pying the portion of the house at Krishna Nagar together with their family members and grand father, Nathu Ram.
Nathu Ram died in 1969.
The other portion was occupied by one Kalu Ram and his family members being brother of Jai BhagWan.
There are 18 people residing at the relevant time in the said house.
The present landlord, the respondent herein, purchased the suit premises from the erstwhile landlord, Dina Nath on or about 9th April, 1973.
On or about 28th of September, 1973, the present landlord applied to the compe tent authority under the Slum Act for permission to evict the appellants from the said premises.
On 12th of December, 1974 the competent authority under the Slum Act granted permission to the landlord to proceed in eviction against the three appellants.
On or about the 16th of April, 1975, the respondent herein filed three eviction suits against the appellants on the grounds contained in section 14(1)(a),(h) & (j) of the Act.
On 31st of January, 1977, it was held by the Additional Rent Controller, Delhi that the ground under section 14(1)(h) was made out against all the three appel lants.
The ground under section 14(1)(a) was also upheld but the appellants were asked to deposit arrears of rent within a month from the date of the order so as to avail the bene fit of section 15(1) of the Rent Act which the appellants availed of.
On or about 24th April, 1979, the Rent Control Tribunal confirmed the decree in ejectment on appeal under section 14(1)(h) of the Act against the three appellants.
On further appeal the High Court construed section 14(1)(h) of the Act to mean that a Building constructed by the tenant which is outside the purview of the Delhi Rent Act on the date of the application for ejectment, was yet within sec tion 14(1)(h) and the tenant was liable to be ejected.
544 In appeal before us, it was submitted on behalf of the appellants that in none of the three judgments, there was any finding as to the suitability of the residence that is built, allotted or of which the tenant was acquired vacant possession of.
None of the courts has re examined the size of the space, the distance and inconvenience that might be caused, the number of persons in the tenants ' families or the state of residence built or allotted by or to the ten ants.
Aggrieved by the aforesaid judgment of the High Court dated 28th August, 1980, the tenants have come up in appeal.
In this case the learned Addl.
Rent Controller had passed an order of eviction under clause (h) of section 14(1) of the said Act against all the three appellants as mentioned before.
The said decision was upheld by the Tribu nal.
It has been held by the courts below that the three tenants have built and acquired vacant possession of the residential house at A 6/25 Krishna Nagar, Lal Quarter, Delhi.
It was held that Ganpat Ram, one of the tenants appellants has been allotted residential quarter at 317, Seelampur III, Shahdara, Delhi.
Before the High Court the judgments of the Rent Controller as well as the Tribunal were challenged on the grounds, inter alia, that none of the three tenants had built or acquired vacant possession of the residential house No. A 6 25, Krishna Nagar, near Lal Quar ter, Delhi.
It was further submitted that in any case the respondent landlady was not entitled to claim eviction under clause (h) on the grounds of waiver and laches.
Counsel submitted before the High Court that Ganpat Ram had not been allotted the quarter at Seelampur and that in any case he was not in possession of the same.
He further submitted that the Act was not applicable to the quarter alleged to have been allotted to Ganpat Ram, tenant and as such grounds covered by clause (h) were not available to the landlady.
Lastly it was submitted that all the three ingredients mentioned in clause (h) of section 14 of the Act were ap plicable to the landlord.
Section 14 of the Act is in Chap ter III and controls eviction of the tenants.
The said section stipulates that notwithstanding anything to the contrary contained in any other law or contract, no order or decree for the recovery of possession of any premises shall be made by any court or Controller in favour of the landlord against the tenant.
Clause (h) deals with the situation where the tenant has, whether before or after the commence ment of the Act, built or acquired vacant possession of or has been allotted a residence.
The High Court noted the apparent purpose of providing clause (h) of sub section (1) of section 14.
The High Court was of the opinion that on account of rapid growth of popu lation of Delhi, landlords were 545 tempted to terminate the tenancies of the existing tenants and ask for their eviction in order to let out the premises to the pew tenants at high rents.
Rent Control Legislation for Delhi and New Delhi was passed for the first time during the second world war and since then there has been Rent Control Legislation applicable to various urban areas in the Union Territory of Delhi.
The Rent Control Act was enacted to provide for the control of rents and evictions.
The object of clause (h), as is apparent, is not to allow the tenant more than one residence in Delhi.
Therefore, it provided that in case that tenant builds a residence, the landlord could get his house vacated.
It also provided that if the tenant acquires vacant possession of any other resi dence, he is not protected.
Lastly, it also stipulated that if a residential premises has been allotted to a tenant, he is not entitled to retain the premises taken on rent by him.
In the instant case, on the three causes on which the land lord can claim eviction were present against the tenant, the High Court held that these causes are not joint.
These need not be conjointly proved or established.
These were in the alternative.
Therefore, if the landlord is successful in proving any one of the causes, he is entitled to an order of eviction against the tenant.
Counsel for the appellants sought to urge before the High Court that if a tenant built a house, he must acquire its vacant possession before he can be evicted under clause (h).
Similarly, it was submitted that if residential accommodation was allotted to a tenant then he must obtain vacant possession of the same.
The word 'or ' showed, according to the High Court, that these were different circumstances in which tenant was liable to be evicted.
These were (i) if the tenant had built a new resi dence, or (ii) if he had acquired vacant possession of it or (iii) if he had been allotted a residence.
The words 'built ' and 'allotted ' do not mean that after building residence or after allotment of a residence, the tenant must also acquire its possession.
If a tenant builds a house and does not occupy it, he is liable to eviction, according to the High Court.
Similarly, if a residence is allotted to a tenant, but he does not occupy it and allows others to occupy the same, he is not protected, according to the High Court.
The Act provides that building of a house by tenant or allotment of residence to him is a ground of eviction available to the landlord against his tenant.
The learned Judge of the High Court was of the view that it is not necessary for a landlord to prove either that the tenant has built and acquired vacant possession of the building or that he has been allotted and taken possession of the allot ted premises.
The landlady in the eviction application alleged that the tenants 546 had built and acquired vacant possession of a residential house at A 6 25, Krishna Nagar, near Lal Quarter, Delhi.
It was denied by all the tenants but the Controller and the Tribunal on the basis of the evidence on record concluded that the three tenants have built and have also acquired vacant possession of the said residential premises.
It was further held that the relatives of the three tenants were in actual physical possession of the said house at Krishna Nagar.
It transpired from the record that Dev Karan.
Kul Bhushan and Kalu Ram were admittedly related to the three tenants and were in occupation of house at Krishna Nagar as licensee of the three appellants tenants.
This is a finding of fact and could not have been challenged in second appeal before the High Court.
Learned counsel for the tenants then submitted before the High Court that the landlady was a purchaser of the property from one Dina Nath and she and her vendor had also been aware that the tenants were owners of the house in Krishna Nagar.
On account of this knowledge it was argued that the landlady respondent had waived her rights under clause (h) of section 14(1) of the Act.
The High Court found that there was no substance in the argument.
There was no plea that the landlady ever waived or was guilty of laches.
No evidence was led by the parties.
The facts were that the respondent landlady purchased this property from Dina Nath on 9th of April, 1973.
There was nothing on record to show that Dina Nath was ever aware of the fact about building or acquiring a house at Krishna Nagar by the three tenants.
The landlady on the 28th September, 1973 filed applications against the three tenants under section 19 of the Slum Area (Improvement & Clearance) Act, 1956 seeking permission to institute eviction proceedings.
The required permission was granted by the competent authority on 12th of December.
1974 and the present eviction application out of which this appeal arises was filed on 16th of April, 1975.
Therefore, there was no question of laches on the part of the landlady.
She filed an application for permission after about six months from the date of purchase and she filed an eviction application after about four months from the date of the grant of permission by the Slum authority.
The landlady claimed eviction of Ganpat Ram, appellant tenant, on another ground also, namely, that he has been allotted residential quarter at 317.
Seelampur III.
Shahda ra. Delhi.
This fact was denied by the tenant.
A.W. 1 Naresh Chand, an Official of the D.D.A. brought the official record relating to the allotment of this quarter.
It was proved that the said quarter was allotted to him in 1958 and that possession was delivered to him.
It was deposed that it was residential in nature.
On behalf of the tenants, it was submitted before the High 547 Court that the same was in possession of Sushila Devi.
Sushila Devi had appeared as a witness.
She admitted that the said quarter was allotted to the tenant, Ganpat Ram, the appellant.
After allotment Ganpat Ram was entitled to occupy the allotted accommodation and possession was delivered to him.
According to the said witness, he was not now in possession and somebody else was in possession.
Evidence was adduced on behalf of the tenant that he was not in possession and somebody else was in possession.
According to the High Court, if once the condition stipulated in clause (h) was fulfilled, by the tenant, he was disentitled to protection under the Act He cannot thereafter claim that he should be protected.
We are of the opinion that the High Court was right.
It was further alleged that Seelampur area known as Seelampur where the allotted quarter was situated, was not governed by the Act and therefore ground covered by clause (h) was not available to the landlady.
There is no plea and the High Court found taking into consideration all the relevant materials that there was no evidence to show that it was situated within the area which was not governed by the Act.
We are in agreement with the learned Judge of the High Court.
Before us in appeal, however, several points were sought to be urged.
It was urged that on a proper construction, there must be a suitable residence, that is to say, a good substitute for the petitioners or the landlord and a reason able substitute.
Reliance was placed on the decision of this Court in Goppulal vs Thakurji Shriji Dwarkadheeshji and another, [ ; There the Court was concerned with the sub letting before the coming into force of the Act and was concerned with section 13(1)(e) of the relevant Act which used the expression "has sublet".
The present perfect tense contemplated a completed event connected in some way with the present time.
The words took within their sweep any sub letting which was made in the past and had continued up to the present time.
Therefore, this Court held that it did not matter that the sub letting was either before or after the Act came into force.
The Delhi High Court in the case of Ved Prakash vs Chunilal, [1971] Delhi Law Times Vol. 7, 59, where the expression 'has ' in the Delhi Rent Control Act.
1958 in section 14(1)(h) came up for consideration.
It was held that the word 'has in clause (h) carries in itself the force of the present tense.
It has therefore to be interpreted in terms of the words employed in the opening part of the proviso which are to the 548 effect that the Controller may on an application made to him in the prescribed manner make an order for the recovery of the premises and those words meant that on the date of the application the tenant must be having a residence either because he might have built the same or might have acquired vacant possession thereof or it might have been allotted to him.
Either of the three situations must be there on the date of the application.
If that is not so, then clause (h) of the proviso to sub section (1) of section 14 of the Act would have no application.
According to the learned single Judge of the Delhi High Court, the word 'has ' applied with the same force and veloc ity to the words 'built ', 'acquired vacant possession of ' and 'been allotted '.
The last words 'a residence ' again relate to all the three contingencies.
The word 'has ' con tains in itself the meaning of presently possessing some thing.
The ordinary English dictionaries while giving the meaning of word 'has ' refer to the word 'have ', which in turn means 'to hold ', 'possess '.
The words 'has built ' or 'has acquired ' or 'has been allotted ' clearly mean that the tenant has already built, acquired or been allotted the residence to which he can move and that on the date of the application for his eviction his right to reside therein exists.
It was therefore held that the words as they stood associated with each other in clause (h) lead to the only conclusion that as on the date of the application the tenant must be possessing a clear right to reside in some other premises than the tenancy premises as a matter of his own rightful choice either because he may have built such premises or acquired vacant possession thereof or the same may have been allotted to him.
In Smt.
Revti Devi vs Kishan Lal, [1970] Rent Control Reporter Vol.
II, 71 Deshpande, J. of the Delhi High Court had occasion to construe section 14(1)(h) of the Act.
The landlord there applied for eviction of his tenant on the ground that the tenant had acquired vacant possession of another residence within the meaning of section 14(1)(h) of the Act.
The tenant defended that he had not acquired any residence and that the alleged residence had in fact been acquired by his wife and his sister in law jointly.
The Rent Control Tribunal held that the view that under section 14(1)(h) the tenant was liable to be evicted only if he himself had acquired the vacant possession of another resi dence and not by any other member of his family including the wife.
The question which came up before the Court for decision was whether the acquisition of a separate residence by the wife of the 549 tenant was sufficient ground for the eviction of the tenant by the landlord under proviso (h) of sub section (1) of section 14: That, however, is not the question here.
In Naidar Mal vs Ugar Sain Jain and another, A.I.R. 1966 Punjab 509, the court had to construe, inter alia, section 13(1)(h) of the Delhi and Ajmer Rent Control Act, 1952.
There under section 13(1)(h) of the said Act in order to be liable for eviction, the tenant must have built a suitable residence.
The Court was of the opinion that merely because the tenant had built a house, would not be a ground for ejectment within the meaning of section 13(1)(h).
The words 'suitable residence ' must be read with all the terms namely 'built ' 'acquired vacant possession of ' or 'been allotted '.
Although the onus to prove facts within the special knowl edge of a party must be on him, a landlord bringing a suit for eviction under section 13(1)(h) of the said Act must first allege the existence of grounds entitling him to a judgment.
The residence of the tenant must be suitable one.
In Siri Chand vs Jot Ram, (Punjab Law Reporter Vol. LXIII, 1961 at page 915), the Punjab High Court had to construe the Delhi and Ajmer Rent Control Act, 1952 and it was held that on the date of the suit for ejectment of the tenant, in order to succeed, all that the landlord had to show was that he was the landlord and secondly.
, that de fendant was his tenant and thirdly the tenant has, whether before or after the commencement of the Delhi and Ajmer Rent Control Act, either built a suitable residence, or been allotted a suitable residence.
The decision of the Delhi High Court in Govindji Khera vs Padma Bhatia Attorney, [1972] Rent Control Reporter, Vol 4. 195 to which our attention was drawn, does not advance the case any further.
Before we discuss the other aspect the result of the several decisions to which reference has been made above, indicate that the position in law is that the landlord in order to be entitled to evict the tenant must establish one of the alternative facts positively, either that the tenant has built, or acquired vacant possession of or has been allotted a residence.
It is essential that the ingredients must be pleaded by the landlord who seeks eviction but after the landlord has proved or stated that the tenant has built acquired vacant possession or has been allotted a residence, whether it is suitable or not, and whether the same can be really an alternative accommodation for the tenant or not, are within the special knowledge of the tenant and he must prove and establish those facts.
The other aspect is that apart from the question 550 of limitation to which we shall briefly refer is that the landlord must be quick in taking his action after the accru al of the cause of action, and if by his inaction the tenant allows the premises to go out of his hands then it is the landlord who is to be blamed and not the tenant.
In the light of these, we have now to examine whether the suit in the instant case was barred by the lapse of time.
But quite apart from the suit being barred by lapse of time, this is a beneficial legislation, beneficial to both the landlord and the tenant.
It protects the tenant against unreasonable eviction and exorbitant rent.
It also ensures certain limit ed rights to the landlord to recover possession on stated contingencies.
The next aspect of the matter is which article of the would be applicable.
Reference was made to Article 66 and Article 67 of the (hereinafter called the ) which stipulates that for possession of immovable property the cause of action arises or accrues when the plaintiff has become entitled to possession by reason of any forfeiture or breach of condition.
Article 67 stipulates a period of twelve years when the tenancy is determined.
Article 113 deals with suit for which no period of limitation is provided elsewhere in this Schedule.
On the facts of this case it is clear that Article 66 would apply because no determination in this case is necessary and that is well settled now.
Determination by notice under section 106 of the Transfer of Property Act is no longer necessary.
It is well settled that time begins to run from the date of the knowledge.
See in this connection the decision of Harbans Singh and another vs Custodian of Evacuee Property 'P ' Block and others, A. I. R. 1970 Delhi 82 though that was a case under a different statute and dealt with a different article.
See also Ujagar Singh vs Likha Singh and another, at page 30.
The Division Bench of the Punjab and Haryana High Court in Somdass (deceased).
v Rikhu Dev Chela Bawa Har Jagdass Narokari, Punjab Law Re porter Vol.
85., 184 held that in a suit for possession under Article 113 of the , material date is one on which the right to sue for possession arises.
In K.V. Ayyaswami Pathar and another vs
M.R. Ry.
Manavik rama Zamorin Rajah and others, A.I.R. 1930 Madras 430, it was held that where a claim is based upon a forfeiture of a lease by reason of alienation of the demised land and noth ing else, the article applicable for the purpose of limita tion was clearly Article 143 and the limitation commences to run from the date of the alienation.
Here 551 accrual of the right of the landlord is not challenged.
The knowledge is indisputably in 1973 looked at from any point of view.
There is no question of limitation in this case.
In the premises, we are of the view that the High Court was right and the appeals must fail and are accordingly dismissed with costs.
N.P.V. Appeals dis missed.
| The respondent purchased the suit premises in April, 1973 and in September, 1973 applied to the Competent Author ity under the Slum Area (Improvement and Clearance) Act, 1956 for permission to evict the appellants who were induct ed into the premises by the erstwhile landlord.
The permis sion was granted in December, 1974 and three eviction suits were filed in April, 1975 on the grounds contained in Sec tion 14(1)(a), (h) and (j) of the Delhi Rent Control Act.
1958 and the Additional Rent Controller held that the ground under Section 14(1)(h) was made out against all the three appellants.
The Rent Control Tribunal confirmed the decree.
Before the High Court in revision, it was submitted that when the landlady purchased the property she and her vendor had also been aware that the tenants owned a house and that on account of this knowledge the respondent had waived her rights under clause (h) of Section 14(1) of the Act, that if a tenant built a house or has been allotted a residential accommodation, he must acquire/obtain vacant possession before he was evicted under clause (h), and that the area where the allotted quarter was situated was not governed by the Act 540 and, therefore, the ground covered by clause (h) was not available to the landlady.
The High Court construed Section 14(1)(h) of the Act to mean that a building constructed by the tenant which is outside the purview of the Delhi Rent Control Act on the date of application for ejectment, was yet within Section 14(1)(h), and held that the word 'or ' showed the different circumstances in which a tenant was liable to be evicted, that it was not necessary for a landlord to prove either that the tenant had built a house and acquired vacant pos session of the building or that he had been allotted and taken possession of the allotted premises, and that there was no substance in the argument advanced by the tenants that on account of the knowledge of the landlady that the tenants owned a house, she had waived her rights under clause (h) of Section 14(1) of the Act, and dismissed the Revision Petitions.
In the appeals, it was submitted that there must be a suitable residence, one which is a good and a reasonable substitute for the appellants or the landlord before evic tion could be ordered under Section 14(1)(h) of the Act.
Dismissing the appeals by special leave, this Court, HELD: 1.
The Rent Control Act is a beneficial legisla tion to both the landlord and the tenant.
It protects the tenant against unreasonable eviction and exorbitant rent.
It also ensures certain limited rights to the landlord to recover possession in stated contingencies.
[550B C] 2.1 The words 'has built ' or 'has acquired ' or 'has been allotted ' in clause (h) of Section 14(1) clearly mean that the tenant has already built, acquired or been allotted the residence to which he can move and that on the date of the application for his eviction, his right to reside therein exists.
Therefore, the High Court was right in holding that the words as they stood associated with each other in clause (h) lead to the only conclusion that as on the date of application the tenant must be possessing a clear right to reside in some other premises than the tenancy premises as a matter of his own rightful choice either because he may have built such premises or acquired vacant possession thereof or the same may have been allotted to him.
The words 'built ' and 'allotted ' did not mean that after building a residence or after allotment of a residence the tenant must also acquire its possession.
[548D F] 2.2 The landlord, in order to be entitled to evict the tenant, must 541 establish one of the alternative facts positively, either that the tenant has built, or acquired vacant possession of or has been allotted a residence.
It is essential that the three ingredients must be pleaded by the landlord who seeks eviction but after the landlord has proved or stated that the tenant has built, acquired vacant possession or has been allotted a residence, whether it is suitable or not and whether the same can be really an alternative accommodation for the tenant or not, are within the special knowledge of the tenant and he must prove and establish those facts.
[549F H] 2.3 The landlord must be quick in taking his action after the accrual of the cause of action, and if by his inaction, the tenant allows the premises to go out of his hands then it is the landlord who is to be blamed and not the tenant.
[550A B] 2.4 The High Court was right in holding that once the condition stipulated in clause (h) was fulfilled by the tenant, he was disentitled to protection.
He cannot, there fore, claim that he should he protected.
[547B C] 3.1 Article 66 of the stipulated that for possession of immovable property the cause of action arises or accrues when the plaintiff has become entitled to possession by reason of any forfeiture or breach of condition.
[550C D] 3.2 On the facts of this case it is clear that Article 66 would apply in this case because no determination is necessary, as determination by notice under Section 106 of the Transfer of Property Act is no longer necessary.
[550D E] In the instant case, the landlady purchased the property on April, 9, 1973.
She filed an application for permission after about six months from the date of purchase, and filed eviction application after about four months from the date of the grant of the permission by the Slum Authority.
Time begins to run from the date of the knowledge.
Knowledge in this case is indisputably in 1973 looked at from any point of view.
There is, therefore, no question of limitation in this case.
[55OH; 551A] Ved Prakash vs Chunilal, [1971] Delhi Law Times Vol. 7, 59; Smt Revti Devi vs Kishan Lal, [1970] Rent Control Re porter Vol.
II, 71; Naidar Mal vs Ugar Sain Jain and anoth er.
A.I.R. 1966 Punjab 509; Siri Chand vs Jot Ram, Punjab Law Reporter Vol.
LXIII, 1961, 915; Govindji Khera vs Padma Bhatia Attorney, [1972] Rent Control Repor 542 ter Vol.
4, 195: Harbans Singh and another vs Custodian of Evacuee Property 'P ' Block and others, A.I.R. 1970 Delhi 82; Ujagar Singh vs Likha Singh and another, A.I.R. 1941 Allaha bad 28, 30; Somdass (deceased) vs Rikhu Dev Chela Bawa Har Jagdass Narokari, Punjab Law Reporter Vol. 85, 184 and K.V. Ayyaswami Pathar and another vs M.R. Ry.
Manavikrama Zamorin Rajah and others, A.I.R. 1930 Madras 430, referred to.
|
Appeal No. 1406 of 1969.
Appeal from the judgment and order dated April 17, 1969 of the Delhi High Court in Civil Writ No. 611 of 1968.
The appellant appeared in person.
Jagadish Swarup, Solicitor General, R. L. Mehta and R. N. Sachthey, for the respondents.
The Judgment of the Court was delivered by Ray, J.
This appeal by certificate from the judgment of the High Court at Delhi challenges the order dated 5th July, 1968 placing the appellant under suspension.
The appellant canvassed two grounds : first, that the order of suspension was passed on a report which was made mala fide, and, therefore, the order of suspension was bad; secondly, the order of suspension was made under sub rule (1) of Rule 7 of the All India Service (Appeal and Discipline) Rules, 1955, and is, therefore, liable to be quashed.
The appellant was appointed to the Indian Police Service in the year 1935.
He was posted as Inspector General of Police of the State of Andhra Pradesh, on 1 November, 1956.
He was ,confirmed as Inspector General of Police, Andhra Pradesh in the year 1957.
On 14 May, 1966, he reached the age of 55 years. 'He, however, continued to work as Inspector General of Police, Andhra Pradesh up to 1 August, 1967.
He was then posted as Special Inspector General of Police for the revision of Police Standing Orders.
123 Some time in the year 1967 the Chief Minister of Andhra Pradesh ordered that the Chief Secretary should make an enquiry with regard to certain allegations against the appellant.
The Chief Secretary recommended that the Vigilance Commissioner in the State of Andhra Pradesh might be requested to look into the matter.
The Vigilance Commissioner advised that the enquiry should be conducted by an independent agency like the Central Bureau of Investigation.
The Central Bureau of Investigation thereafter made an enquiry.
The appellant was given allegations to answer.
The appellant submitted explanation and was examined.
The Central Bureau of Investigation made a report on the enquiry.
On 1 1 July., 1968 the Government of India, Ministry of Home Affairs made an order placing the appellant under suspension.
The appellant alleged as follows.
The Chief Minister of the State of Andhra Pradesh was inimical and hostile to the appellant since the time of the General Elections in the year 1967.
The investigation by the Central Bureau of Investigation was conducted by persons who were hostile to the appellant.
The Ministry of Home Affairs ' Government of India, should not have relied on the report because the initiation and the conduct of the enquiry were motivated mala fide on the part of the Chief Minister of the State and other persons.
The other contention of the appellant was that under sub rule (1) of Rule 7 of the All India Service (Appeal and Discipline) Rules, 1955 the order of suspension could be made only if disciplinary proceeding was initiated and the Government was satisfied that there should be an order and in the present case the order did not satisfy the provisions of the rule, and therefore, the order is bad.
The pre eminent question in this appeal is whether the order of suspension is in infraction of Rule 7.
Rule 7 is as follows "(1) If having regard to the nature of the charges and the circumstances in any case the Government which initiates any disciplinary proceeding is satisfied that it is necessary or desirable to place under suspension the member of the Service against whom such proceedings are started that Government may (a) if the member of the Service is serving under it pass an order placing him under suspension, or (b) if the member of the Service is serving another Government, request that Government to place him under suspension, pending the conclusion of the inquiry and the passing of the final order in the case 124 Provided that in cases where there is a difference of opinion between two State Governments the matter shall be referred to the Central Government whose decision thereon shall be final.
(2). . . . . (3) A member of the Service in respect of or against whom, an investigation, inquiry or trial relating to a criminal charge is pending may, at the discretion of the Government under which he is serving, be placed under suspension until the termination of all proceedings relating to that charge, if the charge is connected with his position as a Government servant or is likely to embarrass him in the discharge of his duties or involves moral turpitude".
Rule 7 sub rule (1) contemplates suspension when disciplinary proceeding is initiated and the Government is satisfied that it is necessary to place a member of the Service under suspension.
It was contended by the appellant that the order of suspension was made under sub rule (1) in the present case without any disciplinary proceedings.
The order does not have any reference to sub rule (1) of Rule 7.
The order recites first that there are ' serious allegations of corruption and malpractice against the appellant, secondly that the enquiry made by the Central Government revealed that there is a prima facie case and thirdly that the Government of India after considering the available material and having regard to the nature of the allegations against the appellant, the circumstances of the case is satisfied that it is necessary and desirable to place the appellant under suspension.
At the hearing of the appeal Mr. Solicitor General produced the correct copy of the First Information Report dated 17 August, 1967 under section 154 of the Code of Criminal Procedure.
It will appear from the report that the appellant was charged with offences under the Prevention of Corruption Act, 1947 and the time of occurrence was the period 1960 to 1967.
Sub rule (3) of Rule 7 states that a member of the Service in respect of, or against whom, an investigation, inquiry or trial relating to a criminal charge is pending may, at the discretion of the Government under which he is serving, be placed under suspension until the termination of all proceedings relating to that charge.
The appellant contended that the appellant was not suspended under sub rule (3) of Rule 7.
That is a contention The facts are that there was an investigation and the trial is awaiting relating to a criminal charge against the appellant.
The order of suspension has to be read in the context of the entire case and 1 2 5 combination of circumstances.
This order indicates that the Government applied its mind to the allegations, the enquiries and ;the circumstances of the case.
The appellant has failed to establish that the Government acted mala fide.
There is no allegation against any particular officer of the Government of India about acting mala fide.
The order or suspension was made under subrule (3) and does not suffer from any vice of infringement of Rule 7.
The appellant made allegations against the Chief Minister of Andhra Pradesh and other persons some of whose names were disclosed and some of whose names were not disclosed.
Neither the Chief Minister nor any other person was made a party.
The appellant filed an affidavit in support of the petition.
Neither the petition nor the affidavit was verified.
The affidavits which were filed in answer to the appellant 's petition were also not verified.
The reason for verification of affidavits are to enable the Court to find out which facts can be said to be proved on the affidavit evidence of, rival parties.
Allegations may be true to knowledge or allegations may be true to information received from persons or allegations may be based on records.
The importance of verification is to test the genuineness and authenticity of allegations and also to make the deponent responsible for allegations.
In essence verification is required to enable the Court to find out as to whether 'it will be safe to act on such affidavit evidence.
In the present case, the affidavits of all the parties suffer from the mischief of lack of proper verification with the result that the affidavits should not be admissible in evidence.
The affidavit evidence assumes importance in the present case because of allegations of mala fide acts on the part of the respondents.
The appellant alleged that the Union of India made the order of suspension because of the pressure of the Chief Minister of the State of Andhra Pradesh.
The appellant, however, did not name any person of the Union of India who acted in that manner and did not implied the Chief Minister as a party.
In order to succeed on the proof of mala fides in relation to the order of suspension, the appellant has to prove either that the order of suspension was made mala fide or that the order was made for collateral purposes.
In the present case, the appellant neither alleged nor established either of these features.
The appellant contended that the report of the Central Bureau of Investigation was made mala fide.
The appellant appeared before the investigation authorities.
We ate not concerned with the correctness and the propriety of the report.
We have only to examine whether the order of suspension was warranted by the rule and also whether it was in honest exercise of powers.
The order of suspension satisfied both the tests in the present case.
126 In view of the fact that the criminal case is pending, it is desirable not to express any opinion on the merits and demerits of the charges as also the rival contentions of the parties because such an opinion may cause prejudice.
The appellant raised a contention as to the vires of the and the validity of the investigation.
In view of the fact that sanction for the trial is pending pursuant to the investigation under the First Information Report dated 17 August, 1967 the appellant did not want a decision on this point in this appeal because the appellant would raise that contention in the criminal case.
We have, therefore, left open the contention as to the to enable the appellant to agitate that contention, if so advised, in the criminal trial.
The appeal, therefore, fails and is dismissed.
In view of the fact that there was no order as to costs in the High Court, we are of opinion that each party should bear its costs in this Court.
G.C. Appeal dismissed.
| Sub section (6) of section 144 of the Code of Criminal Procedure provides that no order under s, 144 shall remain in force for more than two months from the making thereof, unless, in cases of danger to human life, health or safety, or a likelihood of a riot or an affray, the State Government, by notification in the Official Gazette otherwise directs.
The City Magistrate of Jamshedpur passed orders under section 144(1) against the respondents which were later extended by the State Government of Bihar in exercise of its powers under section 144(6).
In a writ petition filed by the respondents the High Court of Patna struck down the second part of sub s.(6) of section 144 as being violative of sub cls.
(b), (c) and (d) of cl.
(1) of article 19 of the Constitution.
The State appealed and contended that the only operative orders were those made by the Magistrate and the Government merely extended those orders.
Further, since the order of the Government got merged in the orders of the Magistrate, the extended order was open to review under sub section
(4) of section 144 and the same was also revisable under section 435 read with section 439 of the Code of Criminal Procedure.
HELD : Per Shelat, Vaidialingam, Hedge and Ray, JJ. (i) The Magistrate 's order is no doubt the basic order.
But after the process in the first five sub sections of section 144 is completed he becomes functus officio.
The decision that the circumstances mentioned in sub section
(6) of section 144 Criminal Procedure Code continue to exist and the original order should be continued is that of the Government.
It is not a case of the Government order getting merged in the Magistrate 's order.
Rather the Magistrate 's order is adopted by the Government as its own order.
[194 A C] The order of the Government is made in the name of the Governor ,and signed by a Secretary to the Government.
It is published in the Official Gazette.
It is thus clearly an executive act of the Government coming within article 166 of the Constitution.
If the direction given under section 144(6) is intended to merely keep alive a judicial order, the legislature would have entrusted that function to a judicial authority as has been done in the case of an order under section 144(1).
[194 E F] Section 144(4) says in clearest possible terms that the Magistrate may rescind or alter any order made under that section by himself or any magistrate subordinate to him or by a predecessor in office.
It is not possible to bring within the scope of this section the order made by the State Government.
for if it was so intended it would have been mentioned in the section.
[194 G] From a plain reading of section 144(6) it is clear that the power conferred on the Government is an independent executive power, not expected to be exercised judicially.
It is open to be exercised arbitrarily.
The direc 182 tions given in the exercise of that power need not be of a temporary nature.
The ambit of that power is very large and is uncontrolled.
[195 B] (ii) The fact that the Legislature is expected to keep a check on governmental actions does not absolve this Court 's responsibility.
The fundamental rights constitute a protective shield to the citizen as against State actions and the Court cannot desert its duty on the assumption that the other organs of the State would safeguard the fundamental right of the citizens.
[195 C D] (iii) In order to be a reasonable restriction within the meaning of article 19 of the constitution the same must not be arbitrary or excessive and the procedure and the manner of its imposition must also be fair and just.
Any restriction which is opposed to the fundamental principles of liberty and justice cannot be considered reasonable.
One of the im portant tests to find out whether a restriction is reasonable is to see whether the aggrieved party has a right of representation against the restriction imposed or proposed to be imposed.
Further the courts have to see whether it is in excess of the requirement or imposed in an arbitrary manner.
Although the object of a restriction may be beyond reproach and may very well attract the protection of sub articles
1 to 6 or article 19, if the State fails to provide sufficient safeguards against its misuse the operative sections will be rendered invalid.
[196 C F] Since section 144(6) gives the power to impose the restrictions contemplated by it to the executive Government and not to a judicial authority and there is no right of representation, appeal or revision given to ,the aggrieved party against an order which may not be of a temporary nature, it must be held that the said impugned provision is violative of article 19 (1) (b) (c) and (d) and is not saved by articles 19(3) (4) or (5).
[196 G] Babulal Parate vs State of Maharashtra and Ors. ; , ,referred to.
State of Madras vs V. G. Rao, ; ; Dr. Khare V. State of Delhi, ; ; State of Madhya Pradesh vs Baldeo Prasad ; and Virendra vs State of Punjab; , , applied.
Per Shah, J. (dissenting).
Sub section
(6) of section 144 does not authorise the ,State Government to make the order of the Magistrate permanent.
It ,cannot direct it to continue after apprehension of danger or emergency ceases.
The validity of a statute conferring power is not open to challenge on the plea that the power may possibly be abused by the authority in which it is vested.
The order duration of which is extended by declaration of the State is and continues to remain that of the Magistrate.
The 'source of the authority of the order is derived not from the State Government, but from the Magistrate.
It cannot be said that the order of the Magistrate gets merged with that of the Government when its duration is extended.
Although no provision is made in the Code for a judicial review of the State Government 's order under section 144(6), the said order does not depend on the subjective satisfaction of the Government and is capable of being challenged in a petition under article 226 of the Constitution ' Further the Magistrate who passed the original order may in considera tion of the materials placed before him under section 144(4) rescind or alter the State Government 's order.
In the exercise of his judicial functions 183 the Magistrate is independent of the Government and not subordinate to it.
The principle applies even in the case of an Executive Magistrate who under the scheme of separation of powers may be responsible to the executive authorities.
The above remedies being available the provision in section 144(6) cannot be held to be unreasonable on the mere ground that there is no express provision in the Code for redress against the, State Government 's order.
Reasonableness of a statutory provision cannot 'be determined by the application of set formulas : it must be determined on a review of the procedural and substantive provisions of the statute keeping in mind the nature of the right intended to be infringed, underlying purpose of the restriction contemplated to be imposed, gravity of the evil intended to be remedied thereby, object intended to be achieved by the imposition of restriction, and other relevant circumstances.
B D] Case law referred to.
|
Appeal No. 605 of 1964.
Appeal by special leave from the judgment and decree dated April 12, 1963 of the Andhra Pradesh High Ccurt in S.A. No. 124 of 1959.
281 P. Ram Reddy and A. V. V. Nair, for the appellant.
H. R. Gokhale, section P. R. Vital Rao, K. Rajendra Chaudhari and K. R. Chaudhuri, for the respondent.
The Judgment of the Court was delivered by Subba Rao, C.J.
This appeal by special leave raises the question whether a suit would lie at the instance of the present trustees of a temple for rendition of accounts of the management of the temple by the ex trustees.
The appellant is Sri Vedagiri Lakshmi Narasimha Swami temple situated at Narasimhuly konda, Nellore taluk, in the State of Andhra Pradesh, represented by its trustees.
The respondent and two others were non hereditary trustees of the said temple and functioned as such for a term of five years ending with January 1951.
The respondent was the managing trustee during that period.
The new trustees were appointed by order of the Hindu Religious Endowments Board dated January 21, 1951 ; but they were able to obtain possession of the temple only on July 21, 1952.
They, representing the temple, filed O.S. No. 246 of 1953 in the Court of the Subordinate Judge, Nellore against the respondent and others for the following three reliefs : (1) to direct all or such of the defendants as may be found liable to render a true and proper account of their management of the temple and its properties since the date of their functioning as trustees and to pay over to the new trustees such amounts as may be found due ; (2) to assess the amount due to the temple as a result, of the various acts of malfeasance, misfeasance and nonfeasance of the defendants 1 to 3 in respect of their management, and to direct them to pay the same to the new trustees ; and (3) to direct the defendants 1 to 3 to deliver to the new trustees all documents, accounts, registers, section 38 register, jewels and movable properties, after rendering a true account thereof and failing such delivery, to pass a decree against the defendants for their value, or pass such decree against them for such damages as the temple had sustained.
In the plaint, the new trustees alleged that the defendants were guilty of acts of misfeasance, malfeasance and nonfeasance and also of gross negligence.
The defendants, inter alia, apart from denying the said allegations made against them, pleaded that the suit was not maintainable in a civil court in view of the provisions of section 87 of the Madras Hindu Religious and Charitable Endowments Act, 1951 (Act 19 of 1951), hereinafter called the Act.
The learned Subordinate Judge, by his judgment dated August 12, 1953, held that the suit was maintainable.
He also found that defendants 1 to 3 were liable to render an account of their management during the period of their trusteeship and to pay damages for the loss suffered by the temple on account of theinr 282 acts of misfeasance, malfeasance and nonfeasance.
In the result, he passed a preliminary decree in favour of the new trustees directing the respondent and defendants 2, 5 and 6 the legal representatives of defendant 3, to render a true and proper account of their management of the temple and its properties for the period commencing from the beginning of 1946 to the date when the plaintiffs took possession of the temple in July 1952 and to pay such amounts as may be found due from them on taking accounts.
The 1st defendant, the ex managing trustee of the temple, preferred an appeal against the said decree to the court of the District Judge, Nellore.
To that appeal, the plaintiffs were made respondents.
Pending the appeal, the plaint was amended and the words "of pass such decree against them for such damages as the temple has sustained thereby" were deleted from prayer 3 of the plaint.
The learned advocate for the plaintiffs made an endorsement on the plaint and the appeal memo stated as follows : "Plaintiffs have given up prayer in respect of the damages as endorsed by the learned advocate on behalf of the plaintiffs on the plaint on 20 8 1958.
" The learned District Judge also recorded in his judgment that the appellant (respondent herein) did not press his appeal in respect of the claim for damages given up by the plaintiffs.
Prima facie this amendment related only to the prayer to deliver to the new trustees the documents and other movable properties and did not affect the other prayers for rendition of accounts on the ground of malfeasance, misfeasance and nonfeasance of the defendants.
The learned District Judge understood the finding given by the learned Subordinate Judge as follows : "Setting out all these things in detail in paras 13 and 14 of his judgment, the learned Subordinate Judge came to the conclusion that it was sufficient to say that there is liability to account in respect of the management on the part of the ex trustees, i.e., defendants 1 and 3, and that they are liable to pay to temple whatever damages it has suffered on account of their acts of misfeasance, malfeasance and nonfeasance." After considering the relevant evidence and the case law on the subject, he came to the following conclusion : " I have no hesitation to hold that the plaintiffs have established liability for ex trustees to render account of their management to deliver possession of the other property yet to be delivered and also the records men tioned in the plaint.
" The learned District Judge, therefore, agreed with the learned Subordinate Judge that the defendants had to render accounts 283 of their management of the temple and to pay to the temple damages suffered by it on account of their acts of misfeasance, malfeasance and nonfeasance.
In the result the decree of the learned Subordinate Judge was confirmed.
But, on Second Appeal, Jaganmohan Reddy, J., of the Andhra Pradesh High Court, held that the suit for accounts was not maintainable.
The reasoning of the learned Judge is found in the following observations : "It is true that a suit for back accounting on the authority of the decisions cited above does not lie and unfortunately in this case though the frame of the suit was for recovery of damages for negligence of the trustees in not taking leases, in not filing rent suits, in not collecting rents and generally for other acts of negligence, that plea was given up by the respondents, probably because they were not in a position to establish these facts.
The learned advocate for the respondents admits that this plea was given up by the clients and in the circumstances the only relief that the respondents claim against the appellant now is one for general accounting relating to the management or administration of the trust property and applying the principle laid down by the two judgments of this Court in Venkataratnam vs Narasimha Rao (1) and Sri Saraveswaraswami Vari temple vs Veerabhadrayya (2), 1 cannot but hold that suit will not he and in this view, the appeal is allowed and the judgments and the decrees of the courts below are set aside." Though, prima facie, as we have said earlier, we are inclined to hold that what was given up by the appellant was only a part of the third relief, in view of the unambiguous admission made by the learned advocate for the appellant and recorded in the judgment of the High Court, we have no option but to hold that the appellant had given up the plea of wilful default against the defendants and confined the relief only to a rendition of accounts by them in respect of their management of the temple during their tenure and to pay the amount that might be found due to the appellant.
Mr. P. Ram Reddy, learned counsel for the appellant temple, raised before us three points : (1) The suit was for damages for gross negligence and the learned Judge did not appreciate the correct scope of the concession made by the learned advocate appearing for the temple before him.
(2) Section 93 of the Act is not a bar to a suit by the present trustees against the ex trustees for rendition of accounts of their management of the temple (1) M15Sup.
CI/66 5 (2) 284 properties and recovery of the amounts due from them.
(3) The learned Judge went wrong in holding that a suit for back accounting would not lie.
On the first point we have already expressed our opinion earlier that, in view of the unambiguous concession made by the learned advocate for the appellant before the High Court, we must hold that the suit, after the amendment of the plaint, was confined only to rendition of accounts, not on account of wilful default or negligence, but only for rendition of accounts by the ex trustees of their management and to pay the amounts due to the present trustees.
The question, therefore, is whether the present trustees can demand a rendition of accounts from the ex trustees in respect of their management without alleging against them any acts of negligence or wilful default and, if so, whether section 93 of the Act was a bar to the maintainability of a suit for the relief of rendition of accounts in a civil court.
It is common place that no trustee can get a discharge unless he renders accounts of his management.
This liability is irrespective of any question of negligence or wilful default.
In the present case, the ex trustees admittedly did not give an account of their management though they put the plaintiffs in possession of the properties in the year 1952 and that too after adopting a course of obstructive attitude.
They are, therefore, liable to render accounts of their management to the present trustees.
The decisions relied upon by the learned Judge to not sup port the view that an ex trustee need not render accounts in the absence of allegations of negligence or wilful default.
In V. K. Kelu Achan vs C.S. Sivarama Pattar (1) one of the questions raised was whether the 1st defendant therein, who was a karnavan of a tarwad and also the manager of temple properties, should be made to give a general rendition of accounts of his management from 1900.
It was found in that case that the 1st defendant was not personally responsible for any loss to the temple, that no relief for rendition of accounts was asked for against him and that he was not the person who was maintaining the accounts.
on those facts, the High Court refused to give a decree against the 1st respondent for back accounting.
In the course of the judgment the following observations were made : "It is a general principle also that back accounting will not be decreed except on proof of dishonesty and malversation, and we have not found any such proof here against the present trustee.
" These observations do not circumscribe the scope of the court 's discretion, but only lay down a guide for its exercise.
They must (1) A.I.R. 1928 Madras 879, 887.
285 be read in the context of the facts found in that case.
Nor the decision in The Madura etc.
Devasthanams vs Doraiswami Nayudu(1) lays down any such wide proposition.
There, the executive officer of a temple sought to recover from its ex trustee a certain amount by way of damages on foot of gross negligence.
It was found that the trustee was not guilty of any wilful default and that he was justified in acting upon the vouchers and accounts furnished by the law department of the Devasthanam and also that it was not established that any items were really due to the temple.
On those facts the suit was dismissed.
Briefly stated, that was a suit for rendition of account on the ground of wilful default in the course of management of the temple affairs and, as no wilful default had been established, the suit for accounts was dismissed.
, It is not an authority for the position that unless wilful default is established an ex trustee need not account to the present trustee and to pay to him the amount due under the said accounts.
In the case of rendition of accounts by an ex trustee to a present trustee, it will necessarily relate to back accounting, for no question of accounting in future arises in his case.
The question that invariably arises in such a context is as to what period he shall be made liable to render accounts.
That depends upon the facts of each case.
Sir Thomas Flumer, M. R., said in Attorney General vs Exetor Mayor (2) : "It has, I think, been properly stated on both sides, that there is no fixed limit of time in directing an account against a trustee of a charity,. .
It does not, however, follow that the relief will be given after a great length of time, it being the constant course of Courts of Equity to discourage stale demands ; even in cases of fraud, in which, if recent, there would have been no doubt, lapse of time has induced the Courts to refuse their interference.
In cases of charities, this principle has often been acted on.
When there has been a long period, during which a party has, under an innocent mistake, misapplied, a fund, from the leaches and neglect of others, that is, from no one of the public setting him right, and when the accounts have in consequence become entangled, the Court, under its general discretion, considering the enormous expense of the enquiries, the great hardships of calling upon representatives to refund what families have spent, acting on the notion of its being their property, has been in the habit, while giving the relief, of fixing a period to the account.
" These observations were followed by a Division Bench of the Madras High Court in Sanyasayya vs Murthamma (3).
Where (1) (2) ; (3) A.I.R. 1919 Madras 943. 286 a suit was filed for an account for the year 1884 and the 1st defendant was asked to account for the management of his father and grand father, the learned Judges of the Madras High Court fixed the period of accounting at 12 years.
The said observations were also followed by the Andhra High Court in Hariharabrahmam vs Janakiramiah (1) and, having regard to the circumstances in that case, the said High Court directed accounts to be taken for a period of six years prior to 1938.
In the present case the learned subordinate Judge and the learned District Judge, in exercise of their discretion, having regard to the circumstances of the case, directed the respondent to render accounts of his management from the beginning of the year 1946 to the date when then plaintiffs took possession of the temple in July 1952.
We do not see any justification to interfere with the discretion of the courts in that regard.
The next question is whether section 93 of the Act is a bar to the maintainability of the suit.
The said section reads : "No suit or other legal proceeding in respect of the administration or management of a religious institution or any other matter or dispute for determining or deciding which provision is made in this Act shall be instituted in any Court of law, except under, and in conformity with, the provisions of this Act." The learned counsel for the appellant contended that in order to invoke this section the following conditions shall be complied with: (1) The suit shall be in respect of the administration or management of a religious institution ; (2) it shall be in respect of any other matter in dispute ; and (3) for determining or deciding such a suit or other legal proceeding there shall be a provision in the Act ; if there is such a provision, such a suit or proceeding could not be instituted in any court of law except under, and in conformity with, the provisions of the Act.
The further argument was that the administration or management referred to in section 93 related to section 58 of the Act, and the other matters of dispute related to section 57 thereof, and that, as the suit for rendition of accounts did not fall either under section 57 or under section 58 of the Act, the present suit for such a relief was outside the scope of section 93 of the Act.
Mr. Gokhale, learned counsel for the respondent, contended that Ch.
VII of the Act provided for rendition of accounts and a machinery for determining or deciding disputes in respect thereof, and that, therefore, no suit or other legal proceeding could be taken in any court except under and in conformity with the provisions of that Chapter.
(1) A.I.R. 1955 Andhra 18.
287 Under section 9 of the Code of Civil Procedure, the courts shall have jurisdiction to try all suits of a civil nature excepting suits of which their cognizance is either expressly or impliedly barred.
It is a well settled principle that a party seeking to oust the jurisdiction of an ordinary civil court shall establish the right to do so.
Section 93 of the Act does not impose a total bar on the maintainability of a suit in a civil court.
It states that a suit of the nature mentioned therein can be instituted only in conformity with the provisions of the Act; that is to say, a suit or other legal proceeding in respect of matters not covered by the section can be instituted in the ordinary way.
It therefore imposes certain statutory res trictions on suits or other legal proceedings relating to matters mentioned therein.
Now, what are those matters ? They are : (1) administration or management of religious institutions ; and (2) any other matter or dispute for determining or deciding which provision, is made in the Act.
The clause "determining or deciding which a provision is made in this Act", on a reasonable construction, cannot be made to qualify "the administration or management" but must be confined only to any other matter or dispute.
Even so, the expression "administration or management" cannot be construed widely so as to take in any matter however remotely connected with the administration or management.
The limitation on the said words is found in the phrase "except under and in conformity with the provisions of this Act.
" To state it differently, the said phrase does not impose a total bar on a suit in a civil court but only imposes a restriction on suits or other legal proceedings in respect of matters for which a provision is made in the Act.
Any other construction would lead to an incongruity, namely, there will be a vacuum in many areas not covered by the Act and the general remedies would be displaced without replacing them by new remedies.
The history of this provision also supports the said interpretation.
Sub section (2) of section 92 of the Code of Civil Procedure says : "Save as provided by the , no suit claiming any of the reliefs specified in subsection (1) shall be instituted in respect of any such trust as is therein referred to except in conformity with the provisions of that sub section.
" Suits for reliefs mentioned in sub s.(1) of section 92 of the Code of Civil Procedure can only be instituted in special courts and in the manner mentioned therein.
Construing the said sub section, a Full Bench of the Madras High Court in Appanna vs Narasinga (1) held that a suit by a trustee of a public religious trust against a co trustee for accounts did not fall within the section, though the relief claimed (1) Madras 113.
288 was the one specified in sub section
(1), cl.
The reason given was that the relief was sought not in the larger interest of the public but merely for the purpose of vindicating the private rights of one ,of the trustees and of enabling him to discharge the duties and liabilities which were imposed upon him by the trust.
Another Full Bench of the Madras High Court in Tirumalai Tirupati Devasthanam ,Committee vs Udiavar Krishnayya Sahnbhaga (1) held that the ,said section did not apply where the general trustees of a public temple sued the trustees of certain offerings given to the deity, for accounts, on the ground that in that suit the right of the public was not sought to be enforced but only the personal rights of the trustees qua the trustees.
These decisions indicate that section 92 of the Code of Civil Procedure does not impose a general embargo on filing of a suit in a civil court, but only directs that suits of the nature mentioned in sub s.(1) thereof shall not be instituted in a civil court except in conformity with the provisions of the said 'sub section.
If a suit does not fall within the ambit of section 92(1) of the Code of Civil Pro cedure, it is not hit also by sub s.(2) thereof.
When the Madras Hindu (2 of 1927) was passed, in respect of the endowments covered by that Act, section 73 of that Act replaced section 92 of the Code of Civil Procedure.
Sub section (4) ,thereof, which was added by Madras Act X of 1946 read : "No suit or other legal proceeding claiming any relief provided in this Act in respect of such administration or management shall be instituted except under and in conformity with the provisions of this Act." The expression "except under and in conformity with the provisions of this Act" in the said sub section is also found in section 93 of the Act.
The scope of the said sub section came under judicial scrutiny in Manjeshwar Srimad Anantheswar Temple vs Vaikunta Bhakta (2) Therein Horwill, J., summarised the legal position reached in respect of the construction of that section thus : "It will be seen therefore that from 54 Mad. 1011 (Vythilinga Pandarasannadhi vs Temple Committee, Tinnevelly) onwards there was a considerable body of opinion that the general scope of section 73, Hindu , is the same as section 92, Civil P.C., that the last paragraph of s .
73 of the Act is meant to refer only to the classes of cases referred to in section 73(1) and other sections of the Act, and that suits which do not fall within the scope of these sections can be tried under the general law.
I have not come across any case in which these opinions were dissented from or contrary opinions expressed," (1) A.I.R. 1943 Madras 466.
(2) A.I.R. 1943 Madras 228, 230.
289 Sub section (4), which corresponds to section 93 of the Act, was held not to impose a total bar on a civil suit but only confined to suits relating to the classes of cases referred to in section 73(1) and other sections of the Act.
Section 93 of the Act enlarges the scope of section 73(4) thereof It bars not only suits or legal proceedings in respect of administration or management of religious institutions but also in respect of any other matter or dispute for determining or deciding which provision is made in the Act.
By repeating the phrase "except under and in conformity with the provisions of the Act" which had received authoritative judicial interpretation when it remained in section 73(4) of the earlier Act, the Legislature must be held to have accepted the interpretation put upon the phrase by the courts.
It follows that section 93 will apply only to matters for which provision has been made in the Act.
It does not bar suits under the general law which do not fall within the scope of any section of the Act.
Even so, the learned counsel for the respondent contended that Ch.
VII of the Act provided a complete machinery for deciding disputes in regard to accounts and, therefore, no suit for accounting against an ex trustee could be filed in a civil court.
This interpretation was accepted by two decisions of the Andhra Pradesh High Court.
The decision in Venkataratnam vs Narasimha Rao(1) dealt with a case of a suit filed with the permission of the Advocate General for removing the trustee, for framing a scheme for the management of the trust property, for appointing a new trustee and for accounts and other incidental reliefs.
The contesting defendant pleaded inter alia that because of the provisions of the Madras Act 19 of 1951, the suit could not be entertained by the civil court, and that section 93 was a bar to such a suit.
The Andhra Pradesh High Court held that section 93 of the Act clearly interdicted the determination of the subject matter of the suit by a civil court.
The reasoning of the decision is summarized thus : "Now the suit is entirely based on allegations of breach of trust and every one of the reliefs prayed for in the plaint can flow from appropriate action that officers named in the Act may take.
The first relief sought in the present plaint can result from action taken under section 45 of the Act ; the second and third reliefs from action under section 58; the fourth from action under section 60 ; the 6th relief from action under section 57 and the relief numbered and lettered as 6(a) from action under section 87.
" The High Court also observed "In our opinion, all these are 'matters or disputes for determining or deciding which provision is made ' in the Act." (1) , 323. 290 On that basis it held that section 93 of the Act was a bar to the maintainability of the suit.
It may be mentioned that the observation that the fourth relief could result from action under section 60 appears to be a mistake, for section 60 applies only to a defunct religious insti tution.
In Sri Sarveswaraswami Vari Temple vs Rudrapaka Veerabhadrayya(1) Seshachelapati, J., speaking for the court, said thus "It will be seen, as correctly observed by the learned Subordinate Judge, that the section has two limbs.
The first limb interdicts suits or other legal proceedings with respect to the administration or management of the re ligious institution.
The second limb enacts an embargo on suits and legal proceedings on any other matter in dispute for the determination of which a provision had been made in this Act.
" There, the suit was by the present trustees for the recovery of the temple properties from the hereditary archakas.
The High Court held that such a suit was not one in respect of the administration or management of the temple and, therefore, it did not attract the embargo entered in the first limb of the section.
This decision, therefore, held that unless the suit fell within the classes of suits mentioned in section 93 of the Act, the provisions of the section were not attracted.
It leads us to the consideration of the scope of Chapter VII of the Act.
If Chapter VII of the Act provides for determining or deciding a dispute in respect of rendition of accounts, section 93 of the Act would be attracted.
The heading of the said Chapter is "Budgets, Accounts and Audit".
Section 70 provides for the presentation of budgets and the particulars to be mentioned therein.
Section 71 enjoins upon a trustee of every institution to keep regular accounts of receipts and disbursements.
Section 71(4) prescribes for an audit of the accounts every year.
Section 72 directs the auditor to send a report of the results of the audit to the prescribed authorities.
Section 73 enumerates the matters in respect of which the auditor has to send his report.
Section 74 directs the prescribed authorities to send the said report to the trustees for remedying the defects pointed out therein.
The Area Committee, one of the prescribed authorities under section 74(2) of the Act, has to forward to the Commissioner the report of the auditor along with the report of the trustees, if any, and with his remarks.
If the Commissioner thinks that the trustee or any other person is guilty of misappropriation or wilful waste of funds of the ninstitu (1) , 251.
291 tion or of gross neglect resulting in a loss to the institution, after making the requisite inquiry, certify the amount so lost and direct the trustee or such person to pay within a specified time such amount personally and not from the funds of the religious institution.
On the receipt of such an order, the trustee can apply to a court to modify or set aside the same.
Instead of filing an application to the Court, he has an alternative remedy to file an appeal to the Government which shall pass such order as it thinks fit.
Under sub section
(7) of section 74, an order of surcharge under the section against a trustee shall not bar a suit for accounts against him except in respect of the matter finally dealt with by such order.
Sub section (8) thereof provides a machinery for collecting the said amounts from the trustee or other person by way of surcharge.
Relying upon the scheme of this Chapter, it is contended that it provides an exhaustive and self contained machinery for scrutinizing the accounts, for orders of surcharge and to recover the amount surcharged from the trustee or other persons and for a suit to set aside such orders or alternatively for an appeal to the Government and that, therefore, no suit for rendition of accounts would lie dehors the provisions of the Act.
We find it difficult to accept this argument.
Chapter VII only provides for a strict supervision of the financial side of the administration of an institution.
The scope of the auditor 's investigation is limited.
It is only an effective substitute for the trustee himself furnishing an audited account.
It is concerned only with the current management of a trustee.
It does not even exonerate a trustee of his liability to render accounts except to a limited extent mentioned in sub section
(7) of section 74 ; it only facilitates the rendition of accounts.
Under sub section
(7) of section 74, an order of surcharge under that section against a trustee shall not bar a suit against him except in matters finally dealt with in such order.
This shows by necessary implication that a suit can be filed for accounts against a trustee in other respects.
In any view, it has nothing to do with the management of a temple by a previous trustee.
It is con tended that under sub section
(5) of section 74 the trustee or any other person aggrieved by such order may file a suit in the civil court or prefer an appeal to the Government questioning the order of the Commissioner and, therefore, it is open to any member of the public to file a suit under the Act.
"Any person" there only refers to a person mentioned in sub section
(3) of section 74, i.e., a person who is guilty of misappropriation or wilful waste of the funds of the institution etc.
It obviously refers to a trustee or some other person in management of the institution who is guilty of misappropriation.
We, therefore, hold that Chapter VII of the Act has no bearing on the question of liability of an ex trustee to render account to the present trustee of his management.
Chapter VII does not provide for 292 determining or deciding a dispute in respect of such rendition of accounts.
If so, it follows that section 93 of the Act is not a bar to the maintainability of such a suit.
In the result, we set aside the decree of the High Court and restore that of the learned Subordinate Judge.
The respondent will pay the costs of the appellant throughout.
V.P.S. Appeal allowed.
| The trustees of a tempter filed a suit for rendition of accounts 'against ,the ex trustees, in respect of their management of the temple.
The trial court and the first appellate court, in their discretion and having regard to the circumstances of the case, directed the defendants to render accounts for about six years prior to the plaintiffs taking possession of the temple.
The High Court held that the defendants were not obliged to render accounts in the absence of allegations of acts of negligence or willful default, and that, section 93 of the Madras Hindu Religious and Charitable Endowments Act, 1951, was a bar to the maintainability of the suit.
In appeal to this Court, HELD : (i) No trustee can get a discharge unless he renders account of his management irrespective of any question of negligence or wilful default.
The defendants, therefore, were liable to render accounts of their management to the plaintiffs.
As regards the period for which they should be made liable to render accounts, it would depend upon the facts of each case, and there was no Justification for interfering with the discretion of the lower courts in that regard.
[284 D E; 286 C] Case law referred to.
(ii) Section 93 is not a bar to the maintainability of the suit.
[292 A] The section only imposes a restriction on suits or other legal proceedings in respect of matters for which a provision has been made in the Act.
The legislative history of the section shows that even in regard to suits or other legal proceedings relating to administration or management of religious institutions, restriction is imposed only in respect of matters for which a provision is made in the Act.
It does not bar suits under the general law which do not fall within the scope of any of the sections of the Act.
Chapter VII of the Act, on which reliance was placed by the defendants as providing a complete machinery for deciding disputes in regard to accounts, has no bearing on the question of the liability of an ex trustee to render account of his management to the present trustee and does not provide for determining or deciding a dispute in respect of such rendition of accounts.
C; 291 H; 292 A] Case law referred to.
|
Civil Appeal No. 1462 of 1971.
Appeal by special leave from the Judgment and Order dated 16th April 1971 of the Patna High Court in Tax Case No. 76/68.
A. K. Sen, section T. Desai, Somen Bose, D. N. Mukherjee and K. N. Jain, for the appellant.
V. section Desai and B. P. Singh for the Respondent.
The Judgment of the Court was delivered by GOSWAMI, J.
This appeal by special leave is directed against the judgment of the Patna High Court in a reference under section 21B(1) of the Bihar Taxation on Passengers and Goods (Carried by Public Service Motor Vehicles) Act, 1961 (briefly the Act) as amended.
The facts as appearing from the statement of case annexing the various orders of the authorities may briefly be stated: The appellant, M/s. National Transport Company, is a transport undertaking without its transport.
The appellant (hereinafter to be described as the assessee) was the sole transporter by road of the cement manufactured by the Associated Cement Company at Sindri (briefly the company) from Sindri to different stockists at various places in Bihar and West Bengal.
In order to have some sort of uniformity in price at different places the manufacturing company used to fix the transport charges according to a schedule.
The assessee 's contract with the manufacturing company commenced some time on October 12, 1963.
Since the assessee did not have its own fleet of trucks, it used to engage thirty six trucks covered by public carrier permits belonging to various persons at different times for transporting the cement.
The assessee was not registered under section 4 of the Act.
On September 3, 1966, there was a surprise inspection of the office of the assessee and certain books of accounts containing accounts of transport charges realised by the assessee for transporting of cement from the Sindri factory to the stockists in Bihar and West Bengal were seized.
The assessee also produced some books of accounts during the hearing before the Officer.
The assessee maintained his accounts ledger wise in respect of the transport charges realised and realisable from different stockists of Bihar and West Bengal for transport of cement by it from the Sindri factory to their godowns.
There were two ledgers.
One was party wise showing charges realised or realisable from the stockists and other truck wise showing hire charges 899 paid to various trucks.
The assessee also produced a list of trucks showing the names of the truck owners with their respective places of residence.
Out of thirty six trucks, twenty four were registered in Bihar and twelve in West Bengal.
Agreements with the truck owners were also produced by the assessee.
The Bills from the petrol supplying company which were paid by the assessee were also filed showing the total amount and the truck wise amount.
The ledger party wise showed rates charged from the stockists.
The ledger truck wise showed hire charges and also deductions on account of petrol, diesel and other lubricants and also for loss in the way as per agreement.
On the basis of the statement furnished by the assessee as corroborated by the books of accounts maintained by it the Assessing Officer determined the total taxable amount and imposed a tax of Rs. 1,41,618.37 by his order of November 1, 1966.
A penalty of Rs. 5000/ was also imposed under section 7(5) of the Act.
The assessee appealed to the Additional Deputy Commissioner of Commercial Taxes without success.
Thereafter the assessee preferred an application in revision before the Commercial Taxes Tribunal, Bihar, which also met with the same fate.
The Tribunal, however, on the application of the assessee under section 218(1) of the Act referred the following question of law to the High Court: "Whether in the facts and circumstances of the case the Tribunal has rightly held the applicant to be the 'owner ' of the vehicles within the meaning of section 2(d) of the Act and whether the imposition of tax and levy of penalty was legal and justified".
The High Court noted the facts found by the Tribunal as follows: (a) The assessee was the sole transporting company of the cement of the manufacturing company, (b) it had engaged certain trucks for use in his (sic) transport work, (c) it was providing petrol and oil for the running of the trucks in the transport work, although the prices paid by the assessee were later on adjusted in the hiring charges, (d) it was obtaining receipts for delivery of the goods to the stockists, (e) it was maintaining a complete record of the trucks used by it for the transport work, (f) it was keeping a complete record of the charges realisable and realised from the stockists on account of freight payable by them, (g) it was keeping a complete record of the charges actually paid to the real owners of the trucks, and 900 (h) the receipts given by the stockists indicated that they had received from the assessee, certain quantities of cement by a particular vehicle".
From the above eight factors the Tribunal came to the conclusion that the assessee was in charge of the trucks for the time being within the meaning of section 2(d) of the Act.
The High Court agreed with the Tribunal in the following words: "In any case, even if the conclusion that the assessee was in charge of the trucks, for the time being, be a conclusion in law, I do not think that any error in law has been committed by the Tribunal, in arriving at its conclusion against the contentions raised on behalf of the assessee.
Relevant facts have been found and a relevant finding has been given on them, before saddling the assessee with liability".
The High Court thereupon upheld the Tribunal 's decision against the assessee.
The only question that is canvassed by Mr. A. K. Sen on behalf of the appellant is that, on the various facts found by the Tribunal, it has erred in law in holding that the assessee is an 'owner ' within the meaning of section 2(d) of the Act.
We may, therefore, immediately turn to the definition of owner as given under section 2(d) 2(d) " 'owner ' means the owner of a public service motor vehicle in respect of which a permit has been granted by a Regional or State Transport Authority under the provisions of the (IV of 1939) and includes the holder of a permit under the said Act in respect of a public service motor vehicle or any person for the time being in charge of such vehicle or responsible for the management of the place of business of such owner".
It is clear that the above definition is an inclusive definition.
Owner means not only the owner of the specified type of vehicle but also includes the permit holder in respect of such a vehicle as also any person for the time being in charge of such vehicle or any person responsible for the management of the place of business of such owner.
The definition has fairly widened the meaning of "owner".
We are only concerned in this appeal with one category included in the definition, namely, that an owner is a person for the time being in charge of a public service motor vehicle.
There is no dispute that the trucks in question are public service motor vehicles.
We are only required to consider whether the assessee is a 'person ' "for the time being in charge of such vehicle".
As the preamble shows the Act is to provide for the levy of tax on passengers and goods carried by public service motor vehicles.
The taxing event is, thus, the carriage of goods and passengers by public service motor vehicles.
By section 2(a) 'business ' means the business of the owner for the purpose of this Act.
901 Section 3 in the charging section and may be read: 3(1) "On and from the date on which this Act is deemed to have come into force under sub section (3) of section 1, there shall be levied and paid to the State Government a tax on all passengers and goods carried by a public service motor vehicle; such tax shall be levied and paid at the rate of twelve and a half per centum of the fares and freights payable to the owner of such vehicle; * * * * (2) Every owner shall, in the manner prescribed in section 9, pay to the State Government, the amount of tax due under this section.
(3) Every passenger carried by a public service motor vehicle and every person whose goods are carried by such vehicle shall be liable to pay to the owner the amount of tax payable under this section and every owner shall recover such tax from such passenger or person, as the case may be." * * * * Under section 4(1) every owner liable to pay tax shall apply for his registration within such period and in such manner as may be prescribed.
Under sub section (2) of section 4, if the application is in order, the prescribed authority shall grant a certificate of registration in the prescribed form.
Under section 6 every owner shall furnish to the prescribed authority such returns, within such period, as may be prescribed.
There is a provision under this section for imposition of penalty on failure to submit a return without any reasonable cause.
Section 18 is the penal section for various offences under the Act including failure to apply for registration or to submit return or for contravention of any other provision of the Act of the Rules and the offender is punishable with fine which may extend to Rs. 1000/ , and when the offence is a continuing one, with a daily fine not exceeding fifty rupees during the period of the continuance of the offence.
By section 3(h) of the Act, a 'public service motor vehicle ' means any motor vehicle used or adopted to be used for the carriage of passengers and goods for hire or reward and includes a motor cab, a stage carriage, a contract carriage or a public carrier.
For the purpose of tax under the Act not every public service motor vehicle but only such a vehicle carrying goods and passengers is exigible to tax for the carriage of those goods and passengers under the Act.
The tax again is a percentage of the fares or freights realised.
The fares and freights have to be realised as a fact.
Such a vehicle carrying goods and passengers driven by employees of the owner of the 902 vehicle would ordinarily be in charge of that owner or of the permit holder wherever it may ply.
The physical presence of the owner or the proprietor or of the permit holder in the running vehicle is not essential.
Even if the driver or the conductor realises the freight it is done on behalf of the owner of the vehicle or of the permit holder and the former is accountable to the latter.
Suppose the conductor misappropriates the collection en route, that will not absolve the permit holder from liability to pay the tax actually realised for the carriage of the goods or the passengers.
In view of the terms of the agreement, on which great reliance has been placed by Mr Sen, it can be safely assumed that the appellant took full responsibility for the carriage of the goods from the Sindri factory to various destinations.
This is manifest even in absence of production by the appellant of agreements, if any, between it and the company or the stockists.
Cement bags will not be loaded on any and every vehicle that reports at the factory but only on those vehicles whose registration numbers must have been communicated to the company or which were taken there by the appellant 's representative who has to be present at the time of loading the trucks with cement as will appear from clause (1) of the agreement.
Clause (1) reads "Cement will be loaded into your lorry at the Sindri Works through us".
The Sindri factory, therefore, entrusted the carriage of their cement bags to the appellant for delivery to various stockists who again in turn, at destinations, gave buyer 's receipts as per clause (3) of the agreement.
Clause (3) States: "You will obtain proper receipts for such deliveries from the consignees on the challans handed over to you and bring back all the documents including the challan duly signed by the consignees leaving one copy of the challan with the consignees".
On delivery to the appellant of the buyer 's receipt by the truck owner or his representative.
"the bills of hire charges" of the truck owner are paid with three weeks thereafter at the rates "as per our schedule" agreed between the appellant and the truck owners".
Clause (12) of the agreement says: "Your bills of hire charges as per our schedule will be prepared every fortnight and will be paid within 3 weeks thereafter." The truck owners, in this case, received as per agreement, only "hire charges" and there is nothing to show nor is there any averment by the appellant that those charges included taxes under the Act although freight had been admittedly realised by the appellant from the stockists.
In the above background of facts and circumstances, there is no escape from the conclusion that the appellant was in charge of the trucks for the purpose of the 'business ' of the appellant during the entire course of transportation of the cement bags from the Sindri factory to the various stockists and as such comes within the third clause of the definition under section 3(d) of the Act.
903 The fact that under the terms of the agreement some incidental arrangement involving contingent financial implications in respect of carriage of the goods had been entered upon does not entitle the appellant to be relieved of the "charge" of the loaded truck for the purpose of tax under the Act for the carriage of the goods.
The matter would have been different if the truck owners had been given the tax collections in addition to the hire charges, but absence of any provision for tax payment by the truck owners in the agreement militates against the contention that in this case the truck owners are liable for the payment of tax under the Act for the carriage of the cement bags.
The owner of the truck under a public carrier permit or a public carrier permit holder is undoubtedly an 'owner ' under section 2(d) of the Act.
But in a given case, the person who is for the time being in charge of the loaded truck and who or on whose behalf some one received the freight or fare is also an 'owner ' within the third clause of the definition under section 2(d) of the Act.
The significant words "for the time being in charge of such vehicle" have to be comprehended in the context of the provisions of the taxing statute and these words have nexus with the actual realisation and appropriation of the freight for the goods carried by the vehicle.
The meaning given to the words "in charge of vehicle" in connection with traffic cases in criminal prosecution, as has been referred to by Mr. Sen citing two English cases, is of no avail to the appellant in this case.
Mr. Sen forcefully submits that the present case is squarely covered by a decision of this Court in Jagir Singh & Ors. etc.
vs State of Bihar and Anr.(1) This was a case where the same Act with some identical Acts from other States came up for consideration.
It is submitted by Mr. Sen that the truck owners lost in that decision and in this appeal also, therefore, they cannot escape from their legal liability by shifting it to the appellant.
We must bear in mind that those applications were under article 32 of the Constitution while the present matter comes to us out of a reference in the fifth tier of litigation after the matter had been gone into in great detail taking note of various facets of the rival pleas by the respective authorities and lastly by the High Court.
In Jagir Singh 's case (supra) this Court was concerned merely with Booking Agents and Forwarding Agents who were sought to be made liable under the Act at the instance of the permit holders of the public service vehicles who did not own their liability for payment of tax under the Act.
This Court observed in that case as follows: "If the permit holder lets out the vehicle to any person on hire it is a matter of internal arrangement between the owner who is the permit holder and the person who is allowed by the permit holder to hire the vehicle to collect tax in order to enable the owner to discharge the liability.
If the owner does not make adequate provision in that behalf the owner cannot escape liability by pleading that the hirer of the vehicle is liable to pay tax and the owner is not liable".
904 From the terms of the agreement in the present case, it is clear that the liability to pay taxes was entirely upon the appellant as the owners of the trucks were only entitled to "hire charges".
Legal liability for payment of tax under the Act is well known to the appellant carrying on transport business.
The appellant has taken charge of the vehicles for the purpose of the collection of tax for the carriage of the goods.
The appellant has actually collected the freight from the stockists on delivery of cement bags.
The appellant has only paid to the truck owners "the hire charges" as per its own schedule of rates without any mention of tax.
These facts clearly distinguish the present case from what apears to have been pleaded in the writ application in Jagir Singh 's case (supra) and he decision is of no aid to the appellant.
Being "in charge" of the vehicle in the context of the provisions of the Act does not relate to mere physical charge or control in the process of movement of the vehicle from one place to another but to charge or control for fulfilment of the legal obligation under the Act for payment of taxes for the carriage of goods or passengers.
Whether a certain person is in charge of the vehicle for the time being depends always on the particular facts of each case and the answer cannot be put in the straitjacket of a formula.
On the facts of the present case we are clearly of opinion that the appellant comes within the meaning of the third clause of the definition under section 2(d) of the Act.
We should observe that once the tax is realised for a particular transaction from one category of owner as defined, no further tax can be collected for the same carriage from any other person even though that person also may come within the definition of "owner" under the Act.
The Tribunal was, therefore, justified in holding the appellant as "owner" for the purpose of the Act.
The High Court was right in not interfering with the conclusion of the Tribunal and in answering the question against the assessee.
In the result the appeal is dismissed but we make no order as to costs.
V.P.S. Appeal dismissed.
| The appellant and V, father of respondents, were brothers.
They, together with their cousin, formed a joint Hindu family.
In a partition in 1929 between the two branches, certain properties were given to V for discharging some family debts.
V took over the management of his branch of the family and after discharging the debts, filed in 1956 a suit for partition against the appellant claiming, inter alia, that one of the items earmarked for the discharge of the debts which remained undisposed of, was his exclusive property as it was given to him absolutely; and also for accounts on the ground that the appellant took over the management from 1938.
The trial court negatived the claim in respect of the property, but directed the appellant to give accounts from 1947 when admittedly he took over management.
On appeal, the High Court upheld V 's claim with respect to the property and gave modified directions for accounts by the parties.
Dismissing the appeal to this Court, ^ HELD: (1) The properties given to V became his separate properties from the date of the partition deed of 1929 and were not liable to partition.
[643A] (a) The salient features of the deed are, (i) the sole responsibility for discharge of the debts was placed on V; (ii) V 's liability was not to the extent of the properties but was irrespective of the sufficiency or otherwise of the properties and any deficit or surplus was to be met or enjoyed by him exclusively; (iii) the cousin was no longer liable for the debts; (iv) in case there was a default on V 's part, and if, any loss was caused to the cousin he was to be indemnified by V; and (v) exclusive dominion and control over, and enjoyment of, the properties was vested in V in consideration of the obligation undertaken by him to discharge the debts.
The properties were thus given to V in view of his personal undertaking to discharge the debts, and, the conveyance was in the nature of remuneration for services to be rendered by him.
[642 C G] Raj Kumar Singh Kukam Chandji vs Commissioner of Income tax Madhya Pradesh referred to.
(b) The arrangement was valid because it was bona fide and its terms were fair.
[643E] Sahu Madho Das vs Pandit Mukand Ram ; , Maturi Pullaiah vs Maturi Narasimham AIR 1966 SC 1836 and section Shanmugam Pillai & Ors.
vs K. Shanmugam Pillai & Ors. ; referred to.
(c) There was no blending of the properties by V with other joint family properties.
There was no evidence of any intention on V 's part to abandon his separate rights over the properties.
The mere fact that they were not separately entered by him in the account books or that no separate account of the earnings from them was maintained by him cannot rob them of their separate character.
[644B C] Lakkireddi Chinna Venkata Reddi & Ors.
vs Lakkireddi Lakshmama ; and G. Narayana Ram vs C. Chamaraju & Ors. ; referred to.
638 (d) If any amount of the joint family funds was used by V for the discharge of the debts, the respondents (legal representatives of V) would be liable for them, but that would not affect the character of the properties.
[644 C D] (2) It is well settled that in the absence of proof of misappropriation or fraudulent or improper conversion by the manager, a coparcener, seeking partition, cannot call upon the manager to account for his past dealings with the family property.
Since there was no evidence of any misappropriation by V, he was not liable for accounts during his period of management.
[644E F]
|
Criminal Appeal No. 722 of 1991.
From the Judgment and Order dated 21.12.1990 of the Kerala High Court in Criminal Appeal No. 425 of 1989.
B.R.L. lyanger, R. Mohan, V. Krishnamurthy and V. Bala chandran for the Appellants.
P.S. Poti, T.T. Kunhikannan, E.M.S. Anam, Ms. Indira Sawlmey, P. Parmeswaran, Ms. Sushma Suri, K. Ram Kumar and Y.P. Rao for the Respondents.
The Judgment of the Court was delivered by YOGESHWAR DAYAL, J.
Special leave granted.
This order will dispose of six matters namely, Crl.
Appeal Nos.
553/ 89, 283/91,284/91, Civil Appeal Nos.
3708 13/89, 1897/91 and Criminal Appeal arising out of S.L.P. (Crl.) No. 2647/91.
FACTS Crl.
A. No. 553/89 This appeal arises from the judgment of the learned Single Judge of the High Court of Kerala dated 6th June, 1988 whereby the learned Single Judge declined to quash the prosecution of the petitioner therein under Section 482 of the Code of Criminal Procedure.
The petitioner therein has been prosecuted for selling adulterated "Ashoka special supari" on the basis of a certificate issued by the Director of Central Food Laboratory showing that the article of Food purchased from the accused contained 2000 mgs/kg.
saccharin and that the sample does not conform to the Prevention of Food Adulteration Rules, 1955, (hereinafter referred to as the Rules).
The High Court took the view the report prima facie goes to show that accused has sold adulterated article of food and consequently declined to quash the prosecution under Section 482 of the Code.
A. No. 283/91 This appeal is directed against the order of the Kerala High Court dared 22nd January, 1991 accepting the appeal against the order of 394 acquittal passed by the Chief Judicial Magistrate, Palakkad, in S.T No. 36 of 1988.
The appeal was filed against the acquittal of accused Nos. 2 and 3 therein and out of whom N. Raja Mohammed, the Joint Managing Director of M/S N.V.K. Mohammed Sultan Rawther (P) Ltd., is the appellant before us.
The High Court confirmed the acquittal of second accused but sentenced the appellant before us under Section 16(1)(a)(i) of the Prevention of Food Adulteration Act to undergo simple imprisonment for six month and to pay a fine of Rs. 1,000 with a default sentence of simple imprisonment for two more months.
284/91.
This appeal is filed against the order dated 21st Decem ber, 1990 passed by the learned Single Judge of the Kerala High Court dismissing the revision petition whereby accused No. I therein was sentenced to pay Rs. 1,000 as fine and the two other accused were sentenced to simple imprisonment for six months each and Rs. 1,000 as fine and in default of payment of fine to undergo simple imprisonment for a period of one month more.
Their conviction were recorded under Section 7(i) and (v) read with Section (16) (1) (a) (ii) of the Prevention of Food Adulteration Act for having sold Roja Sungandha Suparit with admixture of saccharin.
The sample was taken on 22nd December, 1986.
Civil Appeal Nos.
3708 13/89 These appeals are filed by the Union of India against the judgment of the Division Bench of the High Court of Andhra Pradesh dated 16th June, 1986 whereby the Division Bench following the judgment of a learned Single Judge in Crl.
Petition No. 1569 of 1984 allowed the writ peti tions.
A batch of writ petitions were filed for a declara tion that the admixture of saccharin in Anjali Sugandhi Supari; Roja Scented Betelnut; Nizam Supari; A.R.R. Saugan tha Supari and Ajantha Sugandhi Supari is in accordance with Rule 44 of the Rules and restraining the respondents/ appel lant herein from interfering with the business of sale of Supari with such an admixture.
Civil Appeal No. 1897/91 This appeal is directed against the order of the Divi sion Bench of the Kerala High Court dated 22nd November, 1990 whereby the learned Division Bench was inclined to take the view that the learned Single Judge should have declined jurisdiction for the reason that the relief claimed 395 is of a general character for a declaration that the admix ture of saccharin in Roja Scented Betelnut is not a blanket ban under Rule 47 read with Appendix B of the Prevention of Food Adulteration Rules, 1955.
Appeal at, sing out of SLP (Crl.) No. 2647/91 This appeal is directed against the order of the High Court of Kerala dated 21st December, 1990 setting aside the order of acquittal passed by the trial court and remanding the matter to the trial court for fresh disposal according to law.
The trial court had inter alia taken the view that the sample of Supari in question was taken contrary to Rule 22 A of the Rules.
The High Court took the view that the sample was properly taken.
On a plea being raises that the article of Supari was not adulterated as saccharin could be added to Supari, the High Court did not agree with the submission and held that saccharin could not be added to Supari and consequently the High Court remanded the matter to the trial court for fresh disposal according to law.
The case inter alia involves interpretation of Rule 44 (g) of the Rules before its deletion with effect from 15th April, 1988 and the amendment of Rule 47 by Notification No. GSR 454 (E) dated 15.4.1988 (with effect from 15.4.1989) as covered by GSR 1157 (E) dated 9.12.1988.
Rules 44(g) and 47 as they originally stood and as they stood modified at the relevant time of taking of the sample, figured during the arguments and they are extracted hereunder with comments : "44.Sale of certain admixtures prohibited Notwithstanding the provisions of Rule 43, no person shall either himself or by any servant or agent sell (g) any article of food which contains any artificial sweetener, except Saccharin, or in the preparation of which any such artificial sweetener has been used".
" "47.
Addition of Saccharin to be mentioned on the label.
Saccharin may be added to any food if the container of such food is labelled with an adhesive declaratory label.
which shall be in the form given below : This . . (name of food) . . contains an admixture of Saccharin".
These Rules held the field from November 24, 1956 until August 24, 1968 when they were further amended.
The Preven tion of Food Adulteration (Third Amendment) Rules 1968, redrafted Rules 44 (g) and 47.
and it 396 is these Rules which were extant at the time of the alleged offence.
It is proper at this stage to reproduce these two Rules: "44.
Sale of certain admixtures prohibited Notwithstanding the provisions of Rule 43 no person shall either by himself or by any servant or agent sell (g) any article of food which contains any artificial sweetener except where such artifi cial sweetener is permitted in accordance with the standards laid down in Appendix 'B '.
"47.Addition of artificial sweetener to be mentioned on the label Saccharin or any other artificial sweetener shall not be added to any article of food, except where the addi tion of such artificial sweetener is permitted in accordance with the stand ards laid down in Appendix 'B ' and where any artificial sweetener is added to any food the container of such food shall be labelled with an adhesive declaratory label which shall be in the form given below: This . . (name of food) . . contains an admixture . . (name of the artificial sweetener)".
The Supreme Court in its decision Pyarali K. Tejani vs Mahadeo Ramchandra Dange and Others, ; took the view that at the relevant time the article like saccha rin could not be added to the Supan in view of the amended Rules 44(g) and 47 of the Rules.
It will be noticed that till date no standard has been prescribed in Appendix 'B ' to the Rules so far as the Supari is concerned.
Therefore under Rule 44(g) there was a total prohibition of use of saccha rin, which is an artificial sweetener, to any article of food including Supari and regarding saccharin it was specif ically provided in Rule 47 that it shall not be added to any article of food, except where the addition of such artifi cial sweetener is permitted in accordance with the standards laid down in Appendix 'B '.
Therefore, under Rule 47 again so far as saccharin is concerned and for which no standards have been prescribed in Appendix 'B ' there was total prohi bition of adding the same in any article of food.
This was the view taken in the aforesaid case of Pyarali K. Tejani.
For the period relevant for the Tejani 's case the Rules permitted saccharin to be added in case of carbonated water in item 5(B) A 1.01.01 only but no such permission was noticed by the Supreme Court in the case of Supari.
Thus the Supreme Court had settled the law, as far as the Rules between August 24, 1968 and 15th April, 1988 are concerned.
We may mention that w.e.f. 15.4.
1988 Rule 44(g) was omitted and Rule 47 was substituted by new Rules.
397 However, it appears that with effect from 26th May, 1971 for the first time a standard was prescribed for Saccharin Sodium as item No. A.07.10 in Appendix 'B ' to the Rules.
After the provision of standard for Saccharin Sodium in Appendix 'B ' to the Rules, the Bombay High Court in the case of State of Maharashtra vs Ranjitbhai Babubhai Suratwalla, distinguished the judgment of the Supreme Court in Tejani 's case (supra) and took the view that because standards; have been prescribed for saccharin, Rule 47 permitted its user in article of food.
This view was followed by Single Judge of the Andhra Preadesh High Court in the case reported as Thummalapudi Venkata Gopala Rao vs The State, (1986)Cr1 LJ 1699.
Asimilar view was taken by another Single Bench of the Madras High Court in the case M/s. Wahab and Co., a Proprietory concern represented by its proprietor M. A Wahab son of N. Mohamed Sheriff vs Food Inspector, Tiruchirappalli Municipal corparation Trichy; (1990)L.W.(CrI.)437 with out noticing the earlier cotract view of the same High Court reported as State by Public Prosecutor vs K. R. Balakrishnan, (1986) (I) FAC 384.
The Rajasthan High Court also took the same view in the case reported as Kailash vs The State of Rajasthan, (1985) (I) FAC 282.
The Gauhati High Court in the case reported as State of Assam vs Rant Karani and Others (1987) (3) All India Prevention of food Adulteration Journal 153 following some of the aforesaid decisions also look the view that addition of artificial sweetener like saccharin in Supari or Pan Ka Masala, if it conforms to the standard laid down in clause A.07.10 of the Appendix 'B ' of the Rules, did not violate Rule 44(g) read with Rule 47 of the Rules.
The Madhya Pradesh High Court in the case reported as Ujjain Municipal Corporation, Ujjain vs Chetan Das, (1985) (I) FAC 46. followed the view of the Bomaby High Court in the case reported as Ranjitbhai Babubhai Suratwalla (supra).
On the other banal the High court of Kerala, Allahabad and another earlier Single Bench of the Madras High Court took the view that prescription of standard of saccharin in Appendix 'B ' to the Rules could not alter the interpretation of Rule 44(g) nor help could be taken from interpretaion of Rule 47.
The Kerala High Court in the case reported as Food Inspector vs Usman, noticed the view of the Bombay High Court in Ranjitbhai Babubhai Suratwalla 's case (supra) and dissented from it and held: "Rule 47 of the Prevention of Food Adultera tion Rules provides that saccharin or any other artificial sweetener shall not be added to any article of food, except where the addi tion of 398 such artificial sweetener is permitted in accordance with the standards laid down in Appendix 'B ' and where any artificial sweeten er is added to any food, the container of such food shall be labelled with an adhesive de claratory label to that effect.
That means unless and to the extent in accordance with the standards prescribed in Appendix 'B ' saccharin or any other artificial sweetener are prohibited material in food articles.
For pan supari no standard is fixed in Appendix 'B '.
That means addition of artificial sweet ener is not permitted by the standards laid down in Appendix 'B ' and the prohibitions under Rule 47 operates as an absolute prohibi tion against addition of saccharin or other artificial sweetener so far as pan supari is concerned.
Whether addition of artificial sweetener is injurious to health or life is not a matter for consideration when its addi tion is prohibited".
Following the decision of the Supreme Court in Tejani 's case the Court set aside the acquittal of accused No. 1 and sentenced him.
A Division Bench of the Allahabad High Court in Krishna Chandra (in Jail,) vs State of Uttar Pradesh, (1990) (I) F.A.C. 35 differed with the earlier decision of the Single Bench in Ibrahim Hussain vs ,State of Uttar Pradesh and also differed with the view of the Bombay High Court in Ranjitb hai Babubhai Suratwallas case and declined to distinguish the Tejani 's case as held by this court and took the view that the prescription of the standard of saccharin is not at all relevant to the inquiry and saccharin could not be added to any article of food unless permitted by standard pre scribed in Appendix 'B ' to the Rules and purported to the decision of this Court in Tejani 's case.
Before us also Mr. B.R.L. lyengar, who appeared for the accused, made submission that on the construction of Rule 44(g) it permits sale of article of food which contains artificial sweetener with the standard as laid down in Appendix 'B ' to Rules.
We are unable to accept the submis sion.
We are also unable to accept the decisions of the High Courts supporting that view.
Rule 44 (g) indicates that sale of any article of food which contains artificial sweetener is banned.
The ban is lifted only if such artificial sweetener is permitted to be added to the article of food for which standards have been laid down in Appendix 'B ' to the Rules.
Admittedly no stand ard has been laid down for Pan Masala or Supari.
It is this article of food which was being sold.
No standard was pre scribed for this article of food.
Therefore, the exception permitted by clause (g) has no application 399 and no relevance.
The article which was being sold should contain a standard and the standard should permit artificial sweetener to be added.
Again Rule 47 in other form specifi cally bars saccharin or any other article of artificial sweetener to be added in any article of food, except where the addition of such artificial sweetener is permitted in accordance with the standards laid down in Appendix 'B '.
Therefore both Rules 44(g) and 47 constitute a total blanket ban on the addition of any artificial sweetener including saccharin to any article of food unless standards for that article of food is prescribed which authorises the use of such an artificial sweetener.
The argument that since the standards of saccharin have been provided for in the Appen dix 'B ' to the Rules and therefore, it could be added in view of the language of Rule 44(g) is fallacious.
What one has to see is the article of food in which the artificial sweetener is sought to be added.
If the standards for that article of food is provided in Appendix 'B ' to the Rules and such standards permit the addition of saccharin or any other artificial sweetener, then and then only saccharin or any other artificial sweetener could be added and not otherwise not.
It appears that the Bombay High Court and the other High Courts which have taken the opposite view seem to have fallen into errors while interpreting Rule 44(g1.
They have assumed as if once the standards of saccharin or the artifi cial sweetener have been prescribed it could be freely added to any article of food.
It is necessary to point out that the prescription of standard of saccharin or any artificial sweetener in Appendix 'B ' is really irrelevant.
What was emphasised in Tejani 's case is the standard of food and the standard should permit saccharin or any artificial sweetener to be added.
It is not the question of standard being pre scribed for saccharin which is relevant; what is relevant is the standard being prescribed in Appendix 'B ' of the article of food which is being sold and which standard permits user of saccharin.
This is the real intention of the legislature while enacting Rule 44(g) of the Rules.
For Supari and Pan Masala, it is undisputed that there is no standard pre scribed.
In this view of the matter, we agree with the decisions of the Kerala High court in Food Inspector vs Usman ; Allahabad High Court in Krishna Chandra, (in Jail) vs State of Uttar Pardesh, 1990 (I) F.A.C. 35 and Madras High Court in State by Public Prosecutor vs K.R. Balakrishnan, The decisions in: State of Maharashtra vs Ranjitbhai Suratwalla, the Bombay High Court; Thummalapudi Venkata Gopala Rao vs The State.
(1986) Crl.
L.J. 1699 of the Andhra Pradesh High Court; M/s. Wahab and Co., a Proprietory concern represented by its proprietor M.,A. Wahab son of N. Mohammed Sheriff vs Food Inspec 400 tor, Tiruchirapalli Municipal Corporation, Trichy, (1990) L.W. (Crl.) 437 of the Madras High Court; Kailash vs The State of Rajasthan, 1985 (I) F.A.C. 282 of the Rajasthan High Court; The State of Assam vs Ram Karani and Others, 1987 (3) All India Prevention of Food Adulteration Journal 153 of the Gauhati High Court and Ujjain Municipal Corpora tion, Ujjain vs Chetan Das, 1985 (I) F.A.C. 46 of the Madhya Pradesh High Court cannot be said to have been correctly decided and are hereby overruled.
The result is that civil Appeal Nos.
3708 13 of 1989 are accepted and the impugned judgment of the Andhra Pradesh High Court dated 16th June, 1986 is set aside Crl.
Appeal Nos.
553/89, 283/91,284/91, Civil Appeal No. 1897/91 and the appeal arising out of S.L.P. (Crl.) No. 2647/ 91 are dis missed.
T.N.A. Appeals dis posed of.
| The appellant was carrying on the business of a railway contractor in a place in the district of R.
In April 1943, the Income tax Officer of R which was under the charge of the Commissioner of Income tax, Bengal (Mufassil), served a notice under section 22(2) of the Indian Income tax Act, 1922, on the appellant who in pursuance of the notice filed the return on February 28, 1944.
The Income tax Officer then served notices on him under SS.
22(4) and 23(2) Of the Act for the production of books, etc., but before the final assessment was made, the Central Board of Revenue by an order passed under section 5(2) of the Act, transferred the appellant 's case along with some other assessment cases, to the Commissioner of Income tax (Central), Calcutta.
On February 11, 1948, the Income tax Officer, Calcutta, to whom the appellant 's case was assigned, issued notices again under SS.
22(4) and 23(2) of the Act and after making the usual enquiries made the assessment order on March 15, 1948.
The appellant 's appeals to the Appellate Assistant Commissioner and then to the Appellate Tribunal raising objections to the legality of the transfer of his case to Calcutta and to the jurisdiction of the Income tax Officer, Calcutta, were dismissed.
The Appellate Tribunal held that as the objection related to the place of assessment it was not competent for the Tribunal to go into that question.
The appellant then made an application to the Commissioner of Income tax for reference under section 66(1) of the Act, but this was dismissed on the ground that the assessee never raised any objection before the Income tax Officer to his jurisdiction and that, in any case, the question of jurisdiction could not arise out of the order of the Tribunal.
An application filed by the appellant to the High Court under section 66(2) of the Act was dismissed and though the order of dismissal was not taken up on appeal, the appellant filed an appeal to the Supreme Court against the order of the Appellate Tribunal.
It was contended for the appellant that under section 64(1) and (2) of the Act he was entitled to be assessed by the Income tax Officer of the area within which the place of his business was situate, that the 302 assessment by the Income tax Officer of Calcutta was illegal assumption of jurisdiction and that, in any case, the order of transfer by the Central Board of Revenue under section 5(2) of the Act was not valid because, if it wanted to transfer the assessment proceedings from the file of one Income tax Officer to another it could be done only under section 5(7A) and not under section 5(2).
Held : (1) Sub section (7A) of section 5 which confers on the Central Board of Revenue the power to transfer any case from one Income tax Officer to another is not a provision which in any way modifies or cuts down the power given to the Central Board of Revenue under sub section 2 of section 5 which enables it to specify as to which of the Commissioners would perform functions in respect of different areas, persons, incomes or cases or classes thereof.
The two sub sections are complementary and operate in two separate spheres.
Pannalal Binjraj vs Union of India, ; and Bidi Supply Co. vs Union of India, ; , distinguished.
In the present case, the Central Board of Revenue directed the Commissioner of Income tax (Central), Calcutta, to exercise his functions in respect of certain cases including the case of the appellant and that fell under section 5(2) and not under section 5(7A).
The order of transfer was, therefore, valid.
(2)The jurisdiction of the Income tax Officer, Calcutta, to make the assessment on the appellant cannot be challenged, in view of sub section 5(a) of section 64 of the Act, under which sub sections
(1) and (2) of section 64 have no application to an assessee in respect of whom anorder has been made by the Central Board of Revenue under S.5(2) of the Act.
(3) Objections as to the place of assessment cannot be raised in appeal either before the Appellate Assistant Commissioner or before the Appellate Tribunal.
Wallace Brothers & Co. Ltd. vs Commissioner of Income tax, Bombay, Sind and Baluchistan, and Seth Kanhaiyalal vs Commissioner of Income tax, [1936] 5 I.T.R. 739, relied on.
Dayaldas Kushiram vs Commissioner of Income tax (Central), and Dina Nath Hem Raj vs Commissioner of Income tax, All. 616, distinguished.
Consequently, as the question as to the place of assessment could not arise out of the order of the Appellate Tribunal no such question of law could be referred to the High Court.
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Appeals Nos.
635 to 641 of 1957.
Appeals from the judgment and decree dated September 8, 1954, of the Punjab High Court in Regular First Appeals Nos.
42, 43, 44, 45, 46, 47 and 48 of 1949.
R. Gopalakrishnan, T. M. Sen and R. H. Dhebar, for the appellants.
Darya Dutt Chawla, for the respondents.
May 1.
The Judgment of the Court was delivered by RAGHUBAR DAYAL, J.
Civil Appeal No. 635 of 1957 is an appeal, by certificate, and raises the question regarding the effect of the abatement of the appeal, by the State of Punjab, against Labhu Ram, one of the respondents, on the State appeal against Nathu Ram, co respondent.
Civil Appeals Nos.
636 to 641 of 1957 also raise the same question between the same parties.
The facts leading to the appeal are that the Punjab Government acquired on lease certain parcels of land belonging to Labhu Rain and Nathu Ram, for different military purposes, under the Defence of India Act, 81 638 1939 (XXXV of 1939).
Labhu Ram and Nathu Ram, brothers, refused to accept the compensation offered to them by the Collector and applied to the Punjab Government, through the Collector, under r. 6 of the Punjab Land Acquisition (Defence of India) Rules, 1943, hereinafter called the Rules, as amended by the Notification of the Punjab Government No. 1444 HM44/19124, dated 10th March, 1944, and published in the Punjab Gazette, Part 1, dated 17th March, 1944 (Home Department).
The State Government referred the matter to an arbitrator as required under r. 10, who, after enquiry, passed an award ordering the payment of an amount higher than what was offered by the Collector and also ordered the payment of certain amount on account of income tax which would be paid on the compensation received.
The State Government appealed against the award to the High Court of Punjab.
During the pendency of the appeal, Labhu Ram, one of the respondents, died.
The High Court, holding that the appeal abated against Labhu Ram and that its effect was that the appeal against Nathu Ram also abated, dismissed the appeal.
It also dismissed the cross objections.
The State Government applied for a certificate of fitness of the case for appeal to this Court and the High Court granted it, as questions of great private and public importance were involved.
It is not disputed that in view of 0.
XXII, r. 4, Civil Procedure Code, hereinafter called the Code, the appeal abated against Labhu Ram, deceased, when no application for bringing on record his legal representatives had been made within the time limited by law.
The Code does not provide for the abatement of the appeal against the other respondents.
Courts have held that in certain circumstances, the appeals against the co respondents would also abate as a result of the abatement of the appeal against the deceased respondent.
They have not been always agreed with respect to the result of the particular cir cumstances of a case and there has been, consequently, divergence of opinion in the application of the principle.
It will serve no useful purpose to consider the cases.
Suffice it to say that when 0.
XXII, r. 4 does 639 not provide for the abatement of the appeals against the co respondents of the deceased respondent, there can be no question of abatement of the appeals against them.
To say that the appeals against them abated in certain circumstances, is not a correct statement.
Of course, the appeals against them cannot proceed in certain circumstances and have therefore to be dismissed.
Such a result depends on the nature of the relief sought in the appeal.
The same conclusion is to be drawn from the provisions of 0. 1, r. 9, of the Code which provides that no suit shall be defeated by reason of the misjoinder or non joiner of parties and the Court may, in every suit, deal with the matter in controversy so far as regards the rights and interests of the parties actually before it.
It follows, therefore, that if the Court can deal with the matter in controversy so far as regards the rights and interests of the appellant and the respondents other than the deceased respondent, it has to proceed with the appeal and decide it.
It is only when it is not possible for the Court to deal with such matters, that it will have to refuse to proceed further with the appeal and therefore dismiss it.
The question whether a Court can deal with such matters or not, will depend on the facts of each case and therefore no exhaustive statement can be made about the circumstances when this is possible or is not possible.
It may, however, be stated that ordinarily the considerations which weigh with the Court in deciding upon this question are whether the appeal between the appellants and the respondents other than the deceased can be said to be properly constituted or can be said to have all the necessary parties for the decision of the controversy before the Court.
The test to determine this has been described in diverse forms.
Courts will not proceed with an appeal (s) when the success of the appeal may lead to the Court 's coming to a decision which be in conflict with the decision between the appellant and the deceased respondent and therefore which would lead to the Court 's passing a decree which will be contradictory to the decree which had become final with respect to 640 the same subject matter between the appellant and the deceased respondent; (b) when the appellant could not have brought the action for the necessary relief against those respondents alone who are still before the Court and (c) when the decree against the surviving respondents, if the appeal succeeds, be ineffective, that is to say, it could not be successfully executed.
There has been no divergence between the Courts about the Court 's proceeding with the appeal between the respondents other than the deceased respondent, when the decree in appeal was not a joint decree in favour of all the respondents.
The abatement of the appeal against the deceased respondent, in such a case, would make the decree in his favour alone final, and this can, in no circumstances, have a repercussion, on the decision of the controversy between the appellant and the other decree holders or on the execution of the ultimate decree between them.
The difficulty arises always when there is a joint decree.
Here again, the consensus of opinion is that if the decree is joint and indivisible, the appeal against the other respondents also will not be proceeded with and will have to be dismissed as a result of the abatement of the appeal against the deceased respondent.
Different views exist in the case of joint decrees in favour of respondents whose rights in the subject matter of the decree are specified.
One view is that in such cases, the abatement of the appeal against the deceased respondent will have the result of making the decree affecting his specific interest to be final and that the decree against the other respondents can be suitably dealt with by the appellate Court.
We do not consider this view correct.
The specification of shares or of interest of the deceased respondent does not affect the nature of the decree and the capacity of the joint decree holder to execute the entire decree or to resist the attempt of the other party to interfere with the joint right decreed in his favour.
The abatement of an appeal means not only that the decree between the appellant, and the deceased respondent has become final, but also, as a necessary corollary, 641 that the appellate Court cannot, in any way, modify that decree directly or indirectly.
The reason is plain.
It is that in the absence of the legal representatives of the deceased respondents, the appellate Court cannot determine anything between the appellant and the legal representatives which may affect the rights of the legal representatives under the decree.
It is immaterial that the modification which the Court will do is one to which exception can or cannot be taken.
It is therefore necessary to determine, on the facts of this case, whether the State appeal could proceed against Nathu Ram.
The award of the arbitrator in each of these cases was a joint one, in favour of both the respondents Labhu Ram and Nathu Ram.
To illustrate the form of the award, we may quote the award for the year 1945 46 in the proceedings leading to Civil Appeal No. 635 of 1957.
It is: "On the basis of the report of section Lal Singh, Naib Tehsildar (Exhibit P. W. 9/1) and Sheikh Aziz Din, Tehsildar, Exhibit P. W. 9/2, the applicants are entitled to a sum of Rs. 4,140 on account of rent, plus Rs. 3,872 8 0 on account of Income tax etc., due to the inclusion of Rs. 6,193 8 0 in their total income, plus such sum as the petitioners have to pay to the Income tax Department on account of the inclusion of Rs. 4,140 in their income as awarded by this award." The result of the abatement of the appeal against Labhu Ram is therefore that his legal representatives are entitled to get compensation on the basis of this award, even if they are to be paid separately on calculating their rightful share in the land acquired, for which this compensation is decreed.
Such calculation is foreign to the appeal between the State of Punjab and Nathu Ram, The decree in the appeal will have to determine not what Nathu Ram 's share in this compensation is, but what is the correct amount of compensation with respect to the land acquired for which this compensation has been awarded by the arbitrator.
The subject matter for which the compensation is to be calculated is one and 642 the same.
There cannot be different assessments of the amounts of compensation for the same parcel of land.
The appeal before the High Court was an appeal against a decree jointly in favour of Labhu Ram and Nathu Ram.
The appeal against Nathu Ram alone cannot be held to be properly constituted when the appeal against Labhu Ram bad abated.
To get rid of the joint decree, it was essential for the appellant, the State of Punjab, to implead both the joint decree holders in the appeal.
In the absence of one joint decree holder, the appeal is not properly framed.
It follows the that State appeal against Nathu Ram alone cannot proceed.
It is however contended for the State that according to the entries in the village records, Labhu Ram and Nathu Ram had equal shares in the land acquired and that therefore the appeal against Nathu Ram alone can deal with half the amount of the award.
We do not agree.
The mere record of specific shares in the revenue records is no guarantee of their correctness.
The appellate Court will have to determine the share of Nathu Ram and necessarily the share of Labhu Ram in the absence of his legal representatives.
This is not permissible in law.
Further, the entire case of Labhu Ram and Nathu Ram, in their application to the Government for the appointment of an arbitrator, was that the land jointly belonged to them and had been acquired for military purposes, that a certain amount had been paid to them as compensation, that they received that amount under protest and that they were entitled to a larger amount mentioned in the application and also for the income tax they would have to pay on account of the compensation received being added to their income.
Their claim was a joint claim based on the allegation that the land belonged to them jointly.
The award and the joint decree are on this basis and the appellate Court cannot decide on the basis of the separate shares.
The State objected before the arbitrator, and urges before us, that under the rules, the joint application of Labhu Ram and Nathu Ram should have been 643 treated as separate applications with respect to the correctness of the compensation payable to each of them respectively and that the arbitrator should have made separate awards with respect to such separate claims of Labhu Ram and Nathu Ram.
The necessary corollary of such a contention for the State is that the abatement of the appeal against Labhu Ram will not make infructuous the appeal against Nathu Ram.
The respondent urges that the Punjab Land Acquisition (Defence of India) Rules, do not contemplate separate applications by the persons interested in the compensation on account of the acquisition of a particular parcel of land.
The arbitrator did not agree to deal with the claims of Labhu Ram and Nathu Ram separately.
He, however, did not decide the question on the basis of the land belonging jointly to the two brothers as members of the joint Hindu family.
He however held that the expression 'a person interested ' in r. 3, included all persons claiming an interest in the compensation to be paid on account of the acquisition of the land and that r. 18 permitted the joinder of applications for joint enquiry when each case rested on the same and similar basis and each of the applications included land included in a larger part of land acquired at one time.
He also took into consideration that the separation of the applications of Labhu Ram and Nathu Ram would involve various difficulties in matters of income tax.
He therefore used his discretion and ordered the application to be proceeded with jointly.
In view of our opinion on the main point, we do not consider it necessary to interpret the rules and decide whether the joint application was maintainable or not.
The fact remains that Labhu Ram and Nathu Ram made a joint claim and got a joint decree against the State for compensation.
The frame of the appeal is to be with reference to the nature of the decree challenged.
We therefore see no force in this appeal and dismiss it with costs.
This order will govern the other 644 connected appeals, viz., Civil Appeals Nos.
636 to 641 of 1957.
Appeal dismissed.
| The appellant and another were prosecuted ' for offences under section 5(2) of the Prevention of Corruption Act, 1947.
The trial commenced before the special judge who heard the evidence but before he could deliver judgment was transferred and was succeeded by another special judge.
The latter did not recall the witnesses and did not hear the evidence over again, but proceeded with the trial without any objection from either side from the stage at which his predecessor had left.
He convicted both the accused.
On appeal, the Punjab High Court held that section 350 Criminal procedure Code applied to the trial before a special judge in view of section 8(1) of the Criminal Law Amendment Act, 1952, and the succeeding special judge was entitled to proceed on the evidence recorded by his predecessor.
The controversy is whether section 330 of the Code of Criminal Procedure is applicable to a special judge under sub s.(1) ,of section 8 of the Criminal Law Amendment Act, 1952, though it is not applicable under sub section
(3) of the Act.
Therefore the question is what is meant by the words "The procedure prescribed by the court. for the trial of warrant cases by magistrate" in sub s.(1) of section 8 of the Act, and whether section 350 of the Code prescribe one of the rules of such procedure.
The Act was since amended and therein it is expressly provided that s.350 of the Code applies to the proceedings before a special judge.
The amendment does not govern the present proceeding as the impugned part of the proceedings was concluded before the amendment.
Held, that the Criminal Law Amendment Act, 1952, did not intend that section 350 of the Criminal Procedure Code would be available as a rule of procedure prescribed for the trials of warrant cases, to a special judge as the special Judge was not a magistrate for the purpose of the Act not did the Act require before the amendment that he was to be deemed to be such.
329 The Act in using the words "procedure prescribed by the Code. for the trial of warrant cases by magistrate" meant only the sections 251 to 259 of the Criminal Procedure Code as expressly referred in the code as containing the procedure St specified for the trials of warrant cases by magistrate and did not contemplate section 350 of the Code as a procedure so prescribed.
Held, further, that where in a case there is want of competency and not a mere irregularity, section 537 of the Code of Criminal Procedure has no application.
It cannot be called in aid to make what was incompetent, competent.
Held, also, that it is the right of an accused person that his case should be decided by a judge who has heard the whole of it and that very clear words would be necessary to take away such an important and well established right.
In the present case the succeeding special judge had no authority under the law to proceed with the trial of the case from the stage at which hi , predecessor in office left it, and the conviction of the appellant cannot be supported as he had not heard the evidence in the case himself.
The proceeding before the succeeding special judge were clearly incompetent.
There has been no proper trial of the case and there should be one.
In re Vaidyanatha Iyer, (1954) 1 M. I,.
cable.
Pulukuri Kotayya vs King Emperor, (1947) L. R. 74 I A. 65 and Kimbray vs Dapper, , referred to In re Fernandez.
(1958) 11 M. L. J. 294, approved,.
|
Appeals Nos. 2093 and 2094 of 1968.
Appeals from the judgment and order dated August 5, 1968 of the Andhra Pradesh High Court in Writ Petitions Nos. 2339 and 2742 of 1968.
C. B. Agarwala, K. Srinivasa Murthy, B. P. Singh and Naunit Lal, for the appellants (in both the appeals).
A. section R. Chari, M. K. Ramamurthi, section Pappu, Madan Mohan, 207 A J.
Ramamurthi, Vineet Kumar, P. section Khera and Bindra Thakur, for respondent No. 2 (in both the appeals) The Judgment of the Court was delivered by Bhargava, J. An industrial dispute arose between 25 Co operative Central Banks in the State of Andhra Pradesh and their workmen represented by the Andhra Pradesh Bank Em ployees Federation, Hyderabad, which was referred by the Government of Andhra Pradesh to the Industrial Tribunal, Hyderabad, under section 10(1) (d) of the No. 14 of 1947.
The subject matter of the dispute was divided into three issues.
The first issue comprised a number of service conditions, viz., (1) Salary, Scales and Adjustments, (2) Dearness Allowance, (3) Special Allowances, (4) other Allowances, (5) Uniforms and Washing Allowances for subordinate staff, (6) Conveyance Charges, (7) Provident Fund and Gratuity, (8) Leave Rules, (9) Joining Time on Transfer, (1) Rules relating to departmental enquiry against employees for misconduct, (11) Probationary Period and Confirmation, (12) Working Hours and Overtime Allowance, (13) Age of Retirement,, (14) Security, (15) Common Good Fund, (16) Service Conditions and (17) Promotions.
The second and the third issues both related to the question whether the transfers of some employees of two of the Banks, The Vijayawada Co operative Central Bank, Ltd., Vijayawada, and The Vizianagaram Co operative Central Bank Ltd., Vizianagaram, were justified and, if not, to what reliefs were the employees entitled.
Before the Industrial Tribunal, one of the grounds raised on behalf of the Banks was that the reference of the disputes to the Tribunal was invalid, because such disputes were required to be referred for decision to the Registrar of the Co operative Societies under section 61 of the Andhra Pradesh Co operative Societies Act No. 7 of 1964 (hereinafter referred to as 'the Act '), and the effect of the provisions of the Act was to exclude the jurisdiction of the Industrial Tribunals to deal with the same disputes under the .
Various other pleas were also taken by the Banks in resisting the claims of the workmen, but, in these appeals, we are not concerned with them, because the Tribunal dealt with the point, mentioned by us above, as a preliminary issue and rejected the contention of the Banks.
Twenty four of the Banks thereupon challenged the preliminary decision of the Tribunal on this question, treating it as a preliminary award, by filing two Writ Petitions Nos. 2339 and 2742 of 1968 under article 226 of the Constitution in the High Court of Andhra Pradesh.
The High Court also rejected the plea of the Banks.
These two appeals have been brought up before us by certificate against the orders of the High Court dismissing the two writ petitions.
In Civil Appeal No. 2093/1968, the appellants are 10 Banks who 208 were petitioners before the High Court in Writ petition No. 2339 of 1968, while 2 of the petitioner Banks in that writ petition have been impleaded as respondents.
In Civil Appeal No. 2094 of 1968, the appellants are also 10 Banks who had joined in filing the other Writ Petition No. 2742/1968 in the High Court, while one of the petitioner Banks in that writ petition has been impleaded as respondent, and another has not joined the appeal as a party.
In these appeals, therefore, we are only concerned with one single question as to whether the jurisdiction of the Industrial Tribunal to adjudicate on the industrial dispute referred to it under section 10(1) (d) of the was barred by the provisions of section 61 of the Act.
The Tribunal, and the High Court, in rejecting the plea taken on behalf of the Banks, expressed the view that the disputes actually referred to the Tribunal were not capable of being decided by the Registrar of the Co operative Societies under section 61 of the Act and, consequently, the reference to the Industrial Tribunal under the was competent.
Learned counsel appearing on behalf of the Banks took us through the provisions of the Act to indicate that, besides being a local and special Act, it is a self contained Act enacted for the purpose of successful working of Co operative Societies, including Co operative Banks, and there are provisions in the Act which clearly exclude the applicability of other laws if they happen to be in conflict with the provisions of the Act.
It is no doubt true that the Act is an enactment passed by State Legislature which received the assent of the President, so that, if any provision of a Central Act, including the , is repugnant to any provision of the Act, the provision of the Act will prevail and not the provision of the Central .
The general proposition urged that the jurisdiction of the Industrial Tribunal under the will be barred if the disputes in question can be competently decided by the Registrar under section 61 of the Act is, therefore, correct and has to be accepted.
The question, however, that has to be examined is whether the industrial dispute referred to the Tribunal in the present cases was such as was required to be referred to the Registrar and to be decided by him) under section 61 of the Act.
In order to properly appreciate the submissions which have been made on behalf of the Banks by their counsel, it is necessary to set out the provisions of sections 16, 61, 62 and 133.
of the Act which are as follows : "16.
Amendment of bye laws of a society : (I) No amendment of any bye law of a society shall be valid unless such amendment has been registered under this Act.
Where such an amendment is not expressed to come into operation on a particular day, then, it 209 shall come into force on the day on which it is registered.
(2) Every proposal for such amendment shall be forwarded to the Registrar who shall, if he is satisfied that the proposed amendment fulfils the conditions specified in subsection (1) of section 7, register the amendment within a period of sixty days from the date of receipt of such proposals : Provided that the Government may, for sufficient cause which shall be recorded in writing, extend the said period for a further period of sixty days.
(3) The Registrar shall forward to the society a copy of the registered amendment together with a certificate signed and sealed by him, and such certificate shall be conclusive evidence that the amendment has been duly registered.
(4) Where the Registrar is not so satisfied, he shall communicate by registered post the order of refusal together with the reasons therefore, to the society within the period specified in sub section (2).
(5) If in the opinion of the Registrar, an amendment of the bye laws of a society is necessary or desirable in the interest of such society or of the co operative movement, he may, in the manner prescribed, call upon the society, to make any amendment within such time as he may specify.
If the society fails to make such an amendment within the time so specified the Registrar may, after giving the society an opportunity of making its representation, register such amendment and forward to the society by registered post a copy of the amendment together with a certificate signed by him; such a certificate shall be conclusive evidence that the amendment has been duly registered; and such an amendment shall have the same effect as an amendment of any bye law made by the society.
Disputes which may be referred to the Registrar (1) Notwithstanding anything in any law for the ' time being in force, if any dispute touching the constitution, management or the business of a society, other than a dispute regarding disciplinary action taken by the society or its committee against a paid employee of the society, arises (a) among members, past members and persons claiming through members, past members And deceased members; or 210 (b) between a member, past member or Person claiming through a member, past member or deceased member and the society, its committee or any officer, agent or employee of the society; or (c) between the society or its committee and any past committee, any officer, agent or employee, or any past officer, past agent or past employee or the nominee, heir or legal representative of any deceased officer, deceased agent, or deceased employee of the society; or (d) between the society and any other society; such dispute shall be referred to the Registrar for decision.
Explanation : For the purposes of this sub section a dispute shall include (i) a claim by a society for any debt or other amount due to it from a member, past member or the nominee, heir or legal representative of a deceased member, whether such debt or other amount be admitted or not; (ii) a claim by a surety against the principal debtor where the society has recovered from the surety any amount in respect of any debt or other amount due to it from the principal debtor as a result of the default of the principal debtor whether such debt or other amount due be admitted or not; (iii) a claim by a society against a member, past member or the nominee, heir or legal representative of a deceased member for the delivery of possession to the society of land or other immovable property resumed by it for breach of the conditions of assignment or allotment of such land or other immovable property.
(2) If any question arises whether a dispute referred to the Registrar under this section is a dispute touching the constitution, management or the business of a society, such question shall be decided by the Registrar.
(3) (a) Every dispute relating to, or in connection with, any election to a committee of a society referred to in clause (a) of sub section (3) of section 31, shall be referred for decision to a 211 Subordinate Judge or where there is no Sub ordinate Judge, to the District Judge having jurisdiction over the place where the main office of the society is situated, whose decision thereon shall be final.
(b) Every dispute relating to or in connection with any election to a committee of such class of societies as may, by notification in the Andhra Pradesh Gazette, be specified by the Government in this behalf and referred to in clause (b) of sub section (3) of section 31, shall be referred for decision to a District Munsiff having jurisdiction over the place where the main office of the society is situated, and his decision thereon shall be final.
(4) Every dispute relating to, or in connection with, any election to a committee shall be referred under sub section (1) of sub section (3) only after the date of declaration of the result of such election.
Action to be taken by the Registrar on such reference (1) The Registrar may, on receipt of the reference of a dispute under section 61 (a) elect to decide the dispute himself; or (b) transfer it for disposal to any person who has been invested by the Government with powers in that behalf; or (c) refer it for disposal to an arbitrator.
(2) Where the reference relates to any dispute involving immovable property, the Registrar or such person or arbitrator, may order that any person be joined as a party who has acquired any interest in such property subsequent to the acquisition of interest therein by a party to the reference and any decision that may be passed on the reference by the Registrar, or the person or the arbitrator aforesaid, shall be binding on the party so joined as if he were an original party to the reference.
(3) The Registrar may, by order for reasons to be recorded therein, withdraw any reference transferred under clause (b) of sub section (I ) or referred under clause (c) of that sub section and may elect to decide the dispute himself or transfer it to any other person under clause (b) of sub section (I ) or refer it to any other arbitrator under clause (c) of that subsection.
212 (4) The Registrar, such person or arbitrator shall decide the dispute in accordance with the provisions of this Act and the rules and bye laws and such decision shall, subject to the provisions of section 76, be final.
Pending final decision on the dispute, the Registrar, such person or arbitrator, as the case may be, may make such interlocutory orders as he may deem necessary in the,, interests of justice.
Act to override other laws : The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law.
" Reliance was placed on the non obstante clause "Notwith standing anything in any law for the time being in force" occurring in section 61 of the Act which has the effect that a dispute covered by this section must necessarily be referred to the Registrar for decision, so that it cannot be referred to any other authority under any other law.
Further strength is sought in support of this proposition from the provisions of section 133 of the Act which clearly lays down that the provisions of the Act have overriding effect if there be any provision in any other law inconsistent with the provisions of the Act.
Then, it was argued that the language of section 61 of the Act is wide enough to cover the disputes referred to the Tribunal in these cases, because the disputes are between co operative societies and their employees and they touch the business of the co operative societies.
In support of this submission, learned counsel referred us to a number of decisions of various High Courts in which the scope of the provisions contained in section 61 of the Act or of similar provisions in other local enactments was considered.
Most of these decisions were concerned with laying down the meaning of the expression "touching the business of the society" so as to include within its scope disputes of different nature between the co operative socie ties and their employees.
The cases which have been brought to our notice are : (1) a decision of a learned single Judge of the Bombay High Court in G.I.P. Railway Employees Co operative Bank Ltd. vs Bhikhaji Merwanji Karanjia Employee(1), in which a similar provision contained in section 54 of the Bombay Co operative Societies Act No. 7 of 1925 was interpreted; (2) a decision in Sagar Motor Transport Karamachari Union, Sagar vs Amar Kamgar Passenger Transport Company Co opera tive Society, Sagar and Another(2), where the Madhya Pradesh 'High Court interpreted section 55(2) of the Madhya Pradesh (1) A.I.R. 1943 Bom.
(2) (1969) 18 Indian Factories and Labour Reports, 27.
213 Co operative Societies Act, 1960 which required a dispute regarding terms of employment, working conditions and disciplinary action taken by a society, arising between a society and its, employees, to be decided by the Registrar or any Officer appointed by him; (3) a decision of a Full Bench of the Madras High Court in M. section Madhva Rao and Others vs D. V. K. Surya Rao, Member of the Pithapuram Co operative Bank, Pithapuram and Others(1) in which section 51 of the Madras Co operative Societies Act No. 6 of 1932, which was very similar to section 61 of the Act, was interpreted; and (4) a decision of a Full Bench of the Bombay High Court in Farkhundali Nannhay vs Potdar (V.B.) (2), in which also section 54 of the Bombay Co operative Societies Act No. 7 of 1925 came up for interpretation.
Learned counsel for the appellants also brought to our notice a decision of a single Judge of the Calcutta High Court in Cooperative Milk Societies Union, Ltd. vs State of West Bengal and others(3), where a dispute as to wages, wage scales and dearness allowance was held not to be a dispute within the meaning of that word as defined in the Bengal Co operative Societies Act, 1940, and sought to distinguish it on the ground that the decision in that case turned on the meaning specially given in that Act to the word "dispute".
It appears to us that it is not necessary to examine in detail the reasons given by the High Courts in the above cited cases for the interpretation placed by them on provisions similar to section 61 of the Act in view of a very recent decision of this Court in The Deccan Merchants Co operative Bank Ltd. vs Messrs Dalichand Jugraj & Others(4).
In that case, this Court had to interpret section 91 of the Maharashtra Co operative Societies Act, 1960 (Maharashtra Act 32 of 1961), the relevant provision of which is reproduced below "91 (1) Notwithstanding anything contained in any other law for the time being in force, any dispute .touching the constitution, elections of the office bearers, conduct of general meetings, management or business of a society shall be referred by any of the parties to the dispute, or by a federal society to which the society is affiliated, or by a creditor of the society, to the Registrar, if both the parties thereto are, one or other of the following : (1) A.I.R. 1954 Mad. 103.
(3) (2) [1962] I L.L.J. 51.
(4) [1969] 1 S.C.R. 887.
, 214 (a) a society, its committee, any past committee, any past or present officer, any past or present agent, any past Or present servant or nominee, heir or legal representative of any deceased officer, deceased agent or deceased servant of the society, or the Liquidator of the society; One of the questions which the Court formulated as requiring an answer was : what is the meaning of the expression "touching the business of the society" '? In order to decide this question, the Court analysed the provisions of section 9 1 ( 1 ) and held : "Five kinds of disputes are mentioned in sub section (1); first, disputes touching the constitution of a society; secondly, disputes touching election of the office bearers of a society, thirdly, disputes touching, the con duct of general meetings of a society; fourthly, disputes touching the management of a society; and fifthly, disputes touching the business of a society.
It is clear that the word 'business ' in this context does not mean affairs of a society because election of office bearers, conduct of general meetings and management of a society would be treated as affairs of a society.
In this sub section the word 'business ' has been used in a narrower sense and it means the actual trading or commercial or other similar business activity of the society which the society is authorised to enter into under the Act and the Rules and its bye laws.
" In that case, this Court was concerned with the question whether a dispute touching the assets of a society was a dispute touching the business of the society, and it was in that context that the interpretation mentioned above was given by this Court.
In considering the full scope of section 91 (I) of the Maharashtra Act 32 of 1961, the Court further proceeded to hold : "While we agree that the nature of business which a society does can be ascertained from the objects of the society, it is difficult to subscribe to the proposition that whatever the society does or is necessarily required to do for the purpose of carrying out its objects can be said to be part of its business.
We, however, agree that the word 'touching ' is very wide and would include any matter which relates to or concerns the business of a society, but we are doubtful whether the word 'affects ' should also be used in defining the scope of the word 'touching" '.
215 This comment was made when taking.
notice of the decision of the Full Bench of the Bombay High Court in Farkhundli vs Potdar(1).
The Court also held : "One other limitation on the word 'dispute ' may also be placed and that is that the word 'dispute ' covers only those disputes which are capable of being resolved by the Registrar or his nominee. " Considering the similarity between section 61 of the Act and section 91 (1 of the Maharashtra Act 32 of 1961, we are of the opinion that the interpretation already placed by this Court on the provisions of section 91 (I) of the Maharashtra Act 32 of 1961 is fully applicable to the provisions of section 61 of the Act with which we are concerned.
Consequently, in deciding these appeals, we must proceed on the basis that section 61 of the Act requires reference of a dispute to the Registrar only if the dispute is capable of being resolved by the, Registrar or his nominee, and, further, the dispute between the co operative society and the employee touches the business of the society in the sense explained by this Court in that case.
Applying these tests, we have no doubt at all that the dispute covered by the first issue referred to the Industrial Tribunal in the present cases could not possibly be referred for decision to the Registrar under section 61 of the Act.
The dispute related to alteration of a number of conditions of service of the workmen which relief could only be granted by an Industrial Tribunal dealing with an industrial dispute.
The Registrar, it is clear from the provisions of the Act, could not possibly have granted the reliefs claimed under this issue because of the limitations placed on his powers in the Act itself, It is true that section 61 by itself does not contain any clear indication that the Registrar cannot entertain a dispute relating to alteration of conditions of service of the employees if a registered society; but the meaning given to the expression "touching the business of the society", in our opinion, makes it very doubtful whether a dispute in respect of alteration of conditions of service can be held to be covered by this expression.
Since the word "business" is equated with the actual trading or commercial or other similar business activity of the society, and since it has been held that it would be difficult to subscribe to the proportion that whatever the society does or is necessarily required to do for the purpose of carrying out its objects, such as laying down the conditions of service of its employees, can be said to be a part of its business, it would appear that a dispute relating to conditions of Service of the workmen employed by the society cannot be held to be a dispute touching the business of the society.
Further, the position is clarified by the provisions of sub section
(4) of section 62 of the Act which limit the power to be (1) [1962] I.L.L.J. 51.
216 exercised by the Registrar, when dealing with a dispute referred to him under section 61, by a mandate that he shall decide the dispute in accordance with the provisions of the Act and the Rules and bye laws.
On the face of it, the, provisions of the Act, the rules and the bye laws could not possibly permit the Registrar to change conditions of service of the workmen employed by the society.
For the purpose of bringing facts to our notice in the present appeals, the Rules framed by the Andhra Pradesh Government under the Act, and the bye laws of one of the appellant Banks have been placed on the Paper books of the appeals be fore us.
It appears from them that the conditions of service of the employees of the Bank have all been laid down by framing special bye laws.
Most of the conditions of service, which the workmen want to be altered to their benefit, have thus been laid down by the bye laws, so that any alteration in those conditions, of service will necessarily require a change in the bye laws.
Such a change could not possibly be directed by the Registrar when, under section 62(4) of the Act, he is specifically required to decide the dispute referred to him in.
accordance with the provisions of the bye laws.
It may also be noticed that a dispute referred to the Registrar under section 61 of the Act can even be transferred for disposal to a person who may have been invested by the Government with powers in that behalf, or may be referred for disposal to an arbitrator by the Registrar.
Such person or arbitrator, when deciding the dispute, will also be governed by the mandate in section 62 (4) of the Act, so that he will also be bound to reject the claim of the workmen which is nothing else than a request for alteration of conditions of service contained in the bye laws.
It is thus clear that, in respect of the dispute relating to alteration of various conditions of service, the Registrar or other person dealing with it under section 62 of the Act is not competent to grant the relief claimed by the workmen at all.
On the principle laid down by this Court in the case of the Deccan Merchants Cooperative Bank Ltd.(1), therefore, it must be held that this dispute is not a dispute covered by the provisions of section 61 of the Act.
Such a dispute is not contemplated to be dealt with under section 62 of the Act and must, therefore, be held to be outside the scope of section 61.
In this connection, we may take notice of the view expressed by a learned single Judge of the Madras High, Court in South Arcot Co operative Motor Transport Society, Ltd. (for ex servicemen) vs Syed Batcha and others(2) where dealing with an industrial claim, the learned Judge held : "Therefore, in regard to an industrial claim, like the retrenchment compensation, the remedy for the (1) [1969] 1 S.C.R. 887.
(2) [1960] II L.L.S. 693. 217 worker would be only to enforce it by the machinery created by the , namely, by sections 10 and 33C(2).
The Madras Co operative Societies Act being itself a special statute, the authority, acting under it, would have no jurisdiction beyond what the enactment itself conferred on him.
lie could not, therefore, have jurisdiction to decide a dispute under the .
" That decision also related to section 51 of the Madras Co operative Societies Act, 1932, which was similar in terms to section 61 of the Act.
Learned counsel appearing on behalf of the appellant Banks, however, urged a new point to challenge the jurisdiction of 'the Industrial Tribunal to deal with the dispute relating to conditions of service to the effect that the conditions of service having been made the subject matter of bye laws, an Industrial Tribunal will not be competent to alter them, because even an Industrial Tribunal has no jurisdiction to make orders contrary to law.
For this purpose, he referred us to a number of decisions of this Court in Dalmia Cement (Bharat), Ltd., New Delhi vs Their Workmen and Another(1); The Management of Marina Hotel vs The Workmen (2) ; Cinema Theatres vs Their Workmen(3); and The Hindustan Times Ltd., New Delhi vs Their Workmen & Vice Versa(4).
In all these cases, it was held that an Industrial Tribunal acted illegally in prescribing leave in excess of the number of days laid down by the Delhi Shops and Establishments Act, 1954.
In section 22 of that Act there was a specific prohibition that leave for sickness or casual leave with full wages shall not exceed 12 days; and it was held that a direction made by the Tribunal granting to the workmen more than 12 days ' sickness or casual leave was illegal.
The principle of the decisions in those cases does not, however, appear to us to be applicable to the cases before us, because, in the present cases, there is no prohibition contained in the Act that the conditions of service prescribed are not to be altered.
The argument on behalf of the Bank, however, was that the bye laws, which contained the conditions of service, are themselves law, so that any direction made by an Industrial Tribunal altering a condition of service con tained in a bye law would be an order contrary to law and, hence, illegal.
We are unable to accept the submission that the bye laws of a co operative society framed in pursuance of the provisions of (1) [1961] II L.L.J. 130 (3) [1264] II L.L.J. 128.
Ll 2Sup.
CI/69 1 5 (2) ; (4) [1964] T. S.C.R. 234.
218 the Act can be held to be law or to have the force of law.
It has no doubt been held that, if a statute gives power to a Government or other authority to make rules, the rules so framed have the force of statute and are to be deemed to be incorporated as a part of the statute.
That principle, however, does not apply to bye laws of the nature that a co operative society is empowered by the Act to make.
The bye laws that are contemplated by the Act can be merely those which govern the internal management, business or administration of a society.
They may be binding between the persons affected by them, but they do not have the force of a statute.
In respect of bye laws laying down conditions of service of the employees of a society, the bye laws would be binding between the society and the employees just in, the same manner as conditions of service laid down by contract between the parties.
In fact, after such bye laws laying down the conditions of service are made and any person enters the employment of a society, those conditions of service will have to be treated as conditions accepted by the employee when entering the service and will thus bind him like conditions of service specifically forming part of the contract of service.
The bye laws that can be framed by a society under the Act are similar in nature to the Articles of Association of a Company incorporated under the Companies Act and such Articles of Association have never been held to have the force of law.
In a number of cases, conditions of service for industries are laid down by Standing Orders certified under the , and it has been held that, though such Standing Orders are binding between the employers and the employees of the industry governed by those Standing Orders, they do not have such force of law as to be binding on industrial Tribunals adjudicating an industrial dispute.
The jurisdiction which is granted to Industrial Tribunals by the is not the jurisdiction of merely administering the existing laws and enforcing existing contracts.
Industrial Tribunals have the right even to vary contracts of service between the employer and the employees which jurisdiction can never be exercised by a civil court or a Registrar acting under the Co operative Societies Act, so that the circumstance that, in granting relief on issue No. 1, the Tribunal will have to vary the special bye laws framed by the Cooperative Bank does not lead to the inference that the Tribunal would be incompetent to grant the reliefs sought in this reference.
In fact, the reliefs could only be granted by the Industrial Tribunal and could not fall within the scope of the powers of the Registrar dealing with a dispute under section 61 of the Act.
We may also, in this connection, take notice of the submission made by learned counsel that the Registrar could have granted relief, under section 16 (5) of the Act if he thought that it was advis 219 able to grant that relief to the workmen.
in our opinion, this submission must be rejected for two reasons.
The first reason is that action taken by the Registrar under section 16(5) of the Act will not be a decision on a dispute referred to him under section 61 of the Act.
When dealing with the dispute under section 61 of the Act, the Registrar is bound to decide the dispute in accordance with the existing bye laws, so that, if the dispute relates to alteration of conditions of service laid down in the bye laws, he will be incompetent to grant the relief claimed.
It is also to be noticed that a dispute referred to a Registrar under section 61 of the Act may be transferred for disposal to a person who has been invested by the Government with powers in that behalf or may be referred for disposal to an arbitrator.
On the face of it, such person or arbitrator cannot possibly exercise the powers of the Registrar under, section 16(5) of the Act.
The second reason is that, under section 16(5) of the Act, the power given to the Registrar to propose amendments in the bye laws and to enforce them if the proposal is not accepted by a society is to be exercised only when the Registrar is of the opinion that it is necessary or desirable to do so in the interests of such society or of the co operative movement.
Amendments in bye laws under section 16(5) of the Act are not contemplated in the interests of the workmen or for the purpose of resolving industrial disputes.
The provisions of section 16(5) of the Act thus appear to us to be irrelevant when considering the scope of the jurisdiction of the Registrar under section 61 of the Act.
Consequently, the decision of the High Court holding that the Tribunal had jurisdiction to deal with the industrial dispute referred to it must be upheld.
We may also take notice of an argument advanced at the last stage by learned counsel appearing on behalf of the Banks that, in any case, matters covered by issues Nos. 2 and 3 referred to the Tribunal could have been competently decided by the Registrar, and the reference in respect of those two issues at least should be held to be incompetent.
We do not think that at this stage there is any need for us to decide this question, because such a point was not raised at all in the petitions filed under article 226 of the Constitution before the High Court.
In those petitions, the competence of the reference to the Industrial Tribunal as a whole was challenged on the ground that it was barred because of the jurisdiction of the Registrar to deal with the dispute under section 61 of the Act.
Consequently, we need not deal with the question whether a particular issue forming part of the reference has been,.competently referred or not.
The appeals fail and are dismissed with costs.
One hearing fee.
Appeals dismissed.
| In exercise of the power under section 6 of the the undertakings of the appellant company at Allahabad and Lucknow were taken over by the State Electricity Board, U.P. with effect from September 17, 1964.
The workmen of the company were taken into the employment of the Board without any break in continuity of employment.
Certain workmen of the Allahabad undertaking filed before the Labour Court applications under section 6 H(2) of the U.P. , for payment of retrenchment compensation and salary in lieu of notice.
A group of workmen 'from the Lucknow undertaking also sub mitted applications under section 6 H(2) with the same prayers; in addition they claimed compensation for accumulated earned leave not enjoyed by them till September 16, 1964.
The Labour Court allowed the applications.
The Company appealed to this Court by special leave.
According to the company there was no retrenchment of the workmen because they had voluntarily left the service of the company to join the service of the Board with no break in their service.
The questions that fell for consideration wer (i) Whether the matter was to be decided under the provisions of the or those of the U.P. ; (ii) Whether the Labour Court had jurisdiction under section 6 H(2) of the U.P. Act to decide the applications or because of there being dispute as to the liability to pay retrenchment compensation the matter was in view of item 10 of the second schedule to the U.P. Act within the exclusive jurisdiction of the Industrial Tribunal; (iii) Whether section 6 0 of the U.P. Act also necessitated that the question of liability to pay retrenchment compensation be first determined; (iv) Whether in view of sections 6 & 7 of the and sections 57 & 57A of the Indian read with Cl.
V of the sixth schedule thereto, the liability to pay retrenchment compensation was that of the Board and not that of the company; (v) Whether the claim of the Lucknow workmen for compensation for earned leave not enjoyed by them was allowable.
Held : (i) Under the Seventh Schedule to the constitution legislation in respect of 'Trade Union Industrial and Labour Disputes ' falls within Entry 22 of the Concurrent List and both the State and the Union are competent to legislate in respect of that field of legislation.
Act 1 of 1957 added to the U.P. , section 6 R(2) which enacts that the rights and liabilities of employers and workmen relating to lay off and retrenchment shall be determined in accordance with the provisions of 508 sections 6 J to of 1957 received the assent of the President and by virtue of article 254(2) of the Constitution section 6 R(2) of the U.P. Act prevails notwithstanding any prior law made by the Parliament.
The rights and obligations of the parties had therefore to be decided under the U.P. Act including section 6 R(2).
[511 H 512 D] Rohtak & Hissar Districts Electric Supply Company vs State of U.P., , distinguished.
(ii) Section 6 H(1) and (2) of the U.P. Act were substantially the same as sub sections
(1) and (2) of section 33 C of the Central Act and cases decided by this Court under the latter provisions were applicable in the interpretation of the former.
According to the rule laid down in section 6 H(2) the Labour Court was competent to determine what each workman was entitled to receive from the employer by way of retrenchment compensation payable in terms of money and the denial of liability of the company did not affect the jurisdiction of the Labour Court.
Where, however, as in the present case, the dispute was whether the workmen had been retrenched and computation of the amount of compensation was subsidiary or incidental, the, Labour Court had no authority to trespass upon the powers of the industrial Tribunal which had exclusive jurisdiction under item 10 of the second schedule of the U.P. Act to decide disputes relating to retrenchment.
[514 B D 517 F] The Central Bank of India, Ltd. vs P. section Rajagopalan etc. ; and Bombay Gas Co. Ltd. vs Gopal Bhiva and Others, ; , applied.
The Board of Directors of the South Arcot Electricity Distribution Co. Ltd. vs N. K. Mohammad Khan etc., , explained.
Chief Mining Engineer, East India Coal Co. Ltd. vs Rameswar and Others, [1968] 1 S.C.R. 140, State Bank of Bikaner and Jaipur vs R. L. Khandelwal, and Punjab National Bank Ltd. vs K. L. Kharbanda, [1962] Supp.
2 S.C.R. 977, referred to.
(iii) Assuming that the Labour Court had jurisdiction to determine the liability of the company to pay retrenchment compensation no order awarding retrenchment compensation could still be made without recording a finding that workmen were retrenched and compensation was payable for the retrenchment.
For section 6 0 of the U.P. Act deprives the workmen of the right to retrenchment compensation in the conditions mentioned therein.
The company asserted , that the conditions precedent to the exercise of the jurisdiction did not exist while the workmen asserted the existence of the conditions.
Without deciding the, issue the Labour Court could not compute the amount of compensation payable to the workmen on the assumption that the workmen had been retrenched and their claim fell within section 6 0.
[518 B; 519 B C] (iv) Sections 6 and 7 of the did not support the case of the Company that the liability was enforceable against the Board after it took over the undertaking.
Under these sections when the undertaking vests in the purchaser, any debt, mortgage or similar obligation attaches to the purchase money in substitution of the undertaking.
The liability to pay retrenchment compensation is a debt : if it arises on transfer it will attach to the purchase money payable to the Company in substitution of the undertaking.
[521 A B] 509 (v) The provisions of sections 57 and 57A of the Indian , also did not assist the case of the Company.
These sections deal with the licencee 's charges to consumers and the Rating Committees.
In the Sixth Schedule to the Act (incorporated into every license by section 57 'aforesaid) it is provided by cl.
IV that certain amount shall be appropriated towards Contingencies Reserve from the revenues of each year of account.
Clause V then provides for the appropriation of the Contingencies Reserve :it requires the undertaking to hand over the Contingencies Reserve to the purchaser.
If the retrenchment compensation becomes properly due to the employees of the Company, it would, by virtue of cl.
V sub cl.
(2) proviso, be charged upon the Contingencies Reserve and the balance alone would be handed over to the purchaser.
In the present case however there was no finding by the Labour Court that the Contingencies Reserve had been paid over to the purchaser.
521 C 522 Cl (vi) The claim of the Lucknow workmen to compensation in lieu of earned leave not enjoyed by them could not be allowed.
After the company closed its business it could obviously not give any earned leave to these workmen 'and the latter could not claim it.
In the absence of a statutory provision to that effect no such compensation was payable.
[522 E]
|
N: Criminal Appeal No. 362 of 1979.
Appeal by Special Leave from the Judgment and Order dated 28.2.79 of the Allahabad High Court at Allahabad in Crl.
Appeal No. 3500/78 and murder reference No. 33/78.
section K. Bisaria for the Appellant.
H. R. Bhardwaj and R. K. Bhatt for the Respondent.
The Judgment of the Court was delivered by CHANDRACHUD, C. J.
The appellant 's land was auctioned on December 26, 1976 in a revenue sale held to recover arrears of land revenue.
On the same day, the land of one Mool Chand was also sold for a similar reason.
The deceased Bhagwan Singh, who was 269 an Amin, acted as an officer of the Court in effecting the aforesaid sales.
After the sale proceedings were over, Bhagwan Singh was returning home on a bicycle, with his peon Shripat, who is examined in the case as P.W.4 The appellant, Mool Chand and the latter 's son Daya Ram lay in wait for the deceased and while he was passing along on his bicycle, Daya Ram fired three shots at him; two out of these hit Bhagwan Singh, as a result of which he fell down.
A split second thereafter, the appellant emerged with a sword and chopped off the neck of Bhagwan Singh.
Daya Ram is still absconding but the appellant was convicted by the Sessions Court under section 302 read with section 34 of the Penal Code and was sentenced to death.
He was also convicted under section 307 of the Penal Code.
The sentence of death having been confirmed by the High Court, the appellant has filed this appeal by special leave.
The leave is limited to the question of sentence.
We see no reason for commuting the sentence of death imposed upon the appellant to the lesser sentence of imprisonment for life.
The fact that Daya Ram is absconding does not reduce the gravity of the offence committed by the appellant.
Bhagwan Singh had but performed his ministerial duty as an Amin in putting the appellant 's land to sale.
He bore no personal grudge against the appellant nor had he anything to gain for himself by selling the lands of the appellant and of Daya Ram.
Such crimes committed against public servants for reasons arising out of the performance by them of their public duties must be discouraged and put down with a firm hand.
We, therefore, confirm the sentence of death passed on the appellant and dismiss the appeal.
P.B.R. Appeal dismissed.
| The appellants who were displaced persons were allotted land which was entered as sailab land in the revenue records and they became the owners of these lands.
After the coming into force of the Punjab Security of Land Tenures Act, 1953, the Revenue Authorities proceeded to determine the permissible area of the land of the appellants under section 2(3).
They allowed 50 standard acres of land to each of the appellants and declared the balance as surplus land.
The appellants claimed that the lands allotted to them as displaced persons fell in a portion of District Karnal which was sailab and adna sailab and according to the classification made under the Punjab Security of Land Tenures Rules, 1953 they did not carry any valuation.
The Collector dismissed their application.
The Commissioner dismissed their appeals holding that the Collector was right in treating the surplus area as an unirrigated areas and valuing the same at nine annas per standard acre.
A single Judge accepting the contention of the appellant in his writ petition set aside the orders of the Revenue Court.
The Financial Commissioner filed an appeal which was allowed by the Division Bench and the writ petition was dismissed.
In the appeals to this Court it was contended on behalf of the appellants that (1) whereas sub section (5) of section 2 of the Act directed the Government to frame Rules after considering the quantity of the yield and quality of soil, in the Rules framed by the Government the main guide lines laid down by sub section(5) were not followed, and the classification made by the Rules under Annexure 'A ' was arbitrary without determining the quantity of the yield and quality of the soil, and (2) that even if the classification made in Annexure 'A ' was valid, the Revenue Courts as also the High Courts committed an error of law in misconstruing the classification and in arbitrarily placing the surplus area in the category of unirrigated land.
331 Dismissing the appeals, ^ HELD: 1(i) The view of the single Judge is not in consonance with the scheme and spirit of the Rules framed under the Act and is based on a wrong interpretation of the nature, extent and ambit of the classification made in Annexure 'A '.
The classification is in accordance with provisions of sub section (5) of section 2 of the Act and is, therefore, constitutionally valid.
[337 E F, G] (ii) The Land Resettlement Manual prepared in 1952 by Tarlok Singh shows that the classification has been made in a very scientific manner after taking into consideration all the relevant factors.
The Punjab Settlement Manual (4th Edition) prepared by Sir James M. Douie though possessing unimpeachable authenticity was made long ago and since then there have been great changes resulting from various steps taken by the Government for improving the nature and character of the land and the irrigation facilities.
Even so, the classification made by Sir James Douie has been adhered to broadly and basically by Tarlok Singh in his Manual which forms the pivotal foundation for the schedule containing Annexure 'A ' framed under the Rules.
[335H 336 C] (iii) The classifications of land like barani, sailab, abi, nehri, chahi etc.
are clearly mentioned in the Punjab Settlement Manual.
The Rule Making Authority has not in any way either departed from the principles mentioned in sub section(5) of section 2 of the Act or violated the guidelines contained therein, nor could it be said that the classification made under the Rules has not been made according to the quantity of yield or the quality of the soil.
[336 C, D E] (iv) If the dominant object of the act was to take over the surplus area according to the formula contained in various provisions of the Act particularly sub sections (3) and (5) of section 2, there is no material on the record to show that the Rules do not fulfil or carry out the object contained in the Act.
[336 G] Jagir Singh and Ors.
vs The State of Punjab and Ors., 44 (1965) Lahore Law Times 143, approved.
2.(i) There was no error in the classification made by the revenue authorities.
So far as Karnal District was concerned, there was no sailab land at the time when the Rules were framed and the classification was made.
Even if the land in question could be treated as sailab and equated with the land in Sonepat then the valuation would have been at 12 annas which could be more deterimental to the interest of the appellants.
The Collector and the Commissioner have rightly treated the land as unirrigated which is the lowest category and whose valuation is given as nine annas per acre.
[338C, B] (ii) The three categories given in clauses (a), (b) and (c) of Rule 2 do not cover the land of the appellants which is sailab or adna sailab and therefore, they cannot be given the benefit of any of these three sub clauses of the proviso.
[339 A]
|
Appeal No. 133 of 1951.
Appeal by special leave granted by the Supreme Court on the 1st December, 1950, from the Judgment dated the 24th April, 1950, of the Central Government Industrial Tribunal, Dhanbad, in Appeal No. 1 of 1950, arising out of Order dated the 2nd February, 1950, of the Regional Labour Commissioner (Central) Dhanbad.
N. C. Chatterjee (section L. Chhibber, with him) for the appellants.
section P. Sinha (section N. Mukherjee, with him) for the res pondent.
December 12.
The Judgment of the Court was delivered by DAS J.
This appeal by special leave is directed against the decision dated April 24, 1950, of the Central Government Industrial Tribunal at Dhanbad confirming the decision dated February 2, 1950, of 430 the Regional Labour Commissioner (Central), Dhanbad, which had declared the one day strike by the appellants that took place on November 7, 1949, to be an illegal strike.
The relevant facts are as follows: On October 13, 1949, the appellants through the Secretary of their Union gave a notice to the respondents, under section 22(1) of the , that they proposed to call a one day strike on the expiry of November 6, 1949, for the fulfilment of demands, 16 in number, noted therein.
This strike notice was, in accordance with rule 85 of the rules framed under the , sent to (1) the Conciliation Officer (Central), Dhanbad, (2) the Regional Labour Commissioner (Central), Dhanbad, (3) the Chief Labour Commissioner, Department of Labour, Government of India, New Delhi, (4) Secretary, Ministry of Labour, Government of India, New Delhi, and (5) A.D.C., Dhanbad.
This notice was received at the office of the Regional Labour Commissioner (Central), Dhanbad, on October 15, 1949. 'The Regional Labour Commissioner (Central) held conciliation proceedings at Dhanbad on October 22, 1949, but the appellants, by their letter of the same date , declined to participate in the proceedings alleging that they were convinced that nothing would come out of the same and that the proceedings should, therefore, be considered "to be ceased.
" On the same day the Regional Labour Commissioner (Central), Dhanbad, addressed letter No. RLC/CON 5 (Token) 7910 to the Chief Labour Commissioner, New Delhi, stating that after receipt of the notice of strike he had issued notice to the parties for conciliation, that the employers ' representatives were ready to discuss the demands but the Union 's representative filed a petition in writing saying that they did not want to participate in the proceedings and that no fresh material had been placed before him to change his view and that he was not in favour of recommending a reference of the demand to the Industrial Tribunal.
The letter ended with a request that the Government 431 may be informed of the situation.
It appears that this report was received in the office of the Chief Labour Commissioner, New Delhi, on October 25, 1949.
Although the Chief Labour Commissioner, in his letter ' of November 17, 1949, to the Regional Labour Commissioner ( Central), Dhanbad, states that the contents of the latter 's report had already been communicated to the Ministry of Labour, a copy of the report was actually sent to and received by the Ministry of Labour only on that day.
In the meantime on November 7, 1949, the appellants about 700 in number, went on one day strike as per their strike notice.
Apparently the respondents contended that the strike was illegal and they made an application, under section 8 (2) of the Coal Mines Provident Fund and Bonus Scheme Act, 1948, to the Regional Labour Commissioner (Central), Dhanbad, for a deci sion on the question whether the strike was legal or illegal.
By his order dated February 2, 1950, the Regional Labour Commissioner (Central), Dhanbad, declared that the strike was illegal.
Being aggrieved by the aforesaid decision the appellants, under section 8 (4) of the last mentioned Act, preferred an appeal to the Central Government Industrial Tribunal at Dhanbad which, however, also held that the strike was illegal and that the conclusions arrived at by the Regional Labour Commissioner (Central) were correct and accordingly dismissed the appear The appellants thereafter applied for and obtained special leave to appeal to this Court.
The only question raised on this appeal is whether the strike was illegal.
Section 24 (1) of the Act provides, inter alia, that a strike shall be illegal if it is commenced or declared in contravention of section 22 or section 23 of the Act.
Section 22 (1) provides as follows: " 22.
(1) No person employed in a public utility service shall go on strike in breach of 'contract(a) without giving to the employer notice of strike, as hereinafter provided, within six weeks before striking; or 56 432 (b) within fourteen days of giving such notice; or (c) before the expiry of the date of strike specified in any such notice as aforesaid; or (d) during the pendency of any conciliation proceedings before a conciliation officer and seven days, after the conclusion of such proceedings.
" Notice of strike having been given in terms of clause (a) and 14 days having elapsed after the giving of such notice as required by clause (b) and the actual strike having taken place after November 6, 1949, being the date specified in the strike notice, the only other question for consideration is whether the strike took place during the pendency of any conciliation proceedings before a Conciliation Officer, and seven days after the conclusion of such proceedings.
Under section 20(1) a conciliation proceeding shall be deemed to have commenced on the date on which a notice of strike under section 22 is received by the Conciliation Officer.
In this case the strike notice was received by the Regional Labour Commissioner (Central) who is the Conciliation Officer, 'on October 15, 1949, and the conciliation proceedings, therefore, commenced on that date under section 20(1).
The relevant portion of sub section (2) of that section runs as follows: A conciliation proceeding shall be deemed to have concluded (a). . . . . . . (b) where no settlement is arrived at, when the report of the Conciliation Officer is received by the appropriate Government or when the report of, the Board is published under section 17, as the case may be, or (c). . . . . . .
The Regional Labour Commissioner (Central), who is the Conciliation Officer in this dispute, is required by section 12 to hold conciliation proceedings in the prescribed manner and, without delay, investigate the dispute and to do all such things as 433 he thinks fit for the purpose of inducing the parties to come to a fair and amicable settlement of the dispute.
In this case the Regional Labour Commissioner (Central), held conciliation proceedings on October 22, 1949, but no settlement could be arrived at as the appellants declined to take part in the proceedings on the ground that they were convinced that nothing would come out of it.
That being the position, under section 12 (4) it became the duty of the Regional Labour Commissioner (Central) to "as soon ' as practicable after the close of the investigation, send to the appropriate Government a full report setting forth the steps taken by him.for ascertaining the facts and circumstances relating to the dispute and for bringing about a settlement thereof together with a full statement of such facts and circumstances.
and the reasons on account of which,in this case, a settlement could not be arrived at ".
Subsection (6) of this section.
requires that the report shall be submitted within fourteen days of the commencement of the conciliation proceedings or within such shorter period as may be fixed by the appropriate Government.
As already stated, the conciliation proceedings commenced on October 15, 1949.
The report, therefore, was to be submitted within fourteen days from that date.
, In point of fact the report was sent by the Regional Labour Commissioner (Central) to the Chief Labour Commissioner New Delhi, on October 22, 1949 (which was well within 14 days from the commencement of the conciliation proceedings), with the request that the Government may ' be informed of the situation.
Under sub section (4) the report has to be sent to the " appropriate Government " which according to the definition under section 2 (a) means, in relation to an industrial dispute concerning a mine, the Central Government.
The Regional Labour Commissioner (Central) did not send the report direct to Central Government but sent it to the Chief Labour Commissioner, New Delhi, in accordance with what has been called the usual course and routine of 434 official business.
Therefore,however, was received by the Central Government on or about November 17, 1949, and it is only on such receipt that the conciliation proceedings are to be deemed to have concluded according to the provisions of section 20(2)(b).
Prima, facie, therefore, the strike which took place .on
November 7, 1949, was during the pendency of the conciliation proceedings as held by the authorities below.
Shri N. C. Chattanooga, however, argues that in point of fact the conciliation proceedings came to an end when the appellants had withdrawn from the proceedings and the Regional Labour Commissioner (Central) had Bent his report.
It is by a legal fiction, introduced by section 20 (2) (b), that the conciliation proceedings are prolonged until the actual receipt of the report by the appropriate Government.
According to Shri N. C. Chatterjee the conciliation pro ceedings should be held to ' terminate when the Regional Labour Commissioner (Central) sent his report within fourteen days of the commencement of the conciliation proceedings.
The difficulty in accepting this ' argument is that while the word "send is used in section 12 (4) and the word " submitted in section 12(6), the word used in section 20 (2), (b)is " received ".
That word obviously implies the actual receipt of the report.
To say that the conciliation proceedings shall be deemed to have concluded when the report should, in the ordinary course of business, have been received by the appropriate Government would introduce an element of uncertainty, for the provisions of section 22 (1) (d) clearly contemplate that the appropriate Government should have a clear seven days ' time after the conclusion of the conciliation proceedings to make ' up its mind as to the further steps it should take.
It is, therefore, necessary that the beginning of the seven days ' time should be fixed so that there would be certainty as to when the seven days ' time would expire.
It is, therefore, provided in section 20 (2) (b) that the proceedings shall be deemed to have 435 concluded, where no settlement is arrived at,when the report is actually received by the appropriate Government.
Shri N. C. Chatterjee on the other, hand strongly urges, and not without some force, that on that construction it may be possible for the Government or its officers to withhold the report ' designedly or the report may be lost in course of transit or may be actually received after the expiry of the date fixed for the strike in the notice under section 22 (I).
Shri N. C. Chatterjee also points out that it will not be possible for the workers to know when the report is actually received and their right to strike may thus be taken away from them ' Shri N. C. Chatterjee contends that the Government cannot take advantage of its own wrong.
While we feel considerable force in Shri N. C. Chatterjee 's argument based on hardship we are bound to assume that the.
public officers concerned would act fairly and properly.
Further, it is not a case of the Government taking advantage of its own wrong as suggested by Shri N. C. Chatterjee, for here we are concerned with a dispute between the employers and the employees and there is no material before us to justify our attributing the misdeeds, if any, of the Regional Labour Commissioner (Central) or of the Chief Labour Commissioner, to the respondents, the employers who are entitled to take their stand on the language of the law.
The Court can only construe the statute as it finds it and if there is any defect in the law it is for other authority than this Court to rectify the same.
Shri N. C. Chatterjee also urges that the Regional Labour Commissioner (Central) should have, under section 12, sent his report to the appropriate Government, which in this cage means the Central Government, and he should not have sent the report to the Chief Labour Commissioner.
Assuming that that is the position then.
the fact will still remain that the Central Government did not receive the report and, therefore, the conciliation proceedings did not come to an end when the strike took place.
Shri 436 N. C. Chatterjee also suggests that the Chief Labour Commissioner should have returned the report to the Regional Labour Commissioner (Central) because under the law the report should not have been made to him.
He, however, did not return the,same to the Regional Commissioner but took upon himself to.for ward the same to the Labour Ministry.
In the circumstances, Shri N. C. Chatterjee urges, on the authority of Chaturbhuj Ram Lal vs Secretary of State for India (1), that the Chief Labour Commissioner must be deemed to be the agent of the Central Government for the purpose of receiving the report.
We adjourned this case in order to enable Shri N. C. Chatterjee to ascertain whether there was any delegation of authority in this behalf by the Central Government to the Chief Labour Commissioner.
Shri N. C. Chatterjee has not been able to discover any such delegation of authority.
It seems obvious to us that the Chief Labour Commissioner cannot possibly be regarded for this purpose as the Central Government.
In point of fact by a notification in the Gazette of India dated April 5, 1947$ the Chief Labour Commissioner has been appointed as a Conciliation Officer.
and, therefore, in conciliation proceedings conducted by him he has to submit his report to the Central Government.
It follows, therefore, that the Chief Labour Commissioner must be an authority separate from the Central Government.
According to rule 85 to which reference has been made the strike notice has to be sent, amongst others, to the Chief Labour Commissioner as well as to the Department of Labour of the Government of India, which again.
indicates that the two are different entities.
The Chief Labour Commissioner is, therefore, only the channel or post office through which correspondence between the Regional Labour Commissioner (Central) and the Central Government is to pass and he cannot possibly be regarded as an agent of the 'Central Government for the purpose of receiving the report.
The Chief Labour Commissioner (1) A.I.R. 1927 All, 2i5.
437 being the official channel the ruling relied upon by Shri N. C. Chatterjee can have no application to the facts of this case.
For reasons stated above we are of opinion that the conclusions arrived at by the authorities below on this point are correct and that this appeal must be dismissed.
In the peculiar circumstances of the case, however, we think that there should be no order as to costs and the parties should bear their own costs.
Before concluding we must draw the attention of the authorities concerned to the slack and unbusinesslike manner in which the matter was dealt with in the office of the Chief Labour Commissioner.
The Act requires that the Conciliation Officer must submit his report within 14 days from the commencement of conciliation proceedings and then on receipt of the report by the appropriate Government the conciliation proceedings are to be deemed to have concluded.
Although factually the conciliation proceedings terminate when a settlement is arrived at before the Conciliation Officer or when it is found that no settlement can be arrived at, the Act, by a legal fiction, prolongs the conciliation proceedings until the actual receipt of the report by the appropriate Government and goes on to provide that the appropriate Government must have seven days ' time to consider what further steps it would take under the Act.
Up 'to the expiry of this period of 7 days the Act permits no strike but after that period is over the employees are left free to resort to collective action by way of a strike.
Indeed, it is on the basis of these provisions that the date of strike has to be carefully selected and specified in the notice of strike to be given by the employees under section 22 (1) of the Act.
Thus, even a cursory perusal of the Act makes it clear that time is of the essence of the Act and that the requirements of its relevant provisions must be punctually obeyed and carried out if the Act is to operate harmoniously at all.
In this case the conciliation officer submitted his report on October 438 22, 1949, i.e., well within 14 days from the commencement of the conciliation proceedings as required by section 12 (6) of the Act.
The report was sent through what has been called the routine official channel.
Admittedly, it was received in the office of the Chief Labour Commissioner at New Delhi on October 25, 1949, but surprisingly it was not passed on to the Ministry of Labour, which is also in New Delhi, until about November 17, 1949.
The employees had no means of knowing when the report was actually received by the Central Government which is the appropriate Government in this case or when the period of 7 days after such receipt expired.
But in the belief, entertained, we think, quite legitimately, that the official business had been conducted regularly and promptly the employees went on strike on November 7, 1949, as previously notified. ' It now transpires that the report had not been actually received by the Central Government and, therefore, on the letter of the law, the strike must be hold to be illegal and the employees must face and bear the consequences of an illegal strike and may even be deprived ' of benefits to which they would otherwise have been entitled.
This hardship has been thrown upon the employees for no fault of their own but simply because of the callous indifference or utter inefficiency and slackness apparently prevailing in the office of the Chief Labour Commissioner which cannot be too strongly deprecated.
It is to be hoped that public officers would, in the discharge of their official duties in future, show a greater sense of responsibility than, what they have done in the case before us.
Appeal dismissed.
| The accused was committed to trial in July 1963 and was convicted and sentenced to death on September 4, 1964.
The appeal to the High Court under section 411A, Cr.
P.C., was finally dismissed on February 6, 1970.
The High Court left it to the State Government whether it should reduce the sentence on account of inordinate delay.
In appeal to this Court on the question of sentence, HELD : Section 302, I.P.C., prescribes two alternate sentences, namely, death sentence or imprisonment for life.
When there has been inordinate delay in the disposal of the appeal by the High Court, it is a relevant factor for the High Court to take into consideration for imposing the lesser sentence.
[549 A B] In the present case, the appellant has been for 6 years under the fear of sentence of death, which must have caused him unimaginable mental agony.
In view of the excessive delay it is a fit case for awarding the lesser sentence instead of leaving it to the Government to decide the matter on a mercy petition.
[549 B D] Nawab Singh vs State of U.P., A.I.R. 1954 S.C. 278, referred to.
|
Appeal No. 89 of 1960.
Appeal from the judgment and order dated April 12, 1957, of the Mysore High Court in Writ Petition No. 15 of 1956.
557, M. C. Setalvad, Attorney General for India, V. L. Narasimhamoorty, section N. Andley, J. section Dadachanji, Rameshwar Nath and P. L. Vohra, for the appellants.
R. Gopalakrishnan and T. M. Sen, for the respondents.
March 24.
The Judgment of the Court was delivered by SHAH, J.
With a view to enable him to assess cotton cess payable by the appellants under the Indian Cotton Cess Act, 1923 hereinafter called the Act the Deputy Commissioner, District Chitradurga, Mysore State purporting to exercise powers under section 6 of the Act called upon the managing agents of the appellants by letter dated January 13, 1956, to submit in the prescribed form a statement showing the total quantity of cotton consumed or processed in the factory. 'The appellants declined to carry out the requisition and filed a petition in the High Court of Mysore for a writ of mandamus, prohibition or other appropriate writ, direction or order restraining the Deputy Commissioner, Chitradurga and the State of Mysore from "collecting assessments under the Indian Cotton Cess; Act XIV of 1923" in enforcement of the order dated January 13, 1956.
The sole ground urged in support of the petition was that the appellants were bound to furnish returns under the Act to the Collector who alone could assess the cess, and the Deputy Commissioner not being a "Collector" within the meaning of the Act and not being an officer appointed by the Central Government to perform the duties of the Collector under the Act, the demand for returns was "unconstitutional".
The High Court rejected the petition and against that order, this appeal is preferred with certificate of fitness granted by the High Court.
The area in which the mill of the appellants is situ.
ate was originally part of the Indian State of Mysore.
The State of Mysore became a Part B State within the Union of India on the promulgation of the Constitution on January 26, 1950.
The Act was one of the many enactments of the Indian Legislature applied 588 to the State of Mysore by the "Part B States Laws Act" 3 of 1951.
The Act provides for the levy of a cess on cotton and for effectuating that purpose imposes by section 6 a duty upon the owner of a mill to submit to the Collector monthly returns of cotton consumed or processed in the mill.
The authority to assess cess is by section 7 of the Act vested in the "Collector" which expression in the Act means "in reference to cotton consumed in a mill, the Collector of the district in which the mill is situated or any other officer appointed by the Central Government to perform the duties of a Collector under this Act".
The powers of the Collector under the Act can therefore be exercised by the Collector of the district in which the mill is situate or by the officer appointed by the Central Government to perform the duties of a Collector.
It is common ground that the Central Government has not issued an order appointing the Deputy Commissioners in the Mysore area to exercise powers under the Act.
The power to assess cotton ceases in the Mysore State area can therefore be exercised by the Collector and no other officer.
The expression "Collector of the district" which is a component of the first part of the definition is not defined in the Act.
But the X of 1897 defines "Collector" as meaning "in a Presidency town, the Collector of Calcutta, Madras or Bombay as the case may be, and elsewhere the Chief Officer in charge of the revenue administration of a district".
The revenue administration of a district under the Mysore Land Revenue Code is entrusted to the Deputy Commissioner and he is the chief officer in charge of the revenue administration of a district.
The Deputy Commissioner is therefore a Collector within the meaning of the .
Counsel for the appellants however contends that the X of 1897 was not extended by the Part B States Laws Act to the State of Mysore and therefore the definition of "Collector" under the cannot be requisitioned in aid to interpret the expression "Collector" used in the Act.
But the argument proceeds upon a fallacy as to the 559 true nature of the .
By section 3 of that Act, in all Central Acts and Regulations made, after the commencement of the , ' unless there is anything repugnant in the subject or context, the various expressions therein set out shall have the meanings ascribed to them by that Act.
The effect of section 3 is to incorporate it as it were as an interpretation section in all Central Acts and Regulations made after the commencement of the .
Whenever the Central Act or Regulation made after March 11, 1897, is enacted, the becomes statutorily a part thereof and by its own force it applies to the interpretation of every such enactment.
Its vitality does not depend upon any territorial extension.
Existence of a definition of the expression "Collector" in the Act in section 2(a) is not necessarily indicative of an intention that the is not to apply to the interpretation of that expression used in that Act.
The first part of section 2, cl.
(a) of the Act is in truth not a definition at all: it merely states that the Collector of the district in which the mill is situate is the Collector for the purpose,% of the Act.
For determining who the Collector is, one has to go to the .
It is said that bodily importing the definition of "Collector" in the into section 2(a) of the Act results in tautology, because by the definition in the a Collector (outside the Presidency towns) is an officer in charge of the revenue administration of a district.
But by the definition in the , the quality of the power and the duties of the officer concerned are indicated whereas by the use of the expression "of the district" in the definition of Collector in section 2(a) of the Act, the officer in charge of the revenue administration of the district within whose area the mill is situate is indicated.
There is in our judgment no tautology, and no ground for not applying the definition of Collector in the to the interpretation of the Act.
The appeal fails and is dismissed with costs.
Appeal dismissed.
| On an application made by the appellant, the Calcutta High Court granted a certificate on May 18, 1956, enabling him to appeal to the Supreme Court against the judgment and decree of the High Court.
Under 0. 45, r. 7(1)(a), of the Code of Civil Procedure, 1908, the appellant had to deposit the security amount for costs of the respondent within ninety days or such further period, not exceeding sixty days, as the court may upon cause shown allow, from the date of the decree complained of, or within six weeks from the date of the grant of the certificate, whichever was the later date.
Being unable to deposit 644 the amount on the due date, the appellant filed an application on July 4, 1956, before the High Court praying that the amount tendered by him be accepted after condoning the delay, but the High Court rejected it on the ground that according to the uniform current of decisions of that Court it had no jurisdiction to extend the time for depositing the amount.
Held, that reading 0.
45" r. 7, of the Code of Civil Procedure, 1908, along with the other relevant provisions Of the said Order, a High Court has jurisdiction to extend time for furnishing security under the rule, and that the decisions of the Calcutta High Court to the contrary are erroneous.
Order XII, r. 3, of the Supreme Court Rules, 1950, expressly recognises and gives jurisdiction to the High Courts to extend the time for furnishing the security in a proper case.
Raja Kumar Govind Narayan Singh and others vs Shamlal Singh and others, 1 and Akimuddin Chowdhury vs Fateh Chand Mahesri & others, , disap proved.
Roy Jyotindranath Chowdhury & Ors.
vs Rai Prasanna Kumar Banerjee Bahadur, (1906) 11 C.W.N. I 104, Harendra Lal Choudhry vs Sm.
Hari Dasi Debei, , Nilkanth Balwant Natu & Ors.
vs Shri Satchidanand Vidya Narsinha Bharati & Ors., Bom.
430, Bishnath Singh & Ors.
vs Balwant Rao Naik Kalia & Ors., I.L.R. [1939] All 549, Ismail Piperdi vs Momin BiBi & Ors, , Lachmeshway Prasad Shukul vs Girdhari Lal Choudhuri, Pat. 123, Ghulam Rasul vs Ghulam Qutabud din, (1942) I.L.R.23 Lah.447, Gulam Hussain vs Mansurbeg & Ors., I.L.R. and Thota Pitchaiah Andhra 55, approved.
|
N: Criminal Appeal No. 193 of 1979.
From the Judgment and Order dated 23 1 1979 of the Gujarat High Court in Special Criminal Application No. 8/79.
P. H. Parekh and M. Mudgol for the Appellant.
N. M. Phadke, section P. Nayyar and M. N. Shroff for the Respondent.
The Judgment of the Court was delivered by CHINNAPPA REDDY, J.
Kanchanlal Maneklal Chokshi who is in preventive detention under the provisions of the and whose petition for the issue of a writ of Habeas Corpus was rejected by the High Court of Gujarat is the appellant in this appeal.
The High Court, while rejecting the petition, granted a certificate under Article 133(1) of the Constitution that the case involved a substantial question of law of general importance which needed to be decided by the Supreme Court.
The substantial question of law so certified was 'whether it is necessary for the detaining authority to consider whether a person should be prosecuted before an order of detention is made against him '.
The Division Bench of the Gujarat High Court in rejecting the particular contention of the appellant 5 475 SCI/79 56 purported to follow an earlier decision of another Division Bench of the same Court in Ashok Murlidhar vs State of Gujarat.(1) In that case Divan C. J., and Majumdar, J., though inclined to the view that the possibility of a criminal prosecution being launched should be present to the mind of the detaining authority, felt constrained to hold otherwise because of what, they thought had been decided by this Court in Hardhan Saha & Anr.
vs State of West Bengal & Ors.(2).
In our view, this Court did not say in Hardhan Saha vs State of West Bengal that the possibility of a prosecution being launched was an irrelevant consideration which need never be present to the mind of the detaining authority.
On the other hand, we do not also think that it is axiomatic, as sought to be contended by the learned Counsel for the appellant, that the detaining authority must invariably consider the possibility of launching a prosecution before making an order of detention and that, if not, the order of detention must necessarily be held to be bad.
In Hardhan Saha vs State of West Bengal, the vires of the provisions of the Maintenance of Internal Security Act was in question.
One of the contentions was that Section 3 of the Act offended Article 14 of the Constitution as it permitted 'the same offence to be a ground for detention in different and discriminatory ways '.
It was submitted that while A might be prosecuted but not detained preventively, might not be prosecuted but only detained preventively and C might be both prosecuted and detained preventively.
Dealing with the contention, a Bench of five judges of this Court explained the basic distinction between preventive detention and detention following upon conviction and observed: "The power of preventive detention is qualitatively different from punitive detention.
The power of preventive detention is precautionary power exercised in reasonable anticipation.
It may or may not relate to an offence.
It is not a parallel proceeding.
It does not overlap with prosecution even if it relies on certain facts for which prosecution may be launched or may have been launched.
An order of preventive detention may be made before or during prosecution.
An order of preventive detention may be made with or without prosecution and in anticipation or after discharge or even acquittal.
The pendency of prosecution is no bar to an order of preventive detention.
An order of preventive detention is also not a bar to prosecution".
57 The Court then referred to various earlier decisions and deduced the following principles: "First merely because a detenu is liable to be tried in a criminal court for the commission of a criminal offence or to be proceeded against for preventing him from committing offences dealt with in Chapter VIII of the Code of Criminal Procedure would not by itself debar the Government from taking action for his detention under the Act.
Second, the fact that the police arrests a person and later on enlarges him on bail and initiates steps to prosecute him under the Code of Criminal Procedure and even lodges a first information report may be no bar against the District Magistrate issuing an order under the preventive detention.
Third, where the concerned person is actually in jail custody at the time when an order of detention is passed against him and is not likely to be released for a fair length of time, it may be possible to contend that there could be no satisfaction on the part of the detaining authority as to the likelihood of such a person indulging in activities which would jeopardise the security of the State or the public order.
Fourth, the mere circumstance that a detention order is passed during the pendency of the prosecution will not violate the order.
Fifth, the order of detention is a precautionary measure.
It is based on a reasonable prognosis of the future behaviour of a person based on his past conduct in the light of the surrounding circumstances".
Clearly, the Court did not lay down that the possibility of a prosecution being launched was an irrelevant consideration, not to be borne in mind by the detaining authority.
All that was laid down was that the mere circumstance that a detenu was liable to be prosecuted was not by itself a bar to the making of an order of preventive detention.
It does not follow therefrom that failure to consider the possibility of a prosecution being launched cannot ever lead to the conclusion that the detaining authority never applied its mind and the order of detention was, therefore, bad.
In Bhutnath Mate vs State of West Bengal(1) Krishna Iyer and Sarkaria JJ., declared the detention illegal for denial of opportunity to make effective representation.
On the question whether the failure of criminal prosecution was a bar to preventive detention the answer was a definite 'no '.
The learned judges however expressed 58 apprehension against the danger to the democratic way of life inherent in 'the potential executive tendency to shy at Courts for prosecution of ordinary offences and to rely generously on the easier strategy of subjective satisfaction '.
The question presently under consideration, namely, whether the failure of the detaining authority to keep in mind the possibility of a prosecution would necessarily vitiate the order of detention was not considered by the learned judges.
In Srilal Shaw vs State of West Bengal & Ors.(1), the prosecution was dropped and thereafter an order of preventive detention was passed.
The substance of the allegation against the detenu was that he was in unlawful possession of scrap metal belonging to the Railway.
The Court came to the conclusion that on the material which was available to the detaining authority, it was impossible to arrive at the conclusion that the possession of the petitioner was unlawful.
The Court found that the reason given by the District Magistrate for dropping the prosecution was unacceptable.
It was observed that the prosecution was in all probability dropped as the petitioner might have been able to establish that his possession of the goods was not unlawful.
The case struck the Court as a typical case in which for no apparent reason a person who could easily be prosecuted under the punitive law was being preventively detained.
It is seen that the decision turned on the peculiar facts of the case and throws no light on the question presently raised before us.
In Abdul Gaffer vs State of West Bengal(2) the order of detention was passed on the basis of a few instances of theft of Railway property for which the detenu could well and easily have been prosecuted.
The contention before the Court was that the order of detention was passed by the detaining authority mechanically without applying its mind to the question whether the facts disclosed the tendency of the petitioner to act prejudicially in the manner mentioned in the detention order.
The bald and sweeping allegation was made in the counter filed on behalf of the State that material witnesses were afraid of giving evidence in the Court against the detenu.
The material witnesses were members of the Railway Protection Force.
In that situation Sarkaria J., observed that the version given in the counter was incredible and could not be swallowed.
The learned Judge then observed "the conclusion therefore is inescapable that the petitioner has been proventively detained without application of mind as to whether the prosecution against him was foredoomed to failure on the ground of witnesses being afraid to depose against the detenu 59 in Court.
The impugned order has been made in a casual and cavalier manner".
It is seen that there was an express allegation that recourse was had to preventive detention despite the fact that criminal prosecutions could well have been successfully launched, based as the case was on the evidence of members of the Railway Protection Force.
The reason given by the State for taking recourse to preventive detention was found to be fantastic.
The decision thus stands on the special facts of the case.
In Dulal Roy vs The District Magistrate, Burdwan & Ors.,(1) the Court had to consider a situation where a month after a person was arrested in connection with a criminal case he was discharged but was taken into custody on the same day pursuant to an order of detention.
Krishna Iyer and Sarkaria, JJ., while observing that as an abstract legal proposition an order of preventive detention could be validly passed against a person in jail custody on the same facts on which he was being prosecuted for a substantive offence in a Court, pointed out that such an order of detention was readily vulnerable to the charge that the detaining authority was taking recourse to preventive detention in order to circumvent the penal law and the process of the Court.
The learned Judges were satisfied that the discharge of the detenu in a criminal case was not due to any shortcoming in the evidence or difficulty in its production in Court.
The order of detention was, therefore, quashed on the ground of non application of mind by the detaining authority.
In Salim vs State of West Bengal,(2) Chandrachud J., speaking for the Court observed that the fact that the detenu could have been prosecuted for the acts attributed to him did not affect the validity of the order of preventive detention.
The further question whether it was incumbent on the detaining authority to consider the question of possibility of prosecution was not considered by the Court.
In Ashok Murlidhar vs State of Gujarat, (supra) Divan C.J., and Majumdar, J., appeared to think that the Bench of five Judges of this Court which decided Hardhan Saha & Anr.
vs State of West Bengal & Ors.
, (supra) had taken a view different from that expressed in Bhuthnath Mate vs State of West Bengal, Abdul Gaffer vs State of West Bengal, Srilal Shaw vs State of West Bengal & Ors., Dulal Roy vs The District Magistrate, Burdwan & Ors.
, (supra) We do not think that there is any such conflict as thought by the Division Bench of the Gujarat High Court.
The principles emerging from a review of the 60 above cases may be summarised in the following way: The ordinary criminal process is not to be circumvented or short circuited by ready resort to preventive detention.
But, the possibility of launching a criminal prosecution is not an absolute bar to an order of preventive detention.
Nor is it correct to say that if such possibility is not present to the mind of the detaining authority the order of detention is necessarily bad.
However, the failure of the detaining authority to consider the possibility of launching a criminal prosecution may, in the circumstances of a case, lead to the conclusion that the detaining authority had not applied its mind to the vital question whether it was necessary to make an order of preventive detention.
Where an express allegation is made that the order of detention was issued in a mechanical fashion without keeping present to its mind the question whether it was necessary to make such an order when an ordinary criminal prosecution could well serve the purpose, the detaining authority must satisfy the Court that that question too was borne in mind before the order of detention was made.
If the detaining authority fails to satisfy the Court that the detaining authority so bore the question in mind the Court would be justified in drawing the inference that there was no application of the mind by the detaining authority to the vital question whether it was necessary to preventively detain the detenu.
The facts of the present case are that the grounds of detention served on the appellant contain a very elaborate statement of facts quite clearly pointing to an application of the mind by the detaining authority.
The appellant did not complain in the Writ Petition that the detaining authority had not applied its mind and in particular had not considered the question of the possibility of a prosecution.
Nor are there any facts appearing from the record which can lead us to infer that the detaining authority did not apply its mind to relevant considerations.
We do not, therefore, think that the order of detention is in any manner infirm.
The appeal is accordingly dismissed.
P.B.R. Appeal dismissed.
| The services of the appellant, who was appointed as an Assistant Sub Inspector of Police on July 2, 1973 were terminated in September 1977.
The High Court rejected his petition impugning the order of termination of his services.
In appeal to this Court it was contended that on completion of the three year period of probation in accordance with r. 12.8(1) of the Punjab Police Rules the appellant should be deemed to have been confirmed in the post and that the order terminating his services was illegal.
Dismissing the appeal, ^ HELD.
: There is no legal error in the order passed by the Senior Superintendent of Police terminating the appellant 's services.
[490C] 1.
It is well settled that a person is appointed on probation only when he is appointed against a substantive post.
The appellant, having been appointed against a temporary vacancy, was not on probation.
Rule 12.8, which deals with officials appointed on probation, does not apply to this case.
[489 F G] 2.
Assuming that r. 12.8 was applicable, the officer could not be deemed to be confirmed unless there is any rule providing that, in the absence of an order of confirmation at the end of the probation, the employee must be presumed to be confirmed.
There is no such provision in the present rules and hence the period of probation must be presumed to have been extended.
in the State of Punjab vs Dharam Singh, ; this Court held that when a first appointment is made on probation for a specific period a and the employee is allowed to continue in the post after the expiry of the period without any specific order of confirmation he should be deemed to continue in his post as a probationer only in the absence of any indication to the contrary in the original order of appointment or the Service Rules.
In such a case, an express order of confirmation is necessary to give the employee a substantive right to the post.
[489B C] In the instant case since no order of confirmation had been passed after the appellant completed three years, it must be presumed that his probation had been extended 488 State of Punjab vs Dharam Singh [1968] 3 SCR applied.
Supdt.
of Police Ludhiana and Anr.
vs Dwarka Das etc.
; over ruled.
|
minal Appeal No. 123 of 1985.
From the Judgment and Order dated 12.11.84 of the Delhi High Court in State Criminal Appeal No. 71 of 1978.
R.K. Garg and Rajendra Prasad Singh for the Appellant.
233 N.N. Goswamy and Ashok Bhan for the Respondent.
ANAND, J.
This appeal by special leave, is directed against the judgment of the High Court of Delhi dated 12th of November 1984, setting aside an order of the Additional Sessions Judge New Delhi, acquitting the appellant of an offence under Section 302/203 IPC.
The prosecution case is that on the fateful night of 25th/26th July, 1976, the appellant and his wife, Usha Jain, went to sleep in the back verandah of their house situated at P 5, Green Park Extension, New Delhi while his brother M.P. Jain alongwith his wife Sharda and children went to sleep separately in their bed room in the same house.
Police Control Room was informed over the telephone by Sulekh Chand Jain at 4.55 A.M. that an incident had taken place at P 5, Green Park Extension and on receiving the telephone message, S.I. Mauji Ram made a record of it in the daily diary and passed on the information to the duty officer at police station Hauz Khas.
ASI Maha Singh was deputed to proceed to the spot for investigation of the case.
After reaching the spot, the said ASI Maha Singh informed the police station on telephone that a murder had taken place.
The information so provided was recorded by ASI Mangal Sen in the daily diary Whereupon SHO Harmit Singh immediately left for the spot alongwith SI Dalip Singh, SI Moti Singh, Constable Bhawani Dutt and Constable Randhir Singh.
The police party arrived at the spot at about 5.35 a.m. and took charge of the investigation.
The appellant was present near the dead body which had been covered by a Dhoti and on interrogation, the appellant informed the police party that his brother and family had retired for the night in their bed room at about 10.00 p.m. and he alongwith his wife had slept in the back verandah.
Before going to sleep, he had locked the collapsable door of the back verandah.
The wife of the appellant was wearing a gold chain on her neck, eartops in her ears and golden bangles on her wrists besides glass bangles.
At about 1.30 a.m., the appellant felt thirsty and asked his wife to give him water and after some time when he felt chilly, he went inside the room.
He slept in the room while his wife kept sleeping outside.
At about 3.45 a.m., the appellant got up to urinate and when he went outside the room, he found that his wife was lying on the cot with her face upwards but her clothes were in a loose condition and he was almost naked upto the thighs.
On going closer to 234 the cot, he found her tongue protruding and on touching her, he found her dead.
He noticed some scratches on her face and neck and also discovered that the golden chain which was on her neck and golden bangles were missing from her body.
According to the appellant, his wife had been murdered by somebody by strangulation while committing the theft of the golden chain and the bangles.
He started screaming and his brother, the brother 's wife as well as some neighbours came there.
Since, his telephone was found to be out of order, police was informed at his request by Sulekh Chand, another neighbour, from his telephone.
The parents of the deceased, living in Sonepat were also conveyed the tragic news on telephone through their neighbours.
The statement of the appellant which revealed a case of lurking house trespass, with a view to commit offence of theft and murder, was recorded as exhibit P5 and a case under Section 460 IPC was registered.
The statement of the appellant exhibit P5, was despatched by SHO Harmit Singh to the police station with his endorsement for registration of a case under Section 460 IPC.
Formal FIR was registered by ASI Mangal Sen at the police station and the same was received back by the SHO at the house of the appellant at about 6.45 a.m.
The crime team as also the dog squad were summoned.
Both the dogs of the dog squad were first let loose to pick up the smell and according to the ASI Ranbir Singh, in charge of the dog squad, the dogs after picking up the smell from the lock lying in the corner of the back courtyard and from the spot, went to the room where the appellant was sitting and each of the dogs pointed towards him by turn.
That raised a suspicion against the appellant.
According to the SHO, he then asked the appellant to remove his shirt and found that the appellant had injuries in the nature of bruises etc.
on the front part of his body, on the chest, as well as on his back.
Since the appellant had told the police that the bangles of his wife were identical to the bangles of Sharda, the wife of his brother M.P. Jain, who also is the sister of the deceased, the SHO took into possession four bangles from Sharda also for comparing the same in case the stolen property was recovered.
The appellant was thereafter taken for further interrogation to the police station.
Before proceeding to the police station., the SHO had effected recoveries of various articles including some hair, lying near the dead body on the cot.
The appellant had produced the key at the asking of the SHO, which purported to be the key of the lock which had been found lying in the back court yard and the same was taken into possession.
The lock was also taken into possession but it did not appear to have been 235 broken or tampered with.
The recovery of the key was witnessed amongst others by Kuldip Kaul PWl who was present in the crowd outside the home of the appellant.
The inquest proceedings were conducted by SI Moti Singh and the body was thereafter sent for postmortem examination.
At the police station, during interrogation the appellants was placed under arrest and in the presence of SI Dalip Singh PW6, Kuldip Kaul PWl and Harnaik Singh PW2, he made a disclosure statement, exhibit PC, to the effect that he had concealed the golden chain and the bangles in his bathroom and in pursuance of the disclosure statement, the appellant led the police party to the bathroom of his house and after removing the cover from the drain hole, took out the golden chain and the bangles and handed the same over to SHO Harmit Singh in presence of the witnesses.
Recovery memo, EX.PF was prepared and the golden chain and the bangles after being duly weighed were sealed separately and the seal was handed over to Kuldip Kaul PW1.
The appellant was sent for medical examination, after memo of his personal search EX.PE was prepared.
Dr. Dharam Pal PW15 found as many 18 injuries on the person of the appellant consisting of bruises and abrasions on the nose, chest, arm shoulder and on the umbilical region.
The injuries were stated to have been caused by blunt weapon.
The postmortem on the dead body of Usha Jain was conducted on 27.7.1976 at 9.00 a.m. by Dr. Bharat Singh PW 4 and according to the postmortem report EX.PL, all the injuries found on the person of the deceased were ante mortem and the same were possible by throttling the deceased and that the death of Usha Jain was caused by asphyxia resulting from throttling.
The deceased was carrying 7th month pregnancy at the time of her death.
After the disclosure statement was made by the appellant leading to the recovery of the ornaments and after noticing injuries on his person, the case which was originally registered under Section 460 IPC was converted, into one under Section 302/203 IPC.
The SHO during the course of investigation also took sample hair of the appellant and sent the same alongwith the hair recovered from the cot of the deceased to the Central Forensic Science Laboratory.
The nail clippings of the deceased were also sent for analysis to CFSL.
Site plan, EX.PO, was also prepared during the investigation.
After completion of the investigation, challan was filed against the appellant and he was sent up for trial for offences under Section 302/203 IPC in the court of Additional Sessions Judge, New Delhi.
236 There being no eye witness of the occurrence, the prosecution sought to establish the case against the appellant on the basis of circumstantial evidence.
The circumstances set up by the prosecution against the appel lant during the trial were (i) information to the police at 4.55 AM given by a neighbour and not the appellant; (ii) that information not specifically giving out that a murder had taken place and simply intimating happening of an incident; (iii) The accused having slept alone at night in the verandah with the deceased after having locked the collapsable door of that verandah from inside and that lock having been found in the corner of the back courtyard in the morning without being tampered with; (iv) The deceased and accused were last seen together, (v) The dogs of the Dog Squad having pointed out the accused after picking up scent from that lock; (vi) The ornaments which were stated to be on the person of the deceased while she was sleeping, and which were found missing when she was discovered dead having been recovered from the drain hole of the bath room attached to the bed room of the accused in consequence of and in pursuance of a disclousre statement made by the accused; (vii) injuries found on the person of the accused in the nature of abrasions, contusions and lastly; (viii) the accused having given false information to the police by means of hi s statement Ext.
P5" The learned Sessions Judge carefully analysed each of the circumstance and finally observed "On a resume of the analysis of prosecution evidence, and 237 on a very careful appraisal of all the facts and circumstances set up by the prosecution, I am of my earnestly considered view that the prosecution in this case has entirely failed to prove any of the circumstances set up against the accused, much less to establish the chain of circumstances, so as to bring out a nexus between the crime and the accused.
" The appellant was, therefore, acquitted of the offences under Section 302/203 IPC.
On an appeal by the State, a division bench of the High Court reversed the order of acquittal of the appellant.
The High Court held that the circumstances formed a chain and sequences so complete by themselves that one was left in no manner of doubt that the appellant and the appellant alone had committed the crime.
The appeal was accepted and the order of acquittal was set aside.
The appellant was sentenced to undergo rigorous imprisonment for life under Section 302 IPC and also to undergo rigorous imprisonment for a period of one year under Section 203 IPC.
Both the sentences were directed to run concurrently.
Appearing for the appellant, Mr. R.K. Garg, the learned senior counsel submitted that the approach of the High Court was totally erroneous and that a well considered and well reasoned judgment of the Trial Court was upset by the High Court by drawing inferences which were not available from the record and by ignoring material discrepancies and infirmities in the prosecution evidence which not only did not establish various circumstances but which also showed that the chain of circumstantial evidence was wholly incomplete.
Learned counsel for the appellant submitted that the appellant had been roped in on the basis of misguided suspicion and that the circumstances relied upon by the prosecution were not of any conclusive nature and they did not exclude the hypothesis, other than that of the guilt of the appellant.
It was emphasised that the inves tigating officer had created false clues and suppressed material which went against the prosecuting version and supported the defence version.
He argued that the High Court should have drawn adverse inference against the prosecution for not producing the first informant and withholding the evidence of the father of the deceased.
Mr. N.N. Goswami, learned senior counsel assisted by Mr. Ashok 238 Bhan, advocate, on the other hand submitted that some of the circumstances like the pointing out of the appellant by the dogs of the Dog Squad, after picking up the scent from the place of occurence; the disclosure statement and the recovery of ornaments as a consequence thereof at the instance of appellant and the presence of injuries on the person of appellant, were of such a conclusive and clinching nature that they left no doubt that the appellant had committed the crime.
It was submitted that the appellant had made attempt to mislead the investigating officer by giving a false version with a view to screen himself.
According to the learned counsel the established circumstance could only lead to the hypothesis consistent with the guilt of the appellant and not with his innocence.
We shall now consider various circumstances with a view to determine whether the circumstances alleged against the appellant have been established and the chain of evidence is so complete as to lead to no other hypothesis except the one consistent with the guilt of the accused.
There is no motive established in this case by the prosecution for the appellant to commit murder of his wife and the evidence of Tara Chand father of the deceased as welt as the sister of the deceased and the tenants living in, the same house disclosed that the relations between the husband and wife were cordial.
In a case based on circumstantial evidence, motive assumes pertinent significance as existence of the motive is an enlightening factor in a process of presumptive reasoning in such a case.
The absence of motive, however, puts the court on its guard to scrutinise the circumstances more carefully to ensure that suspicion and conjecture do not take place of legal proof Since, the disclosure statement and the consequent recovery pursuant thereto of the ornaments belonging to the deceased has been considered to be one of the most important piece of circumstantial evidence in the case not only by the High Court but has also before us by the learned counsel appearing for the State, we shall first consider that circumstance.
This circumstance is indeed of such an incriminating nature that if found to have been established by reliable and trustworthy evidence, it would go a long way to furnish proof of the guilt of the appellant and connect him with the crime and on the other hand, if the evidence in support of that circumstance is found to be not reliable, the entire chain of circumstantial evidence will snap so badly as to affect the credibility of the prosecution case as a whole.
239 According to the prosecution after the appellant had been taken to the police station by the investigating officer he was interrogated interrogated after being placed under arrest.
He voluntarily made a disclosure statement EX.PC.
The disclosure statement was recorded by the SHO and has been attested by Kuldip Kaul PW 1, SI Dalip Singh PW 6 and Harnaik Singh PW2.
Pursuant to the disclosure statement, the appellant is alleged to have led the police party to the recovery of the ornaments from a drain hole in his bathroom.
The recovery memo EX.PF was prepared at the spot and was attested by SI Dalip Singh PW 6, Kuldip Kaul PW 1 and Hirnaik Singh PW 2 besides the Investigating Officer.
We shall, therefore, first analyse the evidence of the witnesses of the disclosure statement and the recovery memo.
Inspector Harmit Singh, PW 19, SHO, while deposing about the disclosure statement and the consequent recovery of the ornaments at the pointing out by the appellant, stated that he interrogated the appellant in presence of Dalip Singh, Kuldip Kaul and Harnaik Singh PWs at the police station at about 1.45 p.m. and in their presence the appellant made the disclosure statement exhibit PC and then led the party to his house and pointing out the drain hole in the bath room, the appellant took out from that drain hole, three golden bangles and one golden chain, which were weighed separately and while golden bangles were put in one packet the golden chain was put in another packet and the seal used to seal both the packets was handed over to Kuldip Kaul PWI.
The recovery memo EX.PF was prepared at the spot which was signed by the witnesses then and there at about 2 or 2.30 p.m.
In his cross examination, the Investigating Officer denied the suggestion that the bangles and the chain were recovered from underneath a slab in the service lane in the presence of the appellant and Jagminder Dass Jain and a memo had been prepared which was signed by them.
He also stated that he did not call any goldsmith to weigh the ornaments because he had taken with him the measure and the scale.
He then asserted that "Kuldip Kaul did not come back with me to the police station when I came back in the evening after recoveries of the ornaments etc.
had been effected at the spot.
I recorded statement of Kuldip Kaul at the spot after recoveries.
That was a complete statement of his and I recorded only one statement of his on that day.
Kuldip Kaul left from the spot and we were still there when he left." Regarding Harnaik Singh PW2, the I.O. stated "I had gone out to 240 look for another witness and I found at that time Harnaik Singh reversing his taxi in the compound of the police station and then I summoned him.
He had told me that he had dropped a passenger and was taking out his taxi.
I did not see passenger going inside.
There are 60/70 quarters at the back of the police station and that passengers might have gone to any of those quarters.
The disclosure statement was made by the accused in his presence.
I had read out the papers to Harnaik Singh before getting his signature.
In fact, it was written in his presence and whatever were dictated by the accused was within his healing.
It is incorrect to suggest that disclosure statement was already written and I got signatures of Harnaik Singh without explaining to him the document and assuring him to sign on my trust.
" The witness also asserted that he had seen Harnaik Singh for the first time only at about 2 or 2.30 p.m. outside the police station while reversing the taxi and did not know him from before.
Let us now examine as to what the other witnesses have to say in this regard.
Kuldip Kaul PW1, while admitting that he was present outside the house of the appellant in the morning at about 6.30 a.m. when the police party had reached there and had offered himself to join the investigation, went on to say that after the SHO had lifted the shirt of the appellant and found 15 20 marks of scratches on the chest of the appellant, they all came to the police station along with the appellant.
He added that while they were sitting at the police station, Harnaik Singh PW2 also came there along with SHO Harmit Singh and after some initial hesitation, the appellant disclosed that he had kept one golden chain and three bangles which his wife was wearing, in the drain hole of the bath room of his house and he could show the same to the police and get them recovered.
He deposed that disclosure statement EX.PC was prepared at the police station and was signed by him as well as by the other witnesses present there.
Thereafter, the appellant was arrested and he led the police party to his house where he pointed out the drain hole in the bath room and after removing the cover of the drain hole, the appellant took out from inside the drain hole, a golden chain and three golden bangles and handed over the same to SHO Harmit Singh.
Memo of recovery EX.PF was prepared and was signed by the witnesses.
With a view to assert his independence and that he had no earlier connection with the I.O., he stated "I came to know SHO Harmit Singh since March, 1976, when I organised a function of Youth Congress and had contacted the SHO for arrangements for the said function.
I have, never gone to the police station in any other connection or regarding public 241 grievances.
I have not organised any other function in the area except the one stated above.
Regarding the signing of the recovery memo at the house of the appellant and his leaving for his house from there as was deposed to by the Investigating Officer, Kuldip Kaul PWl stated "I had come back with the police to P.S. after the recovery of the ornaments and there at about 3.30 p.m. my, statement was recorded by the police and I came back home at about 4 p.m. " Harnaik Singh PW2 giving his version regarding the disclosure statement and the consequent recovery stated "About 4 1/2 or 5 months back at about 2/2.30 p.m.
I had taken a passenger in my taxi to the quarters of P.S. Hauz Khas.
When I was coming back after dropping the passenger one police officer, Sardarji, who was standing at the gate of the P.S. called me, and took me inside the P.S.
There is one room, besides the police were one Mr. Kaul PWl and Surinder Pal Jain, accused present in court.
Then in the room that Sardarji police officer took up one paper which had been prepared already and asked me to sign, saying that they have to conduct some inquiry in the case.
Then that Sardarji told me to accompany the police party to Green Park.
Then we went there besides the police party and myself PWl and the accused were also there.
On reaching the house in Green Park the accused led the police party to the bath room and I also followed them in to the both room.
Then the Sardarji took out there bangles and one gold chain from the gutter of the bath room.
The Sardarji took those three bangles from the gutter on being told by the accused." He asserted that he did not at all know the Sardarji police officer prior to that date and that.
he had gone to the police station for the first time on that day.
During the cross examination he admitted that "The contents of memos EX.PC and EX.PF were not read out to me but I was told by the police that the weight of things recovered and the recovery was being written in those papers." ASI Maha Singh, PW5, who had arrived at the spot at the earliest and had sent information to his senior officers including SHO Harmit Singh and had kept a guard at the spot.
During the cross examination admitted that "Kuldip Kaul and Harnaik Singh witnesses had come there before 7 a.m." ST Dalip Singh PW6, who had also accompanied the SHO to the house of the appellant at about 6.30 a.m. stated "when we reached Kuldip Kaul and Hamaik Singh witnesses were present.
ASI Maha Singh was already 242 there.
" The witness also deposed about the interrogation of the appellant and the recording of the disclosure statement at the police station in his presence and the subsequent recovery of the ornaments and the preparation of the recovery memo PF in the presence of Kuldip Kaul and Harnaik Singh PWs.
Contrary to what Harnaik Singh PW said, this witness deposed "the accused himself took out three bangles and one golden chain front the main hole and handed them over to the SHO.
" The witness during the cross examination stated "The ornaments were weighed by some goldsmith who was called there by the SHO.
I do not know whether that goldsmith also signed the possession memo or not. ' The above is the entire prosecution evidence relating to the making of the alleged disclsoure statement by the appellant and the consequent recovery under Section 27 of the Evidence Act at his instance.
According to the appellant, however, he had made no disclosure statement nor led the police party to the recovery of the ornaments as alleged.
According to the defence version, the missing ornaments had in fact been recovered by the police party around 11 a.m. during search from the service lane, from underneath a slab, near the boundary wall and at that time the appellant and Jagminder Dass Jain were also present.
This defence version is supported by the evidence of DW2, Tara Chand, father of the deceased.
The presence of this witness is admitted at the spot by the Investigating team, as was natural being the father of the deceased.
His testimony assumes significance as in the normal course of events, he would be the last person to screen the real offender who murdered his daughter.
Tara Chand DW2 stated that the police had interrogated him and he had told the I.O. that the appellant and the deceased had good relations with each other and that he had never received any complaint of any dispute or difference between them from his daughter.
That he had also married of his other daughter with the brother of the appellant, M.P. Jain and that both the sisters alongwith their husbands were living together in the same house.
Deposing about the sequence of events at the house of the appellant, the witness stated "Then at about 10.30 a.m. the police took into possession four golden bangles from Sharda but I cannot say as to from where she had produced them, whether she was wearing them or she had brought them from the house.
I had seen her just producing them.
She had handed over those bangles to the same Sardarji police officer who had talked to me and at that time we were in the drawing room.
The police 243 had been told that the bangles which Usha was wearing and which were missing were of the same type which were with Sharda and there upon they conducted search for the articles in and around the house, with the bangles in hand They went out towards the back side.
Persons who were inside the house and also S.P. Jain accused (had joined the search party).
I came to know that three missing bangles and one chain had been found out from underneath a slab at the back of the house.
I came to know at about 11.30 a.m. that these things had been recovered and after about 1/2 hour of that the police took in jeep M.P. Jain, S.P. Jain and Sharda Jain to the police station.
Police told me that they were taking all the three for interrogation." During the cross examination he asserted, 'After the police had taken Sharda 's four bangles in hand and they went around looking for the stolen bangles I was in the varandah by the side of the dead body and kept on observing the scene and I saw that after sometime the same sub inspector who had the four bangles in hand was coming from outside from the back side and had three bangles and one chain in the other hand.
Some 5/7 persons from the public who were already inside the house had gone outside with the police and they also came back with the police after recovery of the ornaments.
I learnt from them that those ornaments had been found front underneath a slab and sometime after myself went out and saw that spot.
The three bangles and chain were loose and were not found in any cloth." He categorically denied the suggestion that the appellant had led the police party to the bath room on that day and had got recovered form the drain hole of the bath room, the three bangles and the golden chain.
Shri Jagminder Dass Jain appeared as DW12.
He leves in the same locality as the appellant and had gone to the house of the appellant soon after 6 a.m. on learning that some murder had taken place.
Deposing about the recovery of ornaments, he stated that the SHO after taking into possession the bangles from Sharda went outside towards the back lane and the witness accompanied the SHO and the crime team along with some others.
He stated that during the course of the search of the back lane and from underneath a slab, one gold chain and three golden bangles were recovered.
The recovered bangles were compared with the other which had been earlier produced by Sharda and a memo of the recovery was prepared by the police and was signed by the witness as well as the appellant.
The learned Sessions Judge carefully considered the evidence led by the prosecution with regard to the disclosure statement and the recovery 244 of ornaments.
She found the evidence of Harnaik Singh PW2, who according to DW11 Sunder Lal constable of police station Defence Colonly, had been earlier also cited as a witness for the prosecution in a case investigated by Harmit Singh the then Sub inspector of police and the present Investigating Officer was not reliable and that the Investigating Officer had not told the truth when he had deposed that he did not know Harnaik Singh earlier.
That Harnaik Singh had on his own showing signed the disclosure statement after it had already been written and that the appellant bad not made any disclosure statement in the presence of Harnaik Singh PW2, who had been introduced being a convenient witness.
The learned Sessions Judge also found the evidence of PWl Kuldip Kaul as not reliable or trustworthy and disbelieved his testimony by giving cogent reasons after properly appreciating the evidence led by the prosecution.
She found the defence version with regard to the recovery as more probable and opined that the investigating officer had created false clues and fabricated false evidence.
The learned Sessions Judge observed "I, therefore, cannot bring myself at all to accept the prosecution case about any disclosure having been made by the accused or having led to recovery of missing ornaments in pursuance to this disclosure, and I am con strained to say that the I.O. has made unabashed attempt to fabricate false evidence to bring on record incriminating evidence against the accused whom he had tied down for the offence u/s 302 IPC and went to the extent of introducing false witnesses, preparing fabricated recoveries, replacing them by original recoveries." The High Court on the other hand did not deal with the various discrepancies and contradictions appearing in the prosecution evidence relating to the making of the disclosure statement and the recovery of the ornaments.
The High Court placed reliance on the testimony of Kuldip Kaul PWl and Harnaik Singh PW2 to hold that the disclosure statement and the recovery had been made in the manner suggested by the prosecution.
In our opinion, the High Court did not properly appreciate the prosection evidence while reversing the well considered judgment of the learned Sessions Judge.
245 On our independent appraisal of the evidence we find that the prosecution evidence relating to the disclosure statement and the recovery of ornaments is not only discrepent and contradictory but also suffers from glaring infirmities and improbabilities rendering it unsafe to rely upon the same.
There is contradiction between the evidence of Kuldip Kaul PW1` and the I.O. as to the place where Kuldip Kaul signed the recovery memo.
According to the 1.0.
it was signed at the spot while according to Kuldip Kaul PW1, he had returned to the police station and there signed the recovery memo.
Again, while Kuldip Kaul attempted to show that he had met the I.O. just once and did not know him earlier, the I.O. has given a direct lie to it.
After carefully analysing the evidence, we find Kuldip Kaul PWl was a convenient witness and his evidence does not appear to be trustworthy.
Same is our opinion about Harnaik Singh PW2.
Whereas both Harnaik Singh PW2 and the I.O. want the Court to believe that they did not know each other earlier and that I.O. had seen Harnaik Singh for the first time on that day only at the police station, there is abundant material on the record to show only that Harnaik Singh had earlier been cited as witness by the same I.O. while posted as Sub Inspector at another police station, Harnaik Singh PW2 was also present outside the house of the appellant alongwith Kuldip Kaul PWl as early as on 6.30 AM on that day.
Harnaik Singh PW2 also exposed his unreliability when he admitted during the cross examination that the disclosure statement had not been made by the appellant in his presence at the police station but that he had signed a statement which had already been prepared, thus, giving a lie not only to Kuldip Kaul PWI but also to the I.O. who have deposed to the contrary.
As regards the recovery of ornaments also, there is a very serious infirmity which emerges from the testimony of Harnaik Singh PW2.
Contrary to what the I.O. and the other witnesses stated, Harnaik Singh PW2 deposed that the ornaments were taken out by, the Sardarji I. O. from the drain hole and not by the appellant.
This probabilises the defence version that the ornaments had been recovered during the search and were with the I.O. when the ritual of the recovery under Section 27 of the Evidence Act was performed.
The contradictions in the evidence of the I.O. and S.I. Dalip Singh PW6 as to who had weighed the ornaments after their alleged recovery also casts doubt on the correctness of the prosecution story and the bonafides of the investigation.
246 The learned Judges of the High Court noticed the evidence of Harnaik Singh as regards the manner of his signing the disclosure statement and the alleged recovery of ornaments and observed : "Harnaik Singh PW2 even though cited as a witness of the disclosure statement, does not subscribe to it and obviously, as stated by Harmit Singh, he was only brought to the police station after the first interrogation was conducted.
In any event we think that a person like Harnaik Singh PW2 who is not prepared to subscribe to a part of the prosecution case to which he was not a witness could not but be a truthful witness and there is absolutely no reason not to believe his version that these ornaments were recovered at the pointing out of the accused and were drawn from the drain hole by the accused himself.
" We are unable to appreciate this approach of the High Court.
The Court seems to have made a virtue out of a vice.
While deposing about the recovery of the ornaments from the drain hole of the bath room Harnaik Singh PW2 belied the entire prosecution case when he stated that after the appellant had led the police party to the bath room "the Sardarji took out three bangles and one golden chain from the gutter of the bath room".
The High Court did not advert to this aspect of the evidence at all.
Kuldip Kaul PWl who was also disbelieved by the learned Sessions Judge and in our opinion rightly, had also exposed the extent of falsehood indulged into by the investigating officer with regard to the time and place where the witness attested the memo of recovery of the ornaments but the High Court did not deal with the said circumstance also in its proper perspective and on the other hand unjustifiably criticised the Sessions Judge for her adverse comments on the veracity of the prosecution case.
Obviously, the investigating officer had associated Kuldip Kaul PWI not only because he was known to the SHO but also because he was a convenient witness who was prepared to sign the recovery memo at the police station at 3.30 PM, after the police party had returned from the house of the 'appellant.
The glaring discrepancies and contradictions noticed above have rendered the evidence of Kuldip Kaul PW1, Harnaik Singh PW2 and the Investigation Officer Harmit Singh PW19 untrustworthy and unreliable.
On the other hand, we find that the defence version regarding the recovery of ornaments is more probable and is supported by independent witnesses including Tara Chand 247 DW2 father of the deceased whom the I.O. did not produce as a prosecution witness.
Despite searching cross examination nothing was elicited to created any doubt on the veracity of Tara Chand DW2, the father of the deceased, who, as already stated, would be the last person to screen the real murderer of his daughter.
The evidence of Tara Chand DW2 has impressed us and we find that the version given by him, in the facts and circumstances of the case, was more probable.
In view of the serious discrepancies contradictions and the attempt of the Investigating Officer Harmit Singh to create false clues and fabricate evidence, we are of the opinion that the learned Sessions Judge was perfectly justified in rejecting the prosecution evidence relating to the disclosure statement exhibit PC and the consequent recovery of the ornaments.
The prosecution has failed to establish that the appellant did make the disclosure statement as alleged by the prosecution or led to the recovery of the ornaments belonging to the deceased in the manner suggested by the prosecution.
This piece of circumstantial evidence, therefore, has not at all been established, much less conclusively.
In a case based on circumstantial evidence, the settled law is that the circumstances from which the conclusion of guilt is drawn should be fully proved and those circumstances must be conclusive in nature.
Moreover, the established facts should be consistent only with the hypothesis of the guilt of the accused alone and totally inconsistent with his innocence.
Though with the ruling out of the recovery of the ornaments as circumstances relating to the been established conclusively, the chain of the circumstantial evidence snaps badly, we find that there are some other circumstances also in the prosecution case which militate against its correctness.
Admittedly, the nail clippings of the nails of the deceased had been taken by the police.
There was also recovery of the hair from near the cot where the dead body was lying and the romoval of the hair from the scalp of the appellant by the I.O. for the purpose of their comparison.
The report of the chemical examiner has not connected the hair recovered from the cot with those of the appellant.
There is no material on the record either to show that the nail clipping had any blood, which could have tallied with the blood group of the appellant.
Thus, both the/ nail clippings and the hair have failed to connect the appellant with the crime.
248 The information about the incident was given by Sulekh Chand Jain DW13 an immediate neighbour, of the decased who informed the police at 4.55 AM on the request of the appellant about the occurrence.
Sulekh Chand Jain was not examined by the prosecution and was instead examined by the defence and has appeared as DW13.
He deposed that he had conveyed the information, as given to him by the appellant and other inmates of that house, regarding the murder of the deceased to Moti Ram PW11 at police station Hauz Khas on telephone.
The record of the information conveyed by him at the police station was, however, cryptic and no explanation has been furnished as to why the recorded report was so cryptic.
In answer to a question in the cross examination, the witness naturally expressed his ignorance as to why the report had been recorded in the manner in which it was recorded.
That was natural.
This explanation was required to be furnished by the police witnesses rather than DW13.
Though he was subjected to incisive cross examination, nothing emerged from the evidence of DW13 which may show that he had not conveyed the information of murder having been committed to the police.
Under these circumstances, the argument of Mr. Garg that the report was designedly left vague to enable the investigating agency to fill in the blanks latter cannot be dismissed as wholly unplausible particularly when we have noticed the conduct of the Investigating Officer during the investigation.
The possiblility that the entire case was built up after the dogs of the dog squad pointed towards the appellant cannot be ruled out.
Since, the appellant had slept in the verandah near the cot where the dead body of his wife was found; had locked the collapsable door with the recovered lock before going to sleep and had himself been close to the dead body before the police came, the picking up of the smell by the dogs and pointing towards the accused could not be said to be a circumstance which could exclude the possibility of guilt of any person other than that of the appellant or be compatible only with hypothesis of guilt of the appellant.
The pointing out by the dogs could as well lead to a misguided suspicion that the appellant had committed the crime.
The explanation of the appellant regarding the injuries on his person as having been caused by the police is also quite plausible because according to the father of the deceased, the sister of the deceased, the tenants of the house and other neighbours who had reached the spot, the appellant was wearing only a vest and the pyjama and no shirt and there were no marks of injuries on his body before he was 249 taken to the police.
station.
The prosecution case regarding the presence of injuries on the person of the deceased also, therefore, is quite doubtful.
On an independent appraisal of the evidence on the record, we have therefore unhesitatingly come to the conclusion that the learned Sessions Judge was perfectly justified in acquitting the appellant of all the charges and the reasoning given and the findings recorded by her are sound, cogent and reasonable.
The High Court was not justified to set aside those findings on surmises and conjectures.
The finding of guilt recorded against the appellant by the High Court is not sustainable in law and we, agree with the learned Sessions Judge that the prosecution has not established the case against the appellant beyond a reasonable doubt.
We, accordingly, set aside the judgment of the High Court convicting the appellant for the offence under Section 302/203 IPC.
The appeal is allowed and the appellant acquitted of both the charges.
The appellant is on bail, his bail bonds shall stand discharged.
N.V.K. Appeal allowed.
| Six accused persons were arrayed by the investigating agency for offences punishable under Sections 302, 324, 323, 341, 148 read with Section 149 IPC, for an occurrence that took place on 24th December, 1986 in which one Suku succumbed to injuries as a result of the assault during the occurrence.
They were put on trial, and the prosecution sought to establish its case by examining as many as six eye witnesses besides other evidence, documentary and oral.
According to the prosecution case, all the six accused persons were armed with weapons like chopper, iron rod, knife, cycle chain and torches and that the accused had held PW.2 George and while the first accused kicked him, the third accused inflicted injuries on him with a cycle chain.
So far as Suku deceased was concerned, all the accused except the first accused caused him injuries with a torch, a cycle chain and a knife.
The first accused was alleged to have caught hold of Suku by the collar and inflicted injuries on his hands, arms and legs with a chopper.
The assault took place in front of an arrack shop.
It was alleged that enmity between the two groups on account of suspicion of information being passed on to the Excise Officials, regarding illicit distillation was the cause of the occurrence, but no evidence was led in support of this allegation and no motive for commission of the crime was established at the trial.
85 At the trial, four eye witnesses PW3, P.W. 6, PW.7, the salesman and his assistant in the arrack shop and PW.8 turned hostile and did not support the prosecution case.
The prosecution case was sought to be proved by the ocular testimony of PW.4 and PW.5 both aged about 13 years, at the time of the occurrence and other evidence.
Both these eye witnesses supported their statements recorded under section 161 Cr.
P.C. during their testimony in Court.
The trial court on the basis of prosecution evidence found accused No. 1, Subran, guilty of an offence punishable under Section 302 IPC and sentenced him to suffer rigorous imprisonment for life.
Accused Nos. 2 to 6, namely, Rajan, Preman, Viswan, Sura and Shajan, were found guilty of an offence under Section 326/149 IPC and each one of them was sentenced to undergo rigorous imprisonment for three years Besides, accused 1 to 4 were convicted for an offence under Section 148 and sentenced to suffer rigorous imprisonment for one year.
All the accused were also convicted for offences under Sections 14, 341, 323,324 read with Section 149 IPC but no separate sentences were awarded on any of those counts.
On appeal to the High Court, the conviction and sentence awarded to accused 1 to 3 and 5 were confirmed, while accused 4 and 6 were acquitted and the conviction and sentence recorded against them by the Sessions Judge was set aside.
Ile participation of the 6th accused and the role assigned to him by the prosecution was doubted by the Judges of the High Court and he was given the benefit of doubt and acquitted.
Similarly, the High Court disbelieved the role assigned to accused No. 4 and doubted his participation in the commission of the crime. ]Me accused appealed to this Court by Special Leave.
After preliminary hearing it was ordered that the appeal be heard on the limited question regarding the nature of the offence and the quantum of the sentence only.
On the question : Whether after the acquittal of the two accused, could the High Court Convict appellant No. 1 for the substantive offence under Section 302 IPC an offence with which he had not been charged, and appellants 2 to 4 for an offence under section 326/149 IPC, Partially allowing the appeal, the Court, HELD: 1.
A combined reading of Section 141 and Section 149 IPC 86 show that an assembly of less than five members is not an unlawful assembly within the meaning of Section 141 and cannot, therefore, form the basis for conviction for an offence with the aid of Section 149 IPC.
[92F] 2.
The existence of an unlawful assembly is a necessary postulate for invoking Section 149 IPC.
Where the existence of such an unlawful assembly is not proved, the conviction with the aid of Sections 149 IPC cannot be recorded or sustained.
The failure of the prosecution to show that the assembly was unlawful must necessarily result in the failure of the charge under section 149 )PC.
[92H,93A] 3.
A person charged for an offence under Section 302 IPC read with Section 149 cannot be convicted of the substantive offence under Section 302 IPC without a specific charge having been framed against him as envisaged by law.
Conviction for the substantive offence in such a case is unjustified because an accused might be misled in his defence by the absence of the charge for the substantive offence under Section 302 IPC.
[93D] 4.
The conviction of appellants 2 to 4 for an offence under Section 326/149 IPC cannot be sustained and the same would be the position with regard to the conviction of all the appellants for other offences with the aid of Section 149 IPC also.
[93B] 5.
The High Court failed to draw the distinction between an offence under clause (b) and (c) of Section 299 IPC and the one failing under clause (3) of Section 300 IPC.
[93G] 6, The effect of the acquittal of the two accused persons by the High Court and without the High Court finding that some other known or unknown persons were also involved in the assault, would be that for all intent and purposes the two acquitted accused persons were not members of the unlawful assembly.
Thus, only four accused could be said to have been the members of the assembly but such an assembly which comprises of less than five members is not an unlawful assembly within the meaning of Section 141 IPC.
[92G] 7.
Appellant No. 1 Subran not having been charged for the substantive offence of murder under Section 302 IPC, even the trial court, which tried the six accused persons, was not justified in recording a conviction against him for the substantive offence of murder punishable under Sec 87 tion 302 IPC after framing a charge against him for the offence under Section 302 read with Section 149 IPC only.
[93C] 8.
Appellant No. 1, Subran, was never called upon to meet a charge under Section 302 IPC simplicitor and, therefore, in defending himself, he can not be said to have been called upon to meet that charge and he could very well have considered it unnecessary to concentrate on that part of the prosecution case during the cross examination of the prosecution witnesses.
Therefore, the conviction of the appellant No. 1 for an offence under Section 302 was not permissible.
[93E] 9.
The intention to cause murder of Suku deceased, could not be attributed to appellant No. 1 and the medical evidence also shows that the injuries attributed to him were not sufficient in the ordinary course of nature to cause the death of the deceased.
The conviction of appellant No. 1 for the substantive offence under Section 302 IPC is therefore unwarranted and cannot be sustained.
That Suku deceased died as a result of injuries inflicted on him by all the four appellants is not a matter which is in doubt.
From the ocular evidence read with the medical evidence, it stands established that the injuries on the deceased had been caused by all the four appellants and that the death of Suku had occurred due to the receipt of multiple injuries.
[93H, 94A B] 10.
On a consideration of the circumstances of the case, the type of weapons with which the accused were armed and the nature and seat of the injuries, it is not possible to hold that all the four appellants had shared the common intention of causing such bodily injuries on the deceased as were likely to cause the death of Suku or were sufficient in the ordinary course of nature to cause his death.
The appellants would, therefore be liable for the offence committed individually by each one of them.
[94D E] 11.
The case of appellant No. 1 therefore, falls within Section 299 I PC punishable under Section 304 Part 1 [PC.
He is accordingly, convicted for the said offence and sentenced to suffer rigorous imprisonment for a period of seven years and to pay a fine of Rs. 2,000 and in default of payment suffer further rigorous imprisonment for one year.
Fine if realised to be paid to the heirs of the deceased.
[94G H] 12 (a) With regard to the three other appellants their conviction for 88 an offence under Section 326 with the aid of Section 149 is not sustainable in law, it is accordingly set aside and they are convicted under Section 326/149 IPC.
They would be responsible for their individual acts.
The injuries caused by appellants 2 and 3 were with a torch, iron rod and a cycle chain.
None of the injuries caused by them according to the post mortem report were on any vital part of the body, though some of the injuries caused by blunt weapons were grievous in nature.
Each of them are convicted for an offence under Section 325 IPC and sentenced to suffer rigorous imprisonment for two years each.
[95B C] 12 (b) Appellant No. 4 caused grievous injuries to the deceased with a knife, the offence would therefore, fall under Section 326 IPC.
He is therefore convicted for the said offence and sentenced to suffer rigorous imprisonment for a period of three years and to pay a fine of Rs. 500/ and in default of payment to suffer rigorous imprisonment for a period of three months.
The fine, if realised shall be paid to the heirs of the deceased.
[95D] 12 (c) The conviction of all the appellants for the offence under Section 324 as recorded by the High Court as also for the other offences are maintained but without the aid of Section 149 IPC.
|
minal Appeal No. 193 of 1965.
Appeal by special leave from the judgment and order dated October 19, 1965 of the Bombay High Court in Criminal Revi sion Applications Nos. 193 and 194 of 1965.
767 K. Hingorani and N. H. Hingorani, for the appellants.
P. K. Chatterjee and section P. Nayyar, for the respondent.
The Judgment of the Court was delivered by Grover, J.
This is an appeal by special leave in which the main question for decision is whether the appellants were rightly convicted for offences under sections 304A and 337 of the Indian Penal Code.
The facts lie within a narrow compass.
The appellants held licences under the Indian , hereinafter called the Act, and the Rules framed thereunder to manufacture, possess and sell fire works and gun powder not exceeding 200 pounds and to possess and sell safety fuses.
It appears that the appellants had a factory for manufacturing explosives in a house on Shad Road in Latur town.
It is said that an explosion occurred in that place on May 5, 1962 at about 12 O 'clock as a result of which 11 persons died and 7 persons were injured.
The appellants along with one B. G. Kamble were tried for offences under the various provisions of the Act and the Rules as also for offences under sections 304A and 337 of the Code.
The trial judge acquitted B. G. Kamble but convicted the appellants of the various charges framed against them and imposed fine for offences under the provisions of the Act and awarded a sentence of one year under section 304A and three months under section 337 of the Indian Penal Code with a direction that they were to run concurrently.
The learned Additional Sessions Judge dismissed the appeal preferred by the appellants against their conviction and sentence.
The appellants then moved the High Court on the revisional side.
The order of conviction was confirmed by the High Court as also the sentence on all the counts except that under section 304A the substantive sentence was reduced to one of rigorous imprisonment for six months but for the reasons mentioned in the judgment of the High Court the appellants were directed, in addition, to pay a line of Rs. 1,500 each.
Now there can be no manner of doubt and it has been so found that in the explosion which took place the persons who were working in the so called factory of the appellants where crackers etc. were being manufactured died or were injured.
According to the courts below the appellants had, in their possession, unauthorised explosives in contravention of the Act and the rules and had committed a number of breaches of those rules and the conditions of the licences issued to them.
The principal contention on behalf of the appellants is that even on the facts found it is not possible to hold that they were responsible for the explosion or had done anything which could be regarded as a direct and immediate cause of the explosion.
Thus criminal 768 liability could not be imposed on them under sections 304A and 337 of the Code as it has not been established that the deaths or injuries caused were the direct result of any rash or negligent act on the part of the appellants or that any such act had been proved which was the proximate and efficient cause of the explosion without the intervention of another 's negligence.
In the High Court emphasis was laid on the absence of any positive evidence pointing to the presence of the appellants at the material time.
The High Court while holding that there was no direct evidence in respect of the immediate cause of the explosion referred to the conclusion of the courts below that the appellants had committed a number of hazardous breaches of the rules framed under the Act and the conditions of the licences issued to them, particularly the storage of prohibited explosives and employment of children below the, age of 18.
This, it was pointed out, showed a callous disregard for the safety of the employees.
It was noticed that the Assistant Inspector of.
Explosives had also attributed the explosion to the storage of prohibited explosives of a high degree.
Therefore the appellants were found to have been rightly convicted under sections 304A and 337 of the Indian Penal Code.
Our attention has been invited by the learned Counsel for the appellants to certain decisions of this Court.
In Kurban Hussein Mohammedali Rangwalla vs State of Maharashtra(1) a factory was licensed on certain conditions to manufacture paints.
The manager and the working partner did not have a license for manufacturing wet paints but nevertheless the factory manufactured them.
Certain burners were used for the purpose of melting rosin or bitumen by heating them in barrels and adding turpentine thereto after the temperature cooled down to a certain degree.
While this process was going on froth overflowed out of the barrel and because of heat, varnish and turpentine which were stored at a short distance caught fire and resulted in the death of seven persons working in the factory.
The question was whether the manager and the working partner of the firm which ran the factory was guilty under sections 304 A and 285 of the Indian Penal Code.
It was held that the mere fact that the burners were allowed to be used in the same room in which varnish and turpentine were stored even though it might be a negligent act would not be enough to make the appellant before this Court responsible for the fire which broke out.
The cause of the fire, it was observed, was not merely the presence of burners in the room in which the varnish and turpentine were stored though this circumstance was indirectly responsible for the fire which broke out.
The requirement of section 304A was the causing of death by doing any rash or negligent act and this meant that the death must be the direct or proximate result of the rash or negligent (1) ; 769 act.
It was found that the direct or proximate cause of the fire which resulted in seven deaths was the act of a labourer who acted in a hurry and who did not wait until the bitumen or rosin cooled down and thus it was his negligence which was the direct and proximate cause of the fire breaking out.
The appellant, namely, the manager and the working partner of the firm could not be held to have committed the offence under section 304A of the ' Code.
The ratio of the above decision was applied in Suleman Rahiman Mulani & Another V.
The State of Maharashtra(1).
In that case the question was whether the first appellant who had only a learner 's licence and was driving a jeep which knocked down the deceased had been rightly convicted of an offence under section 304A of the Code read with certain provisions of the Motor Vehicles Act.
On the material on the record the court found it impossible to discover under what circumstances the accident had taken place.
This Court held that it was not known what was the proximate cause of the accident and the possibility that it had been caused due to the fault of the deceased could not be ruled out.
The mere fact that the appellant in question held a learner 's licence did not establish that he did not know driving.
His proficiency might furnish a defence which the learner could not have but the absence of proficiency did not make him guilty.
His conviction under section 304A was therefore set aside.
The facts of the present case are somewhat different and distinguishable from those of the above two cases as will be clear from a close examination of the material evidence relating to the substances which were being used in the manufacture of the fire works etc.
in the factory of the appellants.
It appears that soon after the explosion the Inspector of Explosives, West Circle, Bombay, proceeded to Latur for investigation.
He took into possession certain substances from the scene of the accident.
By means of a letter, dated May 11, 1962 sent from the office of the Inspector of Explosives these substances were forwarded to the Chemical Examiner, Government of Maharashtra for examination, the samples were as follows: 1.
A white substance in a packet suspected to be potassium chlorate.
An orange yellow substance suspected to be arsenic sulphide.
A round stone piece containing smears with orange yellow chemical adhering to it.
(This was to (1) Cr. A. 50 of 1965, decided on 1 12 67. 770 be examined for the presence of arsenic sulphide and potassium chlorate).
A contraption to test the explosibility of a mixture of potassium chlorate and sulphur.
Dindeshchandra P. W. 10 Assistant Inspector of Explosives also went to the scene of the explosion along with the Inspector on May 9, 1962 and various samples were collected from the shops of the appellants as well.
All these were forwarded to the Chemical Examiner for examination.
The report of the Chemical Examiner (exhibit 87) which is to be found on the original record gives the following analysis in respect of the above substances "Exhibit (1) is potassium chlorate.
Exhibit (2) is arsenic sulphide.
Exhibit (3) has sediment containing arsenic sulphide and sulphur adhering to it.
Exhibit (4) has Potassium Chlorate and Sulphur in its cavity." "Apart from the original record these facts stand established from the evidence of Dindeshchandra P. W. 10 and the report (exhibit 38) which he had submitted on November 2, 1962 which was duly proved by him when he appeared as a witness.
He has further stated that when he inspected the premises of the factory on May 9, 1962 he noticed half burnt raw material like sulphur white powder the ingredients of which he could not ascertain.
There were grinding stones as also empty tubes for manufacturing exhibition fire works.
As regards the cause of the explosion his opinion may be given in his own words "Probable cause of the explosion must have been the large quantities of the raw materials gun powder and finished fireworks and the raw materials for the same were stored in the premises.
At the time of the explosion there were large quantities of the fireworks, finished as well as in the process of preparation, loose compositions and the gun powder.
There were being dried in the open court yard of the premises.
Some of the items contained very sensitive explosive compositions which might have exploded due to the spark, percussion or friction or fire.
" Although there was no direct evidence of the immediate cause of the explosion but indisputably the explosives the possession of which was prohibited under the notifications issued under the Act were found in the shops or the premises where the appellants carried on their business and on the substances that have been :,mentioned which were of a highly hazardous and dangerous 771, nature were apparently being used in the manufacture of the fire works since they were found at the scene of the explosion, (vide the evidence mentioned before and the finding of the trial court and the Additional Sessions Judge).
As stated by Dindeshchandra P. W. 10 these explosives had sensitive compositions and even friction or percussion could cause explosion.
It is further proved that in the factory itself where the explosion took place the persons who were employed were mostly women who brought their small children with _them and young __children below the age of 18 had been employed in the manufacture of the fire works etc.
The factory was situate in close proximity to residential quarters.
It became therefore all the more incumbent on the appellants to,, have completely avoided the use of highly sensitive compositions of the nature mentioned above.
The decision which is apposite to the present case is the one recently delivered by this Court on April 3, 1968 in Rustom Sherior Irani vs State of Maharashtra(1).
There the chimney of a bakery had collapsed and 11 persons were killed and certain persons were injured.
The appellant had submitted no plan for the alteration of the chimney for the third time and had asked just a mason to remove the iron pipe which had corroded and to bring the height of the chimney to 65 feet.
The mason had told Mm that while the work was being executed it was unnecessary to completely keep the bakery closed except during the period the repair work was being done.
After the chimney fell down a number of officers visited the spot and inspected the bakery.
The Chief Inspector of Boilers was of the opinion that the cause of the collapse of the chimney was the explosion which occurred in it because of the products of combustion and gases not being permitted to escape freely as a pipe of 6 inches diameter had been put instead of 12 inches diameter.
It is unnecessary to refer to, the detailed discussion of the evidence.
It was established that the construction of the new chimney had been done without ther advice of a properly qualified person.
The argument raised was on the lines similar to the one which had been advanced in Kurban Hussein Mohammedall Rangwalla vs State of Maharashtra(2).
It was maintained that no negligence on the part of the appellant had been established and it was on account of the, negligence of the mason that the chimney had fallen down.
This Court was of the view that the proximate and efficient cause of the deaths was the negligence of the appellant in choosing a pipe of 6 inches diameter and asking a mason (who was apparently not a qualified person) to carry out the alterations and also continuing working at least one oven there during the period while the alterations to the chimney were being made.
(1) Cr. A. No. 72/65.
(2) ; 772 In another recent decision, Balachandra Waman Pathe vs The State of Maharashtra,(1) this Court referred with approval to what was said by Straight, J. in Empress of India vs Indu Beg(2) that criminal negligence is the gross and culpable neglect or failure to exercise that reasonable and proper care and precaution to guard against injury either to the public generally or to an individual in particular, which having regard to all the circumstances out of which the charge has arisen, it was the imperative duty of the accused person to have adopted.
In Queen Empress vs Bhutan(1) the lessee of a government ferry having the exclusive right of conveying passengers across a certain river was held to be guilty under section 304A when he had committed the negligent act of putting a boat in the ferry which was in an unsafe condi tion and which sunk resulting in some of persons getting drowned.
The Punjab Chief Court found a person guilty under sections 304A and 338 in Kamr ud din vs King Emperor(4) when he had consigned two boxes containing fire works to the Railway falsely declaring them to contain iron locks with the result that in loading one of the boxes exploded killing one coolie and injuring another.
The inadvertence to the results of concealing the true character of the contents of the box which was the failure of duty to the public at large and the knowledge of the dangerous nature of the contents which must be inevitably presumed coupled with the consequences were regarded as constituting a complete offence under the sections.
Adverting to English law, the case of Regina vs David Dant(5) is highly instructive.
This is what Erle, C.J. observed "The defendant turned a dangerous animal on to a common where there was a public footpath.
This has been found by the jury to be culpable negligence, and the child 's death was caused by it.
Ordinarily speaking these are all ' the requisites of manslaughter.
It is.
contended, however, that no offence was committed, be cause as we must take it, the child was not on the path.
the jury having found that it was very near, but that they could not say whether it was on or off.
In my opinion the defendant is responsible for having brought so great a danger on persons exercising their right to cross the common; and it is not a ground of acquittal that the child had strayed from the path.
" In another case, Rex vs Pittwood(6) the prisoner was charged with manslaughter on the ground that he had been negligent in not (1) Cr. A. 62 of 1965 decided on 20 11 67.
(2) 1.
L. R. III All. 776.
(3) 1.
L. R. XVI All.
(4) 1905 P. R. 22.
(Cr.) (5) 169 English Reports (C. C. ) 1517.
(6) 773 closing a gate when a train passed which it was his duty to do with the result that White who was in a hay cart was killed while the cart was struck by the train which came when it was crossing the line.
Wright, J. was of the opinion that the prisoner had been guilty of gross and criminal negligence as he was paid to keep the gate shut when the train came and protect the public.
It was a clear case of misfeasance as the prisoner directly contributed to the accident and he was guilty of manslaughter.
All the above cases show that criminal negligence can be found on varying sets of circumstances.
The tests which have been applied appear to be fully applicable to the facts of the present case including the one of direct and efficient cause.
The appellants had, undoubtedly displayed a high degree of negligence by allowing or causing to be used dangerous and prohibited compositions and substances which must be held to have been the efficient cause of the explosion.
The appellants were therefore rightly convicted and sentenced under sections 304A and 337 of the Indian ' Penal Code.
As no other point has been pressed or arises for consideration, the appeal is dismissed.
The appellants shall forthwith surrender to their bail bonds.
Y.P. Appeal dismissed.
| The respondent was the proprietor of certain estates in Bihar.
He was also in receipt of a permanent malikana allowance from the Government.
After the passing of the Bihar Land Reforms Act 1950 followed by a notification under section 3 thereof the estates of the respondent vested in the State of Bihar.
In 1958 the State of Bihar stopped payment of the malikana allowance on the ground that it was a proprietary interest which had vested in the State.
The respondent thereupon filed a petition under article 226 ,of the Constitution.
The High Court held that the respondent 's right to the malikana was not an intermediary interest and did not cease with the extinction of his proprietary rights in the estate.
The State of Bihar appealed to this Court.
The contentions raised on behalf of the appellant were : (i) that the right to malikana was an interest in the estates belonging to the respondent which on the issue of the notification under section 3 became extinguished and (ii) alternatively, the respondent was an intermediary of temporary settled estates in respect of which malikana was payable and on the transference of his intermediary interests in those estates, his right to the malikana stood extinguished and he became entitled only to the compensation payable under section 24A.
HELD : (i) The history of the malikana allowance showed that it was a permanent grant of money in lieu of the proprietor 's rights in lands originally held by him.
The proprietors retained certain estates and it was only the interest in these estates that was lost on the publication of the notification under section 3.
The malikana payable to the respondent in the present case was not an interest in such estates and did not cease on the issue of the notification.
[740 B] (ii) The respondent was not a proprietor, tenure holder or an intermediary of the estates in respect of which malikana was paid to him.
The malikana was not rent or income derived from those estates.
Nor was the malikana an incumbrance on them.
The respondent 's right to the malikana was not an intermediary interest in the estates for which compensation was payable under section 24A and it did not therefore vest in the Government.
[740 H] Herranund Shoo vs Mst.
Ozeerun & Ors., , Gobinda Chunder Roy Choudhuri vs Ram Chunder Chowdhury, , Hurmuzi Begum vs Hirday Narayan, and Jaggo Bai vs Utsava Lal, 51 AN. 439, distinguished.
Bhoalee Singh vs Mst.
Neemoo Behoo, , Syed Shah Najamuddin Hyder vs Syed Zahid Hossein, 8 C.L.J. 300, Maharaja P. section Bahadur vs State of Bihar, 18 Pat.
1018, Deo Kuar vs Man Kuar, 21 I.A. 148 and Mahendra Narayan Roy Chowdhuri vs Abdul Gafur Choudhry, referred to.
State of Uttar Pradesh vs Kunwar Sri Trivikram Narain Singh, ; , relied on.
|
Appeal No. 72 of 1965.
Appeal by special leave from the judgment and decree dated August 28, 1962 of the Bombay High Court in Appeal No. 250 of 1959 from Original Decree.
section G. Patwardhan, R. R. Jhagirdar, V. G. Mudholkar and A. G. Ratnaparkhi, for the appellant.
R. H. Dhebar, section section Javali and section P. Nayar, for respondent No. 1.
section section Shukla, for respondents Nos.
2(ii) (v).
The Judgment of the Court was delivered by Shah, J.
One Sambhusing applied under section 19 of the Bombay Public Trusts Act 29 of 1950 for a declaration that City Survey Nos. 371 to 379 of Taloda were settled by one Dagadu Khushal in favour of the Municipality in 1883 for the benefit of the Johari Panch and for an order that the property be registered as property of a public trust under the Act.
The Assistant Charity Commissioner who heard the petition by his order dated January 20, 1956, held that "there was no such institution known as Johari Panch", and that the property in dispute had not been used for the benefit of that community, but Dagadu Khushal had trans ferred the property to the Municipality for the benefit of members of the public interested in the Samadhi of Nagabawa.
The Assistant Charity Commissioner declared that there was a public trust and City Survey Nos.
371 to 379 of Taloda Municipality were the property of the Trust and that the Municipality held it as trustee of that trust.
That order was confirmed in appeal by the Charity Commissioner.
In appeal, the District Court set aside the order of the Charity Commissioner and held that by the deed of transfer executed by Dagadu Khusbal no trust was created, that in any event the trust was not a public trust and that the property in City Survey Nos.
371 to 379 was not the property of any such trust.
In appeal under section 72(4) of the Act, the High Court of Bombay reversed the order passed by the District Court and restored the order passed by the Charity Commissioner.
The Municipality of Taloda has filed this petition with special leave.
A short history of the property may first be set out.
Land which now bears City Survey Nos. 371 to 379 originally be longed to one Charandas who erected a 'Dharamshala ' thereon.
On May 24, 1878, Charandas sold the land and the Dharamshala to Dagadu Khushal purporting to transfer the property absolutely to the vendee.
On August 27, 1883, Dagadu Khushal executed a deed in favour of the Municipality of Taloda, the relevant clause 655 of the deed (as translated in the judgment of the High Court) reads as follows "Having released all my rights, interest and title in the Property mentioned in the boundaries above, I am handing over today all that property in the possession of the Municipality for the purpose of sarvajanik kam (public purpose) as it has been utilised upto date for shelter of Atit, Abhyagat, Sadhu, Sant etc.
to be used in the same way as it has been used up till now.
" It was recited in the deed that in the property conveyed "there is a samadhi (grave) of Nagabawa".
The Municipality, pursuant to the deed, entered into the possession of the property.
It appears that thereafter the Municipality made certain constructions which were used for its offices and for shops.
On September 21, 1936, the Municipality of Taloda filed a suit against one Baba Haridas Guru Shamdas Udasi for a declaration that the defendant had no right or interest over the land City Survey Nos. 371 to 379 and that the defendant had taken unlawful possession thereof and for an order that the obstruction raised by the defendant be removed, and possession of the land be awarded to the Municipality.
In this suit it was claimed by the Municipality that it was in possession of the land for more than sixty years and the property was "utilised for municipal purposes and was enjoyed in all ways for necessary municipal requirements", but the defendant had made unauthorised construction thereon.
Baba Haridas contended that the Municipality had no right to utilise the property for municipal purposes since it was transferred in trust for the residence of "sages, saints, guests, visitors and others of the Nanak Sect", and the defendant being "a sage or saint of the Nanak Sect" had been residing in the property and was entitled to do so.
This suit was decreed by the Subordinate Judge.
In 1950 survey proceedings were started in the town of Taloda and an enquiry regarding the, title to the land was made.
The Secretary of the Municipality admitted before the City Survey Officer that in Survey No. 379 there existed "a temple of the Johari men and the members of that, community had the right to visit the temple at fixed times but they had no other right".
Members of the Johari Panch claimed that they had entrusted their temple to the Municipality for administering it for the community, but the "compound" belonged to them and that the Municipality was merely a trustee thereof.
The City Survey Officer declared the Municipality to be the owner of the property in question and further declared that the Municipality was not a trustee for the Johari Panch.
Sambhusing then submitted the application out of which this appeal has arisen.
The High Court has held that the Municipality held at all material times the property as a trustee of a public trust.
This 656 finding is challenged before us by the Municipality.
The first question which falls to be considered is whether the Municipality holds the property or any part thereof as a trustee.
Dagadu Khushal claiming to be the owner of the property by purchase from Charandas transferred it to the Municipality for public purpose i.e. to be utilised for giving shelter to "Sadhus, saints and religious mendicants" in the same manner in which it had been utilised upto the date of transfer.
We will assume that Dagadu Khushal could have, when he was the owner, stopped the user of the pro perty for the benefit of "Sadhus, saints and religious mendicants".
But after the transfer of the property was accepted by the Municipality for the purposes mentioned in the deed, it was not open to the Municipality to divert the use of that property for its own purposes.
Counsel for the Municipality urged that the Municipality is in a sense a trustee for the residents of the town of Taloda in respect of all the property vested in it by operation of the Act constituting it, and upon that trust another trust which restricts the use of the property for the benefit of.
a limited class of persons cannot be super imposed.
The Municipality was governed by Act VI of 1873 at the date of the settlement.
Section 17 of that Act provided: "All property of the nature, hereinafter specified shall be vested in and belong to the Municipality, and shall, together with all other property, of what nature or kind soever, which may become vested in the Municipality, be under their direction, management, and control, and shall be held and applied by them as trustees for the purposes of this Act; that is to say: (a) All public town walls gates, markets, slaughterhouses, manure and nightsoil depots and public buildings of every description not specially reserved by Government.
(b) All public streams, tanks, reservoirs, cisterns, wells, springs aqueducts, conduits, tunnels, pipes, pumps, and other water works, and all bridges buildings, engines, works, materials, and things connected therewith or appertaining thereto, and also any adjacent land (not being private property) appertaining to any public tank or well.
(c) All public sewers and drains, and all sewers, drains, tunnels, culverts, gutters and watercourses in, alongside, or under any street, and all works materials and things appertaining thereto, as also all :dust, dirt, dung.
ashes, refuse, animal matter or filth, or rubbish of any kind collected by the Municipality from the streets, houses, privies, sewers, cesspools, or elsewhere.
657 (d) All public lamps, lamp posts, and apparatus connected therewith, or appertaining thereto.
(e) All land transferred to them by Government, or by gift, or otherwise for local public purposes.
(f) All public streets, and spaces, and the pavements, stones, and other materials thereof, and also all trees, erections, materials, implements, and things provided for such streets and spaces.
" Property belonging to a Municipality governed by the Act must undoubtedly be held under its direction, management and control and must be applied by it as a trustee, subject to the provisions and for the purposes of the, Act.
But there is nothing in the Act or in the general law which prevents a Municipality from accepting a trust in favour of a section of the general public in respect of property transferred to it, or authorises the Municipality after accepting a trust to utilise it for its own purposes in breach of the trust.
It was then urged by counsel for the Municipality that by the decree passed in the suit filed against Baba Haridas, the right of the members of the Johari community to the property in dispute was negatived and the same right cannot, because of the rule of res judicata, be re agitated in these proceedings.
In that argument, in our judgment, there is no substance.
The only dispute in suit No. 5 10 of 1936 of the Court of the Second Class Sub Judge Nandurbar, was about the right of the Municipality to call upon Baba Haridas to vacate and deliver possession of the property which was in his occupation.
It is true that the defendant Baba Haridas had contended that the property was the property reserved for "Sadhus, saints and religious mendicants" and he as a Sadhu was entitled to reside therein.
But Baba Haridas was not sued in a representative capacity on behalf of the beneficiaries of the trust created in 1883; he was used as a trespasser.
The judgment of the civil court does not operate to prevent the Assistant Charity Commissioner from determining in an appropriate proceeding whether the property was the property of a public trust of a religious or charitable nature.
The argument of counsel for the Municipality that the decision of the City Survey Officer operates by virtue of s.50 A of the Bombay District Municipal Act, 1901, to destroy the rights of the public, is also without substance.
Sub section (1) of section 50 A of the Bombay District Municipal Act, 1901, authorises the City Survey Officer, in proceedings for survey of lands (other than land used for agriculture) in a Municipal District to determine the claim between the Municipality and other persons after formal enquiry of which due notice has been given.
By sub section
(2) any suit instituted in any civil court after the expiration of one year from the date of any order passed by the Collector, or if an appeal has been made I against such order within the period of limitation, shall be dismissed if the suit is brought to set aside such order, or if the relief 658 claimed is inconsistent with such order, provided that the plaintiff has had due notice of such order.
The property undoubtedly is entered in the City Survey record as private property of the Taloda Municipality.
But the legal ownership of the Municipality is not challenged in the proceedings before the Assistant Charity Commissioner.
It is merely contended in this proceeding under section 19 of the Bombay Public Trusts Act that the property 'is held by the Municipality subject to a public trust.
The proceeding under section 19 of the Bombay Public Trusts Act for a declaration that the property is the property of a public trust is not a suit to set aside the order of the Collector, nor is it a suit in which the relief claimed is inconsistent with the order of the City Survey Officer.
The learned Assistant Judge held that the beneficiaries referred in Ext.
14 as "Sadhus, saints and religious mendicants" do not, form the public or a section thereof, and on that account also the use of the property by them was not an object of general public utility.
The bounty of the settlor, observed the learned Judge, must be directed towards the public as a whole or a section of the public: if the object of his bounty is neither the public nor a section of the public, "but merely a conglomeration of men who constitute a mere group and the nexus which ties them is not a nexus which constitutes them a section of the public, the trust is not for advancement of any object of general public utility".
We are unable to agree with that view.
Section 9 of the Bombay Public Trusts Act provides: "For the purposes of this Act, a charitable purpose includes (1) relief of poverty or distress, (2) education, (3) medical relief, and (4) the advancement of any other object of general public utility, but does not include a purpose which relates (a) exclusively to sports, or (b) exclusively to religious teaching or worship." Section 10 of the Act provides, "Notwithstanding any law, custom or usage, a public trust shall not be void, only on the ground that the persons or objects for the benefit of whom or which it, is created are unascertained or unascertainable.
Explanation The expression "public trust" is defined in section 2(13) as meaning an, express or constructive trust for either a public, religious or charitable purpose, or both and includes a temple, a math, a wakf, a dharmada or any other religious or charitable purpose or for both 659 and registered under the .
A trust for either a religious or charitable purpose or for both by the express words of the definition is a public trust.
We are unable to agree with the learned Assistant Judge that Sadhus, religious mendicants and visitors to the samadhi of Nagabawa are not a section of the public.
They have a common bond of veneration for the samadhi.
The beneficiaries of the trust are an uncertain and fluctuating body of persons forming a considerable section of the public and answering a particular description, and the fact that they belong to a religious faith or a sect of persons of a certain religious persuasion does not make any difference in the matter: Mahant Ram Saroop Dasji vs section P. Sahi(1).
The property is entrusted to the Municipality for providing shelter to "sadhus, saints and religious mendicants", the purpose, in our judgment, is religious and charitable within the meaning of section 2(13), of the Act.
The plea that Dagadu Khushal had entrusted the property to the Municipality only for maintaining a Dharamshala for the benefit of persons visiting the samadhi of Guru Nagabawa and the trust was limited only to the building of the Dharamshala has also no force.
The terms of Ext.
14 are clear.
The trust was not limited to the buildings standing on the land, it extended to the entire property.
Two procedural objections which were raised by counsel for the, Municipality remain to be considered.
It was urged that since Sambhusing applied for a declaration that the purpose of the trust was to give shelter to sadhus, saints and religious mendicants during their sojourn in Taloda and to maintain and look after Nagabawa 's samadhi, and for an order that all the lands adjoining the samadhi of Nagabawa i.e. the Dharamshala, the whole building in which there was the Municipal office, may be given into the possession of the Johari Panchas, it was not open to the Assistant Charity Commissioner to give a findings that there existed a public trust for the benefit of persons interested in the samadhi.
It was contended that once it was found that the property was not for the benefit of the Johari Panchas the application should have been dismissed.
We are unable to agree with that contention.
The proceedings were commenced under section 1,9 of the Bombay Public Trusts Act, and it was open to the Assistant Charity Commissioner to determine whether a public trust existed, and if the Assistant Charity Commissioner was satisfied that there existed a public trust, whatever may be the claim made by the applicants.
the Assistant Charity Commissioner was bound to declare the existence of the public trust and register it.
Under section 19 of the Bombay Public Trusts Act an inquiry may be started by the Deputy or Assistant Charity Commissioner either on an application made under section 18 or on an application made by any person (1) [1959] Suppl.
(2) S.C.R. 583 ( 2 ) L/P(N)7SCI 3 660 having interest in a public trust or on his own motion.
The proceedings before the Assistant Charity Commissioner was not a proceeding inter partes, and Sambhusing was not claiming any personal relief.
He was entitled to set in motion an enquiry into the nature of the trust as a person claiming to be interested in the public trust.
If the Assistant Charity Commissioner found that a public trust existed, he could make an appropriate declaration and consequential orders consistent with his findings.
It was finally urged that against the finding of the District Court that there was no public trust, and if there was a public trust the beneficiaries were not the members of the public, the Charity Commissioner could not appeal to the High Court, for, it was said, the Charity Commissioner is constituted by the Act a judicial authority, and he cannot take up in the proceeding a contentious attitude.
We are unable to accept that contention also.
The powers of the Charity Commissioner under the Act are found in section 3.
That Officer is directed to exercise such powers and perform such duties and functions as are conferred by or under the pro visions of the Act, and shall, subject to such general or special orders as the State Government may pass, superintend the administration and carry out the provisions of the Act throughout the State.
If an adverse decision is arrived at by the Court under section 72 and if he is denied the right to appeal to the High, Court, it would be difficult for him, if he is of the view that the property is the property of the public trust and if the District Court rules otherwise, to carry out the provisions of the Act.
The Charity Commissioner was made a party to the appeal, and he was entitled to support his order before the District Court.
A person interested, as the Charity Commissioner is in the due administration of property, cannot be denied a right to appeal against an adverse decision in a proceeding to which he is a party, on the ground that he is pleading for acceptance of the view which he had declared as a quasi judicial authority at an earlier stage of that proceeding.
The appeal fails and is dismissed with costs in favour of the Charity Commissioner.
| The appellant was the owner of 56 standard acres of agricultural land in Punjab from which she was ousted in 1954 by certain persons who had no title to the land and was restored to possession in 1960 after a suit filed by her was decreed in her favour.
The Pepsu Tenancy and Agricultural Lands Act 13 of 1955 was brought into force in March, 1955.
Under section 5 of that Act any land owner owning land exceeding 30 standard acres was entitled to select for personal cultivation a maximum area of land within the permissible limit and to inform the collector of his selection.
Since the appellant 's land was in the occupation of the trespassers at the time, she did not make any selection under section 5.
The Act was amended with effect from October 30, 1956 by the Fast Punjab Act 15 of 1956 which introduced Chapter IV A and the new section 32 A(1) provided that no person shall be entitled to hold land under his personal cultivation which exceeds in the, aggregate the permissible limit.
The appellant submitted a return in the prescribed form in respect of her land and the collector, after considering her objections, declared that she held 21 standard acres in excess of the ceiling prescribed by the Act.
This order was confirmed in appeal by the Commissioner and a writ petition to quash the order was rejected by the High Court.
In appeal to this Court it was contended on behalf of the appellant (i) that section 32 A(1) operates only at the point of time when the Act comes into force i.e. October 30.
1956; the ceiling could be enforced only if a person owned or held land in excess of the permissible limit on that day or if he acquired or possessed it after the commencement of Act 15 of 1956 by transfer, exchange, inheritance or any of the other ways expressly covered by sections 32 L and 32 M; and (ii) the appellant should in any event have been permitted to reserve 10 acres out of her holding under section 32 K for an orchard.
HELD: Dismissing the appeal.
(i) The ban imposed by section 32 A(1) operates whenever a person is found to own or hold land in personal cultivation exceeding, the permissible limit.
[650G] Although sections 32 L and 32 M deal expressly with certain classes of acquisitions after the date of commencement of the Act.
on that account no restriction can be imposed upon the connotation of the expression "no person shall be entitled to own or held" occurring in section 32 A. that it is limited in its operation to the point of commencement of the Act.
[649B D] 647 Such an interpretation is also contrary to the scheme of the Act.
Under the scheme of Chapters II, III and IV as they originally stood the tenants were given the right to purchase the lands not selected by the landowner for personal cultivation, but the landowner was otherwise subject to no further restrictions; by Ch.
IV A it was in tended to place a ceiling upon the owning or holding of land for personal cultivation by a landowner or a tenant in excess of the permissible limit and to provide that the excess land be appropriated to the State.
[650B, C] (ii) In order to qualify for the exemption for land upto 10 acres under section 32 K for planting an orchard, the landowner has to give an undertaking that he will bring the land within two years from the commencement of the Amending Act under an orchard, has to plant the orchard within that period, and to maintain it as such till the date of the grant of exemption.
A person like the appellant who is not in possession of the land at the date when the Amending Act is brought into force may not be in a position to give and fulfill the undertaking.
The legislature has not made any provision for extending the time in respect of special cases like the present or for extending the time for planting an orchard; it is for the legislature to rectify this lacuna and not for the Court to give a strained meaning to the words used by the legislature which they do not bear.
[651C F]
|
ivil Appeal No. 4110 of 1985.
From the Judgment and Order dated 22.5.1985 of the, Patna High Court in Appeal from Appellate Decree No. 51 of 1982.
S.S. Javali, B .P.
Singh and Ranjit Kumar for the Appel lants.
S.N. Kacker, M.S. Singh and K.K. Gupta for the Respondent.
The Judgment of the Court was delivered by, NATARAJAN, J.
This appeal by special leave by the ten ants is directed against the judgment of a Full Bench of the Patna High Court in a Second Appeal against Appellate Decree No. 51 of 1982.
By the impugned judgment the High Court allowed the appeal preferred by the landlord (respondent herein) and restored the order of eviction passed by the Trial Court against the appellants herein on grounds of default in payment of rent and bona fide requirement of the leased premises for the business needs of the landlord.
The circumstances under which the suit came to be filed and the contentions of the parties may be summarised as below.
One Babu Lal who died on 14.11.73 and the respondent were 536 brothers and were members of a Joint Hindu Family governed by the Mitakshra Law.
The joint family was the owner of a non residential building in the G.B. Road, Gaya.
One room in the said building was given on rent in the year 1932 to one Dr. Ramachandra, the husband of the first appellant and father of the second appellant for running a medical shop known as Punjab Dental and Opticals Works.
The joint family has been running its business in the other portions of the building.
The rent was fixed at Rs. 16 per month.
Over the years the rent came to be increased from Rs. 16 to Rs.60 per month.
It would appear that the rent was increased to Rs.20 in 1943, to Rs.25 in 1946, to Rs.30 in 1947, to Rs.32 in 1951, to Rs.35 in 1963, to Rs.40 in 1967, to Rs.50 in 1970 and finally to Rs.60 in 1971.
Dr. Ramachandra, the tenant died in or about 1960 and therefore his wife, the first appellant came to be recognised as the tenant and rent receipts were issued in her name.
Before the Trial Court it was sought to be contended that the second appellant had become the tenant after the demise of his father and as such the notice of termination of tenancy issued to the first appellant was not an effective and valid notice.
The conten tion was repelled by the Trial Court and that finding has not been challenged before the Appellate Court and the High Court.
As already stated Babu Lal the Karta of the family died on 14.11.73.
Consequent on his death the respondent herein became the Karta of the family as the senior most male member of the joint family.
The respondent issued notice on 12.6.74 terminating the tenancy with effect from 30.6.74 and called upon the first appellant to surrender possession of the leased shop from 1.7.74.
It was the case of the respond ent that the first appellant had committed default in pay ment of rent from November 1973 onwards and furthermore the leased portion was required for expansion of the joint family business carried on in the other portion of the building.
As the appellants failed to deliver possession a suit for eviction was filed under the Bihar Buildings (Lease, Rent and Eviction) Control Act (hereinafter referred to as the 'Act ') for a decree for eviction against the appellants.
A sum of Rs.540 was also claimed in the suit as arrears of rent.
The appellants contested the suit raising various de fences.
The principal defences were that the respondent was not the Karta of the family and one Ram Prakash Gupta, the eldest son of deceased Babu Lal was the Karta, that rent was tendered to him after the death of Babu Lal but the said Ram Prakash Gupta demanded rent at Rs. 150 per month refused to receive the rent that was tendered, that thereupon the rent was sent by money order but it was refused and as such 537 there was to default in payment of rent.
It was alternative ly contended that even if there had been default in payment of rent it would not afford a cause of action for seeking eviction because the original rent of Rs. 16 had been ille gally raised to Rs.60 per month in contravention of the terms of the Act, that as such the appellants were entitled to seek adjustment of the excess payments made by them towards the alleged arrears of rent and consequently there can be no arrears of rent under law.
In so far as the re quirement of the shop for the business needs of the respond ent is concerned it was contended that it was not a bona fide claim but only a make believe story in order to get the appellants evicted.
The Trial Court, after a detailed consideration of the oral and documentary evidence adduced by the parties, held that the appellants had neither tendered the rent to Ram Prakash Gupta nor had the latter refused to receive it, that in the absence of a refusal to receive rent the appellants were not entitled under the Act to make remittances of the rent by money order, that in any event the payment of rent to a junior member of the family instead of to the Karta was not a valid payment and that as such the appellants had committed default in payment of rent and were, therefore, liable to be evicted.
On the other ground also the Trial Court held that the leased portion was bona fide required by the Karta for the gainful engagement of two members of the joint family who were unemployed and that was a second ground for ordering eviction.
Accordingly the Trial Court decreed the suit for eviction.
On the appellants preferring an appeal, the Appellate Court reversed the findings of the Trial Court and dismissed the suit for eviction.
The Appellate Court held that even if the appellants had failed to pay the rent from, November 1973 onwards the appellants cannot be deemed to have commit ted default in payment of rent because the enhancement of rent from Rs. 16 to Rs.60 was in contravention of the provi sions of the Act and as such the appellants were entitled to have the excess payments adjusted towards arrears of rent as well as future payments of rent.
The ground of bona fide requirement was also not accepted by the Appellate Court.
Against the judgment of the Appellate Court the respond ent herein preferred a second appeal to the High Court.
As there was a conflict of decisions of different Benches of the High Court on the question whether tenants paying rent in excess of the agreed rent would be affected by the rule of "in pari delicto" and cannot, there 538 fore, seek adjustment of the excess payments towards arrears of rent to resist a suit for eviction for default in payment of rent, the second appeal was referred to a Full Bench.
The Full Bench, after elaborately considering the matter held that the rule of "in pari delicto" would squarely apply to tenants who pay enhanced rents in contravention of the terms of the Rent Restriction Acts and hence the appellants are guilty of pari delicto and cannot, therefore, seek adjust ment of the excess payments made by them and seek avoidance of their eviction for default in paying the rent.
The Full Bench further held that the finding of the Appellate Court on the question of the landlord 's bona fide requirement of the leased premises was vitiated on account of misreading of facts and misapplication of law and hence the Trial Court 's finding warranted restoration.
The Full Bench, therefore, allowed the appeal and restored the decree of eviction passed by the Trial Court on both the grounds set out in the plaint.
Mr. Javali, learned counsel for the appellants strenu ously contended that the High Court was not justified in allowing the second appeal since the appellants had not committed any default in payment of rent and furthermore even if there was any default, due to their erroneous ten der, they were entitled to seek adjustment of the excess payments made by them and avoid eviction.
It was also sub mitted that the appellants, being in the disadvantageous position of tenants, cannot be placed on par with the land lord and held that they are "in pan delicto" and cannot seek adjustment of the excess payments towards arrears of rent.
The further submission was that the respondent 's requirement of the shop for the business needs of the members of the joint family was not established either by the pleadings or the evidence and as such the Appellate Court was perfectly in order in rejecting the second ground on which eviction was sought for and the High Court had erred in interfering with a finding of fact in a second appeal.
In the view we propose taking of the matter we do not think it necessary to go into the question whether the appellants had committed default in payment of rent and secondly even if they had committed default, they are enti tled to adjust the excess rent paid by them over a span of 30 years without reference to the rule of "in pari delicto".
The reason for our refraining to go into these questions is because we find the decree for eviction passed against the appellants can be sustained on the second ground viz. bona fide requirement of the shop for the business requirements of the members of the joint family.
Even so we think it necessary to point out an error contained in the argument of Mr. Javali.
The learned counsel submitted that the 539 decision of the High Court on the question of "in pari delicto" may not be good law in view of recent decision of this Court in Mohd. Salimuddin vs Misri Lal & Anr., ; It is true that the case related to a dispute regarding default in payment of rent between a landlord and a tenant and this Court held that it will be a judicial sin to treat the landlord and tenant on a par and apply the doctrine of pari delicto because the parties were placed in the position of "oppressor" and "oppressed".
The learned counsel has failed to notice that the facts in that case were entirely different.
It was a case where a tenant was obliged to advance a loan of Rs.2,000 to the landlord in order to secure the lease of a premises.
The agreement between the parties specifically provided that the loan amount was to be adjusted against the rent which accrued.
In spite of it the landlord sought the tenant 's eviction on the ground of arrears of rent and set up a plea of "in pari delicto" against the tenant.
It was in such circumstances this Court held that the doctrine of pari delicto cannot be applied since the tenant was perforce compelled to advance a loan to secure the lease even though such advancement of loan was against the terms of the Rent Act.
The learned Judges have taken care to set out that the doctrine will not be attracted when there is no element of compulsion or exploitation and both parties have by consensus contravened the provisions of law for their mutual advantage.
They, however, found that the tenant concerned in that case was a victim of exploitation and hence he was not "in pari delic to".
The relevant portion of the judgment reads as follows: "The doctrine is attracted only when none of the parties is a victim of such exploitation and both parties have voluntarily and by their free will joined hands to flout the law for their mutual gain.
Such being the position the said doctrine embodying the rule that a party to a transaction prohibited by law cannot enforce his claim in a court of law is not attracted in a situation like the present." Coming now to the ground of eviction based on the bona fide requirement of the respondent, Mr. Javali argued that the bona fides of the claim is not established either by the pleadings or the evidence and hence the Trial Court and the High Court were in error in sustaining the said ground of eviction.
It was pointed out by the counsel that in the plaint there is only a casual statement about the require ment of the shop by the landlord and in the evidence it was not made clear whether the shop was required for expansion of the existing business or for starting a new business venture for the benefit of the younger members 540 of the joint family.
The Trial Court has discussed the case of bona fide requirement in para 14 of its judgment and has held that the landlord is bonafide in need of the shop to engage two members of the joint family in business.
The Appellate Judge has reversed the finding of the Trial Court on four grounds viz. that the tenants were refugees from West Pakistan and had no shop of their own in the town of Gaya, that from the point of comparative hardship it would be the tenants who would suffer more than the landlord by an adverse decision, that the shop occupied by the appellants is only a small portion in a massive building in the occupa tion of the landlord and that the landlord 's requirement of the building was more attributable to a desire to recover possession rather than on account of any genuine need for it.
The High Court has pointed out that the Appellate Judge had completely misdirected himself in his approach to the question because of erroneous assumptions of facts as well as law.
Admittedly, the tenancy had commenced in 1932 which was long prior to the partition in 1947 and hence there can be no question of the tenant being a refugee from West Pakistan.
Likewise, the application of the test of compara tive hardship between the landlord and the tenant was an extraneous test because no such test has been prescribed by the Act for going into the reckoning.
Then again it was noticed that without any evidence or materials the Appellate Judge has assumed that the main building in the occupation of the joint family is a massive building and that the leased portion constitutes only a negligible area.
Likewise the Appellate Judge had no materials to hold that the land lord 's requirement of the building was only borne out of desire and not on account of any genuine need.
Since the Appellate Judge had rendered his findings on the question of bona fide requirement of the shop by the landlord on base less assumptions and wrong principles of law, the High Court was justified in setting aside the finding of the Appellate Judge even though it was factual in character.
It is true that in a second appeal a finding on fact even if erroneous will generally not be disturbed but where it is found that the finding is vitiated by application of wrong tests or on the basis of conjectures and assumptions then a High Court will be well within its rights in setting aside in a second appeal a patently erroneous finding in order to render justice to the party affected by the erroneous finding.
Mr. Javali tried to canvass that the Appellate Judge had ren dered his finding mainly with reference to the pleadings and the evidence and his incidental references to other factors and circumstances were only to reinforce his conclusion and as such his finding does not suffer from any infirmity or error.
We are not persuaded by this argument because it cannot be predicated as to how far the Appellate Judge 's conclusion 541 was influenced by the mistaken tests applied by him to determine the issue.
We are, therefore, of the view that the finding of the Trial Court which has been confirmed by the High Court regarding the respondent being bona fide in need of the shop for the business needs of the joint family does not call for any interference by this Court in this appeal under Article 136 of the Constitution.
In the result, the appeal fails and will stand dis missed.
There will be no order as to costs.
To enable the appellants to find alternate accommodation to shift their business they are given time till 30.6.87 to vacate the premises.
S.R. Appeal dis missed.
| The petitioner describing himself as an intending candidate for the Presidential Election filed a petition in the Supreme Court under article 71 (1) of the Constitution of India impugning the election of the President, but it was returned by the Registrar of the Court on the ground that it was not in conformity with the provisions of the Presidential and Vice Presidential Elections Act, 152, and the Rules of the Supreme Court contained in Or.
XXXVII A.
On appeal to the Court it was contended for the appellant that (1) the petition was founded upon doubts as to the validity of the election and, in consequence, was not covered either by the Act or the Rules of the Supreme Court, (2) the Act and the Rules in question were void on the ground that they derogate from the jurisdiction conferred on the Supreme Court under article 71(1) and (3) in any case, the petitioner has a right as a citizen to approach this Court for relief whenever an election has been held in breach of the constitutional provisions.
Held that article 71(1) merely prescribes the forum in which doubts and disputes in connection with the election of the President and Vice President would be enquired into, but the right to move the Supreme Court as well as the procedure therefor, are determined by the Act of Parliament as authorised by article 71 (3).
Accordingly the Act and the Rules in question are valid, and the petitioner has no rights apart from those given by the statute to file an application for setting aside an election.
|
ivil Appeal Nos.
931/77 & 200/78.
Appeals by Certificate from the Judgment and Decree dated 1.4.76 and from the Judgment and Decree dated 19.6.1975 of the Andhra Pradesh High Court in A.S. NO. 71/73 and Appeal No. 259 of 1972.
B. Kanta Rao for the Appellants.
C. Sitaramiah, and B. Parthasarthi for the Respondents.
The Judgment of the Court was delivered by: K.RAMASWAMY, J.
Civil Appeal Nos. 931 of 1977 and 200 of 1978 relate to the same dispute though arose from two suits and separate judgements.
The Bench that heard Civil appeal No. 931 of 1977 directed on January 24, 1991 to list Civil Appeal No. 200 of 1978 for common disposal.
Civil Appeal No. 200 of 1978 arose out of O.S. No 118 of 1968 on the file of the Court of Add.
Subordinate Judge.
Guntur and Appeal No. 259 at 1972 dated June 19, 1975 of the A.P. High Court.
The suit for possession and mesne profits was laid by the descendants of Nori Lakshmipathi Somayaajulu of Vatticherukuru, Guntur Taluq and District, for short `N.L.S. '.
The dispute relates to the tank known as `Nori Lakshmipathi Somayajulu 's Western Tank ' ``Vooracheruva ' ' (Village Tank).
It consists of 100 acres of which roughly 30 acres is covered by water spread area marked A ' Schedule `B ' Schedule consists of 70 acres (silted up area).
The tank was dug in Fasli 1190 (1700 A.D.) Zamindar, Raja Mainikya Rao made a grant of the land for digging the tank and its preservation, maintenance and repairs.
It is the descendants ' case that it is a private tank enjoyed by the `grantee ', N.L.S. as owner and thereafter the descendants and perfected the title by prescription.
It was found as a fact by the High Court and the descendants are unable to persuade us from the evidence to differ from the findings that the tank is a ``public tank ' ' dug by 541 the village.
The descendants ' plea and evidence adduced in support thereof that it is their private tank, was negated by both the courts.
The Trial Court found that the tank is a `public trust ', the appellants would be hereditary trustees and could be removed only by taking action under section 77 of the A.P. Hindu Charitable and Religious Institutions and Endowments Act, 1966 for short `the Endowments Act '.
It also held that the descendants acquired title by adverse possession.
Accordingly the suit for possession was decreed relegating to file a separate application for meesne profits.
On appeal the High Court reversed the decree and held that the tank is a public tank and the tank and the lands stood vested in the Gram Panchayat under A.P. Gram Panchayat Act 2 of 1964 for short `the Act '.
Since the Gram panchayat was in possession from July 7, 1965, though dispossessed the descendants forcibly and as the suit is not under section 6 of the but one based on title, it called for no interference.
It dismissed the suit.
This Court granted leave to appeal under Article 136.
Civil Appeal No. 931 of 1977 arose out of the suit for possession in O.S. No. 57 of 1966 on the file of the court of Subordinate Judge at Guntur filed by the Gram Panchayat against the descendants.
The suit was dismissed by the Trial Court and was confirmed by the High Court in A.S. No. 71 of 1973 and the High Court granted leave under article 133 on Dec. 10. 1976.
The pleadings are the same as in the other suit.
In addition the descendants further pleaded in the written statement that the Gram Panchayat unlawfully took possession of the tank on July 7, 1965.
They also acquired title by grant of ryotwari patta under section 3 of the A.P. Inams (Abolition and Conversion into Ryotwari) Act (Act XXXVII of 1956), for short `the Inams Act '.
The Gram Panchayat had no manner of right to interfere with their possession and enjoyment.
They also pleaded and adduced evidence that they were leasing out the fishery rights and grass and trees grown on the land.
The income was being utilized for the repairs of tank.
The Trial Court and the High Court found that the lands were endowed to N.L.S. for the maintenance of the tank and the descendants obtained ryotwari patta under Inams Act and are entitled to remain in possession and enjoyment as owners subject to maintain the tank.
Accordingly the suit was dismissed.
On appeal in A.S. No. 71 of 1973 by judgment dated April 1, 1976 the High Court confirmed the decree on further finding that by operation of section 14 of the Inams Act, Civil Suit was barred.
Thus both the appeals are before this Court.
542 In Civil Appeal No. 200 of 1978, Shri Seetharamaiah learned Senior Counsel for the descendants N.L.S. have no exclusive personal right title or interest in the tank and the appurtenant total land of 100 acres.
In view of the entries of the Inams Fair Register for short `I.F.R., ' it is a public trust and not a public tank.
Unless recourse is had to remove them from trusteeship under section 77 of the Endowments Act, the appellants cannot be dispossessed.
Since admittedly N.L.S. and the descendants were enjoying the property till date of dispossession, presumption of the continuance of the enjoyment anterior thereto as owners could be drawn.
The High Court thereby committed error of law in holding that the lands stood vested in the Gram Panchayat under the Act and that it is a public tank.
In Civil Appeal No. 931 of 1977, it was further contended that since the grant of Ryotwari patta under the Inams Act had became final section 14 thereof bars the jurisdiction of the Civil Court to entertain the suit.
Shri B.Kanta Rao, learned counsel for the Gram Panchayat contended that the finding of the High Court that the tank and the appurtenant land, namely, the plaint schedule property, as `public tank ', is based on evidence that the tank was dug by the villagers and that they have been using for their drinking purposes and the cattle is a finding of fact.
By operation of sections 85 and 64 of the Act, the land and the tank stood vested in the Gram Panchayat.
Entries in the I.F.R. establishes that the grant of the land was for preservation, maintenance and repairs of the tank.
Therefore, the grant should be in favour of the institution, namely, the tank.
The pattas obtained by the descendants should be for the benefit of the tank, though granted in individual names.
By operation of section 85 of the Act, the descendants acquired no personal title to the property.
Ryotwari patta is only for the purpose of land revenue.
The Gram Panchayat acquired absolute right title and interest in the land.
The Civil Suit is not a bar on the facts in this case.
Before appreciating the diverse contentions, the facts emerged from the findings in both the appeals could be gathered thus.
Admittedly the Zamindar.
Raja Manikya Rao granted 100 acres of land in Inam village to dig the tank and the grant was for its preservation and maintenance, the grant was in favour of N.L.S.
In 1700 A.P., i.e. 1190 Fasli, the tank was dug by the villagers and ever since the villagers have been using the fresh water tank for their drinking purposes and of the cattle and perfected their right by prescription.
In course of time the tank was silted up and in and around 30 acres the water spread area, fresh water is existing.
No. repairs were effected by the descendants.
The rest of the land was silted up.
Grass and trees have been 543 grown thereon and was being enjoyed.
On July 7, 1965, the Gram Panchayat took unilateral possession of the tank and ever since was exercising possession, supervision and control over it.
After expiry of three years from the date of dispossession, the descendants filed O.S. No.57 of 1966 for possession based on title.
Earlier thereto the Gram Panchayat field the suit for possession.
Under the Inams Act, Ryotwari patta under section 3 was granted to the descendants in individual capacity and on appeal the Revenue Divisional Officer, Guntur confirmed the same.
It became final as it was not challenged by filing any writ petition.
Both the suits now stood dismissed.
The counsel on other side have taken us through the evidence and we have carefully scanned the evidence.
From these facts the first question emerges is whether the tank and the appurtenant land stood vested in Gram panchayat.
Section 64 of the Act reads thus: ``Vesting of common property or income in Gram Panchayat Any property or income which by custom belongs to or has been administered for the benefit of the villagers is common, or the holders in common of village land generally or of land of a particular description or of lands under a particular source of irrigation, shall vest in the Gram Panchayat and be administered by it for the benefit of the villagers or holders aforesaid ' '.
Section 85 reads thus: ``Vesting of water works in Gram Panchayat (1) All public water courses, springs, reservoirs, tanks, cisterns, fountains, wells, ponds an other water works (including those used by the public to such an extent as to give a prescriptive right to their use) whether existing at the commencement of this Act or afterwards made, laid or erected and whether made, laid or erected at the cost of the Gram Panchayat or otherwise for the use or benefit of the public, and also any adjacent land, not being private property, appertaining thereto shall vest in the Gram Panchayat and be subject to its control ' '.
Provided that nothing in this sub section shall apply to any work which is, or is connected with, a work of irrigation or 544 to any adjacent land appertaining to any such work.
(2) Subject to such restrictions and control as may be prescribed, the Gram Panchayat shall have the fishery rights in any water work vested in it under sub section (1), the right to supply water from any such work for raising seed beds on payment of the prescribed fee, and the right to use the adjacent land appertaining thereto for planting of trees and enjoying the usufruct thereof or for like purpose.
(3) The Government may, by notification in the Andhra Pradesh Gazettee, define or limit such control or may assume the administration of any public source of water supply and public land adjacent and appertaining thereto after consulting the Gram Panchayat and giving due regard to its objections, if any ' '.
(emphasis supplied) A bird 's eye view of the provisions brings out vividly that any property or income which belongs to or has been administered for the benefit of the villagers in common or the holders in any of the village land generally or of land of a particular description or of lands under particular source of irrigation shall vest in the Gram Panchayat and be administered by it for the benefit of the villagers or holders aforesaid.
The lands or income use for communal purpose shall either belong to the GRam Panchayat or has been administered by the Gram Panchayat.
It is not the case of the Gram Panchayat nor any finding recorded by the courts below to the effect.
So section 64 is not attracted, though the villagers acquired prescriptive right to use the water from the tank for their use and of their cattle.
All public water courses, springs, reservoirs, tanks cisterns, etc.
and other water works either existing on the date of the Act or made thereafter by the Gram Panchayat, or otherwise including those use by the public ripened into prescriptive right for the use and benefit of the public and also adjacent or any appurtenant land not being private property shall vest in the gram Panchayat under section 85(1) and be subject to its control.
The proviso is not relevant for the purpose of this case.
Under sub s (2), the Gram Panchayat shall have fishery rights therein subject to any restriction or control prescribed by the Govt.
by rules.
The Gram Panchayat also shall have the right to use the adjacent land appertaining thereto for planting trees and enjoying the usufruct thereof or for like purposes.
Sub section (3) gives over riding power to 545 the Govt., by a notification published in the A.P. Gazettee to define or limit the control or supervision by the Gram Panchayat or the Govt.
may assume administration of any public source of water supply and public land adjacent and appertaining thereto.
The only condition precedent thereto is prior consultation of the Gram Panchayat and to have due regard to any objections.
If raised, by the Gram Panchayat and issue notification published in the Gazette resuming the water sources or the land etc.
The word `vest ' clothes varied colours from the context and situation in which the word came to be used in a statute or rule.
In Chamber 's Mid Century Dictionary at p. 1230 defined ``vesting ' ' in the legal sense `to settle, secure, or put in fixed right of possession; to endow, to descend, devolve or to take effect, as a right '.
In Black 's Law Dictionary, 5th Edition at p. 1401, the word, `vest ', to give an immediate, fixed right of present or future enjoyment, to accure to, to be fixed, to take effect, to clothe with possession, to deliver full possession of land or of an estate, to give seisin to enfeoff.
In Stroud 's Judicial Dictionary, 4th Edition, Vol. 5 at p. 2938, the word `vested ' was defined in several senses.
At p. 2940 in item 12 it is stated thus `as to the interest acquired by public bodies, created for a particular purpose, in works such as embankments which are vested in them by statue, see Port of London Authority vs Canvey Island Commissioners, in which it was held that the statutory vesting was to construct the sea wall against inundation or damages etc.
and did not acquire fee simple.
Item 4 at p. 2939, the word `vest ', in the absence of a context, is usually taken to mean vest in interest rather than vest in possession '.
In item 8 to `vest ',. ``generally means to give the property in ' '.
Thus the word `vest ' bears variable colour taking its content from the context in which it came to be used.
Take for instance, the land acquired under the Land Acquisition Act.
By operation of sections 16 & 17 thereof, the property so acquired shall vest absolutely in the Government free from all encumbrances.
Thereby, absolute right, title and interest is vested in the Government without any limitation divesting the pre existing rights of its owner.
Similarly, under section 56 of the , the estate of the insolvent vests in the receiver only for the purpose of its administration and to pay off the debts to the creditors.
The receiver acquired no personal interest of his own in the property.
The receiver appointed by the court takes possession of the properties in the suit on behalf of the court and administer the property on behalf of the ultimate successful party as an officer of the court and he has no personal interest in the property vested thereunder.
In Fruit and Vegetable Merchants Union vs Delhi 546 Improvement Trust, [1957] SCR p. 1 the question was whether the Delhi Improvement Trust was vested of the Nazul land belonging to the Government with absolute right, when the property was entrusted under the scheme for construction of the markets etc.
It was held by this court that placing the property at the disposal of the trust did not signify that the Government had divested itself of its title to the property and transferred the same to the trust.
The clauses in the agreement show that the Government had created the Trust as its agent not on permanent basis but as a convenient mode of having the scheme of improvement implemented by the Trust subject to the control of the Government.
The word `vesting ' in section 85 would signify that the water courses and tanks, lands etc.
used by the public to such an extent as to give a prescriptive right to their use, are vested in the Gram Panchayat, and placed them under the control and supervision of the Gram Panchayat.
It confers no absolute or full title.
It was open to the Government, even after vesting, to place restrictions upon the Gram Panchayat in the matter or enjoyment and use of such tanks, and appurtenant lands etc.
Sub section (3) of section 85 expressly makes the matter clear.
It empowers the Government to assume the administration of any such tank or lands or to define or limit the control which is vested in the Gram Panchayat.
Gram Panchayat being a statutory body is bound by the restrictions imposed by sub S3 (3) The assumption of management by the Govt.
would be subject to the prescriptive right of the villagers if any.
The Division Bench in Gram Panchayat, mandapaka & Ors.
V. Distt.
Collector Eluru & Ors., AIR 1981 AP 15 considered the meaning of the word `vesting and correctly laid the law in its interpreting section 85 of the Act.
Anna Narasimha Rao & Ors.
V. Kurra Venkata Narasayya & Ors., [1981] 1 AWR p. 325 relied on by Shri Kanta Rao, though supports his contention that the vesting of the tanks etc.
in the Gram panchayat was with absolute eights and the village community rights would over ride against rights of the Government, in our view the law was not correctly laid down.
Under A.P. Land Encroachment Act, 1905; Talengana Area Land Revenue Act, relevant Abolition Act like A.P. Estates (Abolition and Conversion into Ryotwari) Act, 1948, Inams Abolition Act etc.
give absolute rights of vesting in the State over the forest land, tanks, rivers, mines, poramboke, land, etc.
free from all encumbrances and the pre existing rights in the other land stood abolished and will be subject to the grant of Ryotwari patta etc.
It is also settled law that grant of Ryotwari patta is not a title but a right coupled with possession to remain in occupation and enjoyment subject to payment of the land revenue to the State.
Therefore, we 547 agree with the High Court that the tank is public tank and not a public trust and that under section 85(1) and section 64, the vesting of the tanks, the appurtenant land and the common land is only for the purpose of possession, supervision, control and use thereof for the villagers for common use subject to the over riding title by the Government and its assumption of management should be in terms of sub section
(3) of section 85 of the Act and subject to the prescriptive right in the water; water spread tank for common use.
Admittedly, N.S.L. or the descendants used the plaint schedule property till July 7, 1965.
The question then is what rights the descendants acquired therein.
Admittedly within six months from the date of dispossession no suit under section 6 of the was laid.
Therefore, though the Gram Panchayat was not justified to take law into its own hand to take unilateral possession without due course of law, since the suit filed by the descendants was based on title the descendants in Civil Appeal No.200 of 1978 have to establish their better title.
Their claim was based on the Ryotwari patta granted under section 3 of the Inams Act.
Therefore, entries in I.F.R. bear great evidenciary value to ascertain their rights.
In Arunachalam Chetty vs Venkatachalpathi Garu Swamigal, AIR 1919 PC.
p. 62 at 65 the Judicial Committee of the Privy Council considered the effect of the columns in the I.F.R. and held thus : ``It is true that the making of this Register was for the ultimate purpose of determining whether or not the lands were tax free.
But it must not be forgotten that the preparation of this Register was a great act of State, and its preparation and contents were the subject of much consideration under elaborately detailed reports and minutes.
It is to be remembered that the Inam Commissioners through officials made enquiry on the spot, heard evidence and examined documents, and with regard to each individual property, the government was put in possession not only of the conclusion come to as to whether the land was tax free, but of a statement of the history and tenure of the property itself.
While their Lordships do not doubt that such a report would not displace actual and authentic evidence in individual cases, yet the board, when such is not available, cannot fail to attach the utmost importance, as part of the history of the property, to the information set forth in the Inam Register ' '.
548 Construction of the relevant entries in the I.F.R. is a question of law.
Col. 2, the general class to which the land belongs, described as `Dharmadayam ' endowment for a charitable ``institution ' ', Col. 7, description of tenure for the ``preservation and repairs ' ' of Nori Lakshmipathi Somayajulu Western Tanks at Vatticherkuru, Col. 9 tax free, Col. 10, nature of the tenure, permanent, Col. 11, guarantor of the land Raja Manikya Rao in 1190 Fasli (1700 A.D.), Col 13, name of the original grantee `Nori Lakshmipathi Somayajulu ', Col. 21 to be confirmed under usual conditions of service and Col. 22, confirmed.
In the survey and settlement record of the year 1906 of the same columns have been repeated.
The land in the tank were classified as Village `Poramboke ' and the tank as `village tank '.
In the village map also the same remarks were reiterated.
Therefore, the entries in the I.F.R. are great acts of the State and coupled with the entries in the survey and settlement record furnishes unimpeachable evidence.
On construction of these documents, it would clearly emerge that the original grant was made for the preservation and maintenance of the tank and tax free Inam land was granted for that purpose through it was in the name of the individual granted.
We are of the view that the grant was for the preservation and maintenance of the tank.
In K.V. Krishna Rao vs Sub Collector, Ongole, ; this court held under the Inam Act that the tank is a charitable institution.
Thereby we conclude that the grant was for the institution.
Under section 3 of the Inams Act, the enquiry should be whether (1) a particular land is Inam land; (2) Inam land in a Ryotwari, Zamindar or Inam Village; and (3) is held by any institution.
In view of the finding that the grant was for the preservation and maintenance of tank, the Inam, land in an inam village was held by the institution, namely, the tank.
Ryotwari patta shall, therefore, be in favour of the institution.
Undoubtedly the ryotwari patta was granted in favour of the descendants.
In Nori Venkatarama Dikshitulu & Ors.
vs Ravi Venkatappayya & Ors., [1959] 2 A.W.R.357 in respect of the tope dedicated to the public benefits in the same village, namely Vatticherukuru, one of the question that arose was whether the patta granted in the individuals ' names, would be their individual property or for the endowment.
The Division Bench held that though the pattas were obtained in the individuals ' name, the trustees of an institution cannot derive personal advantage from the administration of the trust property.
It was held that the grant of patta was for the maintenance of the trust.
We approve that the law was correctly laid down.
In Krishan Nair Boppudi Punniah & Ors.
vs Sri Lakshmi Narasimhaswamy Varu, by its trustees & Ors.
, [1963] 1 A.W.R. 214 549 relied on by Shri Sitaramaiah, on the basis of the entries in I.F.R., the finding was that the grant was in favour of the individual burdened with service and not to an institution.
Therefore, the ratio therein does not assist us to the facts in this case.
Moreover, in view of the stand taken by Shri Sitaramaiah that the lands are not the private property of N.L.S. or his descendants but held by them as trustees, the grant of Ryotwari patta to the individuals by necessary implication, as a corollary, is of no consequence.
The question then is whether the enjoyment of the usufruct by the descendants would clothe them with any right as owners of the land.
In view of the concurrent finding that descendants did not acquire title by prescription, the passage in Tagore Law Lecture, `Hindu Religious Endowment and Institutions ' at p. 6 relied on by Shri Sitaramaiah to the effect `dedication of tanks and trees ' as private property also renders no assistance to the descendants.
Undoubtedly, a presumption of an origin in lawful title could be drawn, as held in Syed Md. Mazaffaralmusavi vs Bibi Jabeda & Ors., AIR (1930) P.C. 1031 that the court has so often readily made presumption in order to support possessory rights, long and quietly enjoyed, where no actual proof of title is forth coming.
It is not a mere branch of the law of evidence.
It was resorted to because of the failure of actual evidence.
The matter is one of presumption based upon the policy of law.
It was also further held that it is not a presumption to be capriciously made nor is it one which a certain class of possessor is entitled to, de jure.
In a case such as the one in question where it was necessary to indicate what particular kind of lawful title was being presumed, the Court must be satisfied that such a title was in its nature practicable and reasonably capable of being presumed without doing violence to the probabilities of the case.
It is the completion of a right to which circumstances clearly point where time had obliterated any record of the original commencement.
The longer the period within which and the remoter the time when first a grant might be reasonably supposed to have occurred the less force there is an objection that the grant could not have been lawful.
In Bhojraj vs Sita Ram & Ors., AIR (1936) P.C. 60 it was further held that the presumption, not to supplement but to contradict the evidence would be out of place.
A presumption should be allowed to fill in gaps disclosed in the evidence.
But the documentary evidence in the I.F.R. and the survey and settlement records furnish the unerring evidence.
Though the original grant was not produced, the grant was for the institution and not to the individuals.
Therefore, the colour of title though enabled them to enjoy the usufruct for personal use, once the tank and the appurtenant land was found to be public tank, the descendants acquired no personal right over it.
The decision in Bhupathiraju 550 Venkatapathiraju & Ors.
vs The President, Taluq Board, Naraspur & Ors., [1913]19.I.C.727(Mad.) (D.B.) relied by Shri Sitaramaiah the finding was that the grant was to the plaintiffs ' family subject to conditions of service.
Their right to take the usufruct of the trees therein was held to be for the benefit of the grantee.
In that view its ratio cannot be applied to the facts in this case.
In M. Srinivasacharyulu & Ors.
vs Dinawahi Pratyanga Rao & Ors., one of the contentions raised was that since the produce was being enjoyed by the trustees for over many years for personal use, it must be construed that the trust was for personal benefit of archakas.
It was repelled holding that it would be a dangerous proposition to lay down that if the trustees of the religious trusts have for many years being applying the income to their own personal use, the trust deed must be construed in the light of such conduct.
The decree of the trial court that the enjoyment was for the institution was upheld.
The finding in Civil Appeal No. 931 of 1977, that since the endowment was the dashabandam the descendants are entitled to the Ryotwari patta cannot be upheld.
Dashabandam grant of land burdened with the service of a public nature was made at a time when maintenance of water sources and water courses to the benefits of the villagers was left to the villagers.
In Ravipati Kotayya & Anr.v.
Ramansami Subbaraydu & Ors., it was held that in the case of dashabandam inams situated in Ryotwari villages, the government has the right of resumption on default of service.
The lands burdened with dashabandam service which is service of public nature, are inclinable as being against public policy.
We, therefore, hold that the descendants, though enjoyed the income from the properties, did not effect the repairs and neglected the maintenance and upkeep of the tank.
They rendered the tank disused and abandoned.
By operation of s.85 of the Act the lands and tank stood vested in the Gram Panchayat for control, management and supervision.
Undoubtedly, a hereditary trustee is entitled to be the Chairman of a Board of Trustees, if any, constituted under the Endowment Act or else be in exclusive possession and management of the public trust registered thereunder until he is removed as per the procedure provided therein.
Since the tank always remained a public tank and not being a public trust, the Endowment Act does not apply.
therefore, the question of initiating action under section 77 of the Endowment Act for removal of the descendants as trustees does not arise.
In the suit of the descendants the High Court did not consider the effect of grant of ryotwari patta under Inams Act and in the suit of the 551 Gram (Village) Panchayat the effect of vesting under s.85 of the Act on the grant of ryotwari patta was not considered.
Only section 14 i.e. the bar of civil suit was focussed.
Consequently both the suits were dismissed by different division benches.
The question is whether the suit is maintainable.
All communal lands, porambokes, tanks, etc., in inam villages shall vest in the government under s.2A of Inams Act free from all encumbrances.
Section 3 determines the inam lands whether held by the individual or the institution, provides procedure for determination and s.3(4) gives right of appeal.
Section 4 converts those lands into ryotwari lands and accords entitlement to grant of ryotwari patta.
Section 5 gives power to restitute the lands to the tenants in occupation though were ejected between specified dates.
Section 7 gives power to grant ryotwari patta to the tenants to the extent of two thirds share in the land and one third to the land holder.
If it was held by the institution, two third share would be to the institution and one third to the tenants.
Section 3 grants right of permanent occupancy to the tenants in inam lands held by institutions.
Section 9 prescribes procedure for eviction of the tenants having right of permanent occupancy.
Section 10 A provides right to ryotwari patta to tenants in Ryotwari or Zamindari village with the right of permanent occupancy, even in the lands, held under customary right etc.
Section 12 fastens liability on the ryotwari pattadars to pay land assessment.
Section 13 gives exclusive power of jurisdiction to Tehsildar, the Revenue court and the collector to try the suit as per the procedure as of a Civil Court under the Code of Civil Procedure.
Section 14 of the Inams Act reads thus: 14.
" Bar of jurisdiction of Civil Courts: No suit or other proceedings shall be instituted in any Civil Court to set aside or modify any decision of the Tahsildar, the Revenue Court, or the Collector under this Act, except where such decision is obtained by misrepresentation, fraud or collusion of parties.".
Section 14 A and Section 15 provides that: "14 A Revision (1) Notwithstanding anything contained in this Act, the Board of Revenue may, at any time either suo moto or on application made to it, call for and examine the records relating to any proceedings taken by the Tahsildar, the Revenue Court or the Collector under this act for the purpose of satisfying itself as to the regularity of 552 such proceeding or the correctness, legality or propriety of any decision made or order passed therein; and if, in any case, it appears to the Board of revenue that any such decision or order should be modified, annulled, reserved or remitted for consideration, it may pass order accordingly.
(2) No order prejudicial to any person shall be passed under sub section (1) unless such person has been given an opportunity of making his representation.
Act to override other laws: "Unless otherwise expressly provided in this Act the provision of this act and of any orders and Rules made thereunder shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any such law".
The Constitution intends to herald an egalitarian social order by implementing the goals of socio economic justice set down in the Preamble of the Constitution.
In that regard the Constitution created positive duties on the State in Part IV towards individuals.
The Parliament and the State legislatures made diverse laws to restructure the social order; created rights in favour of the citizens; conferred power and jurisdiction on the hierarchy of Tribunals or the authorities constituted thereunder and given finality to their orders or decisions and divested the jurisdiction of the established civil courts expressly or by necessary implication.
The Inam Act is a step in that direction as part of Estate Abolition Act.
Therefore, departure in the allocation of the judicial functions would not be viewed with disfavour for creating the new forums and entrusting the duties under the statutes to implement socio economic and fiscal laws.
We have to consider, when questioned, why the legislature made this departure.
The reason is obvious.
The tradition bound civil Courts gripped with rules of pleading and strict rules of evidence and tardy trial, four tier appeals, endless revisions and reviews under C.P.C are not suited to the needed expeditious dispensation.
The adjudicatory system provided in the new forums is cheap and rapid.
The procedure before the Tribunal is simple and not hide bound by the intricate procedure of pleadings, trial, admissibility of the evidence and proof of facts according to law.
Therefore, there is abundant flexibility in the discharge of the functions with greater expedition and inexpensiveness.
In order to find out the purpose in creating the Tribunals under 553 the statutes and the meaning of particular provision in social legislation, the Court would adopt the purposive approach to ascertain the social ends envisaged in the Act, to consider scheme of the Act as an integrated whole and practical means by which it was sought to be effectuated to achieve them.
Meticulous lexographic analysis of words and phrases and sentences should be subordinate to this purposive approach.
The dynamics of the interpretative functioning of the Court is to reflect the contemporary needs and the prevailing values consistent with the constitutional and legislative declaration of the policy envisaged in the statute under consideration.
In Denna vs Union of India, ; this Court held that the "Law is a dynamic science, the social utility of which consists in its ability to keep abreast of emerging trends in social and scientific advance and its willingness to readjust its postulates in order to accommodate those trends.
Law is not static.
The purpose of Law is to serve the needs of life".
The law should, therefore, respond to the clarion call of social imperatives evolve in that process functional approach as means to subserve "social promises" set out in the Preamble, directive principles and the fundamental Rights of the Constitution.
It is seen that the Inam 's Act is an integral part of the scheme of the Andhra Pradesh Estates (Aboilition and Conservation into Ryotwari) Act, 26 of 1984 for short 'Estate Abolition Act ' to cover the left over minor Inams.
It determined the pre existing rights of the Inamdars and the religious institutions; envisages grant of ryotwari patta afresh to the concerned and seeks to confer permanent occupancy rights on the tenants.
It also regulates the relationship between institutions and its tenants.
It created appellate and revisional and forums and declared finality to the orders passed by the tribunals and expressly excluded the jurisdiction of the Civil Court, notwithstanding anything contained in any other law or inconsistent therewith the Inams Act shall prevail.
The exception engrafted was that a suit would lie to challenge the decision obtained by fraud, misrepresentation and collusion by parties.
Section 9 of the Civil Procedure Code, 1908 provides that whenever a question arises before the Civil Court whether its jurisdiction is excluded expressly or by necessary implication, the Court naturally feels inclined to consider whether remedy afforded by an alternative provision prescribed by special statute is sufficient or adequate.
In cases where exclusion of the Civil Court 's jurisdiction is expressly provided for, the consideration as to the scheme of the statute in question 554 and the adequacy or sufficiency of the remedy provided for by it may be relevant, but cannot be decisive.
Where exclusion is pleaded as a matter of necessary implication such consideration would be very important and in conceivable circumstances might become even decisive.
The jurisdiction of a Tribunal created under statute may depend upon the fulfilment of some condition precedent or upon existence of some particular fact.
Such a fact is collateral to the actual matter which the Tribunal has to try and the determination whether it existed or not is logically temporary prior to the determination of the actual question which the tribunal has to consider.
At the inception of an enquiry by a Tribunal of limited jurisdiction, when a challenge is made to its jurisdiction, the Tribunal has to consider as the collateral fact whether it would act or not and for that purpose to arrive at some decision as to whether it has jurisdiction or not.
There may be Tribunal which by virtue of the law constituting it has the power to determine finally, even the preliminary facts on which the further exercise of its jurisdiction depends; but subject to that, the Tribunal cannot by a wrong decision with regard to collateral fact, give itself a jurisdiction which it would not otherwise had.
Except such tribunals of limited jurisdiction when the statute not only empowers to enquire into jurisdictional facts but also the rights and controversy finally it is entitled to enter on the enquiry and reach a decision rightly or wrongly.
If it has jurisdiction to do right, it has jurisdiction to do wrong.
It may be irregular or illegal which could be corrected in appeal or revision subject to that the order would become final.
The questions to be asked, therefore, are whether the Tribunal has jurisdiction under Inam Act to decide for itself finally; whether the institution or the Inamdar or the tenant is entitled to ryotwari patta under sections 3,4 and 7 and whether the Tribunal is of a limited jurisdiction and its decision on the issue of patta is a collateral fact.
The consideration as to exclusion of the jurisdiction of Civil Court is no longer res integra.
This Court in bead roll of decisions considered this question in diverse situations.
In Kamala Mills Ltd. vs State of Bombay; , the questions arose were whether an assessment made in violation of the Bombay Sales Tax Act could claim the status of an assessment made under that Act, and whether the nature of the transactions was a decision of collateral fact.
A Bench of seven Judges of this Court held that if it appears that a statute creates a special right or liability and provides for the determination of the right or liability to be dealt with by tribunals specially constituted in that 555 behalf would be considered whether all questions of said right and liability shall be determined by the tribunals so constituted and it becomes pertinent to enquire whether remedies normally associated with actions in Civil Courts are prescribed by the said statute or not.
It was held that the Court was satisfied that the Act provided all the remedies associated with actions in Civil Courts and the remedy for refund of the tax illegally collected was provided and it was not collateral.
Section 20 prohibits such a claim being made before an ordinary Civil Court and held that the civil suit was not maintainable.
The leading decision of the Privy Council in Secretary of State vs Mask & C0.
, [1940] L.R. 67I.A.222; Raleigh Investment Co. Ltd. vs Governor General in Council, L.R. 74 I.A. 50 and the ratio in Firm and Illuri Subbayya Cheety & Sons vs State of Andhra Pradesh, ; were approved.
In Desika Charyulu vs State of A.P. , AIR 1964 SC 807 a Constitution Bench was to consider whether the jurisdiction of the Settlement Officer and the Tribunal created under the Estates Abolition Act to determine whether Shotrium Village was an inam estate was exclusive and the Civil Court 's jurisdiction to try the dispute was barred.
Despite the fact that no express exclusion of the Civil Court 's jurisdiction was made under the Act it was held that very provision setting up an hierarchy of judicial tribunals for the determination of the questions on which the applicability of the Act depends was sufficient in most cases to infer that the jurisdiction of the Civil Courts to try the same was barred.
Accordingly it was held that the jurisdiction of the Settlement Officer and the Tribunal by necessary implication was exclusive and that the Civil Courts are barred from trying or retrying the question once over.
The decisions of the Settlement Officer and of the Tribunal were held final and conclusive.
In Dhulabhai & Ors.
vs State of M.p. & Anr. ; another Constitution Bench reviewed the entire case law on the question of maintainability of civil suit and laid down seven propositions.
Propositions 1 and 2 are relevant, which read thus: "(1) Where the statute gives a finality to the orders of the special tribunals the Civil Court 's jurisdiction must he held to be excluded if there is adequate remedy to do what the Civil Courts normally do in a suit.
Such provision, however, does not exclude those cases where the provisions of the particular Act have not been complied with or the statutory tribunal has not acted in conformity with the fundamental principles of judicial procedure.
556 (2) Where there is an express bar of the jurisdiction of the Court, an examination of the scheme of the particular Act to find the adequacy or the sufficiency of the remedies provided may be relevant but is not decisive to sustain the jurisdiction of the civil court.
Where there is no express exclusion the examination of the remedies and the scheme of the particular act to find out the intendment becomes necessary and the result of the inquiry may be decisive.
In the latter case it is necessary to see if the statute creates a special right or a liability and provides for the determination of the right or liability and further lays down that all questions about the said right and liability shall be determined by the tribunals so constituted, and whether remedies normally associated with actions in Civil Courts are prescribed by the said statute or not.
" It was held therein that the civil suit was not maintainable to call in question of assessment made under the Madhya Bharat Sales Tax Act.
In hatti vs Sunder Singh, [1971]2 SCR 163 the tenant had a declaratory relief before the authorities under Delhi land Reforms Act that he was Bhoomidar.
When it was challenged in the civil suit as not being binding, this Court held that the civil suit was not maintainable.
In Muddada Chayana vs Karam Narayana and Anr.
; , under section 56(1) (c) of the Estates Abolition Act, the dispute whether who the lawful ryot in respect of any holding is, shall be decided by the Settlement Officer.
Whether it is liable to be questioned in the Civil Court.
Chinnappa Reddy, J., who had intimate knowledge as an Advocate and the Judge on the subject reviewed the law and held that the Act is a self contained code in which provision was also made for the adjudication of various types of disputes arising, after an estate was notified, by specially constituted tribunals.
On the general principles it was held that the special tribunals constituted by the Act must necessarily be held to have exclusive jurisdiction to decide dispute entrusted by the statute to them for their adjudication.
Dealing with the object of the Act it was held at p. 207 C D that the Act intended to protect ryots and not to leave them in wilderness.
When the Act provides machinery in section 56(1)(c) to discover who the lawful ryot of a holding was, it was not for the Court to denude the Act of all meaning and by confining the provision to the bounds of sections 55 and 56(1)(a) and (b) on the ground of contextual interpretation.
Interpretation of a statute, contextual or otherwise must further and 557 not frustrate the object of the statute.
It was held that the civil suit was not maintainable and approved the Full Bench judgment of 5 judges of the High Court of Andhra Pradesh in T. Munuswami Naidu vs R. Venkata Reddy., AIR 1978 A.P. 200.
The same view was reiterated in O. Chenchulakshmamma & Anr.
D. Subramanya Reddy; , and held that the order of the Addl.
Settlement Officer was final in so far as the dispute between the rival claimants to the ryotwari patta was concerned and not liable to be questioned in any court of law.
In A. Bodayya & Anr.
L. Ramaswamy (dead) by Lrs. [1984] (Suppl).
SCC 391 while reiterating the ratio in both the judgments, Desai, J. Speaking for a Bench of 3 Judges held that under Estate Abolition Act, who the lawful ryot was decided.
Self same question directly and substantially raised in the suit cannot be decided by the Civil Court as it had no jurisdiction to decide and deal with the same but Settlement Officer had the exclusive jurisdiction to decide and deal with it.
In Doe vs Bridges, at p. 859 the oft quoted dictum of Lord Tenerden, C.J. reads that: "where an act creates an obligation and enforces the performance in a specified manner, we take it to be a general rule that performance cannot be enforced in any other manner." In Premier Automobiles Ltd. vs Kamlakur Shantaram Wadke and Ors., ; a Bench of three Judges after reviewing the case law held that if a dispute was not industrial dispute, not does it relate to enforcement of any right under the Industrial Dispute Act, the remedy lies only in the civil court.
If the dispute arises out of the right or liability under the general common law and not under the Act, the jurisdiction of the civil court is always alternative, leaving it to the election of the suitor to choose his remedy for the relief which is competent to be granted in a particular remedy.
If the dispute relates to the enforcement of a right or obligation of the Act,the only remedy available to the suitor is to get an application adjudicated under the Act.
In that view, it was held that the civil suit was not maintainable.
In State of Tamil Nadu vs Ramalinga Samigal Madam, ; strongly relied on by Shri Kanta Rao, the question therein was whether the jurisdiction of the civil court was ousted to redetermine the nature of the land rendered by the settlement officer under section II of the Estate Abolition Act, Tulzapurkar, J. speaking for the Division Bench proceeded on three fundamental postulates namely that the decision of the Settlement authorities under section 11 of the Act was for (I) 558 revenue purposes '," that is to say for fastening the liability on him to pay the assessment and other dues and to facilitate the recovery of such revenue from him by the Government; and therefore, any decision impliedly rendered on the aspect of nature and character of the land on that occasion will have to be regarded as incidental to and merely for the purpose of passing the order of granting or refusing to grant the patta and for no other purpose".
(II) only revision against the order and not an appeal; and (III) that by Madras Amendment, section 64 c was deleted.
It was unfortunate that it was not brought to the notice of the court that the purpose of Estate Abolition Act was not solely for the purpose of collecting the revenue to the State.
The Act had its birth from a long drawn struggle carried on by the ryots in Madras Presidency for permanent ryotwari settlement of tenures and grant of permanent occupancy rights and the Indian National Congress espoused their rights and passed resolution at Arvadi Session to make a legislation in that regard.
The recovery of revenue was only secondary.
In Syamala Rao vs
Sri Radhakanthaswami Varu a division Bench of the Andhra Pradesh High Court to which one of us (K.R.S.,J) was a member considered the historical background, the purpose of the Act and the scheme envisaged therein in extenso and held that the preamble of the Estate Abolition Act was to repeal the permanent settlements, the acquisition of the rights of the land holders in the Estates and introduction of the ryotwari settlement therein; under section 1(4) by issuance of the notification the prexisting rights shall cease and determined; shall vest in the State free from all encumbrances and declared that all rights and interests created in particular over the State 'shall cease and determine as against the Government ' protected only dispossession of a person in possession of the ryoti land who was considered prima facie entitled to a ryotwari patta.
Section 11 envisaged to enquire into "the nature of the land" and whether "ryotwari land immediately before the notified dates" to be properly included or ought to have been properly included in the holding of the ryot".
The enquiry under the Act was entrusted to the Revenue Authorities who have intimate knowledge of the nature of the lands and the entries in the revenue records of the holders, etc.
Act created hierarchy of the tribunals, namely Asstt.
Settlement Officer; Settlement Officer; Director of Settlements and Board of Revenue; provided revisional powers to those authorities and ultimately the order is subject to the decision of the High Court under article 226.
In that view it was held that by necessary implication the jurisdiction of the civil court was ousted, the decision of settlement authorities under section 11 was made final and no civil suit was maintainable.
The legislature having made the Act to render economic justice to the ryots and 559 excluded the dispute between land holders and the ryots covered under sections 12 to 15 and the ryots inter se under section 56(1)(c), from the jurisdiction of the Civil Court, it would not be the legislative intention to expose the ryots to costly unequal civil litigation with the state of the dispute under section 11.
It is not necessary in this case to broach further but suffice to state that unfortunately this historical perspective and the real purpose and proper scope and operation of Estate Abolition Act was not focussed to the notice of this court.
In Jyotish Thakur & Ors.
vs Tarakant.
Jha & Ors.
,[1963] Suppl. 1 SCR 13 section 27 of regulation III of 1872 provides that in respect of transfer of ryoti interest in contravention of the regulation revenue courts shall not take cognizance of such a transfer.
It was contended that by necessary implication the civil suit was not maintainable.
In that context this Court held that provisions therein were not intended to be exhaustive to bar the relief in Civil Court.
In Sri Athmanathawami Devasthanam vs K. Gopalaswami Aiyangar, ; the question was whether the civil suit to recover damages and for ejectment of the ryoti lands belonging to the temple was barred.
The findings were that the lands were ryoti lands and that the tenant acquired the occupancy rights, but the lease was granted in excess of 5 years.
It was contended that it was a transfer without permission of the Endowment department.
While upholding that the lands were ryoti lands and the tenant acquired occupancy rights, this Court disagreeing with the High Court, held that there was no transfer and that the tenant is liable to pay the arrears of rent and the suit was maintainable.
In Sri Vedagiri Lakshmi Narasimha Swami Temple vs Induru Pattabhirami Reddy, ; the contention raised was that section 93 of the Madras Hindu Religious and Charitable Endowments Act, 1951 was a bar to maintain suit for rendition of accounts and recovery thereof against the ex trustees.
This Court repelled the contention and held that the suit for rendition of accounts was not expressly or by necessary implication barred the jurisdiction of the civil court under section 93.
In Shree Raja Kandregula Srinivasa Jagannadha Rao Panthulu Bahadur Garu vs State of Andhra Pradesh; , it was conceded that the question whether Kalipathnam village is an Inam estate was to be adjudicated before the tribunals appointed under the Rent Reduction Act.
It was contended that the tribunals have no jurisdiction to decide the validity of the notification reducing the rent by operation of section 8(1) thereof.
It was held that there was no statutory prohibition to determine the nature of the land contemplated by the Rent Reduction Act.
Accordingly the suit was held to be maintainable.
In Dr. Rajendra Prakash Sharma vs Gyan Chandra & Ors.,[1980] 3 SCR 207 it was found that under s, 7 of the , no proceedings were taken to 560 declare the suit house as on evacuee property.
No notification under sub section
(3) of 7 was published in the gazette.
Under those circumstances it was held that section 46 did not bar the civil suit.
In Anne Besant National Girls High School vs Dy.
Director of Public Instruction & Ors.
this Court held that the Civil Court has jurisdiction to examine whether action or decision of an administrative authority was ultra vires the relevant rules of Grant in Aid Code and Rule 9 (vii) was held to be ultra vires.
Accordingly the suit was held to be maintainable.
In Raja Ram Kumar Bhargava(dead) by Lrs.
vs Union of India, [1988] 2 SCR 352 two questions were raised, firstly the validity of the assessment and secondly recovery of the tax paid under Excess Profit Tax Act, 1940.
On the first question it was held that the suit was not maintainable.
On the second question, without going into the technicalities of the maintainability of the suit, this Court granted the relief.
In Pabbojan Tea Co., etc.
vs The dy.
Commissioner Lakhimpur, etc.[1968] 1 SCR 260 the questions were whether the workmen were ordinary unskilled labour or skilled labour; whether the jurisdiction of the authorities under section 20 of the is exclusive and whether the jurisdiction of the Civil Court was barred.
This court held that the authorities did not hold any inquiry nor received any evidence for determining that issue.
No proper hearing was given to the parties to tender evidence.
Section 20 is not a complete Code as there was no provision for appeal or revision against the orders passed under s.20(3).
There was no further scrutiny by any higher authority against the imposition of penalty.
The Act in terms does not bar the employers from instituting a suit.
In those circumstances, it was held that the legislature did not intend to exclude the jurisdiction of the civil court.
The ratio in K. Chintamani Dora & Ors.
vs G. Annamnaidu & ors.
; also does not assist Gram Panchayat for the reason that the decree therein originally granted became final.
Subsequently it was sought to be reopened in a later suit.
Under those circumstances the civil suit was held to be maintainable notwithstanding the provisions contained under the Estate Abolition Act.
Thus we have no hesitation to hold that the ratio in all these case are clearly distinguishable and render little assistance to the Gram Panchayat.
The scope, ambit and operation of the Inams Act was considered by P. Jaganmohan Reddy,J. (as he than was) in D.V. Raju vs B.G. Rao & Anr.
and held that the paramount object of the legislature was to protect the tenant in occupation and is sought to be achieved by making effective orders of eviction made by the Civil Court either in execution or otherwise.
It further prohibits the institution of any suit or proceeding in a Civil 561 Court under section 14 to set aside or modify any decision of the Tehsildar, Collector or Revenue Court except where such decision has been obtained by misrepresentation, fraud or collusion.
Section 15 enjoins that the provisions of the Act and orders made thereunder shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of absolute jurisdiction on the Tehsilder, Revenue Court or the Collector, as the case may be, notwithstanding any provision of law or any suit or decree of a Civil Court or for that matter even where evictions have taken place in pursuance of such decrees, the evicted tenants can be restored to occupation provided the requirements for the protection of the possession of the tenants are satisfied.
In that case the occupant in possession laid proceeding before the Tehsildar for injunction restraining the writ petitioner from ejecting him from the lands.
The Tehsildar in exercise of the power under Rule 16 of the Rules granted injuction pending consideration of his right to Ryotwari patta.
The order of injunction was challenged firstly on the ground of ultra vires of Rule 16 and secondly on the ground of jurisdiction.
While upholding the order on both the grounds the learned Judge held that Tehsildar, Revenue Court and the Collector have exclusive jurisdiction and the civil suit is barred.
We respectfully approve it as correct law.
The Inams Act did not intend to leave the decisions of the revenue courts under section 3 read with section 7 to retry the issue once over in the Civil Court.
Undoubtedly the decision of the division Bench in P. Pedagovindayy vs Subba Rao, is in favour of the contention that the civil suit is maintainable.
It is not good law.
Thus the glimpse of the object of the Inames Act, scheme, scope and operation thereof clearly manifest that Inames Act is a self contained code, expressly provided rights and liabilities, prescribed procedure; remedies of appeal and revision, excluded the jurisdiction of the civil court, notwithstanding anything contained in any law, given primacy of Inams Act though inconsistent with any law or instrument having force of law.
The jurisdictional findings are an integral scheme to grant or refuse ryotwari patta under section 3, read with s.7 and not collateral findings.
It was subject to appeal and revision and certiorari under article 226.
The decision of the Revenue Tribunal, are final and conclusive between the parties or persons claiming right, title or interest through them.
The trick of pleadings and the camouflage of the reliefs are not decisive but the substance or the effect on the order of the tribunal under the Inams Act are decisive.
The civil suit except on grounds of fraud, misrepresentation or collusion of the parties is not maintainable.
The necessary conclusion would be that the civil suit 562 is not maintainable when the decree directly nullifies the ryotwari patta granted under section 3 of the Inams Act.
Under the Gram Panchayat Act the statutory interposition of vesting the tank and the appurtenant land in the Gram Panchayat made it to retain possession, control and supervision over it, though the Gram Panchayat unlawfully took possession.
The need to grant decree for possession in favour of the Gram Panchayat is thus redundant.
The suit of the descendants normally to be decreed on the finding that ryotwari patta under section 3 of the Inams Act was granted in their favour and that they were unlawfully dispossessed.
Since the grant of ryotwari patta, though in the name of individuals, was to maintain the public tank which stood vested under section 85 of the Act in the Gram Panchayat, the descendants are divested of the right and interest acquired therein.
Thus the suit of the descendants also is liable to be dismissed.
Accordingly, the decrees of dismissal of both the suits are upheld and the appeals dismissed.
But in the circumstances, parties are directed to bear their own costs.
V.P.R. Appeals dismissed.
| Civil Appeal Nos. 931 of 1977 and 200 of 1978 relate to the same dispute though arose from, two suits and separate judgements.
Civil Appeal No. 931 of 1977 arose out of the suit for possession by the Gram Panchayat against the descendants of the grantee of inam.
The suit was dismissed by the Trial Court and was confirmed by the High Court and the High Court granted leave under Art.133.
Civil Appeal No. 200 of 1978 arose out of the suit for possession and mesne profits which was laid by the descendants of the grantee of inam.
The pleadings are the same in both cases.
A Zamindar granted 100 acres of land inam to dig, preserve 532 and maintain a tank in favour of the predecessors of the respondents of C.A. No. 931/77.
In 1700 A.D.i.e.
, 1190 Fasli, the tank was dug by the villagers and ever since, the villagers were using the tank for their drinking purpose and perfected their right by prescription.
In course of time the tank was silted up and fresh water existed only in and around 30 acres.
The grantee 's descendants respondents did not make any repairs, Grass and trees had been grown in the rest of the area and was being enjoyed.
Under section 3 of the A.P.Inams ( Abolition and Conversion into Ryotwari) Act, ( Act XXXVII of 1956) Ryotwari Patta was granted to the respondents in individuals capacity and on appeal the Revenue Divisional Officer confirmed the same and it became final, as it was not challenged any further.
On 7.7.1965, the Gram panchayat the appellant in C.A. No. 931/77 took unilateral possession of the tank and ever since , it was exercising possession, supervision and control over it.
After the expiry of three year from the date of dispossession, the respoondents filed a suit for possession based on title.
Earlier thereto the appellant Gram Panchayat had filed a suit for possession.
The Trial Court found that the tank was a 'public trust ', the appellants would be hereditary trustees and could be removed only by taking action under section 77 of the A.P. Hindu Charitable and Religious Institutions and Endowments Act, 1966 and that the respondents had acquired title by adverse possession.
Accordingly the suit for possession was decreed relegating the filing of separate application for mesne profit.
On appeal, the High Court reversed the decree and held that the tank was a public tank, and the tank and the lands stood vested in the Gram Panchyat under A.P. Gram Panchayat Act,1964.
Since, the Gram Panchayat was in possession from July 7, 1966, though dispossessed the respondents forcibly and as the suit was not under section 6 of the , but one based on title, it called for interference and dismissed the suit.
This court granted leave to appeal under article 136.
533 The respondents in C.A. No. 931/77 (the appellants in C.A. No. 200/78) contended that in view of the entries of the Inam Fair Register, the tank was a public trust and not a public tank; they could not be dispossessed until recourse made under section 77 of the A.P. Charitable and Religious Institutions and Endowments Act; that under the Gram Panchayat Act, the lands did not vest in the gram Panchayat; and that since the grant of ryotwari patta under the Inams Act had become final, section 14, thereof barred the jurisdiction of the Civil Court to entertain the suit.
The appellant Gram Panchayat in C.A. No. 931/77 (the respondents in C.A. No. 200/78) contended that the tank and the appurtenant land was correctly held as public tank by the High Court that by operation of sections 85 and 64 of the Gram Panchayat Act, the land and the tank stood vested in the Panchayat, that the entries in the Inam Fair Register established that the grant of land was for preservation, maintenance and repairs of the tank and therefore, the grant should be in favour of the institution, i. e., the tank and the respondents thereby did not acquire any title, that ryotwari patta was only for the purpose of land revenue; that the Gram Panchayat acquired absolute right, title and interest in the land; and the suit was not a bar in the facts of the case.
Dismissing both appeals, this Court HELD: 1.01.
Any property or income, which belongs to or has been administered for the benefit of the villagers in common or the holders in any of the village land generally or of land of a particular description or of lands under particular source of irrigation shall vest in Gram Panchayat and be administered by it for the benefit of the villagers or holders.
The lands or income used for communal purpose shall either belong to the Gram Panchayat or has been administered by the Gram Panchayat.
It is not the case of the Gram Panchayat nor any finding recorded by the courts below to that effect.
section 64 is not attracted though the villagers acquired prescriptive right to use the water from the tank for their use and of their cattle.
[554D F] 1.02.
All public water courses, springs, reservoirs, tanks, cisterns, etc.
and other water works either existing on the date of the Act or made thereafter by the Gram Panchayat, or otherwise including those used by the public ripened into prescriptive right for the use and benefit of the public and also adjacent or any appurtenant land not being private property shall vest in the Gram Panchayat under section 85(1) and be subject to its control.
[554F G] 534 2.01.
The word`vesting ' in section 85 would signify that the water courses and tanks, lands etc.
used by the public to such an extent as to give a prescripvtive right to their use, are vested in the Gram Panchayat, and placed them under the control and supervision of the Gram Panchayat.
It confers no absolute or full title.
It was open to the Government, even after vesting, to place restriction upon the Gram Panchayat in the matter of enjoyment and use of such tanks, and appurtenant lands etc.
The assumption of management by the Government would be subject to the prescriptive right of the villagers, if any.
The vesting of the tanks etc.
in the Gram Panchayat was with absolute rights and the village community rights would over ride against rights of the Government.
[546C F] 2.02.
The tank is a public tank and not a public trust and that under section 85(1) and section 64, the vesting of the tanks, the appurtenant land and the common land is only for the purpose of possession, supervision, control and use thereof for the villagers for common use subject to the over riding title by the Government and its assumption of management should be in terms of sub section
(3) of section 85 of the Act and subject to the prescriptive right in the water, water spread tank for common use.
[547A B] Gram Panchayat, Mandapaka & Ors.
V. Distt.
Collecctor, Eluru & Ors. , approved.
Anna Narasimha Rao & Ors.
vs Kurra Venkata Narasayya & Ors., , OVER RULED. 3.01.
Under A.P. Land Encroachment Act, 1905; Talengana Area Land Revenue Act, relevant Abolition Acts like A.P. Estates (Abolition and Conversion into Ryotwari) Act, 1948, Inams Abolition Act etc.
give absolute rights or vesting in the State over the forest land, tanks, rivers, mines, poramboke, land, etc.
free from all encumbrances and the preexisting rights in the other land stood abolished and will be subject to the grant of Ryotwari Patta etc.
[546F H] 3.02 Grant of Ryotwari patta is not a title but a right coupled with possession to remain in occupation and enjoyment, subject to payment of the land revenue to the State.
[546H] 3.03.
The entries in the Inam Fair Register are great acts of the State and coupled with the entries in the survey and settlement record 535 furnishes unimpeachable evidence.
On construction of these documents, it would clearly emerge that the original grant was made for the preservation and maintenance of the tank and tax free Inam land was granted for that purpose, though it was in the name of the individual grantee.
The grant was for the preservation and maintenance of the tank.
[548C D] 3.04.
The grant was for the institution.
Under section 3 of the Inams Act, the enquiry should be, whether (1) a particular land is Inam land; (2) Inam land in a Ryotwari, Zamindar or Inam Village; and (3) is held by any institution.
In view of the finding that the grant was for the preservation and maintenance of tank, the Inam land in an inam village was held by the institution, namely, the tank.
Ryotwari patta shall, therefore, be in favour of the institution.
Undoubtedly the ryotwari patta was granted in favour of the descendants.
[548D F] 3.05.
The pattas were obtained in the individuals name, the trustees of an institution cannot derive personal advantage from the administration of the trust property.
The grant of patta was for the maintenance of the trust.
[548G] 3.06.
The descendants, though enjoyed the income from the properties, did not effect the repairs and neglected the maintenance and upkeep of the tank.
They rendered the tank disused and abandoned.
By operation of section 85 of the Act the lands and tank stood vested in the Gram Panchayat for control, management and supervision.
[550E F] 3.07.
A hereditary trustee is entitled to be the Chairman of a Board of Trustees, if any, constituted under the Endowment Act or else be in exclusive possession and management of the public trust registered thereunder until he is removed as per the procedure provided therein.
Since the tank always remained a public tank and not being a public trust, the Endowment Act does not apply.
Therefore, the question of initiating action under section 77 of the Endowment Act for removal of the descendants as trustees does not arise.
[550F G] Arunachalam Chetty vs Venkatachalpathi Garu Swamigal, AIR 1919 P.C. 62 at P. 65; Syed Md. Mazaffaral Musavi vs Bibi Jabeda & Ors., AIR 1930 Pc 1031; Bhojraj vs Sita Ram & Ors, AIR 1936 P.C. 60; M. Srinivasacharyulu & Ors.
V. Dinawahi Pratyanga Rao & Ors., ; Ravipati Kotayya & Anr.
vs Ramaswamy Subbaraydu & Ors., , referred to.
536 K.V. Krishna Rao vs Sub Colletor, Ongole, ; , followed.
Nori Venkatarama Dikshitulu & Ors.
vs Ravi Venkatappayya & Ors., , approved.
Krishan Nair Boppudu Punniah & Ors.
vs Sri Lakshmi Narasimhaswamy Varu, ; Bhupathiraju Venkatapathiraju & Ors.
V. The President Taluq Board, Narsapur & Ors.; [1913] 19 1.C. 727 (Mad.) (D.B.), distinguished.
Tagore Law Lecture, ``Hindu Religious Endowments and Institutions at p. 6, distinguished.
In the laws made to restructure the social order creating rights in favour of the citizens and conferring power and jurisdiction on the hierarchy of Tribunals or the authorities constituted thereunder and giving finality to their orders or decisions and divested the jurisdiction of the established civil courts expressly or by necessary implication Departure in the allocation of the judicial functions would not be viewed with disfavor for creating the new forums and entrusting the duties under the statutes to implement socio economic and fiscal laws.
Courts have to consider, when questioned, why the legislature made the departure.
The reason is obvious.
The tradition bound civil courts gripped with rules of pleading and strict rules of evidence and tardy trial, four tier appeals, endless revisions and reviews under C.P.C. are not suited to the needed expeditious dispensation.
The adjudicatory system provided in the new forums is cheap and rapid,.
The procedure before the Tribunal is simple and not hide bound by the intricate procedure of pleadings, trial, admissibility of the evidence and proof of facts according to law.
Therefore, there is abundant flexibility in the discharge of the functions with greater expedition and inexpensiveness.
{552D H] 4.02.
In order to find out the purpose in creating the Tribunals under the statues and the meaning of particular provisions in social legislation, the Court would adopt the purposive approach to ascertain the socials ends envisaged in the Act, to consider scheme of the Act as an integrated whole and practical means by which it was sought to be effectuated to achieve them.
Meticulous lexographic analysis of words and phrases and sentences should be subordinate to this purposive approach.
The dynamics of the interpretative functioning of the Court is to reflect the contemporary needs and the prevailing values consistent with the constitutional and legislative declaration of the policy envisa 537 ged in the statute under consideration.
[552H 553B] 4.03.
The law should, therefore, respond to the clarion call of social imperatives evolve in that process functional approach as means to subserve ``social promises ' ' set out in the Preamble, Directive Principles and the Fundamental Rights of the Constitution.
[553d] 4.04.
Section 9 of the Civil Procedure Code, 1908 provides that whenever a question arises before the Civil Court whether its jurisdiction is excluded expressly or by necessary implication, the court naturally feels inclined to consider whether remedy afforded by an alternative provision prescribed by special statute is sufficient or adequate.
In cases where exclusion of the civil court 's jurisdiction is expressly provided for, the consideration as to the scheme of the statue in question and the adequacy of sufficiency of the remedy provided for by it may be relevant, but cannot be decisive.
Where exclusion is pleaded as a matter of necessary implication such consideration would be very important and inconceivable circumstances might become even decisive.
[553G 554B] 4.05.
The jurisdiction of a Tribunal created under statute may depend upon the fulfilment of some condition precedent or upon existence of some particular fact.
Such a fact is collateral to the actual matter which the Tribunal has to try and the determination whether it existed or not is logically temporary prior to the determination of the actual question which the Tribunal has to consider.
At the inception of an enquiry by a Tribunal of limited jurisdiction, when a challenge is made to its jurisdiction, the Tribunal has to consider as the collateral fact whether it would act or not and for that purpose to arrive at some decision as to whether it has jurisdiction or not.
There may be Tribunal which by virtue of the law constituting it has the power to determine finally, even the preliminary facts on which the further exercise of its jurisdiction depends; but subject to that, the Tribunal cannot by a wrong decision with regard to collateral fact, give itself a jurisdiction which it would not otherwise have except such tribunals of limited jurisdiction when the statue not only empowers to enquire into jurisdictional facts but also the rights and controversy finally it is entitled to enter on the enquiry and reach a decision rightly or wrongly.
If it has jurisdiction to do right, it has jurisdiction to do wrong.
It may be irregular or illegal which could be corrected in appeal or revision subject to that the order would become final.
[554B F] 4.06.
The Inams Act did not intend to leave the decisions of the revenue courts under section 3 read with section 7 to retry the issue once over in the civil court.
[561D E] 538 4.07.
The glimpse of the object of the Inams Act, scheme, scope and operation thereof clearly manifest that Inams Act is a self contained code, expressly provided rights and liabilities; prescribed procedure; remedies; of appeal and revision, excluded the jurisdiction of the civil court, notwithstanding anything contained in any law, given primacy of Inams Act though inconsistent with any law or instrument having force of law.
The jurisdictional findings are an integral scheme to grant or refuse ryotwari pattta under section 3, read with section 7 and not collateral findings.
It was subject to appeal and revision and certiorari under Art 226.
The decision of the Revenue Tribunal, are final and conclusive between the parties or persons claiming right, title or interest through them.
The trick of pleadings and the camouflage of the reliefs are not decisive but the substance or the effect on the order of the tribunal under the Inams Act are decisive.
The civil suit except on grounds of fraud, misrepresentation or collusion of the parties is not maintainable.
The necessary conclusion would be that the civil suit is not maintainable when the decree directly nullifies the ryotwari patta granted under section 3 of the Inams Act.
[561E 562A] Deena vs Union of India, [1984] ISCR, referred to.
Kamala Mills Ltd. vs State of Bombay, ; ; Secretary of State vs Mask & Co., [1940] L.R. 67 I.A. 222; Raleigh Investment Co. Ltd. V. Governor General in Council, L.R. 74 I.A. 50; Firm and Illuri Subbayya Chetty & Sons vs State of Andhra Pradesh; , ; Deesika Charyulu vs State of A.p., AIR 1964 SC 807; Dhulabhai & Ors vs State of M.P. & Anr., ; ; Hati vs Sunder Singh, ; ; Muddada Chayana vs Karam Narayana and Anr.
; , ; T. Munuswami Naidu vs R. Venkata Reddy, AIR 1978 A.P. 200; O. Chenchulakshmamma & Anr.
vs D. Subramanya Reddy; , ; A. Bodayya & Anr.
V. L. Ramaswamy(dead) by Lrs., ; Doe vs Bridges, at p. 359; Premier Automobiles Ltd. vs Kamlakar Shantaram Wadke and Ors., ; ; State of Tamil Nadu vs Ramalinga Samigal Madam, ; ; Syamala Rao vs Sri Radhakanthaswami Varu, ; Jyotish Tahakur & Ors.
vs Tarakant Jha & Ors., [1963] Suppl.
1 SCR 13; Sri Athmanathaswami Devasthanam vs K. Gopalaswami Aiyangar, {1964] 3 SCR 763; Sri VEdagiri Lakshmi Narasimha Swami Temple vs Induru Pattabhirami Reddy, ; ; Shree Raja Kandragula Srinivasa Jagannadha Rao Panthulu Bahadur Garu vs State of Andhra Pradesh, ; ; Dr. Rajendra Prakash Sharma vs Gyan Chandra & Ors., ; ; Anne Basant National Girls High School vs Dy.
539 Director of Public Instruction & Ors., ; Raja Ram Kumar Bhargava (dead) by Lrs.
vs Union of India, [1988] 2 SCR 352; Pabbojan Tea Co., Ltd., etc.
vs the Dy.
Commissioner, Lakhimpur, etc.
; , and K. Chintamani Dora & Ors.
vs G. Annamnaidu & Ors., ; , distinguished.
D.V. Raju vs B.G. Rao & Anr., , approved.
P.pedagovindayy vs Subba Rao, , over ruled.
The word `vest ' clothes varied colours from the context and situation in which the word came to be used in a statue of rule.
[545B C] 5.02.
The word [vest '], means, to give an immediate, fixed right of present or future enjoyment, to accrue to, to be fixed, to take effect, to clothe with possession, to deliver full possession of land or of an estate, to give seisin to enfeoff.
[545C D] 5.03.
The word, `vest ', in the absence of a context, is usually taken to mean, `vest ' in interest rather than vest in possesion '.[545E F] 5.04.
`Vest '.
``generally means to give the property in ' '.
[545E F] 5.05.
The word, `vested ' was defined, `as to the interest acquired by public bodies, created for a particular purpose, in works, such as embankments, whcih are `vested ' in them by statute. ' {545D E] 5.06.
``Vesting ' ' in the legal sense means, to settle, secure, or put in fixed right of possession; to endow, to descend, devolve or to take effect, as a right '.
[545C] Chamber 's Mid Century Dictionary at P. 1230; Blacks Law Dictionary, 5th Edition at P. 1401; Stroud 's Judicial Dictionary, 4th Edition Vol, 5 at P. 2938, Item 12, at P 2940, Item 4 at P. 2939; Port of London Authority vs Canvey Island Commissioners, {1932] 1 Ch.
446; Fruit and Vegetable Merchants Union vs Delhi Improvement Trust, ; , referred to.
Under the Gram Panchayat Act the statutory interposition of vesting the tank and the appurtenant land in the Gram Panchayat made it to retain possession, control and supervision over it, though the Gram Panchayat unlawfully took possession.
The need to grant decree for possession in favour of the Gram Panchayat is thus redundant.
The suit 540 of the descendants normally to be decreed on the finding that ryotwari patta under section 3 of the Inams Act was granted in their favour and that they were unlawfully dispossessed.
Since the grant of ryotwari patta, though in the name of individuals, was to maintain the public tank whcih stood vested under section 85 of the Act in the Gram panchayat, the descendants are divested of the right and interest acquired therein.
Thus the suit of the descendants also is liable to be dismissed.
[562A C]
|
Civil Appeal No. 4139 of 1986.
From the Judgment and order dated 18.6.1986 of the Bombay High Court in Appeal No. 874 of 1983.
R.P. Bhatt and D.N. Misra for the Appellant.
25 L.C. Chogale, M.N. Shroff, K.M.M. Khan, R.F. Nariman, R. Karanjawala, Hardeep Singh, Mrs. Manek Karanjawala, S.V. Deshpande, A.S. Bhasme and A.M. Khanwilkar for the Responlents .
The Judgment of the Court was delivered by SEN, J.
By section 127 the Maharashtra Regional & Town Planning Act, 1966 enacts: " 127.
If any land reserved, allotted or designated for any purpose specified in any plan under this Act is not acquired by agreement within ten years from the date on which a final Regional plan, or final Development plan comes into force or if proceedings for the acquisition of such land under this Act or under the Land Acquisition Act, 1894, are not commenced within such period, the owner or any person interested in the land may serve notice on the Planning Authority, Development Authority or as the case may be, Appropriate Authority to that effect; and if within six months from the date of the service of such notice, the land is not acquired or no steps as aforesaid are commenced for its acquisition, the reservation, allotment or designation shall be deemed to have lapsed, and thereupon the land shall be deemed to be released from such reservation, allotment or designation and shall become available to the owner for the purpose of development or otherwise, permissible in the case of adjacent land under the relevant plan.
" The short point involved in this appeal by special leave from a judgment of a Division Bench of the Bombay High Court dated June 18, 1986, is whether the period of six months specified in section 127 of the Act is to be reckoned from the date of service of the purchase notice dated July 1, 1977 by the owner on the Planning Authority i.e. the Municipal Corporation of Greater Bombay here, or the date on which the requisite information of particulars furnished by the owner.
The late Dr. Eruchshaw Jamshedji Hakim was the former owner of a double storeyed building situate on land admeasuring 3645.26 square metres bearing the cadastral survey No. 176 of Tardeo, Bombay known as Dr. Hakimwadi.
The property is located at the junction of Falkland Road and Eruchshaw Hakim Road.
It 26 consists of several structures housing 24 small scale industries, 13 shops on the ground floor and 26 residential tenements on the first floor, facing the Falkland Road.
On the rear side of this building, there are several structures housing about 24 small scale industries.
The said Dr. Eruchshaw Jamshedji Hakim created a trust in respect of the properties and respondents nos.
6 9 i.e. respondents nos.
4 7 in the High Court, herein described as such are the present trustees appointed under the deed.
The Planning Authority published a draft Development Plan in respect of 'D ' ward where the property in dispute is situate.
In the Development Plan property of Dr. Eruchshaw Jamshedji Hakim was reserved for a recreation ground.
The Development Plan was finalised and sanctioned by the State Government on January 6, 1967.
The final development scheme came into effect from February 7, 1967 and thereunder the land was again reserved for recreation ground.
No action having been taken for acquisition of the land until January 1, 1977, the owners thereof i.e. the trustees served a purchase notice dated July, 1, 1977 on the Commissioner for Municipal Corporation of Greater Bombay either to acquire the same or release it from acquisition, and the same was received on July 4, 1977.
On July 28, 1977 the Corporation 's Executive Engineer wrote to respondents nos.
4 7 and asked for information regarding the ownership of the land and the particulars of the tenants thereof.
The letter stated that the relevant date under section 127 of the Act would be the date upon which this information was received.
The trustees for the time being the landlords of the property known as Hakimwadi by their lawyer 's letter dated August 3, 1977 conveyed that the date of six months stipulated by section 127 of the Act has to be computed from the date of the receipt from them of the information required.
Further, they stated that as the Planning Authority for Greater Bombay was the Municipal Corporation of Greater Bombay, it had p access to all the relevant records including the records pertaining to cadastral survey No. 176.
It was also appointed out that the Corporation had been assessing them to property tax in respect of the said property and issuing bills and receipts therefor and could not now question their title to ownership of the property.
It was further said that as regards the number of tenants, the inspection registers maintained by the Corporation 's Assessment Department, upon which the assessment of the rateable value of the various tenements was based, bear ample testimony.
It was next stated that the property was partly residential, partly commercial and partly meant for storage.
The trustees went on to say that they were not aware of any rule framed under the Act whereby the Planning 27 Authority could make an inquiry at that stage without taking a decision on the material question and thereby attempt to extend the time limit of six months stipulated in section 127.
The said letter was received by the Executive Engineer on August 16, 1977 and presumably the information required was furnished on August 16, 1977.
The Executive Engineer wrote to respondents nos.
4 7 stating that the period of six months allowed by section 127 of the Act would accordingly commence on August 4, 1977, the date when the requisite information was furnished.
Next, the Executive Engineer by his letter dated November 2, 1977 intimated respondents nos.
4 7 that the Municipal Corporation had accorded sanction to initiate acquisition proceedings in respect of the property in question under the Land Acquisition Act.
Thereafter, the Corporation passed a resolution dated January 10, 1978 for the acquisition of the land and made an application to the State Government dated January 31, 1978 for taking necessary steps.
The State Government being satisfied that the land was required for a public purpose issued the requisite notification dated April 7, 1978 under section 6 of the Land Acquisition Act, 1894 for acquisition of the land.
On July 17, 1978 respondent No. 1 Dr. Hakimwadi Tenants Association filed a petition in the High Court under article 226 of the Constitution for quashing the impugned notification.
A learned Single Judge (Pendse, J.) by his judgment dated September 21, 1983 allowed the writ petition on the ground that the Planning Authority having taken no steps for acquisition of land under section 126(1) of the Act read with section 6 of the Land Acquisition Act within 10 years from the date on which the final Development Plan came into force, the acquisition proceedings commenced by the State Government under sub section
(2) of section 126 at the instance of the Planning Authority were not valid inasmuch as the issuance of the impugned notification under section 6 of the Land Acquisition Act for the reservation of the property under the final Development Plan for a recreation ground was not within the period of six months as required under section 127.
According to the learned Single Judge, the period of six months prescribed under section 127 of the Act begin to run on the date of service of the purchase notice on the Corporation and therefore the Corporation had to take steps to acquire the property before January 4, 1978.
The Corporation not having taken any steps till the expiry of the period of six months, the resolution dated January 10, 1978 passed to acquire the property and the consequent notification dated April 7, 1978 were invalid and of no legal consequence In other words, he held that the commencement of the statutory period of six months was not dependent upon the directions issued by the officers 28 of the Planning Authority, nor could the officers extend the period fixed under section 127.
As regards the practice prevalent in the Corporation to compute the period of six months from the date of receipt of the information sought, he held that it was wholly unwarranted and entirely illegal.
He accordingly struck down the impugned notification under section 6 of the Land Acquisition Act and declared that the reservation of the land under the Development Plan had lapsed and it was open to the tenants of the property to claim that due to the lapse of reservation, the Planning Authority and the State Government had no jurisdiction to acquire the land in exercise of the powers under s.126 of the Act.
Aggrieved, the appellant carried an appeal to a Division Bench under section 15 of the Letters Patent.
Bharucha, J. speaking for himself and Desai, J. upheld the view of the learned Single Judge and held that the most crucial step was the application to be made by the Corporation to the State Government under section 126(1) of the Act for acquisition of the land, it ought to have been taken within the period of six months commencing from July 4, 1977, the date of service of the purchase notice.
That decision proceeds upon the view that the details of ownership or particulars of tenants are not required to be furnished in the purchase notice served by the owner or any person interested in the land.
All that is required is that the owner or the person interested in the land must inform the authority that the land reserved for any plan under the Act had not been acquired by agreement within 10 years from the date on which the plan came into force and that proceedings for acquisition of such land under the Land Acquisition Act had not been commenced within that period.
It was accordingly held that the purchase notice dated July 1, 1977 served by respondents nos.
4 7, the trustees, was a valid notice under section 127 of the Act and therefore the period of six months specified in section 127 commenced running from July 4, 1977, the date of service, and came to an end on January 4, 1978.
That being so, it was held that upon the expiry of the period of six months on January 3, 1978, the reservation of the land for recreation ground lapsed and it was released from such reservation.
According to the plain reading of section 127 of the Act, it is manifest that the question whether the reservation has lapsed due to the failure of the Planning Authority to take any steps within a period of six months of the date of service of the notice of purchase as stipulated by section 126, is a mixed question of fact and law.
It would therefore be difficult, if not well nigh impossible, to lay down a rule 29 of universal application.
It cannot be posited that the period of six months would necessarily begin to run from the date of service of a purchase notice under section 127 of the Act.
The condition pre requisite for the running of time under section 127 is the service of a valid purchase notice.
It is needless to stress that the Corporation must prima facie be satisfied that the notice served was by the owner of the affected land or any person interested in the land.
But, at the same time, section 127 of the Act does not contemplate an investigation into title by the officers of the Planning Authority, nor can the officers prevent the running of time if there is a valid notice.
Viewed in that perspective, the High Court rightly held that the Executive Engineer of the Municipal Corporation was not justified in addressing the letter dated July 29, 1977 by which he required respondents nos.
4 7, the trustees, to furnish information regarding their title and ownership, and also to furnish particulars of the tenants, the nature and user of the tenements and the total area occupied by them at present.
The Corporation had the requisite information in their records.
The High Court was therefore right in reaching the conclusion that it did.
In the present case, the Planning Authority was the Municipal Corporation of Greater Bombay.
It cannot be doubted that the Municipal Corporation has access to all land records including the records pertaining to cadastral survey No. 176 of Tardeo.
We are inclined to the view that the aforesaid letter dated July 28, 1977 addressed by the Executive Engineer was just as attempt to prevent the running of time and was of little or no consequence.
As was rightly pointed out by respondents nos.
4 7 in their reply dated August 3, 1977, there was no question of the period of six months being reckoned from the date of the receipt from them of the information requisitioned.
The Municipal Corporation had been assessing the trust properties to property tax and issuing periodic bills and receipts therefor and obviously could not question the title or ownership of the trust.
We are informed that the building being situate on Falkland Road, the occupants are mostly dancing girls and this is in the knowledge of the Corporation authorities.
The rateable value of each tenement would also be known by an inspection of the assessment registers.
We must accordingly uphold the finding arrived at by the High Court that the appellant having failed to take any steps, namely, of making an application to the State Government for acquiring the land under the Land Acquisition Act within a period of six months from the date of service of the purchase notice, the impugned notification issued by the State Government under section 6 of the Land Acquisition Act making the requisite declaration that such land was required for a public purpose i.e. for a recreation ground was invalid, null and void.
30 While the contention of learned counsel appearing for the appellant that the words 'six months from the date of service of such notice ' in section 127 of the Act were not susceptible of a literal construction, must be accepted, it must be borne in mind that the period of six months provided by section 127 upon the expiry of which the reservation of the land under a Development Plan lapses, is a valuable safeguard to the citizen against arbitrary and irrational executive action.
Section 127 of the Act is a fetter upon the power of eminent domain.
By enacting section 127 the legislature has struck a balance between the competing claims of the interests of the general public as regards the rights of an individual.
An analysis of section 126 would reveal that after publication of a draft regional plan, a development or any other plan or town planning scheme, any land is required or reserved for any of the public purposes specified therein, the Planning Authority, Development Authority or as the case may be, any Appropriate Authority may, except as provided in section 113A, at any time acquire the land either by agreement or make an application to the State Government for acquisition of such land under the Land Acquisition Act, 1894.
Sub section
(2) thereof provides that the State Government may on receipt of the applications contemplated by section 126(1) or if the Government (except in cases falling under section 49 and except as provided in section 113A) is itself of opinion that any land included in any such plan is needed for any public purpose, it may make a declaration to that effect in the final gazette, in the manner provided in section 6 of the Land Acquisition Act in respect of the said land.
The rule is subject to an exception.
Proviso to section 126(2) interdicts that no such declaration shall be made after the expiry of three years from the date of publication of the draft regional plan, development plan or any other plan.
Sub section
(3) deals with the procedure to be followed for acquisition of the land covered by a declaration under section 6 of the p Land Acquisition Act.
Sub section
(4) is of some relevance and reads as follows: "(4).
If a declaration is not made within the period referred to in sub section (2) or having been made, the aforesaid period expired on the commencement of the Maharashtra Regional and Town Planning (Amendment) Act, 1970, the State Government may make a fresh declaration for acquiring the land under the Land Acquisition Act, 1894, in the manner provided by sub sections (2) and (3) of this section, subject to the modification that the market value of the land shall be market value at the date of declaration in the official Gazette made for acquiring the land afresh.
" 31 The conjoint effect of sub sections
( 1), (2) and (4) of section 126 is that if no declaration is made within the period referred to in sub section
(2), that is to say, before the expiry of three years from the date of publication of the draft regional plan, development plan or any other plan, the compensation payable to the owner of the land for such acquisition, in that event, shall be the market value on the date of the fresh declaration under section 6 of the Land Acquisition Act i.e. the market value not at the date of the notification under section 4(1) of the Land Acquisition Act but the market value at the date of declaration under section 6.
That is one of the safeguards provided under the Act.
Another safeguard provided is the one under section 127 of the Act.
It cannot be laid down as an abstract proposition that the period of six months would always begin to run from the date of service of notice.
The Corporation is entitled to be satisfied that the purchase notice under section 127 of the Act has been served by the owner or any person interested in the land.
If there is no such notice by the owner or any person, there is no question of the reservation, allotment or designation of the land under a development plan of having lapsed.
It a fortiori follows that in the absence of a valid notice under section 127, there is no question of the land becoming available to the owner for the purpose of development or otherwise.
In the present case, these considerations do not arise.
We must hold in agreement with the High Court that the purchase notice dated July 1, 1977 served by respondents nos.
4 7 was valid notice and therefore the failure of the appellant to take any steps for the acquisition of the land within the period of six months therefrom, the reservation of the land in the Development Plan for a recreation ground lapsed and consequently, the impugned notification dated April 7, 1978 under section 6 of the Land Acquisition Act issued by the State Government must be struck down as a nullity.
Section 127 of the Act is a part of the law for acquisition of lands required for public purposes, namely, for implementation of schemes of town planning.
The statutory bar created by section 127 providing that reservation of land under a development scheme shall lapse if no steps are taken for acquisition of land within a period of six months from the date of service of the purchase notice, is an integral part of the machinery created by which acquisition of land takes place.
The word 'aforesaid ' in the collocation of the words 'no steps as aforesaid are commenced for its acquisition ' obviously refer to the steps contemplated by section 126(1).
The effect of a declaration by the State Government under sub section
(2) thereof, if it is satisfied that the 32 land is required for the implementation of a regional plan, development plan or any other town planning scheme, followed by the requisite declaration to that effect in the official gazette, in the manner provided by section 6 of the Land Acquisition Act, is to freeze the prices of the lands affected.
The Act lays down the principles of fixation by providing firstly, by the proviso to section 126(2) that no such declaration under sub section
(2) shall be made after the expiry of three years from the date of publication of the draft regional plan, development plan or any other plan, secondly, by enacting sub section
(4) of section 126 that if a declaration is not made within the period referred to in sub section
(2), the State Government may make a fresh declaration but, in that event, the market value of the land shall be the market value at the date of the declaration under section 6 and not the market value at the date of the notification under section 4, and thirdly, by section 127 that if any land reserved, allotted or designated for any purpose in any development plan is not acquired by agreement within 10 years from the date on which a final regional plan or development plan comes into force or if proceedings for the acquisition of such land under the Land Acquisition Act are not commenced within such period, such land shall be deemed to be released from such reservation, allotment or designation and become available to the owner for the purpose of development on the failure of the Appropriate Authority to initiate any steps for its acquisition within a period of six months from the date of service of a notice by the owner or any person interested in the land.
It cannot be doubted that a period of 10 years is long enough.
The Development or the Planning Authority must take recourse to acquisition with some amount of promptitude in order that the compensation paid to the expropriated owner bears a just relation to the real value of the land as otherwise, the compensation paid for the acquisition would be wholly illusory.
Such fetter on statutory powers is in the interest of the general public and the conditions subject to which they can be exercised must be strictly followed.
There still remain the other two points raised, namely, (i) There was waiver or abandonment of right by respondents nos.
4 7, the trustees, to question the validity of the acquisition proceedings; and (ii) There was inordinate delay or laches on the part of respondent No. 1 which disentitled it to grant of relief under article 226 of the Constitution.
We find it difficult to give effect to these contentions.
In order to deal with these questions, a few facts are to be stated.
The Executive Engineer of the Municipal Corporation by his letter dated November 2, 1977 addressed to the lawyer acting on be 33 half of respondents nos.
4 7, the trustees, to inquire whether they were prepared to sell the property in question situate at Cadastral Survey No. 176 of Taradeo.
In response thereto, respondents nos.
4 7 through their lawyer 's reply dated November 18, 1977 intimated that they were prepared to consider the sale of the property in its existing condition with all the structures tenanted or otherwise at an overall rate of Rs.650 per square metre.
This response was without prejudice and they expressly stated that the offer was made without admitting the power and authority of the appellant to acquire the land or to initiate the proceedings for acquisition.
Instead of accepting the same, the Executive Engineer by his letter dated January 11, 1978 wanted respondents nos.
4 7 to disclose the basis upon which they claimed price at the rate of Rs.650 per square metre.
While keeping respondents nos.
4 7 in suspense, the Municipal Corporation had in the meanwhile on January 10, 1978 passed a Resolution that necessary steps be taken to move the State Government for acquisition of the land and thereafter actually moved the Government by their letter dated January 31, 1978 to make the requisite declaration under section 6 of the Land Acquisition Act, 1894 i.e. the property in question was needed for, public purpose viz. a recreation ground under the Development Plan.
The State Government accordingly on April 7, 1978 on being satisfied that the property was needed issued the requisite impugned notification under section 6 of the Act.
Thereafter, the Special Land Acquisition officer on January 18, 1979 issued a general notice under section 9 of the Land Acquisition Act and the same was published at the site and also issued individual notices to the persons interested.
The hearing was fixed for February 26, 1979.
On February 22, 1979 i.e. four days before the hearing some of the tenants approached the Special Land Acquisition officer and applied for three months ' adjournment and accordingly the bearing was adjourned to April 24, 1979.
However, no claims for compensation were filed.
Nobody remained present at the hearing.
Accordingly, the Special Land Acquisition officer was constrained to issue fresh notices under section 9 on May 25, 1981.
Thereafter, the Municipal Corporation on the date fixed applied to the Special Land Acquisition officer to keep the proceedings in abeyance at the behest of some of the tenants who had applied to the Corporation for three months ' time.
In the circumstances, respondents nos.
4 7 moved the High Court under article 226 of the Constitution for a writ in the nature of mandamus requiring the Special Land Acquisition officer to make an award.
On January 20, 1981, the learned Government Advocate gave an undertaking before the High Court that the Special Land Acquisition officer would declare the award within a period of six months 34 and make payment of compensation within eight months.
In view of this, the High Court dismissed the writ petition as not pressed.
On these facts, it cannot be said that there was any waiver or abandonment of rights by respondents nos.
In order to constitute waiver, there must be voluntary and intentional relinquishment of a right.
The essence of a waiver is an estoppel and where there is no estoppel, there is no waiver.
Estoppel and waiver are questions of conduct and must necessarily be determined on the facts of each case.
In the present case, respondents nos.
4 7 had without admitting that the appellant had the authority or power to initiate the proceedings for acquisition, signified their willingness to sell the property subject to certain terms.
But the appellant did not accept the offer.
On the contrary, the appellant took further steps for the acquisition of the land by moving the State Government under section 126(1) of the Act to initiate acquisition proceedings by the issuance of a notification under section 6 of the land Acquisition Act.
In view of this, it cannot be said that the conduct of respondents nos.
4 7 was such as warrants an inference of relinquishment by a known existing legal right.
There is no question of estoppel, waiver or abandonment.
There is no specific plea of waiver, acquiescence or estoppel, much less a plea of abandonment of right.
That apart, the question of waiver really does not arise in the case.
Admittedly, the tenants were not parties to the earlier proceedings.
There is, therefore, no question of waiver of rights by respondents nos.
4 7 not would this disentitle the tenants from maintaining the writ petition.
The objection that there was undue delay in moving the High Court cannot prevail.
The reservation has lapsed, acquisition upon such reservation is bad and the delay in filing the petition, such as it is, can make no difference to this position in law.
In the result, the appeal fails and is dismissed with costs.
P.S.S. Appeal dismissed.
| % Section 127 of the Maharashtra Regional and Town Planning Act, 1966 provides that if any land reserved under the Act was not acquired by agreement within ten years from the date on which a final regional plan or final development plan came into force or if proceedings for the acquisition of such land under that Act or under the Land Acquisition Act, 1894 were not commenced within such period, the owner or any person interested in the land may serve notice on the appropriate authority to that effect and if within six months from the date of the service of such notice, the land was not acquired or no steps as aforesaid were commenced for its acquisition, the reservation should be deemed to have lapsed.
The Planning Authority, the Municipal Corporation of Greater Bombay, published a draft development plan reserving the land in dispute for a recreation ground.
The said plan was finalised and sanctioned by the State Government on January 6, 1967.
It came into effect from February 7, 1967 and thereunder the land was again reserved for recreation ground.
No action having been taken for acquisition of the land, the trustees of the land served a notice dated July 1, 1977 on the Commissioner for Municipal Corporation either to acquire the land or release it from acquisition.
The same was received by the latter on July 4, 1977.
On July 28, 1977 the Corporation 's Executive Engineer asked for information regarding the ownership of the land and the particulars of the tenants thereof from trustees respondents Nos. 4 7, and stated that the relevant date under section 127 cf the Act would be the date 22 upon which this information was received.
The trustees by their lawyer 's letter dated August 3, 1977 conveyed that the period of six months stipulated by section 127 has to be computed from the date of the receipt of the purchase notice by the Corporation, i.e. July 4, 1977 and stated that the Corporation had access to all the relevant records.
The requisite information was also provided therein.
The Executive Engineer wrote stating that the period of six months allowed by section 127 of the Act would commence on August 4, 1977, the date when the requisite information was furnished.
Thereafter the Executive Engineer by his letter dated November 2, 1977 inquired of the trustees whether they were prepared to sell the property in question to which the trustees quoted an overall rate of Rs.650 per square metre through their lawyer 's reply dated November 18, 1977.
They expressly stated that the offer was made without admitting the power and authority of the appellant to acquire the land or to initiate the proceedings for acquisition.
Instead of accepting the same, the Executive Engineer by his letter dated January 11, 1978 asked the respondents to disclose the basis for the rate of Rs.650 per sq.
metre.
The Corporation had, in the meanwhile passed a resolution on January 10, 1978 for the acquisition of the land and made an application to the State Government dated January 31, 1978 for taking necessary steps.
The State Government issued the requisite notification dated April 7, 1978 under section 6 of the Land Acquisition Act 1894 for acquisition of land.
On July 17, 1978, respondent No. 1, the tenants ' association, filed a petition in the High Court under article 226 of the Constitution for quashing the impugned notification.
The High Court held that the most crucial step was the application to be made by the Corporation to the State Government under section 126(1) of the Act for acquisition of the land within the period of six months commencing from July 4, 1977, the date of service of the purchase notice, and that upon the expiry of the said period on January 3, 1978, the reservation of the land had lapsed and it was released from such reservation.
It took the view that all that was required was that the owner or the person interested in the land must inform the Authority that the land reserved for any plan under the Act had not been acquired by agreement within ten years from the date on which plan came into force and the proceedings for acquisition of such land under the Land Acquisition Act had not been commenced within that period.
Consequently it struck down the impugned notification as invalid, null and void.
In the appeal to this Court by special leave it was contended that there was waiver or abandonment of right by respondents Nos. 4 7, 23 the trustees, to question the validity of the acquisition proceedings, and that there was inordinate delay or laches on the part of respondent No. 1 which disentitled it to grant of relief under article 226 of the Constitution.
Dismissing the appeal, ^ HELD: 1.
Section 127 of the Maharashtra Regional and Town Planning Act, 1966 is a fetter upon the power of eminent domain.
By enacting it the legislature has struck a balance between the competing claims of the interests of the general public as regards the rights of an individual.
[30B C] 2.
The condition pre requisite for the running of time under 127 of the Act is the service of a valid purchase notice.
In the instant case, the purchase notice dated July 1, 1977 was a valid notice.
The appellant having failed to take any steps for acquisition of the land within a period of six months therefrom the reservation of the land in the development plan for a public purpose lapsed and consequently the impugned notification dated April 7, 1978 issued by the State Government under section 6 of the Land Acquisition Act must be struck down as a nullity.
[29A B; 31D F] 3.1 The question whether the reservation has lapsed due to the failure of the planning authority to take any steps within a period of six months of the date of service of the notice of purchase as stipulated by section 127 is a mixed question of fact and law.
A rule of universal application cannot, therefore, be laid down.
[28G H] In the instant case the High Court found that the planning authority had failed to acquire the land reserved for the plan under the Act by agreement within ten years from the date on which the plan came into force and proceedings for acquisition of the land under the Land Acquisition Act had not been commenced within the period of six months from the receipt of notice from respondents Nos. 4 to 7, the trustees.
The Municipal Corporation had been assessing the trust properties to property tax and issuing periodic bills and receipts therefor and obviously could not question the title or ownership of the trust.
Accordingly, it struck down the impugned notification under section 6 of the Land Acquisition Act and declared that the reservation of the land under the development plan had lapsed.
[28E, 29F, 28B] 3.2 There was no question of the period of six months being 24 reckoned from the date of receipt from respondents of the information requisitioned.
Section 127 of the Act does not contemplate an investigation into the title by the officers of the Planning Authority, nor can the officers prevent the running of time if there is a valid notice.
The Executive Engineer of the appellant Corporation was not justified in addressing the letter dated July 28, 1977 calling upon respondents 13 Nos.
4 7, the trustees, to furnish information regarding their title and ownership, and also to furnish particulars of the tenants, the nature of user of the tenements and the total area occupied by them.
The Corporation had the requisite information in their records.
The Planning Authority was the Municipal Corporation.
The said letter was, therefore, just an attempt to prevent the running of time and was of little or no consequence.[29A, B E] 4.
In order to constitute waiver, there must be voluntary and intentional relinquishment of a right.
The essence of a waiver is an estoppel and where there is no estoppel, there is no waiver.
Estoppel and waiver are questions of conduct and must necessarily be determined on the facts of each case.
[34B] In the instant case, respondents Nos.
4 7 had without admitting that the appellant had the authority or power to initiate the proceedings for acquisition, signified their willingness to sell the property subject to certain terms.
But the appellant did not accept the offer.
On the contrary, the appellant took further steps for the acquisition of the land by moving the State Government under section 126(1) of the Act to initiate acquisition proceedings by the issuance of a notification under section 6 of the Land Acquisition Act.
It cannot, therefore, be said that the conduct of respondents Nos. 4 7 was such as warrants an inference of relinquishment of a known existing legal right.
[34B D] 5.
The tenants were not parties to the earlier proceedings.
They were, therefore, not disentitled from maintaining the writ petition.
The objection that there was undue delay in moving the High Court cannot prevail.
[34E F]
|
Appeal No. 404 of 1958.
Appeal by special leave from the decision dated March 10, 1958, of the Industrial Tribunal, Rajkot, in Adjudication Case No. 67 of 1955.
M. C. Setalvad, Attorney General for India, R. J. Kolah, section N. Andley, J. B. Dadachanji, Rameshwar Nath and P. L. Vohra, for the appellants.
Janardan Sharma, for respondent No. 2. 1960.
March, 3.
The Judgment of the Court was delivered by GAJENDRAGADKAR, J.
Can a registered trade union representing a minority of workmen governed by an award give notice to the other party intimating its intention to terminate the award under section 19(6) of the XIV of 1947 (hereinafter called the Act)? That is the short question which arises for decision in the present appeal.
In answering the said question it would be necessary to examine the scheme of the Act and to ascertain the true meaning.
and effect of section 19(6) on its fair and reasonable construction.
The controversy thus raised undoubtedly lies within a narrow compass; but before addressing ourselves to the merits of the dispute, it is necessary to state the material facts which led to the present proceedings.
The present appeal has been brought before this Court by the Associated Cement Companies Limited (hereinafter called the appellant) against their workman (hereinafter called the respondents), and it arises from an industrial dispute between them which was referred for adjudication to the Industrial Tribunal for the State of Saurashtra by the Saurashtra Government under section 10(1) of the Act.
Several items of demand presented by the respondents constituted the subject matter of the reference.
When the tribunal began its proceedings the appellant raised four preli 159 minary objections against the competence of the reference itself.
The tribunal heard parties on these preliminary objections, and by its interlocutory judgment delivered on March 10, 1958, it has found against the appellant on all the points.
In the result it set down the reference for further hearing on the merits.
It is against this interlocutory judgment and order that the appellant has come to this Court by special leave.
Out of the four points urged by the appellant as preliminary objections we are concerned with only one in the present appeal, and that relates to the incompetence of the reference on the ground that the award in question by which the parties were bound has not been duly terminated under section 19(6) of the Act inasmuch as the union which purported to terminate the said award represents only a minority of workmen bound by it.
The circumstances under which this contention was raised must now be stated in some detail.
The appellant is a limited company and owns and runs a number of cement factories spread out in different States in India as well as in Pakistan.
It has a factory at Porbandar in Saurashtra.
The factory is known as the Porbandar Cement Works.
An industrial dispute arose between the appellant and the respondents in 1949 and it was referred for adjudication to the industrial tribunal on March 22, 1949.
This reference ended in an award made on September 13, 1949.
Thereafter the said award was terminated by the appellant; and on disputes arising between it and the respondents another reference was made to the same tribunal for adjudication of the said disputes.
A second award was made on July 24, 1951, by which the earlier award with slight modifications was ordered to continue in operation.
In the proceedings in respect of both the references the appellant 's workmen were represented by their Union called Kamdar Mandal, Cement Works, Porbandar.
It appears that the registration of the said union was cancelled on July 2,1954, and that led to the formation of two unions of the appellant 's workmen, the Cement Kamdar Mandal which was registered on 160 July 7, 1954, and the Cement Employees ' Union which was registered on September 18, 1954.
The Cement Kamdar Mandal gave notice to the appellant 's manager on September 23, 1954, purporting to terminate the first award pronounced on September 13, 1949, at the expiration of two months ' notice from the date of the said communication.
By another letter written on December 20,1954, the same union purported to terminate the second award pronounced on July 24, 1951, in a similar manner.
On November 22, 1954, the said Mandal presented fresh demands most of which were covered by the two previous awards.
The said demands were referred to the Conciliation Officer for conciliation but the efforts at conciliation failed., and on receiving a failure report from the officer the Saurashtra Government made the present reference purporting to exercise its jurisdiction under section 10(1)(c) of the Act.
The appellant 's case is that the Cement kamdar Mandal was not authorised to terminate either of the two awards under section 19(6) of the Act, that the second award is thus still in operation, and so the reference is invalid.
Meanwhile it appears that the Cement Employees ' Union, which represents the majority of the appellant 's workmen at Porbandar, instead of giving notice of termination under section 19(6) raised disputes with the appellant and the same were referred to the Conciliation Officer.
Efforts at conciliation having failed the conciliation officer made a failure report to the Government of Saurashtra; the Saurashtra Government, however, did not refer the ' said dispute for adjudication.
In the present proceedings this Union has been impleaded and it has supported the demands made by the Cement Kamdar Mandal; in other words, notwithstanding the rivalry between the two Unions, the demands made by the minority union were supported by the majority union, and in fact, in the appeal before us, it is the latter union that has appeared to contest the appeal.
The tribunal has dealt with the point of law raised by the appellant under section 19(6) on the assumption that the Cement Kamdar Mandal which purported to terminate the awards under the said section represents the minority 161 of the workmen employed at Porbandar, and we propose to deal with the point raised in the appeal on the same assumption.
The main sections which fall to be considered in dealing with the dispute are sections 18 and 19 as they stood in 1954.
Section 18 provides, inter alia, that an award which has become enforceable shall be( binding on (a) all parties to the industrial dispute, (b) all other parties summoned to appear in the proceedings as parties to the dispute, unless the Board or tribunal, as the case may be, records the opinion that they were so summoned without proper cause, (c) where a party referred to in cl.
(a) or cl.
(b) is an employer, his heirs, successors or assigns in respect of the establishment to which the dispute relates, and (d) where a party referred to in cl.
(a) or cl.
(b) is composed of workmen, all persons who were employed in the establishment or part of the establishment, as the case may be, to which the dispute relates on the date of the dispute, and all persons who subsequently became employed in that establishment or part.
It is thus clear that though an industrial dispute may be raised by a group of workmen who may not represent all or even the majority of workmen, still, if the said dispute is referred to the industrial, tribunal for adjudication and an award is made, it binds not only the parties to the dispute or other parties summoned to appear but all persons who were employed in the establishment or who would be employed in future are also governed by the award ; in other words, the effect of section 18 is that an award properly made by an industrial tribunal governs the employer and all those who represent him under section 18(c) and the employees who are parties to the dispute and all those who are included in section 18(b) and (d).
Section 19 prescribes the period of operation of settlements and awards.
Section 19(3) provides that an award shall, subject to the provisions of this section, remain in operation for a period of one year.
This is subject to the provisos to suubs.
(3) as well as to sub section (4) but we are not concerned with the said provisions.
Section 19(6) provides that notwithstanding the expiry of the period of operation under 21 162 sub section
(3) the award shall continue to be binding on the parties until a period of two months has elapsed from the date on which the notice is given by any party bound by the award to the other party or parties intimating its intention to terminate the award.
The effect of this sub section is that unless the award is duly terminated as provided by it shall continue to be binding notwithstanding the expiration of the period prescribed by sub section
This position is not in dispute.
The dispute between the parties centers round the question as to who can issue the notice terminating the award on behalf of workmen who are bound by the award as a result of section 18 of the Act.
What the sub section requires is that a notice shall be given by any party bound by the award to the other party or parties.
To whom the notice should be given may not present much difficulty.
Where the award is sought to be terminated on behalf of the employees the notice has to be given to the employer and that is the party entitled to receive notice.
Then, as to " the parties " to whom also notices are required to be given, it may perhaps be that the parties intended are those joined under section 10, sub section
(5) or under section 18, sub section
(2) or are otherwise parties to the dispute; but with that aspect of the question we are not concerned in the present appeal, because notice has been given to the appellant and all the workmen concerned in the dispute have appeared before the tribunal through the two respective unions.
The question with which we are concerned and which is not easy to determine is the true interpretation of the word " any party bound by the award ".
We have already noticed the effect of section 18, and we.
have seen how wide is the circle of persons who are bound by the award as a result of the said section.
, Literally construed, any party bound by the award may mean even a single employee who is bound by the award, and on this literal construction even one dissatisfied employee may be entitled to give notice terminating the award.
On the other hand, it may be possible to contend that any party in the context must mean a party that represents the majority of the persons bound by the award.
163 Terminating the award is a serious step and such a step can be taken by a party only if it can claim to represent the will of the majority on that point.
It is for this construction that the appellant contends before us.
In construing this provision it would be relevant to remember that an industrial dispute as defined by section 2(k) of the Act means any dispute or difference between employers and employers, or between employers and workmen, or between workmen and workmen which is connected with the employment or non employment, or the terms of employment, or with the conditions of labour of any person.
This definition emphatically brings out the essential characteristics of the dispute with which the Act purports to deal.
The disputes must relate to the terms of employment or with the conditions of labour and they must arise, inter alia, between workmen and their employer.
Ordinarily, an individual dispute which is not sponsored by the union or is otherwise not supported by any group of workmen is not regarded as an industrial dispute for the purposes of the Act.
A provision like that contained in section 33A is of course an exception to this rule.
The basis of industrial adjudication recognised by the province of the Act clearly appears to be that disputes between employers and their employees would be governed by the Act where such disputes have assumed the character of an industrial dispute.
An element of collective bargaining which is the essential feature of modern trade union movement is necessarily involved in industrial adjudication.
That is why industrial courts deal with disputes in relation to individual cases only where such disputes assume the character of an industrial dispute by reason of the fact that they are sponsored by the union or have otherwise been taken up by a group or body of employees.
In The Central Provinces Trans port Services Limited vs Raghunath Gopal Patwardhan (1) this Court has observed that " the preponderance of judicial opinion is clearly in favour of the view that an individual dispute cannot per se be an industrial dispute but may become one if taken up by a (1) [ ; 164 trade union or a number of persons ".
These observations have been cited with approval by this Court in the case of The Newspapers Limited vs The State Industrial Tribunal, U. P.
Having regard to this aspect of the matter it would be difficult to hold that "any party bound by the award " can include an individual workman, though speaking literally he is a party bound by the award.
In our opinion, there fore, the said expression cannot include an individual workman.
We oughtto add that this position is fairly conceded by '.Sharma for the respondents.
That takes us tothe question as to whether the expression " any party bound by the award " must mean a union representing the majority of the workmen bound by it or a group of workmen constituting such majority acting otherwise than through the union.
The expression " any party bound by the award " obviously refers to, and includes, all persons bound by the award under section 18.
The learned Attorney General has urged before us that we should construe section 19(6) so as to preclude a minority of workmen bound by the award from disturbing the smooth working of the award and thereby creating an industrial dispute.
When an award is made it binds the parties for the statutory period under section 19(3); and even after the expiration of the said period it continues to be binding on the parties under section 19(6) unless it is duly terminated.
The policy of the Act, therefore, appears to be that the smooth working.
of the award even after the prescribed statutory period should not be disturbed unless the majority of the workmen bound by it feel that it should be terminated and fresh demands should be made.
If a minority of workmen or a minority union is allowed to terminate the award it would lead to the anomalous result that despite the willingness of the majority of workmen to abide by the award the minority can create disturbance and raise an industrial dispute and that cannot be within the contemplation of the Legislature when it enacted section 19(6) of the Act.
That in substance is the argument urged before us; thus presented the argument no doubt appears prima facie attractive; (1) ; 165 but, in our opinion, it would be unreasonable to accept this construction and impose the limitation of the majority vote in the matter of the termination of the award.
The effect of imposing such a limitation would, in our opinion, seriously prejudice the interests of the employees.
It is well known that the trade union movement in this country cannot yet claim to cover all employees engaged in several branches of industry.
Membership of the important trade unions no doubt shows an appreciable increase and progress, but the stage when trade unions can claim to have covered all employees or even a majority of them has still not been reached.
If the majority rule for which the appellant contends is accepted and section 19(6) is accordingly construed, termination of the award would, we apprehend, become very difficult, if not impossible, in a very large number of cases.
It is in this context that the effect of section 18 has to be borne in mind.
As we have already indicated the class of employees bound by the award under section 18 is very much wider than the parties to the industrial dispute in which the award is made; the said class includes not only all the persons employed in the establishment at the date of the award but it covers even the subsequent employees in the said establishment.
It is, therefore, obvious that if the majority rule is adopted very few awards, if any, could be terminated because very few unions would be able to claim a majority of members on their rolls, and in their present stage of Organization in very few cases would a majority of workmen be able to meet, decide and act together otherwise than through their unions.
That is why the majority rule would very seriously prejudice the rights of employees to terminate awards when they feel that they need to be modified or changed.
That is one aspect of the matter which cannot be ignored in construing the material words in section 19(6).
There is another aspect of the question which is also relevant and which, in our opinion, is against the construction suggested by the appellant.
We have already noticed that an industrial dispute can be raised by a group of workmen or by a union even 166 though neither of them represent the majority of the workmen concerned; in other words, the majority rule on which the appellant 's construction of section 19(6) is based is inapplicable in the matter of the reference of an Industrial dispute under section 10 of the Act.
Even a minority group of workmen can make a demand and thereby raise an industrial dispute which in a proper case would be referred for adjudication under section 10.
It is true that an award pronounced on such reference would bind all the employees under section 18; but logically, if an industrial dispute can be raised by a minority of workmen or by a minority union why should it not be open to.
a minority of workmen or a minority union to terminate the award which is passed on reference made at their instance ? The anomaly to which the learned Attorney General refers has no practical significance.
If the majority of workmen bound by the award desire that the award should continue and needs no modification, they may come to an agreement in that behalf with their employer, and adopt such course as may be permissible under the Act to make such agreement effective.
However that may be, we are satisfied that both logic and fairplay would justify the conclusion that it is open to a minority of workmen or a minority union to terminate the award by which they, along with other employees, are bound just as much as it is open to hem to raise an industrial dispute under the Act.
hat is the view taken by the industrial tribunal in he present case and we see no reason to differ from it.
It appears that when this question was argued before the tribunal the appellant strongly relied on rule 83 framed by the Government of Bombay under section 38 of the Act; and it was urged that the said rule is consistent with the construction sought to be placed by the appellant on section 19(6).
It is conceded that at he relevant time this rule was not in force; and so it s strictly not applicable to the present proceedings.
hat being so, we do not propose to consider the argument based on the said rule and to examine the question as to whether the rule really supports the appellant 's construction, and, if yes, whether it would be valid.
The question raised before us must obvi 167 ously be decided on a fair and reasonable construction of section 19(6) itself, and the rule in question, even if applicable would not be material in that behalf.
We accordingly hold that, on a fair and reasonable construction of section 19(6) the true position is that, though the expression "any party bound by the award" refers to all workmen bound by the award, notice to terminate the said award can be given not by an individual workman but by a group of workmen acting collectively either through their union or otherwise, and it is not necessary that such a group or the union through which it acts should represent the majority of workmen bound by the award.
In the result the appeal fails and is dismissed with costs.
Appeal dismissed.
| This was an appeal by certain textile mills of Ahmedabad against a scheme for gratuity awarded by the Industrial Court.
The Labour Association, the respondent, gave a notice of change under section 42(2) of the Bombay Industrial Relations Act, 1946 (Bom.
XI of 1947), intimating the Mill Owners ' Association that they wanted a scheme for gratuity and mentioned four categories of termination of service in the annexure.
This demand was refused and so referred to the Industrial Court under section 73A of the Act.
Pending the reference the Employees ' Provident Funds Act, 1952 (19 of 1952), came into operation and the Industrial Court, on an objection by the Mill Owners ' Association, held that it was inadvisable to proceed with the reference and that a fresh application should be made, if necessary, after the scheme envisaged by the Act is introduced and rejected the respondent 's demand.
Thereafter a fresh notice of change was given by the respondent and there were certain references to the Industrial Court in respect of the demand.
The parties came to an agreement to refer all their disputes to arbitration, the references were withdrawn and the disputes were referred to the Board of Arbitrators.
Before the Board the Mill Owners ' Association took the objection that so long as the award of the Industrial Court dismissing the earlier reference subsisted, the claim for gratuity could not be considered by it.
That objection was upheld by the Board and it made no provision for gratuity.
Thereupon the respondent applied for the modification of the award under section 116A of the Act, and the Industrial Court by its award, which is the subject matter of the present appeal, framed a scheme for gratuity on an industry cum region basis: Held, that the decision of the Industrial Court was correct and must be upheld.
Regard being had to the true nature of its earlier award and the scope of the application for its modification, it could not be said that the respondent was seeking to alter the framework or change any of the principles of that award and the application under section 116A of the Act must be held to be competent.
330 A scheme for gratuity is by its nature an integrated scheme and covers all classes of termination of service where gratuity benefit can be legitimately claimed and the refusal of the Industrial Court in the earlier award amounted to a refusal to frame any scheme at all.
The statutory provident fund created by the Employees ' Provident Funds Act, 1952, could be no bar to the respondent 's claim for a gratuity scheme although there can be no doubt that in awarding such a scheme Industrial Courts must make due allowance for it.
Provisions of section 17 of the said Act clearly indicate that the statutory benefits under the Act are the minimum to which the employees are entitled and that they are no bar to additional benefits claimed by the employees.
Indian Hume Pipe Co. Ltd. vs Their Workmen, [1960] 2 S.C.R. 32, referred to.
It was not correct to say that the claim for gratuity was essentially similar to a claim for profit bonus and must always be considered on unitwise basis.
The benefit of gratuity is in the nature of a retiral benefit and before framing such a scheme industrial adjudication has to, take into account such relevant factors as the financial condition of the employer, his profit making capacity, the profits earned by him in the past, the extent of his reserves and the chances of his replenishing them as well as the claims for capital invested by him, and in evolving a long term scheme a long view of the employer 's financial condition should be taken and on that basis alone the feasibility of a scheme and the extent of the benefit to be given should be determined.
Arthur Butler & Co. (Muzaffarpur) Ltd. and Arthur Butler Workers Union, and Boots Pure Drug CO.
(India) Ltd. vs Their Workmen, , referred to.
Even assuming that gratuity is no part of deferred wage, it would not be reasonable to assimilate the scheme for gratuity to that of profit bonus or to apply the principles of the Full Bench formula applicable to the latter.
A claim for gratuity is strictly not a claim to receive a share of the profits at all.
Express Newspapers (Private) Ltd. vs The Union of India, and Indian Oxygen and Acetylene Co. Ltd. Employees ' Union vs Indian Oxygen and Acetylene Co. Ltd., , referred to.
It was not correct to say that an industry wise basis is wholly inappropriate in dealing with gratuity or that the Industrial Court was in error in adopting that basis.
Although some hardship to the weaker units in the industry may not be avoided, there were several factors in its favour both from the point of view of employers and employees.
Since in the present state of economic development in the country the propriety of the adoption of an all India basis for a scheme of gratuity may be open to doubt no exception can on principle be taken to the industry cum region basis adopted in the instant case.
331 Express Newspapers (Private) Ltd. vs The Union of India, , applied.
|
Appeal No. 72 of 1952.
Appeal under articles 132 (1) and 133 (1) (b) of the Constitution of India from the Judgment and Order dated the 27th April, 1951, of the High Court of Judicature at Madras (Rajamannar C.J. and Satyanarayana Rao J.) in Civil Miscellaneous Petition No. 4697 of 1951.
M.K. Nambiyar (U. Sethumadhava Rao, with him) for the appellant.
M. Seshachalapathi for the respondent.
V.K.T. Chari, Advocate General of Madras (Porus A. Mehta and V.V. Raghavan, with him) for fife Intervener (State of Madras).
February 10.
The Judgment of the Court was delivered by DAs J.
This is an appeal arising out ' of a judgment delivered on the 27th April, 1951, by a Bench o15 the Madras High Court in C.M.P. No. 4697 of 1951 filed under article 226015 the Constitution for the issue of a writ of certiorari or other appropriate writ to call 780 for the records and quash the order of the Government passed under section 4(1) of the Madras Act XLIII of 1949 declaring the undertaking of the appellant company to vest in the Government.
The appellant company was formed and registered under the Indian Companies Act in 1924 with the object, inter alia, of generating and supplying electrical ,energy to the public in Rajahmundry.
In 1949 the Madras Legislature passed the Madras Electricity Supply Undertakings (Acquisition) Act, 1949.
The Act received the assent of the Governor General on the 18th January, 1950, and was published in the Official Gazette on the 24th January, 1950.
Upon the Constitution of India coming into force on the 26th January, 1950, the Act was submitted to the President for his certification and on the 12th April, 1950, the President certified that the Act should not be called in question m any court on the ground that it contravened the provisions of clause (2) of article 31 or it contravened the provisions of sub section (2) of section 299 of the Government of India Act, 1935.
By an order in writing made on the 2nd September, 1950, the Government of Madras acting under section 4(1) of the Act declared that the undertaking of the appellant company should vest in the Government on the date specified therein.
Under the proviso to section 4(1) the Government from time to time postponed the date of vesting and the 2nd April, 1951, was the last extended date fixed for such vesting.
On the 29th March, 1951, the appellant company filed C.M.P. No. 4697 of 1951, under article 226 for quashing the order of the Government.
Shortly stated the contentions of the.
appellant before the High Court were that the Act was ultra vires in that (1) it was beyond the legislative competency of the Madras Legislature to enact it, (2) it was not enacted to subserve any public purpose, and (3) the compensation provided for was illusory.
The High Court repelled each and all of the aforesaid contentions of the appellant company.
It held that the legislation was with respect to electricity under entry 31 of the 781 concurrent list in the seventh Schedule to the Government of India Act, 1935, and was not a legislation with respect to corporations under entry 33 in list I as contended by the appellant and that, therefore, the Madras Legislature was competent to enact it.
It further held that the Act having received the certificate of the President the challenge based on an alleged absence of public purpose or the illusory nature of the compensation was shut out and could not be raised.
The High Court, however, held that certain sections and rule 19(2) of the Rules framed under the Act were invalid and subject thereto dismissed the application of the appellant company.
The High Court granted leave to the appellant company to appeal before this court.
The appeal has now come up for heating before us.
Learned counsel appearing in support of the appeal has not pressed before us the contention raised in the High Court as to the absence of public purpose or the illusory nature of the compensation provided by the Act.
He has confined his submissions to the question of the legislative competency of the Madras Legislature to enact this piece of legislation.
In the High Court the contest centered round the question whether the Act was a law with respect to electricity under entry 31 of the concurrent list or with respect to corporations under entry 33 in list I. The High Court held that the Act was, in pith and substance, a law with respect to electricity and was, therefore, within the legislative competency of the Provincial Legislature.
In his arguments before us learned counsel contended that the act is in substance and effect one for the acquisition of an electrical undertaking and, as such, is ultra vires because (a) the acquisition of an electrical undertaking was not a legislative item in any of the three lists in the seventh schedule to the Government of India Act, 1935, and (b) in so far as it relates to the acquisition of an electrical undertaking of a corporation it is a law with respect to corporations under entry 33 in list I. 782 In our opinion this appeal can be disposed of on the first of the two grounds mentioned above.
Turning to the Act it will be noticed that the long title of the Act is "an Act to make provision for the acquisition of undertakings in the Province of Madras supplying electricity.
" The preamble recites the expediency of making Provision "for the acquisition of undertakings in the Province of Madras engaged in supplying electricity.
" Section 1 gives the short title, extent and commencement of the Act.
Section 2 is a definition section.
Section 3 provides that the Act shall apply to all undertakings of licensees including certain undertakings therein mentioned.
Section 4 empowers the Government to take over any undertaking by making an order in writing declaring that such undertaking shall vest in the Government on a specified date.
Section 5 provides for compensation payable to a licensee who is not a local authority.
The section gives an option to the licensee to claim compensation on one of three bases therein specified.
Section 6 deals with compensation payable where the licensee is a local authority.
Section 7 specifies the properties or assets which will vest according aS compensation is claimed under one basis or another.
Section 8 provides for the appointment of a sole representative to act as the sole and accredited representative of the licensee in connection with the handing over of the undertaking and performing on behalf of the licensee the functions thereinafter specified.
The choice of basis of compensation is to be made within one month under section 9 and such choice once intimated to the Government is not to be open to revision except with the concurrence of the Government.
Section 10 authorises the Government, in case the licensee has disposed of any of the assets otherwise than in the normal course of events causing loss to the Government as succeeding owners, to deduct from the compensation payable to the licensee an amount which they consider to be the loss sustained by them.
Section 11 prescribes the various deductions which the Government shall be entitled to make from the compensation payable under the Act.
The manner of 783 payment or deposit of compensation is laid down in section 12.
Section 13 permits the Government to repay all loans, debentures, mortgages and the like outstanding on the vesting date at any time before the time fixed for repayment.
Section 14 is the arbitration section.
Section 15 provides for the termination of the managing agency.
Section 16 authorises the Government to terminate the services of any person on the staff of the licensee immediately before the vesting 'date.
Section 17 requires all licensees to prepare and hand over to the Government a complete inventory of all the assets.
Section 18 gives power of entry to the Government or any officer authorised by the Government upon any land or premises in the possession of the licensee.
Section 19 prescribes penalties for various defaults therein specified.
Section 20 makes certain officers of a company liable for the offence committed by the company.
Section 21 gives protection against suit or prosecution for anything done in good faith under any rule or order made under the Act.
Section 22 confers rule making power on the Government.
Section 23 provides that the provisions of certain Acts in so far as they are inconsistent with the provisions of this Act shall have no effect.
Section 24 gives power to the Government to do anything which appears to them necessary for the purpose of removing any difficulty.
From the above summary it will be noticed that the Act does not purport to make any provision for the granting of licenses or maintenance of works for generating or transmitting energy or for supplying electrical energy as one would expect to find in a law dealing with electricity nor does the Act purport to make any provision for the incorporation, regulation or winding up of trading corporations.
On the contrary, it is abundantly clear from the long title, the preamble and the sections that it is, in pith and substance, nothing but an Act to provide for the acquisition of electrical undertakings.
Section 299 (2) of the Government of India Act, 1935, provided that neither the Federal nor a Provincial Legislature would have power to make any law authorising the compulsory acquisition for public purposes 784 of any land or any commercial or industrial undertaking or any interest in or in any company owning any commercial or industrial undertaking unless the law provided for the payment of compensation for the property acquired.
Compulsory acquisition of property is undoubtedly an important sovereign right of the State but this right has to be exercised under a law.
The legislative power of the State was distributed by sections 99 and 100 amongst the Federal Legislature and the Provincial Legislatures in the manner provided ' in the several lists set forth in the Seventh Schedule to the Act.
Section 100 read with entry 9 in list II authorised the Provincial Legislature to make a law with respect to compulsory acquisition of land.
There was no entry in any of the three lists relating to compulsory acquisition of any commercial or industrial undertaking, although section 299 (2) clearly contemplated a law authorising compulsory acquisition for public purposes of a commercial or industrial undertaking.
The acquisition of a commercial or industrial undertaking not being the subject matter of any entry in any of the three legislative lists, neither the Federal Legislature nor the Provincial Legislature could enact a law with respect to compulsory acquisition of a commercial or industrial undertaking.
Under section 104, however, the Governor General, in his individual discretion, could, by public notification, empower either the Federal Legislature or a Provincial Legislature to enact a law with respect to any matter not enumerated in any of the lists in the seventh schedule to the Act.
It is, therefore, clear that although Parliament expressly entrusted the Provincial Legislature with power to make a law with respect to compulsory acquisition of land it did not straightaway grant any power, either to the Federal Legislature or the Provincial Legislature, to make a law with respect to compulsory acquisition of a commercial or industrial undertaking but left it to the discretion of the Governor General to empower either of the Legislatures to enact such a law.
There is no suggestion that the Governor General had, in exercise of his discretionary powers under section 104, authorised the Madras 785 Legislature to enact the impugned Act and, therefore, the Act was, prima facie, beyond the legislative competency of the Madras Legislature.
The learned Advocate General of Madras urges that there was implicit in every entry in the legislative lists in the Seventh Schedule to the Government of India Act, 1935, an inherent power to make a law with respect to a matter ancillary or incidental to the subject matter of each entry.
His argument is that each entry in the list carried with it an inherent power to provide for the compulsory acquisition of any property, land or any commercial or industrial undertaking, while making a law under such entry.
It is quite true that the powers of each Legislature to make laws with respect to the different subjects assigned to it by the, appropriate list were to be regarded as wide and plenary and also covering matters incidental or ancillary to such subject matter, but it is, nevertheless, clear from the provision of the Act that the power to make a law for compulsory acquisition was, under entry 9 in list II, given only to Provincial Legislatures and that such power of the Provincial Legislatures was, under that entry, limited to making a law for the compulsory acquisition of land only and that unless the Governor General made an .order under section 104 of the Act the Provincial Legislatures had no power to make a law for the compulsory acquisition of any property other than land ,and that the Federal Legislature had no power to make any law with respect to the compulsory acquisition of any property at all.
If the argument of the learned Advocate General were correct then entry 9 in list II 'was wholly unnecessary for under entry 21 in list II the Provincial Legislatures could make a law for the compulsory acquisition of land.
A similar argument was repelled by this court in the State of Bihar vs Maharajadhiraja Sir Kameshwar Singh( ).
The matter is placed beyond any doubt or dispute by the provisions of section 127 of the Government of India Act, 1935, which provided that the Federal might, if it ,deemed it necessary to acquire any land situate in a (1) 786 Province for any purpose connected with a matter with respect to which the Federal Legislature had power to make laws, require the Province to acquire the land on behalf and at the expense of the Federation.
If power ' inhered in the Federal Legislature to make a law for the acquisition of any property for any purpose connected with a matter with respect to which it had ' power to make laws then section 127 would not have ' been necessary at all.
The absence of any entry empowering any Legislature to make laws with respect to compulsory acquisition of a commercial or industrial undertaking and the provisions of section 127 to, which reference has just been made make it abundantly clear that the contentions urged by the learned ' Advocate General cannot possibly be sustained.
In our opinion, therefore, it must be held that the Madras Legislature had no legislative competency to enact the impugned law.
This is sufficient to dispose of this appeal and it is not necessary to express any opinion, on the other points raised in the court below.
The result, therefore, is that this appeal must be ' allowed with costs both in the High Court as well as in this court.
Appeal allowed.
Agent for the intervener: R.H. Dhebar.
| The petitioner, the editor of a newspaper, was detained under r. 30(1)(b) of the Defence of India Rules, 1962.
He filed a petition under article 32 of the Constitution for a writ of habeas corpus challenging the legality of the detention order on various grounds.
Dismissing the petition, HELD:Rule 30 (1) (b) cannot be said to be ultra vires of section 3 (2) (15)(i) of the Defence of India Act for the reason that it does not state that the satisfaction of the authority making the order of detention has to be on grounds appearing to it to be reasonable.
The rule requires only that the detaining authority must be satisfied that the detention is necessary for the purposes mentioned and that is what the latter part of the section under which it was made also says.
This part does not contain any requirement as to satisfaction on reasonable grounds.
The rule has clearly been made in terms of the section authorising it.
[211 F] Article 352 of the Constitution does not require the proclamation to state the satisfaction of the President about the Emergency.
The Article requires only a declaration of emergency threatening the security of India by one of the causes mentioned.
The words "to that effect" can have no other meaning.
A proclamation ceases to have effect only by one of the events mentioned in cl. 2 of article 352 of the Constitution.[212 C] Section 3(2)(15)(iv) of the Defence of India Act and r. 30 A of the Defence of India Rules, does not give a right to make a representation.
Their effect is to provide a review of the detention order by the authorities and in the manner mentioned.
Rule 23 of the Defence of India (Delhi Detenus) Rules, 1964, states that a detente will be allowed to interview a legal practitioner for the Purpose of drafting his representation against his detention.
[213 C D].
The fact that newspapers and men connected with them may be dealt with under other provisions of the Art and Rules does not prevent detention of such persons under r. 30(1)(b) of the Defence of India Rules.
[213 H] The order need not mention the part of India which was to be Prejudicially affected by the acts of the detenue.
|
N: Criminal Appeal No. 271 of 1986 From the Judgment and Order dated 31.1.
1985 of the Gauhati High Court in Cr. A. No. 66 of 1983.
S.K. Nandy for the Appellant.
R.K. Garg, Sunil K. Jain and Vijay Hansaria for the Respondents.
The Judgment of the Court was delivered by 1041 B.C. Ray, J.
This appeal by special leave is against the judgment and order passed in Criminal Appeal No. 66 of 1983 by the High Court of Gauhati acquiting both the accused respondents from the charges under Sec.
302 read with Sec.
34 I.P.C. as well as under Sec.
436 read with Sec.
34 of Indian Penal Code, 1860.
The prosecution case in short is that on 2nd November, 1978 at about 7 p.m. two accused respondents Muhim Chandra Barkataki and Dulu Dutta came together to the shop of Nagen Dey since deceased and sprinkled and poured kerosine oil in the shop as well as on the person of Nagen Dey and then set fire.
Immediately fire caught and spread over the shop as well on the body of Nagen Dey.
The shop was a Guliamal (grocery) shop where rice, Dahl, soap, mustered oil, kerosine oil, etc goods were sold and situate at Na Ali Road of Jorhat Town in front of M/s Baruah Printers.
Nagen Dey came out of the shop house with ablazing condition all over his body.
The witnesses Arun Barua, Prabin Barua and Kiron Saikia on seeing the fire rushed to the place of occurrance and put off the fire from the body of the Nagen Dey but Nagen Dey suffered extensive burnt injuries all over his body.
Pradip Jyoti Sarma, Assistant Sub Inspector of Police also came to the place of occurrence a few minutes later and he also witnessed the fire on the person of Nagen Dey as well as in the shop of Nagen Dey.
Prosecution case is, further, that Nagen Dey made a dying declaration before the witnesses stating that the two accused persons namely Muhim Barkataki and Dulu Dutta set fire on his body after pouring kerosine oil.
It was also the prosecution case that both the accused were found at the place of occurrence and public caught hold of the accused Muhim Barkataki red handed at the shop of occurrence whereas other accused Dulu Dutta fled away.
Injured Nagen Dey was immediately removed to Jorhat Civil Hospital for treatment, but he died at the hospital.
Accused Muhim Barkataki was handed over to the Police by the witness Pradip Joyti Sarma, Assistant Sub Inspector of Police.
The information of the incident was received over telephone message at 7.15 p.m. by the Officer Incharge of Jorhat Police Station who recorded an entry in the General Diary being G.D. Entry No. 47 dated 2.11.1978 at 7.15 p.m.
The Town Sub Inspector Sri P. Khatoniar was immediately deputed to make local investigation on the spot.
Sri P. Khatoniar made enquiry and investigation locally at the spot, arrested accused Muhim Barkataki at the spot and returned to police station.
He then informed the facts of occurrence to the Officer incharge of the Police Station who recorded the same under G.D. Entry No. 50 at 8.10 p.m. On 3rd November, 1978 at about 7 a.m. one Sri 1042 Montu Ch.
Dey, nephew of deceased Nagen Dey lodged Ejahar (Ext.5) with Jorhat Police Station.
Thereafter murder and arson cases have been registered against Muhim Barkataki and Dulu Dutta.
Investigation was carried on by Shri Prafulla Kumar Khatoniar.
The Investigation Officer forwarded witnesses Arun Barua, and Kiran Saikia to the court for recording their statements under Sec.
164 of the Criminal Procedure Code.
The Judicial Magistrate Shri Dharyya Saikia recorded the statements of these two witnesses on 7.11.1978.
The Sessions Judge found that the message received over telephone was an information relating to commission of cognizable offence and same was entered into General Diary of the Police Station as Entry No. 47.
On the basis of this information the investigation of the case was entrusted to the Town Sub Inspector Shri Prafulla Kumar Khatoniar with the recording of General Diary Entry No. 47 and the Investigating Officer fairly progressed with the investigation in that very night.
Subsequent information of Montu Chandra Dey on 3rd November, 1978 are nothing but statements during the course of investigation and as such those are hit by Sec. 162 of the Criminal Procedure Code.
It has, therefore, been held that Exhibit 5 cannot be recoganized as the First Information Report of the occurrence.
The General Diary Entry No. 47 which is proved as Ext.
7(1), is the First Information Report of the occurrence.
The Sessions Judge duly considered the evidences of P.W. 4 Arun Barua and C.W. 1 Pradip Joyti Sarma as well as the statements under Sec.
164 recorded by the Judicial Magistrate, P.W. 8 on 7.11.1978 and accepted the dying declaration made by the deceased Nagen Dey implicating the accused Muhim Barkataki and Dulu Dutta as pouring kerosine oil on his body and setting fire to his person.
P.W. 6 Kiran Saikia also stated in his statement under Sec.
164 of Criminal Procedure Code before the Judicial Magistrate, that Nagen Dey, deceased made a dying declaration that these two accused persons sprinkled kerosine over the body of the deceased Nagen Dey and then set fire to him.
These witnesses also proved that the accused Muhim Barkataki was caught hold of red handed at the place of occurrence whereas Dulu Dutta fled away from the place.
The Sessions Judge, therefore, convicted both the accused under sec.
302 read with Sec.
34 of the Indian Penal Code and sentence them to rigorous imprisonment for life.
The accused persons were further convicted and sentenced under Sec.
436 read with Sec.
34 of the Indian Penal Code and they were sentenced to suffer rigorous imprisonment for 5 years each.
Both the sentences shall run concurrently.
1043 Against this judgment and order of conviction and sentence the accused person preferred an appeal being Criminal Appeal No. 66 of 1983 in the High Court of Gauhati.
The High Court proceeded on the footing that entire evidence in the case was circumstantial as there was no eye witness to the occurrence and the clinching circumstances in which the case according to the prosecution is proved are the circumstances relating to the dying declaration.
The learned Judges held that the evidence of P.W. 4 Arun Barua who deposed to the dying declaration was wholly unreliable as there was serious infirmity in his evidence as he disputed his statement made to the Police that the three persons used to drink liquor and play cards which fact as we have observed, is very material to cast a serious doubt on prosecution version itself.
The learned Judges therefore, held that the prosecution failed to prove beyond doubt the offences for which the appellants were charged.
The conviction and sentence passed against the accused persons was set aside and the appeal was allowed.
There is no dispute that the shop of deceased Nagen Dey situated by the side of Na Ali Road was set on fire and fire was also set on the person of Nagen Dey by pouring kerosine.
Eye witnesses P.W. 4 Arun Barua, P.W. 6 Kiran Saikia and P.W. 5 Prabin Barua came to the place of occurrence immediately on seeing the fire.
It is also evident from the evidence of P.W. 4 that he and Kiran Saikia who was in the shop of P.W. 4 both came together at the place of occurrence and they tried to put out the fire by throwing dust on the body of Nagen Dey who was on fire by tearing off his dress and Kiran Saikia put the clothing on the person of deceased Nagen Dey.
It is also in the evidences of P.W. 4 and C.W. 1 Pradip Joyti Sarma, Assistant Sub Inspector, Police that the deceased Nagen Dey made a dying declaration to the effect that the accused persons Muhim Barkataki and Dulu Dutta poured kerosine oil in his shop and sprinkled kerosine oil on his person and then set on fire.
It is also evident from the depositions of P.W. 4 and C.W. 1 that the accused Muhim Barkataki was caught hold red handed on the spot and he was detained there by the public while Dulu Dutta fled away from the place of occurrence.
It is also evident from the G.D. Entry No. 47 i.e., telephonic message received at the Jorhat Police Station at about 7.15 p.m. on the date of occurrence that the said two men set fire to the person of Nagen Dey, deceased as well as to his Guliamal shop which is in front of Baruah Printers after pouring kerosine oil.
One of the accused persons was caught hold of by local rija (public) while it was informed that Shri P.K. Khatoniar was investigating for local investigation after giving all entries in the diary.
1044 This is proved by Investigation Officer P.W. 7 and marked as Ext.7(1).
It also appeared that immediately after the enquiry and investigation into the incident the Town Sub Inspector Shri Khatoniar returned to the Police Station and informed that Muhim Barkataki and Dulu Dutta entered in the Guliamal shop of Nagen Dey which was in front of Barua Printers of Na Ali and poured kerosine oil kept in the shop for sale and set fire on it and as a result the Guliamal shop was burnt.
Nagen Dey was the owner of the shop who also was set on fire.
It was also recorded in the G.D. Entry that Muhim Barkataki who was caught hold of at the place by the local people has been sent to the police station.
This G.D. Entry No. 50 was proved by P.W. 7 and it was marked as Ext.
It also appears that the witnesses P.W. 4 Arun Barua, P.W. 5 Prabin Barua, P.W. 6 Kiran Saikia and C.W.1 Pradip Joyti Sarma who was on duty on that Na Ali locality at that time arrived at the place of occurrence almost simultaneously and all of them found Nagen Dey out of his shop in a complete ablazing state all over his body.
It also appears from evidences of these three witnesses Arun Barua, Kiran Saikia and Pradip Joyti Sarma that the injured Nagen Dey was conscious and was crying out due to burning pain.
It was also their evidence that the deceased Nagen Dey made a dying declaration at the place of occurrence implicating accused Muhim Barkataki and Dulu Dutta as his assailants.
It is also evident from Exts. 3 and 4 that the Judicial Magistrate Shri Dharyya Saikia (P.W. 8) recorded the statements of Arun Barua (P.W. 4) and Kiran Saikia (P.W. 6) on 7.11.1978 under Sec.
164 of the Criminal Procedure Code stating about the dying declaration made by the deceased Nagen Dey implicating that Muhim Barkataki and Dulu Dutta had set fire on him.
P.W. 4 Arun Barua also in his evidence clearly testifies to this dying declaration made by the deceased Nagen Dey.
Of course P.W. 6 Kiran Saikia tried to contradict his statement made before the Police as well as before the Judicial Magistrate as to the dying declaration made by the deceased Nagen Dey.
He admitted in his examination in chief that he made a statement about this incident before the Magistrate of Jorhat Court.
Exhibit 4 is his statement and Ext.
4 (2) is his signature.
He further stated that the Magistrate has recorded his statement.
But in cross examination he contradicted himself by saying that he was tutored by the police to say so before the Magistrate.
Even if his statement is not taken into consideration there is a clear statement of P.W. 4 Arun Barua before the Magistrate (Ext. 3) as well as his deposition which clearly corroborates his statement before the Magistrate about the dying declaration made by the deceased implicating the two accused persons as his assailants.
The court of appeal below has acted 1045 illegally in discarding the evidence of P.W. 4 as well as his statement recorded under Sec. 164 of the Criminal Procedure Code by the Judicial Magistrate on the flimsy ground that it was not reliable because he contradicted his statement made before the Police that these three persons (the two accused and the deceased Nagen Dey) used to take liquor and play cards.
Moreover C.W. 1 Pradip Jyoti Sarma who came to the place of occurrence a few minutes after the arrival of P.W. 4 and P.W. 6 at the place of occurrence has stated in his evidence that he saw the body of the deceased under fire and the deceased is crying out of burnt pain.
He implicated in his dying declaration that Muhim Barkataki and Dulu Dutta had set fire on his person after pouring kerosine oil on him.
He also stated that at the place of occurrence he found that the accused Muhim Barkataki was caught by the public and he was being assaulted.
He further stated that to save Muhim Barkataki from assultant he handed him over to the Police Constable who was with him.
He also deposed that Nagen Dey has sense and he was speaking.
There was no cross examination of this witness as to the dying declaration made by the deceased.
This witness further stated that he came to the Thana in the night and told the inspector about the incident.
He also stated that he did not know whether O.C. recorded this in the General Diary or not.
P.W. 2 Dr. Jibakanta Borah who hold post mortum on the body of the deceased has stated in his evidence that a person sustaining burnt injuries of such nature may have consciousness for some time before death.
It cannot, therefore, be ruled out that the deceased Nagen Dey was conscious in spite of the severe burnt injuries on his person and he could speak and could make dying declaration as testified to by the witnesses P.W. 4, and C.W. 1.
It has been tried to be urged before us by the learned counsel on behalf of the respondents that there is no evidence to show that the deceased Nagen Dey made a dying declaration as has been alleged as the General Diary Entry was not produced to show such statement of C.W. 1 about the dying declaration recorded therein.
Moreover even if such a dying declaration has been made the same being not corroborated cannot be taken into consideration by the court in convicting the accused respondents.
It has been further submitted that the court of appeal below rightly discarded the alleged dying declaration as being not corroborated by any other evidence and duly acquitted the accused persons.
We have considered and appraised thoroughly the evidence on record and on an overall assessment of the same, we hold that the prosecution has proved beyond reasonable doubt, the charges framed 1046 against them.
The order of acquittal passed by the High Court is liable to be set aside for the reasons stated here after.
Firstly, eye witnesses P.Ws. 4, 5, 6 and C.W. 1 undoubtedly arrived at the place of occurrence immediately on seeing the fire in the grocery shop of the deceased Nagen Dey at about 7 p.m. on 2.11.1978.
All these witnesses have seen that the shop is ablaze and there is fire on the person of Nagen Dey.
It is also the specific evidence of P.W. 4 Arun Barua and C.W. 1 Pradip Jyoti Sarma, A.S.I. at Jorhat Police Reserve deputed by the Jorhat Thana at Jorhat Town in law and order duty on that day.
All these eye witnesses P.W. 4 and C.W. 1 also stated that Nagen Dey was crying a lot in pain out of burnt injuries and he stated clearly that the accused persons Muhim Barkataki and Dulu Dutta poured kerosine oil on him and set fire on his body.
So far as depositions of P.W. 4 and C.W. 1 are considered there is no cross examination on this point.
Further more, P.W. 4 and P.W. 6 made statements Exts.
3 and 4 under Sec.
164 of Criminal Procedure Code before the Chief Judicial Magistrate of Jorhat (P.W. 8) to the effect that the deceased Nagen Dey made a dying declaration implicating the accused persons as his assailants.
This recording of the statements of P.W. 4 and P.W. 6 was proved by the deposition of the Addl.
Chief Judicial Magistrate at Jorhat, Shri Dharyya Saikia (P.W. 8).
Of course, P.W. 6 Kiran Saikia tried to contradict his statement made before the Chief Judicial Magistrate.
As regards the evidence of C.W. 1 it has been tried to be contended that his statement before the O.C. of the Police Station that the deceased made a dying declaration cannot be accepted as there is nothing to show that this was recorded in the G.D. Entry.
This statement cannot be accepted inasmuch as the learned Sessions Judge has assigned cogent reasons as to why Pradip Jyoti Sarma was examined as a court witness under the provisions of Sec.
311 of the Code of Criminal Procedure.
It has been clearly found that Shri Sarma was an independent and disinterested witness and he was found to be reliable and trustworthy.
It has been also found that Shri Pradip Jyoti Sarma is an important witness of the case and his examination was for the just decision of the case and his evidence has full corroboration with another independent and disinterested witness namely Arun Barua who is also found to be trustworthy and reliable witness.
The evidence of Shri Pradip Jyoti Sarma cannot be under estimated merely because he is a police officer.
The Sessions Judge also stated in his order that the reasons for examining him as a court witness had been elaborately recorded in the order sheet dated 17.2.1982 and 22.3.1983.
Therefore, considering this finding of the Sessions Judge we hold that there is no infirmity in the findings of the Sessions Judge in treating Pradip Jyoti 1047 Sarma as a court witness under the provisions of Sec.
311 of the Code of Criminal Procedure.
There is no criticism regarding the evidence of P.W. 4 on behalf of the respondents as to why his testimony regarding the dying declaration shall not be taken into consideration apart from the evidence of C.W. 1 Pradip Jyoti Sarma.
Moreover it is evident from Exts. 3 and 4, the statements of P.Ws. 4 and 6 recorded under Sec. 164 of the Code of Criminal Procedure by the Addl.
Judicial Magistrate, Jorhat on 7.11.1978 that these two witnesses P.Ws. 4 and 6 clearly stated about the dying declaration made by Nagen Dey implicating both the accused as his assailants.
Along with this testimony of P.W. 4 and C.W. 1 that Muhim Barkataki was caught hold red handed on the spot and was detained by the public while Dullu Dutta fled away from the place of occurrence.
All these clearly go to prove the prosecution case beyond any reasonable doubt and it leads to the only conclusion that these two accused persons poured kerosine oil in the shop as well as sprinkled kerosine oil on him and set fire on the deceased as well as to the shop.
It has been tried to be contended that the dying declaration as referred to by P.W. 4 in his deposition has not been corroborated by any independent witness and as such the same cannot be relied upon in convicting the accused.
In support of this submission reference has been made to the decision reported in Ramnath Madho Prasad & Ors.
vs State of Madhya Pradesh, A.I.R. 1953 S.C. 420 wherein it has been observed: "It is settled law that it is not safe to convict and accused merely on the evidence furnished by a dying declaration without further corroboration because such a statement is not made on oath and is not subject to cross examination and because the maker of it might be mentally and physically in a state of confusion and might be well drawing upon his imagination while he was making the declaration.
It is in this light that the different dying declaration made by the deceased and sought to be proved in the case have to be considered.
" This observation has been overruled being in the nature of obiter dicta by this Court in a subsequent decision in Khushal Rao vs State of Bombay, ; The same view was taken by this Court in the case of Kusa & Ors.
vs State of Orissa; , at 562 para 9.
It is pertinent to refer to the observation of this Court on this point made in State of Assam vs Muaizuddin Ahmed, ; at 19 para 10 which are in the following terms: 1048 "Thus, the law is now well settled that there can be conviction on the basis of dying declaration and it is not at all necessary to have a corroboration provided the court is satisfied that the dying declaration is a truthful dying declaration and not vitiated in any other manner.
" It has been observed by this Court in Jayarajl vs State of Tamil Nadu, A.I.R. 1976 S.C. 1519 at 522 para 16 which reads: "When the deponent (while making his dying declaration) was in severe bodily pain (because of stab injuries in the abdoman) and words were scare, his natural impulse would be to tell the Magistrate, without wasting his breath on details as to who stabed him.
The very brevity of the dying declaration, in the circumstances of the case, far from being a suspicious circumstance, was an index of its being true and free from the taint of tutoring, more so when the substratum of the dying declaration was fully consistent with the occular account given by the eyewitness.
" In the instant case we have carefully considered the evidences of P.W. 4 as well as of C.W. 1 and we are clearly of the opinion that the deceased Nagen Dey made the dying declaration in question clearly implicating the two accused persons as his assailants.
The dying declaration made by the deceased while he was suffering severe pain from grievous injuries is truthful and reliable.
Therefore, on an overall as sessment of evidences recorded particularly the evidence of P.W. 4 and C.W. 1 and also the statements recorded under Sec. 164 of Criminal Procedure Code Exts.
6 and 4, we find that the charges under Sec. 382/34 and Sec.
436/34 of the Indian Penal Code, 1860 has been proved by the prosecution beyond reasonable doubt against the two accused persons.
They were rightly convicted by the Sessions Judge and sentence to rigorous imprisonment for life under Sec.
302/34 I.P.C. and also to rigorous imprisonment for 5 years under Sec.
436/34 of the Indian Penal Code.
Both the sentences will run concurrently.
The judgment and order of acquittal passed by the High Court is hereby set aside and the judgment and order of conviction and sentence awarded by the Sessions Judge is hereby affirmed.
Let warrant of arrest issue forthwith against the accused for serving out the sentence.
P.S.S. Appeal allowed.
| A provisional liquidator was appointed in respect of two textile undertakings of the petitioner company since they had gone into huge loss and had to be closed sometime in May 1972.
As the textile undertakings of the petitioner company were 'sick textile undertakings ' within the meaning of sub clause (i) of section 2(d) of the Sick Textiles Undertakings (Taking over of Management) Act 1972 (for short, Take over Act) and have also been specified in the First Schedule to the Take over Act, they vested in the Central Government as 'sick textile undertakings ' by virtue of section 4(1) of the Take over Act.
The petitioner company challenged before the Supreme Court the taking over of the management of the aforesaid two textile mills under the Take over Act and also the constitutional validity of the Take over Act and the Sick Textile Undertakings (Nationalisation) Act 1974 on the grounds (a) that the Company should have been given an opportunity of being heard before the management of its undertakings was taken over as 'sick textiles undertakings ' and if such an opportunity had been given, the company could have shown that its undertakings were not sick undertakings; (b) that the legislature, having itself decided the question whether an undertaking is sick textile undertaking or not without giving any opportunity to the owner of such undertaking to make a representation, has damaged the basic structure of the Constitution 938 namely separation of power between the legislature, the executive and the judicially; and (c) that the Nationalisa tion Act is consititutionally invalid on the ground of inadequacy of compensation.
Dismissing the petition, ^ HELD 1.1 In the First Schedule to the Take over Act, the undertakings of the company have been specified as sick textile undertakings.
In other words, the Legislature has itself decided the undertakings of the Company to be sick textile undertakings.
Indeed, in the First Schedule all the sick textile undertakings have been specified.
Thus, it is apparent that the Legislature has not left it to the Executive to decide whether a particular textile undertaking is a sick textile undertaking or not.
If under the Take over Act the question whether a textile undertaking is a sick textile undertaking or not had been directed to be decided by the executive authorities, the owner of such undertaking could claim an opportunity of being heard.
But when an undertaking has been specified in the First Schedule to the Take over Act as a sick textile undertaking, the question of giving an opportunity to the owner of the undertaking does not at all arise.
[942C F] 1.2 In including the sick textile undertakings in the First Schedule, the Legislature has not acted arbitrarily, for it has also laid down the criteria or tests for such inclusion.
If any undertaking which has been so specified in the First Schedule does not satisfy the tests under section 2(d) of the Take over Act, the owner of it is entitled to challenge such inclusion or take over in a court of law, although such challenge has to be founded on a strong ground.
Thus, there is no finality or conclusiveness in the legislative determination of an undertaking as a sick textile undertaking.
Such determination is neither judicial nor quasi judicial.
Therefore, the question of damaging or altering the basic structure of the Constitution namely, separation of powers among the Legislature, the Executive and the Judiciary, does not at all arise.
So also the question of the validity of the constitutional amendments by which the Take over Act and the Nationalisation Act have been included in the Ninth Schedule on the ground that by such amendments the basic structure of the Constitution is damaged, as contended on behalf of the petitioners, does not arise.
[943F H; 944A B] 2.
The Nationalisation Act gives effect to the policy of the State towards securing the ownership and control of the material resources of the community which are so distributed as best to subserve the common 939 good, as contained in article 39(b) of the Constitution.
It falls within the provision of article 31C of the Constitution before it was amended by the Constitution (Forty Second Amendment) Act, 1976.
Even assuming that the Nationalisation Act violates the provision of article 31, no challenge to its validity can be made on that ground.
[944E G] Minerva Mills Ltd. & Ors.
vs Union of India & Ors., Writ Petition Nos.
356 361 of 1977, decided on September 9, 1986, relied upon.
In the instant case, the compensation that has been awarded to the Company is neither inadequate nor illusory.
It is not in dispute that the paid up share capital of the Company was Rs.60 lakhs and it paid dividend from 1965 to 1970.
It will not be unreasonable to presume that in specifying the compensation, the Legislature has taken these facts into consideration.
There is, therefore no substance in the contention of the petitioners that the compensation specified in First Schedule to the Nationalisation Act in respect of the undertakings of the Company is illusory.
[944G H; 945A]
|
Civil Appeal No. 537 of 1978.
From the Judgment and Order dated 13.10.1977 of the Andhra Pradesh High Court in C .
250 of 1977 .
P.P. Rao, K. Ram Kumar and Mrs. Janki Ramachandran for the Appellant .
A.S. Nambiar and B. Parthasarthi for the Respondent.
The Judgment ot ' the Court was delivered by NATARAJAN, J.
This appeal by special leave directed against a judgment of the Andhra Pradesh High Court lies within a narrow compass.
The respondent/landlord filed a petition under Section 10(3) of the Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act, 1960 (for short the Act ') to seek the eviction of the tenant/appellant from premises bearing No. 1 1 250 Chikkadpalli, Hyderabad.
The appellant is running a pan shop and a hire cycle shop in the front room of the premises and residing in the rear portion.
Besides the leased premises, the respondent owns the adjoining building bearing No. 1/1/249.
In the said building the respondent was running a grocery shop in the ground floor and residing in the second and third floors subsequently constructed by him.
It would appear that the respondent has since changed PG NO 436 over his business to retail sale of liquor.
On the ground of requirement of additional space for the grocery shop, the respondent sought the eviction of the appellant.
The Rent Controller held that the respondent was not entitled to an order of eviction either under Section 19(3)(a)(iii) or Section 10(3)(c) because the leased premises was a separate building and did not form part of the building in which the respondent was carrying on his business.
In the appeal preferred by the respondent, the Chief Judge, City Small Cause Court, Hyderabad, took a different view of the matter and held that even though the leased premises had a separate municipal door number it can be treated as forming part of the building in the respondent 's occupation because both the buildings are owned by the second respondent and besides the two buildings are separated only by a single wall.
For reaching such a conclusion, the Appellate Authority followed the ratio laid down in Balaiah vs Lachaiah, AIR 1965 A.P. 435.
As the Appellate Authority further found that the requirement of additional space by the respondent was a bona fide one, the Appellate Authority allowed the appeal and ordered the eviction of the appellant.
A civil revision filed by the appellant to the High Court did not meet with success and hence the appellant has preferred this appeal.
Though the proceedings before the Rent Controller and the Appellate Authority were conducted on the footing that the respondent was entitled to seek the appellant s eviction under Section 10(3)(a)(iii) as well as under Section 10(3)(c) it was conceded before us by Mr. Nambiar, learned counsel for the respondent that the tenant 's eviction was sought for only under Section 10(3)(c) vi. requirement of additional space for the respondent 's business.
In such circumstances the only factor for determination is whether the respondent can seek the appellant 's eviction from the tenanted building the ground he requires additional accommodation for his business.
Before we proceed to deal with the question, it is necessary to state a few facts.
Originally, a row of buildings comprised in door numbers 1 1 248 to 1 1 251 were owned by one R. Kistiyah and after him by one Rambai.
The said Rambai sold the buildings in the row to different persons.
The respondent and his brother were two of such purchasers and they purchased premises No. 1 1 248 and l 1 249.
Subsequently, in a partition between them, premises No. 1 l 249 was allotted to the respondent and premises No. l 1 248 was allotted to his brother.
After the partition was effected, the respondent constructed : two storeys over his building by erecting concrete pillars on both sides of hiS building.
At that time, the suit premises bearing No. 1 1 250 was owned by an advocate by name Sri section Sitaram Rao.
PG NO 437 When the concrete pillars were erected, Sitaram Rao complained of encroachment by the respondent and eventually, the dispute was resolved by the respondent himself purchasing Sitaram Rao 's house viz. No. 1 1 250.
After constructing the two floors, the respondent shifted his residence to those floors and utilised the entire ground floor for his business.
he appellant who was a tenant of the suit premises even before the respondent purchased it attorned his tenancy to the respondent.
Under the Act, a landlord can seek the eviction of a tenant from a non residential building under Section 10(3)(a)(iii) if he is not already occupying a non residential building which is either his own or to the possession of which he is entitled or under Section 10(3)(c) by way of additional accommodation if the non residential building occupied by him is not sufficient for the purpose of the business he is carrying on.
Since we are concerned in this appeal only with Section 10(3)(c), we need extract only that clause which reads as under: "10(3)(c).
A landlord who is occupying only a part of a building, whether residential or non residential, may not withstanding anything in clause (a), apply to the Controller for an order directing any tenant occupying the whole or any portion or the remaining part v he building to put the landlord in possession thereof, if he requires additional accommodation for residential purpose or for purpose of a business which he is carrying on, as the case may be. ' ( Emphasis supplied).
From a reading of clause (c), it is obvious that provision has been made under that clause only to seek the eviction of a tenant occupying another portion or the remaining portion of the building in which the landlord is also residing or carrying on his business in one portion.
Section 10(3)(c) of the Tamil Nadu Buildings (Lease and Rent Control Act 1960 which is identically worded as Section 10(3)(c) of the Andhra Pradesh Buildings (Rent, Eviction and Control) Act came to be construed in a different context by this Court in Balaganesan Metals v, M.N. Shanmugham Chetty, (JT It was held in that case that a landlord occupying only a part of a building for residential or non residential purposes may seek the eviction of a tenant ocCupying the whole or any portion of the remaining part of the building if he requires additional accommodation for his residential or non residential needs and that it is not necessary that there must be identical user of the leased portion by the tenant if the landlord wants to seek his eviction for his residential ar business needs.
PG NO 438 In this case, the controversy centres around the question whether a landlord can invoke Section 10(3)(c) of the Act to seek the eviction of a tenant who is not occupying a portion of the building occupied by the landlord himself but is occupying another building belonging to the landlord.
While the Rent Controller held that the two premises viz. 1/1/249 and 1/1/250 are separate and independent, the Appellate Authority has taken the view that by reason of the unity of ownership of the two buildings in the respondent and by reason of the two buildings being separated only by a single wall "it can be said that the mulgi constitutes additional accommodation to the appellant" and the fact that the two mulgies bear different municipal numbers should not make any difference.
The High Court has not construed the scope of Section 10(3)(c) but has sweepingly said that: "Whether both can be said to be same building or separate buildings it does not matter, if ' the respondent wants the premises bona fide as an additional accommodation; whether it is a separate building or a portion of the same building, he can require it on that ground.
" counsel for Before us it was canvassed by Mr. P.P. Rao, learned counsel for the appellant that Section 10(3)(c) would entitle a landlord to seek the eviction of his tenant for purposes of additional accommodation for himself only if the portion occupied by the tenant forms part of the same building occupied by the landlord and that Section 10(3)(c) will not apply to a case where the landlord and the tenant re occupying different buildings even though the two buildings may be owned by the same landlord.
Controverting this argument Mr. Nambiyar, learned counsel for the respondent contended that the premises occupied by the appellant, though assigned a separate municipal door number cannot be treated as an independent and separate building because both the buildings are owned by the respondent and secondly the leased premises are separated from door number l/ l/249 only by a single wall.
On a consideration of the matter, we find that the contention of Mr. Nambiyar, which has found acceptance with the Appellate Court and the High Court is not at all a tenable one.
What Section 10(3)(c) envisages is the oneness of the building and not the oneness of ownership of two different buildings, one occupied by the landlord and the other by the tenant.
The significant words used in Section 10(3)(c) are "the landlord who is occupying only a part of a PG NO 439 building" and "any tenant occupying the whole or any portion of the remaining part of the building".
Surely no one can say that two adjoining buildings bearing different door numbers, one occupied by the landlord and the other by the tenant would make them one and the same building if they are owned by one person and separate buildings if they are owned by two different persons.
A practical test which can be applied to find out if two adjoining buildings form part of the same building or two different buildings would be to see whether one of the two buildings can be sold by the landlord and the purchaser inducted into possession of the premises sold without the landlord 's possession and enjoyment of the premises in his occupation being affected.
Viewed in that manner, it can at once be seen that the leased premises in the appellant 's occupation can be independently sold and the purchaser delivered possession without the respondent 's possession of door No. 1 1 249 being affected in any manner.
As a matter of fact, the previous history of the building shows that before it was purchased by the respondent, it was owned by Sri Sitaram Rao and the respondent was owning only door No. 1 1 249.
Such being the case, merely because the appellant has acquired title to door No. l l 250 also, it can never be said that the building under the tenancy of the appellant became part and parcel of the respondent 's building No. l 1 29.
Similarly, the fact that the two buildings are separated only by a single wall with no intervening space between them would not alter the situation in any manner because the identity of two separate buildings is not to be judged on the basis of the buildings being separated by a single wall or by two separate walls with intervening space in between them.
Section 10(3)(c) which occurred as Section 7(3)(c) in the Madras Buildings (I ease and Rent Control) Act 1 '4 has been properly construed by Chandrasekhara Sastri, J. in M. Ramaswamy Naidu vs P. Venkateswarlu, (Vol. 11) 1961(1) A.W.R. page.
The learned judge has stated that Section 7(3)(c) "applies only n a case where the landlord is occupying a part of a building and still requires the remaining part for the purpose ot ' his own business as additional accommodation.
" This decision has not been noticed by the Appellate Authority and the High Court and they have proceeded solely on the basis that as per the ratio in Balaiah vs Lachaiah, (supra) the respondent is entitled to an order of eviction even under Section 10(3)(a)(iii) for additional accommodation despite the fact that he is in occupation of a building of his own.
Mr. Nambiyar referred to the definition of the word "building" in Section 2(iii) of the Act and argued that if PG NO 440 for the purposes of the Act, where the context warrants it, different portions of the same building can be treated as separate buildings, it should conversely be held that if adjoining building are owned by the same person and one of them is in the occupation of the landlord and the other by a tenant, then for purposes of Section 10(3)(c) the two buildings should be treated as an integrated and composite building.
We are unable to accept this argument because firstly the terms of Section 2(iii) do not afford scope for such a construction and secondly the argument fails to take note of the purpose and object lying behind the definition of "building" in the manner in which the clause is worded.
Section 2(iii) has been provided so as to make the provisions of the Act applicable to the whole of the building as well as to parts of it depending upon whether the entirety of the building has been leased out to a tenant or different portions of it have been let out to different tenants.
There is, therefore, no room or scope for the respondent to invoke Section 2(iii) to contend that two different premises should be treated as a single and integrated building for the purposes of the Act if the two buildings adjoin each other and are owned by the same person but under different occupation i.e. one by the landlord and the other by the tenant.
Mr. Nambiyar then argued that if section 10(3)(c) is to be construed as being applicable only when different portions of the same building are in the occupation of the landlord as well as one or more tenants, it would result in a landlord like the respondent who is genuinely in need of additional accommodation being left with no remedy whatever for securing additional accommodation for his business needs.
We find it unnecessary to go into the merits of this submission because however genuine the respondent s need for additional accommodation may be and whatever be the hardship resulting to him by non eviction of the appellant, we cannot grant any relief to the respondent under the Act as it now stands.
As per the Act the relief of eviction of a tenant can be given to a landlord only under two situations viz. (1) where the landlord is not in occupation of a building of his own or to the possession of which he is entitled to by an order of eviction under Section 10(3)(a)(iii) and (2) where the landlord is in occupation of only a portion of his building and is bona fide in need of additional accommodation and another or the remaining portion of the building is in the occupation of a tenant or tenants by ordering his or their eviction under Section 10(3)c).
The Legislature has not provided for Section 10(3)(c) being made applicable to a landlord where he owns adjoining buildings and is in occupation of only one of those two buildings and the tenant is in occupation of the other and the land lord 's PG NO 441 bona fide in need of additional accommodation for his residential or business needs.
If the hardship experienced by landlords similar to the respondent is to be alleviated, then it is for the Legislature to remedy the situation by making suitable amendments to the Act and it is not for the Court to read Section 10(3)(c) beyond its terms oblivious to the limitations contained therein and hold that a separate tenanted building adjoining the building in the owner 's occupation would also form part of the latter building.
In the light of our conclusions, it follows that the judgment and order of the Appellate Authority and the High Court cannot be sustained and have to be set aside.
In the result, the appeal succeeds and the order of the Rent Controller dismissing the respondent 's petition for eviction will stand restored.
There will, however, be no order as to costs .
R.S.S. Appeal allowed.
| By an agreement dated 1st January, 1964, the disputant, a tenant Co partner member of a Cooperative Housing Society, permitted appellants ' father the user of her flat.
On a joint application by both the parties, the Society granted permission for his occupying the flat on terms of leave and licence.
The disputant later made a claim under section 91 of the Maharashtra Cooperative Societies Act, 1960 (`the Act ') before the District Deputy Registrar for his eviction.
The claim for eviction was resisted by him on the ground that the transaction between the parties was one of lease and the Registrar had no jurisdiction to enter upon the reference under section 91.
It was held that the parties stood in the jural relationship of landlord and tenant and the dispute did not touch upon business of the Society within the meaning of section 91.
Aggrieved, the disputant carried an appeal to the Maharashtra State Cooperative Appellate Tribunal.
The Tribunal remanded the case for a fresh decision on the question whether the disputant was a tenant co partner member or a tenant owner member, as the society was held to be a mixed type of society of both tenant co partner members and tenant owner members.
On remand, the Judge.
first Cooperative Court recorded a finding that the Society was a tenant Co partnership type of society and the disputant was only a tenant Co partner member.
Thereafter the dispute came up for adjudication before the said Judge.
The Judge rendered an award holding that after the termination of the licence the possession of appellants ' father was wrongful, and directing him to vacate and hand over possession of the flat.
He went in appeal before the Maharashtra State Co operative Appellate Tribunal but without avail.
Dismissing the appeal, the Court, HELD: The agreement between the parties was embodied in PG NO 60 PG NO 61 usual standard form of an agreement for leave and licence.
The parties to the agreement were bound by the terms thereof.
There was nothing to suggest that the agreement for leave and licence was merely a device to camouflage the real nature of the transaction, viz., creation of a tenancy, which would clearly be against the bye laws of the society.
The disputant, the licensor, was only a tenant co partner member and all hat she could do under the terms of the bye laws was to create a licence with the permission of the society by making the licensee to be a nominal member thereof.
The matter is directly covered by the decision of this Court in O.P. Bhatnagar vs Smt.
Rukibai Narsindas, ; [67C E] The Society was purely a tenant co partnership type of housing society consisting only of tenant co partner members and there were no tenant owner members in the society.
In view of the subsequent change brought about by the amendment of the bye laws, there was no question of the disputant being regarded as a tenant owner member.
The Appellate Court and the Judge of the First Cooperative Court rightly held her o be a tenant Co partner member.
The appellant 's father having been inducted into the premises under the terms of the agreement for leave and licence could not say that the disputant was a tenant owner member and not a tenant co partner member or that the transaction was one of ease and not licence.
[68G; 69D E] Sabharwal Brothers vs Smt.
Guna Amrit Thandani, [1973] I SCR 53 and Ramesh Himmatlal Shah vs Harsukh Jadavji Joshi, , distinguished.
O.P. Bhatnagar vs Smt.
Rukibai Narsindas, ; ; Dr. Manohar Ramchandra .Sarlare vs The Konkan Co operative Housing Society Ltd. & Ors., , I.R.; Hingorani vs Pravinchandra, ; Contessa Knit Wear vs Udyog Mandir Cooperative Housing Society, and Bandra Green Park Co operative Housing Society Ltd. & Anr.
vs Mrs. Dayadasi Kalia
|
Appeal No. 234 of 1959.
Appeal from the order dated February 15, 1957 of the Bombay High Court of Judicature at Nagpur in Special Civil Application No. 2 N of 1956.
section P. Varma, for appellant No. 1.
597 B. section Shastri and Ganpat Rai, for respondent No. 1.
B. R. L. Iyengar and T. M. Sen, for respondent No. 2. 1961.
March 28.
The Judgment of the Court was delivered by KAPUR, J.
This is an appeal on a certificate by the High Court of Bombay against the judgment and order of that Court passed on a petition under article 226 of the Constitution by the present appellants in regard to the legality of the notification levying an octroi duty on certain goods.
The appellants are some of the ratepayers of the Municipal Committee of Shegaon which is respondent No. I in this appeal.
The other respondent is the State of Bombay.
The appellants were carrying on trade and business which involved their bringing goods within the limits of the Municipal Committee.
On July 25,1954, the Municipal Committee passed a resolution for tile purpose of levying an octroi duty instead of terminal tax.
This resolution was published in the State Gazette on June 29, 1956, along with rules for assessment.
Oil August 4, 1956, objections were invited to the proposed tax.
The objections by the first appellant were filed on August 4, 1956, and by some others on August 5 and 6.
At a meeting of the Municipal Committee dated August 16, 1956, the objections of the other appellants were rejected as being time barred and those by the first appellant were rejected because it was the only objector whose objections were within time.
Some representations were made by the first appellant to the Government and a few days later the other objectors also made similar representations but the Government issued the notification sanctioning the imposition of the tax and the Draft Rules on October 27, 1956, though the Gazette Notifications were published on two separate dates, i.e., October 30 and October 31, 1956.
The appellants then filed a petition under article 226 in the High Court of Bombay at Nagpur challenging the legality of the, imposition of the tax.
Two main grounds were urged (1) that the notification was ultra 598 vires because section 67 of the C. P. & Berar Municipalities Act, 1922 (Act II of 1922), hereinafter termed the 'Act ', had not been complied with and (2) that the rate of tax in regard to certain articles was unauthorised in that it was more than the maximum which could be levied under the law.
The High Court rejected the first ground but accepted the second objection and gave relief accordingly.
Appellants Nos.
2 to 6 have not taken steps for the prosecution of the appeal and the appeal, in so far as it relates to them, is dismissed for non prosecution.
The appellant No. 1 before us has challenged the vires of the imposition on two grounds: (1) that all the steps necessary for the imposition of the octroi duty had not been taken and therefore section 67 had not been complied with and (2) that as a matter of fact there was no notification imposing an octroi duty.
For the purpose of the decision of these objections it is necessary to refer to the scheme of the Act, Chapter IX of which relates to the imposition, assessment and collection of taxes.
Section 66 enumerates the taxes which may be imposed and section 67 prescribes the procedure for imposing taxes.
Section 67 reads as under: Section 67(1) "A committee may at a special meeting, pass a resolution to propose the imposition of any tax under section 66.
(2) When such a resolution has been passed, the committee Bhall publish in accordance with rules made under this Act, a notice defining the class of persons or description of property proposed to be taxed, the amount or rate of the tax to be imposed and the system of assessment to be ' adopted.
(3) Any inhabitant of the municipality objecting to the proposed tax may, in thirty days from the publication of the notice, submit his objection in writing to the committee.
(4) The committee shall take the proposal and a objections received thereto into consideration at a special meeting, and may modify the proposals so as not to affect their substance and may then forward them to the Provincial Government along with all objections received, its decisions thereon 599 and its reasons therefore.
If the committee decided to modify the proposals so as to affect their substance it shall publish them again in the manner prescribed in sub section (2).
(5) The Provincial Government, on receiving such proposals may sanction or refuse to sanction the same, or sanction them subject to such modifications as it may think fit, or return them to the committee for further consideration: (6). . . . . . . (7) If any proposals for taxation have been sanctioned under sub Section (5) the Provincial Government may, by notification direct the imposition of the tax as sanctioned from such date as may be specified in such notification, and thereupon, the tax shall come into effect as from the date so speci fied.
A notification of the imposition of a tax under this section shall be conclusive evidence that the tax has been imposed in accordance with the provision of this Act.
" The objection to the vires of the notification in regard to procedure is that the objections raised by appellant No. 1, though within time, were"not considered on their merits and were rejected merely on the ground that there was only one objector and as this was one of the essential steps for the validity of the imposition it could not be said that section 67 had been complied with; and the imposition was therefore invalid.
The High Court rejected this plea because of section 67(8), although it found that non consideration of the objections was an error in procedure.
The language of sub section (8) lends support to this view.
It provides that the issuance of the notification imposing a tax shall be conclusive evidence that the tax had been imposed in accordance with the provisions of the Act.
But it was argued that as a matter of fact there was no notification imposing the tax and therefore the question of conclusive evidence does not arise.
This, in our opinion, is not established.
As stated above, there were two notifications issued 600 by the Government both of October 27, 1956.
One was published in the Gazette on October 30, 1956, and the other on the following day.
The first notification was as follows: "No. 4963 5869 M XIII.
In exercise of the pow ers conferred by sections 71, 76 and 85 of the Central Provinces and Berar Municipalities Act, 1922 (11 of 1922), the State Government are pleased to sanction the following draft rules for assessment, collection and refund of the octroi tax within the limits of the Shegaon Municipality, in the Buldana District.
The rules shall come into force from the date of their publication in the 'Madhya Pradesh Gazette Extraordinary ' ".
And the second notification stated: "No. 4962 5869 M XIII.
In exercise of the pow ers conferred by sub section (2) of section 67 of the Central Provinces and Berar Municipalities Act, 1922 (II of 1922), the State Government are pleased to confirm the following draft rules for the imposition of the octroi tax within the limits of the SHEGAON MUNICIPAL COMMITTEE, in the Buldana district, under clause (c) of sub section (1) of section 66 of the said Act, on animals and goods brought for sale, expenditure or use in supersession of the rules of terminal tax, sanctioned under Notification No. 3716 B VIII dated the 15th February, 1921.
The rules shall come into force from the date of their publication in the 'Madhya Pradesh Gazette Extraordinary" '.
The first notification purports to be in exercise of the powers under section 71 which relates to Rules for assessment and for preventing evasion of assessment of taxes; section 76 which provides for collection of taxes and section 85 which relates to refunds.
That notification therefore lays down the various rules and other matters necessary for the collection of taxes.
The second notification on the face of it is under sub section
(2) of section 67.
It appears to us that this is a mistake and should have been under sub a.
(7) of section 67.
By this notification the State Government confirmed the draft rules for 601 the imposition of the octroi duty which in the context must mean imposition of the tax because the very first rule states: Rule 1 "Octroi shall ordinarily be levied on commodities included in the following classes and specified in the schedule hereto annexed and at the rates therein entered".
The various classes of articles and commodities on which octroi was to be levied are then set out and then the exceptions and explanations are given.
With these rules are the schedules specifying the goods under each class which are liable to octroi duty and the rate at which the octroi duty was chargeable.
This notification therefore clearly is one which directs imposition of octroi and falls within sub section (7) of section 67 and having been notified in the Gazette it is conclusive evidence of the tax having been imposed in accordance with the provisions of the Act and it cannot be challenged on the ground that all the necessary steps had not been taken.
In our opinion this appeal is without force and is therefore dismissed with costs.
Appeal dismissed.
| The respondent Municipality passed a resolution under s.67(1) of the C.P. & Berar Municipal Act, 1922, for the purpose of levying an octroi duty which was published in the State Gazette along with the rules for assessment.
Objections were invited to the said proposed tax, and only one objection was filed within time which was also rejected.
The Government gave its sanction to the imposition of the tax and draft Rules by two Notifications.
The appellants filed a petition challenging the legality of the imposition of the tax inter alia on the ground that the notifications were ultra vires.
They contended that all steps necessary for the imposition of tax had not been taken and that objections raised within time by the respondent No. 1 were not considered on their merits and were rejected merely on the ground that there was only one objector; as this was one of the essential steps for the validity: of the imposition of tax it could not be said that section 67 of the Act had been complied with, therefore the imposition was invalid.
Held, that where the Government Notification clearly was one which directed imposition of Octroi Tax it fell within subs.
( 7) of section 67 of the Act and having been once notified in the Gazette sub section
(8) of section 67 of the Act came into operation and the issue of the notification was conclusive evidence of the Tax having been imposed in accordance with the provisions of the Act, and it could not be challenged on the ground that all necessary steps had Rot been taken.
|
Appeal No. 165 of 1954.
Appeal from the judgment and order dated May 27, 1953, of the Calcutta High Court in Income tax Reference No. 35 of 1952.
G. N. Joshi and R. H. Dhebar, for the appellant.
Jyotish Chandra Pal and D. N. Mukherjee, for the respondent.
May 23.
The Judgment of the Court was delivered by BHAGWATI, J.
This appeal with certificate of fitness under section 66A(2) of the Indian Income tax Act (XI of 1922) is directed against the Judgment and order of the High Court of Judicature at Calcutta on a reference under section 66(1) of the Act.
The respondent owns an area of 6,000 acres of forest land assessed to land revenue and grown with Sal and Piyasal trees.
The forest was originally of spontaneous growth, "not grown by the aid of human skill and 104 labour" and it has been in ' existence for about 150 years.
A considerable income is derived by the assessee from sales of trees from this forest.
The assessment year in which this forest income was last taxed under the Indian Income tax Act was 1923 24 but thereafter and till 1944 45 which is the assessment year in question, it was always left out of account.
The assessment for 1944 45 also was first made without including therein any forest income, but the assessment was subsequently re opened under section 34.
In response to a, notice under section 22(2) read with section 34 of the Act, the respondent submitted a return showing the gross receipt of Rs. 51,978 from the said forest.
A claim was, however, made that the said income was not assessable under the Act as it was agricultural income and was exempt under section 4(3) (viii) of the Act.
The Income Tax Officer rejected this claim and added a sum of Rs. 34,430 to the assessable income as income derived from the forest after allowing a sum of Rs. 17,548 as expenditure.
The Appellate Assistant Commissioner confirmed the assessment and the Income Tax Appellate Tribunal also was of opinion that the said income was not agricultural income but was income derived from the sale of jungle produce of spontaneous growth and as such was not covered by section 2(1) of the Act.
At the instance of the assessee the Tribunal referred to the High Court under section 66(1) of the Act two questions of law arising out of its order, one of which was: "Whether on the facts and in the circumstances of this case, the sum of Rs. 34,430 is "agricultural income" and as such is exempt from payment of tax under section 4(3)(viii) of the Indian Income Tax Act?" The Tribunal submitted a statement of case from which the following facts appear as admitted or established : " (i) The area covered by the forest is about 6,000 acres, trees growing being Sal and Piyasal; (ii)It is of spontaneous growth being about 150 years old.
It is not a forest grown by the aid of human skill and labour; 105 (iii)The forest is occasionally parcelled out for the purposes of sale and the space from which trees sold are out away is guarded by forest guards to protect offshoots; (iv)It has been satisfactorily proved that considerable amount of human labour and care is being applied year after year for keeping the forest alive as also for reviving the portions that get denuded as a result of destruction by cattle and other causes; (v)The staff is employed by the assessee to perform the following specific operations: (a) Pruning, (b) Weeding, (c) Felling, (d) Clearing, (e) Cutting of channels to help the flow of rain water, (f) Guarding the trees against pests and other destructive elements, (g) Sowing of seeds after digging of the soil in denuded areas.
" The Tribunal found that the employment of human labour and skill in items (a) to (f) was necessary for the maintenance and upkeep of any forest of spontaneous growth.
Regarding item (g), however, it found that the said operation had been performed only occasionally and over a small fraction of the area where the original growth had been found to have been completely denuded.
Such occasions were however few and far between, the normal process being that whenever a tree was cut, a stump of about 6" height was left intact which sent forth off shoots all round bringing about fresh growth in course of time.
This went on perpetually unless an area got otherwise completely denuded.
The reference was heard by the High Court and the High Court held that actual cultivation of the land was not required and as human labour and skill were spent for the growth of the forest the income from the forest was agricultural income.
It accordingly answered the above question in the affirmative.
The 14 106 Revenue obtained the requisite certificate of fitness for appeal to this Court and hence this appeal.
The question that arises for consideration in this appeal is whether income derived from the sale of Sal and Piyasal trees in the forest owned by the assessee which was originally a forest of spontaneous growth "not grown by the aid of human skill and labour" but on which forestry operations described in the statement of case had been carried on by the assessee involving considerable amount of expenditure of human skill and labour is agricultural income within the meaning Of section 2(1) and as such exempt from payment of tax under section 4(3)(viii) of the Indian Income tax Act.
Section 2(1) of the Act defines agricultural income and states (so far as it is relevant for the purposes of this appeal): (1) "agricultural income" means (a) any rent or revenue derived from land which is used for agricultural purposes, and is either assessed to land revenue in the taxable territories or subject to a local rate assessed and collected by officers of the Government as such : (b) any income derived from such land by: (i) agriculture, or (ii) the performance by a cultivator or receiver of rent in kind of any process ordinarily employed by a cultivator or receiver of rent in kind to render the produce raised or received by him fit to be taken to market, or (iii) the sale by a cultivator or receiver of rentin kind of the produce raised or received by him, in respect of which no process has been performed other than a process of the nature described in sub clause (ii) . . . . . . . . . . .
Section 4(3) of the Act provides: " (3) Any income, profits or gains falling within the following classes shall not be included in the total income of the person receiving them; . . . . . . . . . . . (viii) Agricultural income. . . 107 Even though "agricultural income" which is exempted under section 4 (3) (viii) of the Act is defined in section 2(1) as above, there is no definition of "agriculture" or "agricultural purpose" to be found in the Act and it therefore falls to be determined what is the connotation of these terms.
An argument based on entries 14 and 19 of List II of the Seventh Schedule to the Constitution may be disposed of at once.
It was urged that entry No. 14 referred to agriculture including agricultural education and research protection against pests and prevention of plant diseases while entry No. 19 referred to forests and there was therefore a clear line of demarcation between agriculture and forests with the result that forestry could not be comprised within agriculture.
If forestry was thus not comprised within agriculture, any income from forestry could not be agricultural income and the income derived by the assessee from the sale of the forest trees could not be agricultural income at all, as it was not derived from land by agriculture within the meaning of the definition of agricultural income given in the Indian Income tax Act.
This argument, however, does not take account of the fact that the entries in the lists of the Seventh Schedule to the Constitution are heads of legislation which are to be interpreted in a liberal manner comprising within their scope all matters incidental thereto.
They are not mutually exclusive.
If the assessee plants on a vacant site trees with a view that they should grow into a forest, as for example, Casuarina plantations and expends labour and skill for that purpose, the income from such trees would clearly be agricultural produce.
It has to be remembered that even though this demarcation between agriculture and forestry was available in the Lists contained in the Seventh Schedule to the Government of India Act, 1935, no such demarcation existed in the Devolution Rules made under the Government of India Act, 1919, and in any event the definition of agri cultural income with which we are concerned was incorporated in the Indian Income tax Acts as early as 1886, if not earlier: vide section 5 of the Indian Income tax of 1886).
It has also to be remembered that inspite of this demarcation between agriculture and forests in the Constitution, taxes on agricultural income are a separate head under entry 46 of List II of the Seventh Schedule and would comprise within their scope even income from forestry operations provided it falls within the definition of agricultural income which according to the definition given under article 366(1) means agricultural income as defined for the purposes of the enactments relating to Indian Income tax.
The terms " agriculture " and " agricultural purpose" not having been defined in the Indian Income tax Act, we must necessarily fall back upon the general sense in which they have been understood in common parlance.
"Agriculture" in its root sense means ager, a field and culture, cultivation, cultivation of field which 'of course implies expenditure of human skill and labour upon land.
The term has, however, acquired a wider significance and that is to be found in the various dictionary meanings ascribed to it.
It may be permissible to look the dictionary meaning of the term in the absence of any definition thereof in the relevant statutes.
As was observed by Lord Coleridge, in R. vs Peters (1): I am quite aware that dictionaries are not to be taken as authoritative exponents of the meanings of words used in Acts of Parliament, but it is a wellknown rule of courts of law that words should be taken to be used in their ordinary sense, and we are therefore sent for instruction to these books.
" Cozens Hardy, M. R., also said in Camden (Marquis) vs I.R.C. (2): "It is for the Court to interpret the statute as best it may.
In so doing the Courts may no doubt assist themselves in the discharge of their duty by any literary help they can find, including of course the consultation of standard authors and reference to wellknown and authoritative dictionaries. " (1) , 641.
(2) 1, 647.
109 Turning therefore to the dictionary meaning of agriculture " we find Webster 's New International Dictionary describing it as " the art or science of cultivating the ground, including rearing and management of livestock, husbandry, farming, etc.
and also including in its broad sense farming, horticulture, forestry, butter and ' cheese making etc.
" Murray 's ' Oxford Dictionary describes it as " the science and art of cultivating the soil; including the allied pursuits of gathering in the crop and rearing live stock; tillage, husbandry, farming (in the widest sense)".
In Bouvier 's Law Dictionary quoting the Standard Dictionary" agriculture " is defined as " the cultivation of soil for food products or any other useful or valuable growths of the field of garden; tillage, husbandry; also, by extension, farming, including any industry practised by cultivator of the soil in connection with such cultivation, as breeding and rearing of stock, dairying, etc.
The science that treats of the cultivation of the soil.
" In Corpus Juris the term " agriculture " has been understood to mean: " art or science of cultivating the ground, especially in fields or large quantities, including the preparation of the soil, the planting of seeds, the raising and harvesting of crops, and the rearing, feeding and management of live stock; tillage, husbandry and farming.
In its general sense the word also includes gardening or horticulture.
" Bhashyam Ayyangar J. in Murugesa Chetti vs Chinnathambi Goundan(1) gave the following dictionary meanings of agriculture as culled out from the Century Dictionary and Anderson 's Dictionary of Law: " The primary meaning of agriculture is the cultivation of the ground (The Century Dictionary) and in its general sense it is the cultivation of the ground for the purpose of procuring vegetables and fruits for the use of man and beast including gardening or horticulture and the raising or feeding of cattle and other stock (Anderson 's Dictionary of Law).
Its less general and more ordinary signification is the cultivation with the plough and in large areas in order to raise (1) Mad.
421,423.
110 food for man and beast (The Century Dictionary) or, in other words, "that species of cultivation which is intended to raise grain and other field crops for man and beast." (Anderson 's Dictionary of Law).
Horticulture, which denotes the cultivation of garden or orchards, is a species of agriculture in its primary and more general sense." Ramesam J. in Panadai Pathan vs Ramasami Chetti (1) referred to the following connotation of 'agriculture ': "Wharton 's Law Lexicon adopts the definition of ,,agriculture" in 8 Edw.
VII, c. 36, as including "horticulture, forestry, and the use of land for any purpose of husbandry etc.
In 10 Edw.
VII, c. 8 section 41, it was defined so as to include the use of land as "meadow" or pasture land or orchard or osier or woodland, or for market gardens, nursery grounds or allotments, etc.
In 57 and 58 Viet.
c. 30 section 22, the term agricultural property ' was defined so as to include agricultural land, pasture and woodland, etc.
" These are the various meanings ascribed to the term " agriculture" in various dictionaries and it is significant to note that the term has been used both in the narrow sense of the cultivation of the field and the wider sense of comprising all activities in relation to the land including horticulture, forestry, breeding and rearing of livestock, dairying, butter and cheesemaking, husbandry etc.
It was urged on behalf of the assessee that the Court should accept the wider significance of the term and include forestry operations also within its connotation even though they did not involve tilling of the land, sowing of seeds, planting, or similar work on the land.
The argument was that tilling of the land, sowing of the seeds planting or similar work on the land were no doubt agricultural operations and if they were part of the forestry operations carried on by the assessee the subsequent operations would certainly be a, continuation of the same and would therefore acquire the characteristic of agricultural operations.
But the (1) Mad.
absence of these basic operations would not necessarily make any difference to the character of the subsequent operations and would not divest them of their character of agricultural operations, so that if in a particular case one found that the forest was of spontaneous growth, even so if forestry operations were carried on in such forests for the purpose of furthering the growth of forest trees, these operations would also enjoy the character of agricultural operations.
If breeding and rearing of live stock, dairying butter and cheese making etc., could be comprised within the term "agriculture", it was asked, why should these also be not classed as agricultural operations.
Considerable stress was laid on the fact that section 4(3)(viii) of the Act enacted a provision in regard to the exemption of "agricultural income" from assessment and it was contended that exemptions should be liberally construed.
Reliance was placed on the observations of Vishwanatha Sastri J. in Commissioner of Income tax, Madras vs K. E. Sundara Mudaliar (1): " Exemption from tax granted by a Statute should be given full scope and amplitude and should not be whittled down by importing limitations not inserted by the Legislature.
" Mookerjee J. in Commissioner of Agricultural Income tax, West Bengal vs Raja Jagadish Chandra Deo Dhabal Deb (2) also expressed himself similarly: " and the present day view seems to be that where an exemption is conferred by statute, that clause has to be interpreted liberally and in favour of the assessee but must always be without any violence to the language used.
The rule must be construed together with the exempting provisions, which must be regarded as paramount.
" He also quoted a passage from The Upper India Chamber of Commerce vs Commissioner of Income tax, C.P. & U.P. (3) : (1) , 271.
(3) ; A.I.R.1948 All.70 (2) , 438. 112 " It is needless to observe that, as in the present case, we are concerned with the interpretation of an exemption clause in a taxing statute, that clause must be, as far as possible, liberally construed and in favour of the assessee, provided no violence is done to the language used.
" It was also pointed out that " Taxes on agricultural income " formed a head of legislation specified in item 46 of List.
II of the Seventh Schedule to the Constitution and should be liberally construed, with the result that agriculture should be understood in the wider significance of the term and all agricultural income derived from agriculture or so understood should be included within the category.
There was authority for the proposition that the expression " agricultural land " mentioned in Entry 21 of List II of the Seventh Schedule to the Government of India Act, 1935, should be interpreted in its wider significance as including lands which are used or are capable of being used for raising any valuable plants or trees or for any other purpose of husbandry.
(see Sarojinidevi vs Shri Krishna Anjanneya Subrahmanyam (1) and Megh Raj vs Allah Rakhia (2).
While recognizing the force of the above expressions of opinion we cannot press them into service in favour of the assessee for the simple reason that "agricultural income " has been defined in the Constitution itself in article 366(1) to mean agricultural income as defined for the purposes of enactments relating to Indian incometax and there is a definition of " agricultural income " to be found in section 2(1) of the Indian Income tax Act.
We have therefore got to look to the terms of the definition itself and construe the same regardless of any other consideration, though, in so far as the terms " agriculture " and " agricultural purposes " are concerned, we feel free in view of the same not having been defined in the Act itself, to consider the various meanings which have been ascribed to the same in the legal and other dictionaries.
(1) I.L.R. (2) , 62. 113 We may also note here the dictionary meanings of the terms "Forestry" and "Cultivation." The Shorter Oxford Dictionary, Vol.1, page 735, gives the meaning of "forestry" as the "science and art of forming and cultivating forests, management of growing timber.
" Webster 's New International Dictionary, Vol. 1, page 990, gives the following meaning of forestry: " Science and art of farming, caring for, or cultivating forests; the management of growing timber.
" Webster 's New International Dictionary.
Vol. 1, page 643, while talking of cultivation says that "to cultivate" means "(i) to prepare, or to prepare and use, for the raising of crops; to till; as, to cultivate the soil; to loosen or break up the soil about (growing crop or plants) for the purpose of killing weeds, etc., especially with a cultivator, as to cultivate the corn; (2)to raise, or foster the growth of, by tillage or by labour and care; to produce by culture; as to cultivate roses; to cultivate oysters.
" Whether the narrower or the wider sense of the term agriculture" should be adopted in a particular case depends not only upon the provisions of the various statutes in which the same occurs but also upon the facts and circumstances of each case.
The definition of the term in one statute does not afford a guide to the construction of the same term in another statute and the sense in which the term has been understood in the several statutes does not necessarily throw any light on the manner in which the term should be understood generally.
The decided cases disclose a variety of opinions in regard to the connotation of the terms "agriculture" and "agricultural purposes.
" At one time "agriculture" was understood in its primary sense of cultivation of field and that too for production of food crops for human beings and beasts.
This limited interpretation could not be adhered to even though tilling of the land, sowing of the seeds, planting or similar work on the land were the basic operations, the scope of the crops produced was enlarged and all crops raised on the land, whether they be food crops or not were included in the produce raised by agriculture.
There was however another school of thought 15 114 which extended the term "agriculture" and included within its connotation not only the products raised by the cultivation of the land but also allied activities which had relation to the land and operations which had the effect of fostering the growth, preservation and maintenance as also the regeneration of the products of the land, thus bringing within its compass not only the basic agricultural operations but also the further operations performed on the products of the land even though they were not necessarily accompanied by these preliminary basic operations.
As against these cases which dealt with these preliminary basic operations and also the further operations either by themselves or in conjunction with the former which of course necessarily involved the expenditure of human skill and labour in carrying out those operations, there were instances of products of land which grew wild or were of spontaneous growth without the expenditure of human skill and labour and which it was agreed on all hands could not be comprised within "agriculture" and the income from which could not fall within the definition of "agricultural income".
We shall briefly discuss the various cases dealing with these different aspects and try to evolve some principle therefrom which would serve as a guide in the determination of the question before us.
Kunhaven Haji vs Mavan (1) was the earliest case in which it was held that a lease of a coffee garden was not an I agricultural lease within the meaning of Transfer of Property Act, section 117.
The case however concerned itself with the situation where as far as the Court could gather from the Karar the lease was of the coffee plants only.
There was no further discussion of the legal position and it may be noted that Shephard, J., who was a party to this decision stated in the later case of Murugesa Chetti vs Chinnathambi Gounden (2) that he was wrong in the opinion he expressed with regard to a coffee garden in this case.
Murugesa Chetti vs Chinnathambi Goundan (2) also was concerned with section 117 of the Transfer of Property Act.
The lease there was a lease of land for (1) Mad. 98.
(2) Mad.
421,423.
115 the cultivation of betel and the Court held that such a lease was an agricultural lease falling under section 117.
Bhashyam Ayyangar, J., who delivered the main judgment of the Court discussed the dictionary meanings of the term " agriculture " and stated that in section 117 of the Transfer of Property Act it was used in its more general sense as comprehending the raising of vegetables, fruits and other garden products as food for men or beast, though some of them may be regarded in England as products of horticulture as distinguished from agriculture.
The learned Judge considered the distinction between " agriculture " and " horticulture " and observed : " The distinction between agriculture when it is used otherwise than in its primary and more general sense and horticulture is a fine one even in England and in India, especially, it will be impossible in the case of several products of the land to draw a line between agriculture and horticulture according to English notions.
The only practical distinction which I can suggest and one which will give effect to the policy of the Legislature in exempting agricultural leases from the operations of section 107, etc., of the Transfer of Property Act is to regard as agriculture, as distinguished from horticulture, not only all field cultivation by tillage but also all garden cultivation for the purpose chiefly of procuring vegetables or fruits as food for man or beast and other products fit for human consumption by way of luxury, if not as an article of diet.
" He then discussed the policy of exemptions setting out the observations of Cave J. in Ellis & Co. vs Hilse(l): " The very object of this exemption is the wellknown one of favouring agriculture an old object of English Legislation in favour of a very important industry ", and stated: " This observation of Mr. Justice Cave will apply with much greater force in this country where the agricultural industry is more, important than in England and is one that is common to wet cultivation (1) 116 as to garden and dry cultivation, the object of all such cultivation being chiefly to procure food for men and cattle and other products of the soil which are usually consumed by the people as gentle stimulants or by way of luxury.
Betel leaf is an article of daily consumption with all classes in this country as tobacco leaf is with most classes and betel vine is generally grown side by side with plantations, the products of which are among the chief articles of vegetable food.
" The lease in that case being one for the cultivation of betel was therefore held to be agricultural lease and Shephard, J., agreed with this conclusion revising the opinion which he had expressed earlier in Kunhavan Haji vs Mavan (supra).
In Raja of Venkatagiri vs Ayyappa Reddy (1) the question was whether land usually fit only for pasturing cattle and not for cultivation, i.e., ploughing and raising agricultural crops, was "ryoti" land, though it might have been "old waste" and a tenant of such land was a "ryot" and any amount agreed to be paid for pasturing cattle was " rent " within the definitions of section 3 of the Madras Estates Land Act (Mad.
I of 1908).
The Court held that such land was not " ryoti " land inasmuch as it was not fit for ploughing and raising agricultural crops.
The ordinary meaning of " agriculture " was taken to be " the raising of annual or periodical grain crops through the operations of ploughing, sowing, etc." (Per Sadasiva Ayyar, J., at page 741).
The Chief Commissioner of Income Tax, Madras vs Zamindar of Singampatti (2) was a reference arising out of the assessment for income tax under Act VII of 1918 of the income derived by the Zamindar of Singampatti from forests and fisheries within the ambit of his Zamindari.
The assessee objected to the assessment (i) on the ground that the income was agricultural income within the meaning of section 4 of the Act and, therefore, not chargeable to income tax; (ii) that the (1) (1913) I.L.R. 38 Mad. 738.
(2) Mad, 5 18 (F.B.) 117 assessment was illegal as contravening the terms of his permanent sanad for the Zamindari and the provisions of Regulation XXV of 1802.
The Court held ' that where the peishkush of a permanently settled estate was fixed in commutation not only of the rentals of the cultivated lands but also of all income which might be derived from forests or fisheries, both under the terms of the sanad and section I of Regulation XXV of 1802, these incomes were exempt from further taxation by the Government, and section 3 of the Income tax Act did not abrogate this exemption.
In view of this conclusion the Court did not think it necessary to determine whether income from forests or fisheries came under the definition of " agricultural income.
" The Court, however, pointed out that " a reference to Murray 's and Webster 's dictionaries shows that the word "agriculture ", while sometimes used in the narrow sense of the art or science of cultivating the ground, is also used in a much wider sense so as to include even " forestry ", according to Webster.
In which sense it was used by the framers of the Income tax Act would be a matter for determination and to this end it would not be out of place to consider the probable reason for the exemption of agricultural income from income tax.
No other reason is suggested than the equity of exempting from further burden income which had already paid toll to the State in the shape of land revenue.
" The question, therefore, whether the income from forests would be " agricultural income " within the meaning of section 4 of the Income tax Act ' was thus left open and the decision that income from forests was not liable to income tax was reached under the terms of the Sanad of section I of Regulation No. 25 of 1802.
Kaju Mal vs Salig Ram(1) was concerned inter alia with a field in which tea was grown and the question was whether the land fell within the definition of Cc agricultural income " or " village immoveable property " as given in section 3(i) and (ii) of the Punjab Pre emption Act, 1905.
The Court held that fields planted with tea bushes were fields used for agricultural (1) (1919) P.R. NO.
118 purposes and this decision was affirmed by the Privy council in Kaju Mall vs Salig Ram(1).
It was held that the words " agricultural purposes " in section 2 (iii) of the Punjab Alienation of Land Act, 1900, included the cultivation of tea; consequently, land which was not occupied as the site of any building in a town or Village, and was occupied or let for the cultivation of tea was " agricultural land" within the meaning of section 3(i) of the Punjab Pre emption Act, 1905.
Emperor vs Probhat Chandra Barua (2) was a case under the Indian Income tax Act and the classes of income derived from permanently settled estates were "1.
Income from fisheries.
Income from land used for stacking timber.
Income from pasturage.
" The income from the first two heads was certainly not agricultural income or income derived from "land which is used for agricultural purposes" within the meaning of sections 2 and 4 of the Act.
But income derived from pasturage was held to be agricultural income which could not lawfully be charged with income tax.
There was a difference of opinion between Rankin, J., and Page, J., in regard to the liability of income from fisheries and income from land used for stacking timber based on the construction of the Permanent Settlement Regulations of 1793.
But that is immaterial for our present purposes.
What is material is that both the learned Judges were unanimous in their opinion that income from pasturage was income derived from "land which is used for agricultural purposes" and was, therefore, within the exemption given by a. 4(3)(viii) to agricultural income as defined by section 2(1)(a) of the Act.
In Kesho Prasad Singh vs Sheo Pragash Ojha (3) the Privy Council held that a grove was not land " held for agricultural purposes " within the meaning of section 70 of the Agra Tenancy Act, 1901, affirming the decision of the High Court of Allahabad that it was impossible to hold that that section had, any application whatever to such a property as the grove in fact was.
(1)(1923) I.L.R. (2)(1924) I.L.R. (3) All.
831. 119 The Commissioner of Income tax, Madras vs T. Manavedan Tirumalpad (1) was also a decision under the Indian Income tax Act (XI of 1922) and the assessee there was assessed by the Income Tax Officer for the year 1928 29 on the amount received by the sale of timber trees cut and removed from the forests.
The question was whether these amounts were liable as such to income tax and the Court observed derived from the sale of paddy which is grown on land and the income derived from the sale of timber cut in a forest; but the profits earned from the sale of paddy would be assessable to income tax but for the special exemption given to that income in the Incometax Act, by reason of its being agricultural income.
There is such exemption in the case of income derived from the sale of timber.
" There is no further discussion to be found in the judgment which would throw light on the question whether such receipts by the assessee were agricultural income and as such exempt from income tax.
The later decision of the Madras High Court in Chandrasekhara Bharathi Swamigal vs Duraisami Naidu (2) however contains an elaborate discussion as to the connotation of the term "agriculture ".
The case arose under the Madras Estates Land Act (Mad.
I of 1908) and the question which the Court had to consider was whether growing Casuarina trees, i.e., trees for fuel, was an agricultural purpose so as to make the person who held the land for that purpose a " ryot " within the meaning of the Madras Estates Land Act.
The Court held that land held for growing Casuarina trees was not land held for purposes of agriculture and the person holding the land for that purpose was not a " ryot " within the meaning of the Act.
While delivering the judgment of the Court Reilly, J., embarked upon a consideration of what the term " agriculture " meant and came to the conclusion that agriculture could not be defined by the nature of the product cultivated but should be defined rather by (1) Mad. 21 (S.B.) (2) Mad.
120 the circumstances in which the cultivation was carried on.
He observed at page 902: " I agree with the remark of Shephard, J., in Murugesa Chetti vs Chinnathambi Goundan(l) that a man who plants or maintains trees for firewood is not in ordinary parlance an agriculturist.
If we take the strict meaning of " agriculture " according to its derivation, it means the cultivation of a field, the cultivation of an open space, as opposed to horticulture, the cultivation of a comparatively small enclosed space.
The cultivation either of the field in agriculture or of the garden in horticulture cannot be confined, I think, to any particular product.
With great respect, I do not agree with the opinion of Bhashyam Ayyangar, J:, in Murugesa Chetti vs Chinnathambi Goundan(l) that agriculture implies production of things useful as food for men or beast or other products fit for human consumption by way of luxury.
That appears to me to be too narrow an interpretation.
Still less do I agree with the opinion expressed by Sadasiva Ayyar, J., in Raja of Venkatagiri vs Ayyappa Reddi that agriculture is confined to the production of grain crops.
I can see no reason why the cultivation in open spaces of such useful products as cotton, jute, flax and hemp should not be agriculture.
Indeed I think agriculture cannot be defined by the nature of the products cultivated but should be defined rather by the circumstances in which the cultivation is carried on.
In some cases it has been suggested that agriculture is confined to tillage.
I think it can easily be shown that agriculture was carried on in this world before ploughs were invented.
In the present day in many places cultivation is done with spades and not with ploughs, but the planting of timber or firewood trees, which are to stand on the land for a considerable number of years, forming plantations or woods or forests, appears to me to be opposed to the idea of agriculture, the cultivation of an open space.
It is true that for the purpose of growing trees in a plantation it may be necessary first to prepare the land.
(1) Mad.
42I, 423.
(2) (1913) I.L.R. 38 Mad.
121 Later on it may be necessary to protect and water the young plants.
Still later it may be necessary to thin out the plantation.
But, when the land is covered with trees which had to stand on it for a number of years, sometimes as long as a century, during most of which period the land itself is untouched, to describe that as agriculture appears to me inappropriate.
To my mind it is something very different from the cultivation of a field or of an open space.
It may be noticed that in Kesho Prasad Singh vs Sheo Pragash Ojha (1) their Lordships of the Privy Council approved of the opinion expressed by two learned judges of the Allahabad High Court that land let for a grove was not let for an agricultural purpose.
It happened that the case then under consideration was one arising under the Agra Tenancy Act.
But in that Act there is no definition of 'agriculture '.
Therefore both the learned judges of the Allahabad High Court and their Lordships of the Privy Council were, we may take it, considering what is the meaning of the word I agriculture ' in its general sense.
I may mention also that in Commissioner of Income Tax vs Manavedan Tirumalpad (2) a Full Bench of this Court remarked that income from cutting timber was not agricultural income.
" It may be noticed that the learned Judge enlarged the connotation of the term "agriculture " by having regard to the circumstances in which the cultivation was carried on rather than the nature of the products cultivated and embraced within the scope of the term not merely the production of things useful as food for man or beast or other products fit for human consumption by way of luxury but also such useful products as cotton, jute, flax and hemp, though he stopped short at those products and hesitated to include therein growing of trees in plantation where the land was covered with trees which have to stand on it for a number of years.
The last case to be referred in this series is that of Deen Mohammad Mian vs Hulas Narain Singh(2) (1)(1924) I.L.R. 46 All.
(2) , 152.
16 122 where it was held that an orchard is an agricultural land.
It was observed: it The case of an orchard is quite different.
Orchard trees ordinarily are, and can be presumed to have been, planted by men after preparation of the ground which is cultivation and seasonal crops are gathered.
Fruit trees also require seasonal attention such as pruning and digging of the soil around the roots and it cannot be said that this ceases to be cultivation merely because the whole tree is not replanted every year. . .
In my opinion the land in suit is agricultural land; it is land from which by preparing the soil and planting and cultivating trees the raiyat expects to enjoy periodical returns in the way of produce for food.
" This was a further extension of the idea which had 'germinated in the opinion expressed by Reilly, J., in Chandrasekhara Bharathi Swamigal vs C. P. Duraisami Naidu(1) and even plantation of trees in orchards which did not require to be replanted every year was included in the connotation of the term "agriculture".
A still further extension of the term is to be found in the following observations of Vishwanatha Sastri, J., in The Commissioner of Income tax, Madras vs K. E. Sundara Mudaliar (2) at p. 273: " It is a matter of ordinary experience, at least in this part of the country, that mango, cocoanut, palmyra, orange, jack, arecanut, tamarind and other trees are planted usually in an enclosed land, and that these trees do not yield any fruit or crop in the early years of their growth.
They remain on the land for a long number of years yielding fruit only after their maturity.
There is no reason why the planting, rearing, watering, fencing and protection of such trees and the gathering of their fruits during the annual seasons should not be held to be "agriculture".
There is some kind of cultivation or prodding of the soil at the inception when the planting is done and subsequently also at intervals.
In the. case of coffee grown on hill slopes, there is no ploughing or tillage as in the (1) Mad.
(2) , 271.
123 case of wet and dry fields; but it cannot be maintained that growing coffee is not an agricultural operation.
Coffee and tea plants stand on the soil for many years, and their produce is gathered periodically.
In the padugai lands or lands lying between the sandy bed and flood bank of rivers, plantains are grown in many places in deltaic tracts.
Young plants are often brought and planted in pits dug for the purpose in a row with sufficient interspaces.
Trenches are dug by the side of a row of plantain trees in order to catch and detain water.
The plantain trees last for about two years, and from each tree off shoots spring up and grow in place of the parent tree.
There is thus a natural replenishment of the plantain garden.
It cannot be said that the raising of plantains is not an agricultural purpose.
Similarly in the case of sugarcane the plants stand on the land for two years or a little more, and there are usually two cuttings.
Castor plants stand for some years on the soil and the seeds are periodically gathered in.
Bamboo is often planted in enclosed lands by digging pits, filling them with sand and manure and then planting the young stalks in a bunch at suitable distances.
Watering is done for the first 2 or 3 years.
Every year, the land surrounding each bamboo cluster is dug with a spade and small earthen ridges are put up so as to catch and retain rain water.
Bamboo plants attain maturity in about 3 or 4 years, and the thorny branches which grow on the main stem are then fit to be cut off and used for fencing purposes. . . . .
I am unable to see why these operations are not agricultural operations.
" The cases above noted all of them interpret the term "agriculture" in its narrower sense, though there is a marked progress from the extremely narrow construction put upon it by Bhashyam Ayyangar J. in Murugesa Chetti vs Chinnathambi Goundan(1) to the somewhat wider connotation thereof adopted by Reilly J. in Chandrasekhara Bharathi Swamigal vs C.P. Duraisami Naidu (2) and by Vishwanatha, Sastri J. in The Commissioner of Income tax, Madras vs K. E. Sundara (1) Mad.
421, 423.
(2) Mad.
124 Mudaliar(1) It is interesting to note that all throughout these cases runs the central idea of either tillage of the land or sowing of seeds or planting or similar work on the land which invests the operation with the characteristic of agricultural operations and whenever that central idea is fulfilled there is the user of land for agricultural purposes and the income derived therefrom becomes agricultural income.
There were, on the other hand, decisions which interpreted the term "agriculture" in the wider sense as including all activities in relation to the land, even though they did not comprise these basic agricultural operations.
King Emperor vs Alexander Allen(2) involved the interpretation of the expression "land used solely for agricultural purposes" in sub section
(3) of section 63 of the Madras District Municipalities Act (Mad. IV of 1884) as amended by the Madras District Municipalities Amendment Act (Mad. III of 1897) and the Court held that the lands on which potatoes, grain, vegetables, etc., were grown, as well as pasture land, were used solely for agricultural purposes " within the meaning of the sub section.
The Court adopted the definition of agricultural land given in the Agricultural Rates Act (59 and 60 Vict., Chap.
16) section 9: " The expression " agricultural land " means any land used as arable, meadow, or pasture ground only, cottage gardens exceeding one quarter of an acre, market gardens, nursery grounds, orchards, or allotments, but does not include land occupied together with a house as a park, gardens other than as aforesaid, pleasure grounds or any land kept or preserved mainly or exclusively for purposes of sport or recreation or land used as a race course." and also the meaning ascribed to it in Murray 's Oxford English Dictionary quoted above and observed: " We also note that it is there pointed out that the restriction of the word agriculture to tillage, as in the following quotation, is rare.
The lands were not fields for agriculture but pastures for cattle.
We believe that we cannot do better than follow these definitions in (1) , 271.
(2) Mad.
627, 629,630.
125 attempting to decide what, for the purposes of subsection (3) of section 63 of the Municipalities Act, are or are not lands used solely for agricultural purposes . .
We do not consider that any distinction can be drawn between large and small plots of lands on which roots of grain are cultivated.
All such land must be held to be land used solely for agricultural purposes Counsel has urged before us that these so called waste lands are pasture lands and as such should be held to be lands used solely for agricultural purposes If, therefore, it could be shown that these so called waste lands were in reality pasture grounds or lands used for "rearing livestock", we should certainly decide that they were lands used solely for agricultural purposes.
" The learned Judges there were influenced by the dictionary meaning of the term agriculture as given in Murray 's New Oxford Dictionary and understood the term agriculture in the widen sense as including the user of land for rearing live stock also.
In Panadai Pathan vs Ramaswami Chetti(1) a lease of land was given for growing casuarina trees and the question was whether such a lease was a lease for agricultural purposes within the meaning of section 117 of the Transfer of Property Act.
The Court held that it was a lease for agricultural purposes and therefore did not require a registered instrument for its creation.
Spence J. in the course of his judgment differed from the opinion of Bhashyam Ayyangar, J., in Murugesa Chetti vs Chinnathambi Goundan (2) that the word agriculture in its more general sense comprehends the raising of vegetables, fruits and other garden products as food for man or beast, if the learned Judge intended thereby to limit it to the raising of food products.
For to so restrict the word would be to exclude flower, indigo, cotton, jute, flax, tobacco and other such cultivation.
He also differed from the opinion expressed by Sadasiva Ayyar J. in Seshayya vs Rajah of (1) Mad. 710.
(2) Mad.
42I, 423.
126 Pittapur (1) and Rajah of Venkatagiri vs Ayyappa Reddi (2) that agriculture meant the raising of annual or periodical grain crops through the operation of ploughing, sowing, etc., as such definition would exclude sugar cane, indigo, tea, flower, tobacco, and betel cultivation from agriculture.
He then referred to the dictionary meaning of the term "agriculture" as given in the Oxford Dictionary and the Bouvier 's Law Dictionary set out above and observed: " In my opinion agriculture connotes the raising of useful or valuable products which derive nutriment from the soil with the aid of human skill and labour; and thus it will include horticulture, arboriculture and silviculture, in all cases where growth of trees is effected by the expenditure of human care and attention in such operations as those of ploughing, sowing, planting, pruning, manuring, watering, protecting etc.
" Ramesam, J., who delivered a concurring judgment referred to the definition of agriculture adopted in Wharton 's Law Lexicon and was of opinion that it would include the use of land as " meadow or pasture or orchard or osier or woodland, or for market gardens, nursery grounds or allotments etc." but would exclude all cultivation of fibrous plants such as cotton, jute and linen and all plants used for dyeing purposes, such as indigo etc., and all timber trees and flowering plants etc.
According to him, the rearing of a Casuarina plantation requires some preparation of the ground and subsequent care by watering the plants and he was therefore of Opinion that rearing of Casuarina trees was an agricultural purpose within the meaning of section 117 of the Transfer of Property Act.
It may be observed however that according to both the learned Judges some preparation of the ground or some expenditure of human care and attention in such operations as those of ploughing, sowing, planting etc., was considered essential for constituting these operations agricultural operations.
In Commissioner of Income tax, Burma vs Kokine Dairy, Rangoon(3) the question was whether income (1) (1916) 31 M.L.J. 284; 1916 M.W.N. 396.
(3) , 509.
(2) Mad.
738. 127 from a dairy farm and the milk derived from the farm is agricultural income and exempt as such from incometax.
Roberts C.J. who delivered the opinion ' of the Court observed: "Where cattle are wholly stall fed and not pastured upon the land at all, doubtless it is trade and no agricultural operation is being carried on; where cattle are being exclusively or mainly pastured and are none the less fed with small amounts of oil cake or the like, it may well be that the income derived from the sale of their milk is agricultural income.
But between the two extremes there must be a number of varying degrees, and the task of the Income tax Officer is to apply his mind to the two distinctions and to decide in any particular case on which side of the fence, if I may use the term, the matter falls.
" He then referred to the case of Lean and Dickinson vs Ball (1) where Lord Cullen had said that he proceeded on the footing that the case, which was one dealing with poultry farming, was one in which poultry derived sustenance to a material extent from the produce of the ground.
This method of approach was on a par with the one adopted by Lord Wright in Lord Glanely vs Wightman(2) where it was observed: " If authority were needed, the provisions just quoted do at least show that profits of occupation ' include gains from the animal produce as well as the agricultural, horticultural, or arboricultural produce of the soil;. . . . equally it is obvious that the rearing of animals, regarded as they must be as products of the soil since it is from the soil that they draw their sustenance and on the soil that they liveis a source of profit from the occupation of land, whether these animals are for consumption as food (such as bullocks, pigs or chickens), or for the provision of food (such as cows, goats or fowls), or for recreation (such as hunters or race horses), or for use (such as draught or plough horses).
All these animals are appurtenant to the soil, in the relevant sense for this purpose, as much as trees, wheat crops, flowers or roots though no doubt they differ in obvious respects.
Nor (1) 128 is it now material towards determining what are products of occupation that farming has developed in its use of mechanical appliances and power, not only in such matters as ploughing, reaping, threshing, and so forth, but in such ' ancient methods of preparing its products as making cream, butter or cheese.
The farmer is still dealing with the products of the soil, and Schedule B covers the income.
" The House of Lords were dealing with the profits of occupation of land not with income derived from user of land for agricultural purposes and therefore not restricted in their interpretation of the term " occupation " and all these activities which were described therein might as well have been comprised within the scope of the taxing statutes.
What we have, however, to see is whether these activities fall within the connotation of the terms " agriculture " and " agricultural purpose " which are the only terms to be considered for bringing the income derived therefrom within the definition of agricultural income in section 2 (1) (a) of the Indian Income tax Act.
In Moolji Sicka & Co., In re(1) Derbyshire C.J. understood the term ,agriculture" in a wider sense as including operations not only on the land itself but on the shrubs which grew on the soil and were according to him a part of the soil.
The assessees were manufacturers of biri, a kind of cigarette consisting of tobacco wrapped in tendu leaves.
The tendu plant was of entirely wild growth and propagated itself without human agency in jungle and waste lands.
The assessees had taken several villages on " lease " for plucking the leaves of such plants and the work done by the assessees consisted in pruning the trees and burning the dead branches and dried leaves lying on the ground.
The Court held that the profits accruing to the assessees by the sale of tendu leaves was not exempt as agricultural income but to the extent to which pruning of the tendu shrub occurred, there was in a technical and legal sense a cultivation of the soil (1) 129 in which the shrub grew and therefore so much of the income as was shown by the.
assessee to be profit derived from the collection and preparation, so as to make them fit to be taken to the market, of tendu leaves produced by the pruning of the tendu shrubs was exempt as agricultural income under section 2 (1) and section 4 (3) (viii) of the Indian Income tax Act.
The learned Chief Justice observed: " Cutting back or pruning the wild tendu clearly contributes to the growth of the leaves in that shrub and I am prepared to hold that the pruning of the shrub is a cultivation of the shrub and as the shrub grows in the soil and as a part of it, is a cultivation of the soil in a legal and technical sense." The word cultivation was here understood by the learned Chief Justice not only in the sense of cultivation of the soil but in the sense of cultivation of the tendu shrubs which grew on the soil and were therefore a part of it.
The operations which were performed on the shrubs were certainly not operations performed on the soil itself and the opinion expressed by the learned Chief Justice has certainly given an extended meaning to the term cultivation and used with reference to the soil.
It is significant however to observe that cultivation of the soil was considered an essential ingredient which rendered the income derived from the tendu leaves agricultural income within the meaning of its definition in section 2(1)(a) of the Act.
Commissioner of Income Tax, Madras vs K. E. Sundara Mudaliar (1) contains a further extension of this idea where Vishwanatha Sastri J. observed at p. 274: " Pasture land used for the feeding and rearing of livestock is land used for agricultural purposes: Emperor vs Alexander Allen (2) .
Rearing of livestock such as cows, buffaloes, sheep and poultry is included in "husbandry".
These animals are considered to be the products of the soil, just like crops, roots, flowers and trees, for they live on the land and derive their sustenance from the soil and its produce: Glanely vs Wightman(3) ; Commissioner of Income tax, Burma vs (1) , 27I. (3) ; 638.
(2) Mad.
627, 629, 630.
17 130 Kokine Dairy Co. (1) It is therefore not legitimate, in my opinion, to confine the word "agriculture" to the cultivation of an open field with annual or periodical crops like wheat, rice, ragi, cotton, tobacco, jute, etc.
Casuarina is usually raised on dry lands of poor quality, and it is usual to find the same land used alternatively "for the cultivation of ordinary cereal crops like ground nut, gingelly, cholam, kambu, etc., and for the raising of Casuarina plantations.
The land bears the dry assessment whatever be the nature of the crop raised.
" This enlarged connotation of the term "agriculture" has been tinged by the dictionary meanings ascribed to it in Murray 's Oxford Dictionary and the Webster 's Dictionary quoted above which understood the term as including the allied pursuits of rearing, feeding and management of live stock and also including husbandry, farming horticulture, etc., in the widest sense, as also butter, cheese making etc.
We shall have to consider at the appropriate stage as to how far such enlargement is warranted, by the definition of " agri cultural income " as given in section 2 (1) (a) of the Indian Income tax Act.
The cases above noted all of them involve some expenditure of human skill and labour either on the land or the produce of the land, for without such expenditure there would be no question of the income derived from such land being agricultural income.
Where, however, the products of the land are of wild, or spontaneous growth involving no expenditure of human labour and skill there is unanimity of opinion that no agricultural operations were at all involved and there is no agricultural income.
In such cases, it would be the absence of any such operations rather than the performance thereof which would be the prime cause of growth of such products.
The cases bearing on this aspect of the question may be noted.
Kaju Mal & others vs Salig Ram (2) is the earliest case where a stretch of natural forest came in for consideration.
It was a forest land and it was held to (1) , 509.
(2) (1919) P.R. No. 131 be agricultural land or land used for purposes subservient to agriculture or for pasture, and therefore exempt from pre emption under section 4 of the Punjab Premption Act, 1905.
There was no discussion of any legal principles in that decision but when we come to the next case of Province of Bihar vs Maharaja Pratap Udai Nath Sahi Deo(l) which was a case under the Bihar Agricultural Income Tax Act (Bihar VII of 1938), we find the ratio of these decisions laid down in clear terms.
The assessees there derived their income from " Bankar " and " Palkar ".
" Bankar " was income derived from the sale of wood from virgin jungles or jungles not actually cultivated; and "Phalkar" was income derived from the fruits of wild jungle trees and bushes.
The question was whether this income was agricultural income within the meaning of the term as defined in the Act.
Harries C.J. who delivered the judgment of the Court observed: "Bankar" : It appears that this head of income was derived from virgin jungles or jungle land not actually cultivated.
A few forest guards appear to have been employed to protect the property, but it cannot be said that the trees have grown as the result of cultivation.
They appear to have grown naturally in the jungles without the intervention of the human agency, and in my view the growth of these trees cannot be said to result from the cultivation of the soil.
In fact, it was the absence of cultivation that permitted the area to develop into a jungle. . . . " " Phalkar ": This is income derived from wild jungle fruits, and it cannot be said that the fruit gathered is the result of the cultivation, but, on the contrary, it is the result of the absence of cultivation.
Trees and bushes yielding these fruits grow not on cultivated soil but on the land not under cultivation and frequently the more neglected and wild the land is the thicker grow these wild bushes and trees yielding such crop.
Practically in all cases the crop is the result of want of cultivation and not the result of cultivation.
(1) [194I] , 328. 132 In my judgment it is not established that the income described as phalkar in these cases is income derived from land used for agriculture or from agriculture and is, therefore, not assessable to agricultural income tax.
" In Raja Mustafa Ali Khan vs Commissioner of Income Tax, U. P. & C. P. (1) which went up to the Privy Council, the Oudh Chief Court held that income from the sale of forest trees growing on land naturally and without the intervention of human agency, even if the land was assessed to land revenue, was not agricultural income within the meaning of section 2(1)(a) of the Income tax Act.
The Court followed an earlier decision given by it in the case of Maharaja of Kapurthala vs Commissioner of Income Tax C. P. & U. P. (2) in which the court had discussed the meaning to be ascribed to the term "agriculture" and observed at page 93: "A fiscal statute should no doubt be construed strictly, and, if there be any doubt about its construction, the subject must be given the benefit.
But we do not feel any doubt that the expression "land used for agricultural purposes" in the Income tax Act does not extend to forests of spontaneous growth, where nothing is done to prepare the soil for trees to be planted therein, and where the growth of the trees is not fostered by tillage.
We should not be justified in giving the taxpayer the benefit of the dictionary definition when it is not disputed that the meaning of the term " agricultural" cannot be extended for the purpose of the Income tax Act to all the secondary implications therein suggested.
We therefore construe the term in its primary sense.
We accordingly hold that income from the sale of forest trees of spontaneous growth growing on land which is assessed to land revenue is not agricultural income within the meaning of section 2(1)(a) of the Income Tax Act.
" Yuvarajah of Pithapuram & Anr.
V. Commissioner of Income Tax, Madras(3)was also a case where the (1) (2)[1945] ,93.
(3)[1946] ,99.
133 assessee derived income from forests of spontaneous growth by the sale of wood, bark, leaves, other usufruct of trees, minor forest produce and licence fees and from trees that had grown wild in non forest areas.
The Zamindari of Pithapuram was a permanently settled estate under the Permanent Settlement Regulation (Regulation XXV of 1802) and it was contended that the imposition of income tax in respect of income other than agricultural income derived from a permanently settled estate would not be a breach of Regulation XXV of 1802 relating to permanent settlement.
Reliance was placed in support of this position on the decision in Chief Commissioner of Income Tax vs Zamindar of Singampatti (1).
It was, however, held that the case was impliedly overruled by the decision of the Privy Council in Probat Chandra Barua vs King Emperor (2) and the Court proceeded to consider whether income derived from forests of spontaneous growth by the sale of wood, bark, leaves, other usufruct of trees, minor forest produce and licence fees and from trees which have grown wild in nonforest areas was agricultural income within the meaning of section 2(1) of the Indian Income tax Act.
The Court observed : "There is ample authority for holding that income derived from trees which have grown wild is not agricultural income but without the aid of authority, we should have no hesitation in saying that to describe it as such would involve a distortion of the meaning of the word agriculture '.
and such income was accordingly held to be not agricultural income within the meaning of section 2 (1) of the Act.
(It may be noted that the appellant preferred an appeal to the Privy Council against this decision but the same was dismissed vide Yuvarajah of Pithapuram & Anr.
vs Commr.
of Income Tax, Madras (3) Benoy Ratan Banerji vs Commissioner of Income Tax, U.P., C.P. & Berar (4) was another case in which the assessee derived income from the sale of timber from (1) Mad. 518 (F.B.).
(2) (1930) L.R. 57 I.A. 228.
(3) (4) 134 the Zamindari on which there had been for many years, a number of forest trees, khar and wild plants.
There was no evidence on the record to show that the growth of the trees in question was the result of any actual culivation by the assessee at all.
The various trees which he sold were of spontaneous growth, not having grown as a result of actual cultivation.
The Court held that in order to come within the definition of " agricultural income ", the income had not only to be derived from land which was used for "agricultural purposes" but such income had also to be derived by the process of " agriculture ".
The Court observed that being trees of spontaneous growth, to the pro duction of which the assessee had made no contribution by way of cultivation, no question could arise either of the land on which they grew being "used for agricultural purposes" or of the trees themselves and the income they produced being the result of "agriculture." The Court accordingly held that the income from the sale of forest trees of spontaneous growth, growing on land naturally and without the intervention of human agency, was not agricultural income within the meaning of section 2(1)(a) of the Income Tax Act even if such land was subject to a local rate assessed and collected by officers of the Crown as such and such income was not exempt from income tax under section 4(3) (viii) of the Act.
A decision of the Nagpur High Court in Beohar Singh Raghubir Singh vs Commissioner of Income Tax, U.P., C.P., and Berar (1) (delivered on September 4, 1946, but reported in 1948) may be noted here.
There also the income in question was derived by the assessee from the sale of forest produce such as timber, tendu leaves, mohua flowers, harranuts etc., derived from a forest which was not a cultivated one but was of spontaneous growth.
The question was whether such income was agricultural income and as such exempt from taxation under section 4(3)(viii) of the Indian Incometax Act.
The Court considered the dictionary meanings of the term "agriculture" which included forestry within its compass but observed that the essence of (1) 135 agriculture even when it was extended to include "forestry", was the application of human skill and labour; without that it could neither be an art nor a science and that was according to them the determining factor in such class of cases.
The Court then referred to the various decisions referred to above and cited with approval the following passage from the Judgment of the Federal Court in Meghraj vs Allah Rakhia (1).
"Their Lordships confirmed a decision of the Punjab Chief Court to the effect that land used as a tea garden was used for "agricultural purposes." In the judgment of the Chief Court (which was generally approved by their Lordships) it was observed that the term "agricultural land" is used in the Act of 1905 in its widest sense to denote all land which is tilled. . .
The, Chief Court had held that land covered by a natural forest was not agricultural land, and this view also would seem to have been confirmed by the Judicial Committee," and they further proceeded to observe " We have underlined the word "tilled" because, in our opinion, that brings out the distinction which we have sought to draw between an agricultural and a non agricultural purpose.
The decisions referred to are Kaju Mal vs Saligram and Kajumal vs Saligram (2)".
The Court came to the conclusion that it was essential that the income should be derived from some activity which necessitated the employment of human skill and labour and which was not merely a product of man 's neglect or inaction except for the gathering in of the spoils.
Not only must the assessee labour to reap the harvest, but he must also labour to produce it and they accordingly held that the income in question was not agricultural income and was not exempt from taxation under section 4(3)(viii) of the Indian Income tax Act.
We now come to the decision of the Privy Council in Raja Mustafa Ali Khan vs Commissioner of (1) ,62.
(2) [1919] P. R. No. and Lah.
136 Income tax, U. P. Ajmer and Ajmer Merwara (1).
It will be recalled that the Oudh Chief Court had in Raja Mustafa Ali Khan vs Commissioner of Income Tax, U. P. & C. P. (2) decided that income from the sale of forest trees growing on land naturally and without the intervention of human agency even if the land was "assessed to land revenue was not agricultural income within the meaning of section 2(1)(a) of the Indian Income tax Act.
The appellant took an appeal to the Privy Council against this decision and the main question for consideration before their Lordships was whether the land was 'used for agricultural purposes and the income derived therefrom was agricultural income.
Their Lordships of the Privy Council observed that the income in question " was derived from the sale of trees described as forest trees growing on land naturally and the case has throughout proceeded upon the footing that there was nothing to show that the assessee was carrying on any regular operations in forestry and that the jungle from which trees had been cut and sold was a spontaneous growth.
Upon those facts the question is whether such income is (within section 2(1)(a) of the Act) rent or revenue. . or alternatively. . whether such income was, within section 2(1)(b), income derived from such land by agriculture.
It appears to their Lordships that, whether exemption is sought under section 2(1)(a) or section 2(1)(b), the primary condition must be satisfied that the land in question is used for agricultural purposes; the expression " such land" in (b).
refers back to the land mentioned in (a) and must have the same quality.
It is not then necessary to consider any other difficulty which may stand in the way of the assessee.
His case fails if he does not prove that the land is "used for agricultural purposes.
" Upon this point their Lordships concur in the views which have been expressed not only in the Chief Court of Oudh but in the High Court of Madras (see Yuvarajah of Pithapuram vs (1) (2) 137 Commissioner of Income Tax, Madras (1), and the High Court of Allahabad (see Benoy Ratan Banerji vs Commissioner of Income Tax, U.P., C.P. & Berar(2) and elsewhere in India.
The question seems not yet to have been decided whether land can be said to be used for agricultural purposes within the section, if it has been planted with trees and cultivated in the regular course of arboriculture, and upon this question their Lordships express no opinion.
It is sufficient for the purpose of the present appeal to say (1) that in their opinion no assistance is to be got from the meaning ascribed to the word "agriculture" in other statutes and (2) that, though it must always be difficult to draw the line, yet, unless there is some measure of cultivation of the land, some expenditure of skill and labour upon it, it cannot be said to be used for agricultural purposes within the meaning of the Indian Income tax Act.
In the present case their Lordships agree with the High Court in thinking that there is no evidence which would justify the conclusion that this condition is satisfied.
" It may be noted that the Privy Council also proceeded upon the footing that there was nothing to show that the assessee was carrying on any regular operations in forestry and these observations are patient of argument that if any regular operations in forestry had been carried on the land they might have made a difference to the result.
Their Lordships also did not express any opinion on the question whether land can be said to be used for agricultural purposes within the section if it has been planted with trees and cultivated in the regular course of arboriculture.
They were, however, definite in their opinion that unless there is some measure of cultivation of the land, some expenditure of skill and labour upon it, the land cannot be said to be used for agricultural purposes within the meaning of the Act.
Agricultural operations are thus defined by them to be operations where there was some measure of cultivation of the land, some expenditure of skill and labour upon it.
If these conditions were satisfied in regard to any particular land, then (1) , 99.
(2) , 18 138 such land can be said to be used for agricultural purposes and the income derived therefrom constitute agricultural income within the meaning of section 2(1)(a) of the Act.
The term "agriculture" for the purposes of the Indian Income Tax Act was thus in effect defined by their Lordships to mean some measure of cultivation of the land and some expenditure of skill and labour upon it and unless the operations, whether they be agricultural operations or forestry operations conformed with those definitions, they could not be styled agricultural operations so as to constitute land on which they were performed land used for agricultural purposes.
One should have thought that this decision of the Privy Council would put an end to all controversies with regard to the connotation of the term " agriculture " and " agricultural purposes ".
That was, however, not to be.
The words used by their Lordships in their judgment were cryptic and the controversy arose immediately thereafter as to whether " some measure of cultivation of the land" and "some expenditure of skill and labour upon it" were used by them as cumulative or in the alternative.
Considerable ingenuity was exercised in determining what were regular operations in forestry and whether they could be assimilated to agricultural operations which could have the effect of constituting the land upon which they were performed land used for agricultural purposes within the meaning of the Indian Income tax Act so that income derived therefrom could fall within the definition of agricultural income" contained therein.
The first case which came up for consideration after the above decision of the Privy Council was the case of Commissioner of Agricultural Income Tax, West Bengal vs Raja Jagadish Chandra Deo Dhabal Deb (1) before the Calcutta High Court.
The assessee was the Zamindar of Chilkigarh in the district of Midnapore the western part of which contained jungle mahal.
The income in question was derived from the sale of Sal trees which grew in the forest.
The forest was not an uncared for virgin forest.
The assessee maintained a staff of one forester, 6 guards and 24 Chaukas to look after the (1) , 438.
139 forest and for the proper cultivation of the same.
The Sal trees were generally sold off in blocks when about 15 years old.
Annually blocks of about 1,000 acres were sold up.
All the trees in the blocks sold up were cut down by the purchasers for sale as fuel and house posts.
During the rainy season from the stumps of the trees cut down, new shoots come out which grew into mature trees in 15 years, to be cut down again.
In order to prevent damage to the young shoots in the early stages of their growth the areas cut down were closely guarded for one year at least from the time when the block in question had been completely denuded of trees, in order to keep cattle and men off from the lands so that they may not damage the young growing shoots.
In order to promote the growth of shoots, the ground was also kept free from undergrowth jungle.
This was not cleared at the assessee 's expense but the villagers were allowed to clear the grounds of the undergrowth and take the same away free of cost.
The existing Sal trees in the forests and the Sal trees which had been sold off in 1350 B.S. had been grown in the same manner as described above.
From the above facts it was clear that human care and skill had been utilised for promoting the growth of the Sal trees from which the income was derived in 1350 B.S.
The Court discussed the dictionary meaning of the term " agriculture " and following the decision of the Privy Council in Raja Mustafa Ali Khan vs Commissioner of Income Tax U.P., Ajmer & Ajmer Merwara(l) came to the conclusion that income from a virgin forest or forests of spontaneous growth was not agricultural income.
The view that the tilling of the soil was the sine qua non for bringing a pursuit within the term agriculture was also held to have been exploded and it was observed at p. 440: " Whether a particular forest is one of spontaneous growth or not has to be decided on one important consideration as indicated by the Judicial Committee in that decision i.e., whether there has been I some expenditure of skill and labour upon it '." (1) [1948] 16 1.L.R. 330.
140 Reliance was placed upon the further observations of the Privy Council that, whether there were " any regular operations in forestry " would be a material fact for consideration and it was observed: " To put it in another form, the introduction of human agency and the application of human efforts would be the criteria for consideration" and after discussing several cases on the subject the Court observed at p. 441 : " On a careful analysis of the reasons given by the learned Judges in the various decisions referred to above it will be apparent that the facts of each particular case must be considered for determining whether there has or has not been sufficient application of human efforts before it can be determined whether the income from a particular forest is agricultural or otherwise.
" On the findings of fact recorded by the Tribunal in the case before them the Court was of opinion that the forest in question was not either a virgin forest or containing trees which grew spontaneously and naturally without any human intervention whatever.
The circumstance that there was felling of the trees, the new shoots appearing during the rainy season without any human intervention, guarding of the new shoots from either being trampled under foot or being browsed by animals and the removal of undergrowth of fallen leaves were considered regular operations in forestry in the forests in question which required the application of human efforts sufficient to include them under the head agricultural income.
It was further observed : " If the view of the Judicial Committee were to exclude all kinds of income from the category of agricultural income unless there was actual cultivation of the soil, reference to "regular operations of forestry" would have been unnecessary.
Not that there must always be " some measure of cultivation of the land " and " some expenditure of skill and labour upon it " but that the proof of either would be sufficient to bring the case within either clause (a) or (b) of section 2(1) of 141 the Act.
" Regular operations in forestry " do require expenditure of skill and labour upon the land on which the forest grows. " The Court, therefore, came to the conclusion that in the special circumstances as disclosed in the case, there were regular operations in forestry and the income, derived from forests in question was agricultural income within the meaning of section 2 (1) (a) of the Bengal Agricultural Income tax Act, 1944.
Jyotirindra Narayan Sinha Choudhury vs The State of Assam (1) arose under the Assam Agricultural Income tax Act, 1939 and the question for the consideration of the Court was whether the amounts realised by the assessee from the sale of Sal tree, , growing in the forest was agricultural income within the meaning of section 2 (1) of the Act.
There was no evidence to show that these Sal trees were of spontaneous growth.
Even though the possibility of the forests originally having been of spontaneous growth was recognised, it was an admitted fact that forest trees were protected and fostered in growth by the application of human labour and skill.
In these forests, operations ' in forestry such as clearing jungles, creepers and climbers, thinning by removal of less healthy trees from thickly grown areas, removal of unsound, crooked and diseased trees, burning of leaves to fertilise the ground, cutting of trees at special heights, reservation of blocks by turns and their operation in cyclic order, preservation of mother trees for the spread of seed, protection of forests from fire, etc., were regularly carried on and regular operations were thus being undertaken for their growth, preservation and regeneration.
The Court held that as extensive operations in forestry were employed in the forest of Sal trees, the income from the sale of such trees would be agricultural income as defined in the Assam Agricultural Income tax Act.
In arriving at this conclusion, the Court relying on the various dictionary meanings of the term "agriculture " observed at p. 390: (1) 142 " in spite of the diversity as to the scope and purpose of agriculture as revealed by the different definitions, there is one feature which is essentially common to all of these.
This is the application of human skill and labour without which there can be no agriculture.
" The Court then referred to the decision of the Privy Council in Raja Mustafa Ali Khan vs Commissioner of Income Tax(1) and after quoting the passage from the judgment above referred to proceeded to observe : " Their Lordships have not laid down that some measure of cultivation is absolutely necessary before it can be said that land is used for agricultural purposes.
In fact " some measure of cultivation " is placed on a par with " some expenditure of skill and labour ".
If either of the two conditions exists, the land could be said as being used for agricultural purposes.
Tillage or actual cultivation would not in their view be an essential pre requisite of " agriculture " in its wider implication.
" After referring to a decision of the Calcutta High Court in Hedayat Ali vs Kamalanand Singh(2) and Commissioner of Agricultural Income Tax vs Jagadish Chandra Deo Dhabal Deb (3) the Court observed: " The review of the authorities considered above leads to the conclusion that purpose within the meaning of the Assam Act can be agricultural even if its achievement does not involve actual cultivation of the soil.
In the words of their Lordships of the Privy Council in the case of receipts from the sale of forest trees, the income would be agricultural if there is some expenditure of skill and labour upon it.
Regular operations in forestry necessarily involve expenditure of skill and labour.
Where, therefore, such operations take place, the income from the sale of trees in the forest would be within the ambit of agricultural income as defined in the Assam Act." In Pratap Singh Balbeer Singh vs Commissioner of Income Tax, U. P., C. P. & Berar (4), however, the (1)[1948] (2)[1913] 17 C.L.J. 411.
(3)[1949] , 438.
(4)[1952] 143 High Court of Allahabad struck a different note.
The assessee there derived the income from the sale of forest trees growing on land naturally and spontaneously without the intervention of any human agency but carried on forestry operations working the forest for at least some time on scientific lines in accordance with a scheme of making profits.
There was a regular working plan and the assessee was deriving regular income from the forest and spending money to increase the profit.
The Court held that the " agriculture " and " agricultural purposes " with reference to land clearly implied that some operations must be carried on on the land itself; human skill and labour should be used for the purpose of ploughing the land, manuring it, planting the trees or some similar process, and that mere weeding care and preservation of forest trees which grew spontaneously were not operations on the land which were necessary to constitute the process a process of agriculture.
In the course of the judgment, the Court interpreted the above passage from the judgment of their Lordships of the Privy Council in Raja Mustafa Ali Khan vs Commissioner of Income Tax (1) a. , under: " It is quite clear that their Lordships were of the view that, for income to be agricultural income, the essential element that must exist is that there should be "some measure of cultivation of the land" or " some expenditure of skill and labour upon it".
The language used by their Lordships of the Privy Council shows that the expenditure of skill and labour must be upon the land and not merely oil the trees which are already growing on it as a result of spontaneous growth." Mere regeneration and preservation of trees could not be said to be expenditure of human skill and labour upon the land itself and the land could not under the circumstances be held to be used for agricultural purposes nor could it be held that any process of agriculture was being carried on.
The Court observed that planned and scientific exploitation of a forest of spontaneous growth, though it might yield (1) 144 regular income, would not be income from agriculture as no operations were carried out and no human skill and labour was expended in such a case, on the land itself.
Raja Benoy Kumar Sahas Roy vs Commissioner of Income Tax, West Bengal (1) the judgment under appeal before us here struck a middle path.
The Tribunal had found that except the sowing of seeds, the operations carried out, though equally necessary for the maintenance and upkeep of any forest of spontaneous growth, did not involve such expenditure of human labour and skill as to constitute them operations in agriculture.
The sowing of seeds were " few and far between " and the normal process by which the forest grew again, after a part of it had been cut down, was by the growing out off shoots from the stumps left, the operations were therefore in the main only operations for the " maintenance, preservation, nursing and rearing ", of the forest.
It was urged before the High Court on behalf of the assessee that the exemption from agricultural income tax determined in Commissioner of Agricultural Income Tax, West Bengal vs Raja Jagadish Chandra Deo Dhabal Deb(2) covered the case and it was submitted that the facts here were if at all far stronger in favour of the assessee.
The decision of the Privy Council in Raja Mustafa Ali Khan vs Commissioner of Income Tax, U.P., Ajmer and Ajmer Merwara (3) was considered and the Court observed at p. 87: " I do not think that when the Privy Council said that there must be 'some measure of Cultivation on the land, some expenditure of skill and labour upon it ", their Lordships intended to say that the expenditure of skill and labour must always be in the form of cultivation.
The word "or" introduced by the Allahabad High Court between the two phrases does not occur in the original, but I think it is implied.
The idea, it seems to me, is that if the land has been left to the forces of nature to grow what products such forces could, there is no agriculture and there can be (1) , 87.
(2) [1049] , 438.
(3) 145 SUPREME COURT REPORTS agriculture only if the labour and skill of man has operated on the land to cause or aid the growth of certain products.
All that is necessary is that the land should be actively exploited with a view to procuring growth or better growths from the soil but it does not seem to be also necessary that the exploitation should be by tillage.
" The Court accordingly came to the conclusion that even though tillage was thus not essential, human labour and skill must be expended on the land itself and not merely on the growth from the land.
When income is derived from the natural growths from the land, it is derived from land but not derived from land by the process of agriculture.
It is derived from land by agriculture only when the land is subjected to the labour and skill of man, whether in the form of cultivation or otherwise, in order to produce or the improvement of the produce which yields the income.
On the facts before them the learned Judges were of opinion that if forest of natural growth was taken over and then the land was regularly weeded and cleared, if it was supplied with moisture, necessary for the nourishment of the trees, by the cutting of channels across it and by the distribution of rain water through them and if the land was dug, and sown with seeds whenever bare patches appeared and while all this was done, if elaborate subsidiary arrangements were also maintained for the protection of the trees and the tending of new shoots springing from the stumps of old trees cut down till they themselves grew into new trees, it might well be said that operations in forestry involving agricultural operations were carried on on the forest land and that income derived from the land was derived from agriculture.
Sir Kameshwar Singh vs Commissioner of Income tax, Bihar & Orissa (1) which is the subject matter of C.A. Nos. 11 2 to II 7 of 1956 before us also was a case under the Indian Income tax Act (XI of 1922).
It was found by the Appellate Tribunal that the Sal and ebony trees which grew in the forest were conserved by allowing each a circle of 15 feet, that there was cutting down (1) , 19 146 of the trees and jungles which fell within that circle leaving sufficient space for growth and that forest conservancy staff was maintained to look after the forest.
The Court construed the observations of the Privy Council in Raja Mustafa Ali Khan 's case (1) to mean that " in order to show that an income is agricultural income within the meaning of the definition, it must be found that the land itself was cultivated and that there was some expenditure of skill and labour upon it." The Court held that even conceding that the two conditions laid down by the Privy Council in Raja Mustafa Ali Khan 's case were to be read as alternative conditions, there was no material on which to hold that there was any expenditure of skill and labour upon the land and therefore the income from the sale of forest trees was not agricultural income.
In Jyotikana Chowdhurani vs Commissioner of Income Tax, Assam (3) which is also under appeal before us in Civil Appeals Nos. 57 to 62, a Special Bench of the Assam High Court considered whether income, derived by the assessees from the sale of trees of spontaneous growth where there was no planting or sowing or employment of any human agency for the purpose of tilling the land but operations in forestry were carried on by the assessee involving considerable expenditure of human skill and labour was agricultural income within the meaning of section 2 (1) (a) of the Indian Income Tax Act.
The majority of the Court consisting of Sarjoo Prasad C.J. and Ram Labhaya J. (Deka J. dissenting) held that even though there was no tilling of the land or planting of seed or saplings and the trees were of spontaneous germination, the operations carried on by the assessees were conducive to the growth and development of the trees and in essence involved the expenditure of human skill and labour on the land itself.
Those operations were "agricultural operations" and the land on which the trees stood was being used for "agricultural purposes" and, therefore, the income from the sale of the trees was "agricultural income" and was exempt from taxation under section 4(3)(viii) of the Income tax Act.
(1) (2) , 439, 461.
147 Sarjoo Prasad C.J. explained the test laid down in Raja Mustafa Ali Khan vs Commissioner of Incometax(1) in the manner following: " The contention of Mr. Iyengar is that the expression "some expenditure of skill and labour upon it" is used merely in further clarification of the expression "cultivation of the land" and, therefore, all ' that their Lordships held was that cultivation of the land was necessary.
I do not concede that the word "cultivation" is necessarily synonymous with ploughing or tillage.
But even if it were, I am unable to accept the argument for the simple reason that if precision is the hallmark of Privy Council decisions, as I think it is, then their Lordships would have stopped short with the phrase "some measure of cultivation of the land".
This, in itself, was quite expressive and no further expressions were needed to clarify the matter.
Therefore, when they proceeded to add after a 'comma, the phrase "some expenditure of skill and labour upon it", they evidently intended to signify something more than mere cultivation.
There is, of course, no conjunctive phrase between the two expressions, but in the context the meaning seems to be plain." Ram Labhaya J. expressed himself in the test laid down by the Privy Council in these words: " A test however was laid down for finding out when land may be said to be used for agricultural purposes.
The test requires that there must be some measure of cultivation of the land; some expenditure of skill and labour upon it.
It has however to be borne in mind that their Lordships when stating the facts did point out that the case had proceeded on the footing that there was nothing to show that the assessee was carrying on any regular operations in forestry.
This statement has an important bearing on the inter pretation of the test.
Such operations in forestry are carried on in forests.
They involve the use of human labour and skill on the soil.
They aim at stimulating growth and could easily satisfy the requirements of the (1) 148 test evolved by their Lordships.
Due importance, therefore, has to be given to the absence of operations in forestry in Raja Mustafa Ali Khan 's Case (1) when interpreting the test laid down therein.
" Vikram Deo Varma vs Commissioner of Income tax, 'Bihar & Orissa (2) is the last case of this series.
The assessee derived income from extensive forest areas in the impartible estate of which he was proprietor.
Over several decades the whole of the forest area had been subjected by hill tribes to a process of "podu" cultivation setting fire to ' the trees and cultivating the forest lands and raising crops thereon so that it was impossible to say that there was any virgin forest left.
Through a huge forest establishment considerable amount of human labour and skill was spent (i) in fostering the growth of trees and preserving them from destruction by men and cattle; (ii) in cultivation of the soil by felling and burning trees from time to time; (iii) in planned exploitation of trees by marking out the areas into blocks: (iv) in systematic cutting down of trees of Particular girth and at particular heights (v) in planting new trees where patches occur; and (vi) watering, pruning, dibbling and digging.
The Tribunal had held that as there was no forest cultivation or tilling as such the income was not due to agricultural operations and therefore not exempt under section 4(3)(viii) of the Indian Income Tax Act.
In the course of the judgment the learned Judges referred to the observations of their Lordships of the Privy Council in Raja Mustafa Ali Khan 's Case (1) but observed that their Lordships did not lay down what the measure of that cultivation should be or what the nature of skill and labour expended should be, in order to bring the operations within the meaning of the expression " agricultural purposes " as used in the definition section.
The question to be determined in each case should, therefore, be whether the land out of which the rent or revenue was derived was used for " agricultural purposes.
" Unless the land was subject to some measure of cultivation or there was some expenditure of human skill and labour on it in order to (1) (2) 149 derive the rent or revenue, the purpose would not be agricultural.
It was observed that the cultivation was not mere tilling but the science and art of cultivating the soil may depend upon the nature of the soil the atmosphere and various other factors.
It was therefore idle to regard" tilling " as the sole or indispensable test of agriculture.
On the facts before it, the Court held that the operations carried on by the assessee through the forest establishment showed that there had been both cultivation of the soil as well as the application of human skill and labour upon the land as well as on the trees themselves, and that therefore the income derived from the forest was exempt from taxation under section 4(3) (viii) of the Indian Income tax Act.
Before parting with these cases it may be apposite here to note the following observations of Vishwanatha Sastri J. in Commissioner of Income Tax, Madras vs K.E. Sundara Mudaliar (1) at page 277: " In Commissioner of Agricultural Income Tax vs Raja Jagdish Chandra Deo Dhabal Deb (2) it was held by a Division Bench of the Calcutta High Court that income derived from the sale of sal trees growing spontaneously in forest and not planted by man was " agricultural " income within the meaning of section 2(1) of the Bengal Agricultural Income Tax Act.
There was no digging or ploughing of the land nor planting of trees but there were " operations in forestry " such as guarding the forest trees to keep away cattle and allowing leaves and undergrowth to be removed by people of the locality.
There was no breaking up of the soil, no sowing or planting or watering or fencing.
Whether the decision is correct or not can only be authoritatively declared by the Supreme Court of India.
It seems to rest on an undue extension of the principle laid down by the Judicial Committee in Raja Mustafa Ali Khan 's Case(3) and goes much further than our decision in the present case.
" It appears from the above survey that there has been a divergence of opinion amongst the various (1) ,271.
(2) , 438.
(3) 150 Courts not only in regard to the connotation of the terms "agriculture ' and "agricultural purposes" but also in regard to the nature of forestry operations performed in the forest which can be styled agricultural operations so as to constitute the "land used for agricultural purposes" within the definition of agricultural income as given both in the Indian Income tax Act and in the several Agricultural Income Tax Acts passed by the various States.
It may be noted at the outset that the definition of "agricultural income" given in section 2(1) of the Indian Income tax Act is in identical terms with the definitions of that term as given in the various Agricultural Income tax Acts passed by the several States.
It will be idle therefore to treat "Taxes on Agricultural Income" which fall within the legislative competence of the State Legislature as having no relation at all to the corresponding provisions of the Indian Income tax Act.
Once it is determined that the income in question is derived from land used for agricultural purposes by agriculture, it would be agricultural income and as such exempt from tax under section 4(3)(viii) of the Indian Income tax Act and would fall within the purview of the relevant provisions of the several Agricultural Income tax Acts passed by the various States.
The result of this determination would be that the assessee would not be liable to assessment under the Indian Income tax Act but he would have to pay the Agricultural Income tax which would be levied upon him under the relative Agricultural Income tax Acts.
The only enquiry which would therefore be relevant is whether the income in question is agricultural income within the terms of the definition thereof and that would have to be determined in each case by the Court having regard to the facts and circumstances of the particular case before it.
In order that an income derived by the assessee should fall within the definition of agricultural income two conditions are necessary to be satisfied and they are: (i) that the land from which it is derived should be used for agricultural purposes and is either assessed for land revenue in the taxable territories or is subject 151 to local rates assessed and collected by the officers of /the Government as such; and (ii) that the income should be derived from such land by agriculture or by one or the other of the operations described in cls.
(ii) and (iii) of section 2 (1) (b) of the Indian Income tax Act.
It was at one time thought that the assessment of the land to land revenue in the taxable territories was intended to exempt the income derived from that land from liability for payment of income tax altogether and that theory was based on the assumption that an assessee who was subject to payment of land revenue should not further be subjected to the payment of income tax, because if he was so subjected he would be liable to pay double taxation.
It is interesting to note at this stage the genesis of the provision exempting agricultural income derived from the lands assessed to land revenue as understood by the Courts.
Vishwanatha Sastri J. in this context observed in the Commissioner of Income Tax, Madras vs
K.E.Sundara Mudaliar(l) at page 270: "I shall briefly advert to the genesis of the provision exempting agricultural income derived from lands assessed to land revenue, as I consider that the subject matter with which the Legislature was dealing, and the facts existing at the time with respect to which the legislation was made, are legitimate topics for consideration in ascertaining the object and scope of the exemption from income tax conferred on agricultural income.
This exemption, it would be noticed, has been a persistent feature of the Income tax legislation of this country from 1867 onwards, and nothing like it is found in the English Income Tax Acts.
Even at a time when there was no provision like Section 100 of the Government of India Act, 1935, with Federal and Provincial Lists and there was no incompetency on the part of the Central Legislature to levy a tax on agricultural income, the Income Tax Acts passed from time to time by the Central Legislature including the existing Act of 1922, exempted from income tax the agricultural income of land assessed to public revenue.
(1) , 271.
152 This exemption was granted for no other reason than the justice and equity of exempting from further burden income which had already paid its toll to the State in the shape of land revenue either as a permanently fixed peishkush under Regulation No. XXV of 1802 or as an assessment periodically fixed under the ryotwari settlement.
Under what may be called the common law in India, the State had the immemorial prerogative right to collect a share of the produce of the land from its owner, the latter having the full right to enjoyment of the land and its produce, subject only to the aforesaid contribution to the State.
Land revenue is collected annually from the proprietor of the land and is presumably exigible from the income of the land.
Cash payment in lieu of a share of the produce due to the State was substituted long ago to facilitate collection of revenue.
Income derived from the produce of the land having been subjected to the payment of the annual land revenue, it was thought inequitable to subject the same income again to annual income tax.
Hence the exemption of the agricultural income of assessed lands or lands whose revenue had been remitted either in whole or in part, as in the case of the inams.
Mines, minerals, and quarries having been reserved by the State, at any rate in respect of lands other than those comprised in a permanently settled estate, income derived from such sources was not exempted from income tax.
The revenue assessment was based on the quality of the soil and the income derived from the produce of the lands, and therefore the exemption from income tax was limited to agricultural income derived from assessed lands.
Such is the reason for exemption from income tax of agricultural income.
" Whatever may have been the genesis of the exemption of agricultural income from income tax, the liability to pay land revenue or fixed peishkush under Regulation XXV of 1902 was not considered by Rankin J. as a deterrent against the levy of incometax in appropriate cases, even on certain classes of income derived from the permanently settled estates, if that was the clear intention of the legislature.
The 153 learned Judge observed in Emperor vs Probhat Chandra Barua (1): ,,Some reference was made at the bar to the practice of the Revenue Authorities since 1886 as regards fisheries in permanently settled estates but there is no agreement as to what that practice if there be any practice has been.
Assuming that it would have been open to us to place some degree of reliance upon an interpretation settled by practice as contemporanea expositio we are in fact without any such assistance.
" Some reference was also made to what has been called a" presumption against double taxation ".
In Manindra Chandra Nandi vs Secretary of State (2), royalties from a coal mine were held liable both to cess under the Cess Act, 1880, and to income tax under the Act of 1886, but it was said that "it may be considered that courts always look with disfavour upon double taxation, and Statute will be construed, if possible, to avoid double taxes.
" Reference was made to certain dicta of American Courts and to the English case of Carr vs Fowle (3) But the only observation in this case was to the effect that the statute presumably did not intend that a vicar should in effect pay the same tax (land tax) twice on the same hereditament.
This is plain enough.
Thus the income tax is one tax, and income assessed under one schedule cannot be assessed all over again under another.
That there is any legal presumption of a general character against " double taxation " in any wider sense is a proposition to which I respectfully demur as a principle for the construction of a modern statute.
In Manindra Chandra Nandi vs Secretary of State (2) it did not avail to cut down clear ' though absolutely general language.
" This view of Rankin J. was upheld by the Privy Council in Prabhat Chandra Barua vs King Emperor(4).
In the later case of Yuvarajah of Pittapuram vs Commissioner of Income Tax, Madras (5) the Privy Council held that the imposition of Income tax in respect of income derived from the permanently settled estate (1) Cal. 504.
(2) Cal.
257, 287.
(3) (4) (1930) L.R. 57 I.A. 228.
(5) 20 154 would not be a breach of the Madras Permanent Settlement Regulations No. XXV of 1802.
The assessment of land to land revenue or its being subject to local rates assessed and collected by the officers of the Government as such is merely an indication that the land is an agricultural land as distinguished from land which can be used for agricultural purposes but carries the matter no further.
We have, therefore, to consider when it can be said that the land is used for agricultural purposes or agricultural operations are performed on it.
Agriculture is the basic idea underlying the expressions "agricultural purposes" and "agricultural operations" and it is pertinent therefore to enquire what is the connotation of the term "agriculture".
As we have noted above, the primary sense in which the term agriculture is understood is agar field and cultra cultivation, i.e., the cultivation of the field and if the term is understood only in that sense, agriculture would be restricted only to cultivation of the land in the strict sense of the term meaning thereby, tilling of the land, sowing of the seeds, planting and similar operations on the land.
They would be the basic operations and would require the expenditure of human skill and labour upon the land itself.
There are however other operations which have got to be resorted to by the agriculturist and which are absolutely necessary for the purpose of effectively raising the produce from the land.
They are operations to be performed after the produce sprouts from the land, e.g., weeding, digging the soil around the growth, removal of undesirable under growths and all operations which foster the growth and preserve the same not only from insects and pests but also from depredation from outside, tending, pruning, cutting, harvesting, and rendering the produce fit for the market.
The latter would all be agricultural operations when taken in conjunction with the basic operations above described, and it would be futile to urge that they are not agricultural operations at all.
But even though these subsequent operations may be assimilated to agricultural operations, when they are in conjunction with these basic operations, could it be said that even 155 though they are divorced from these basic operations they would nevertheless enjoy the characteristic of agricultural operations ? Can one eliminate these basic operations altogether and say that even if these basic operations are not performed in a given case the mere performance of these subsequent operations would be tantamount to the performance of agricultural operations on the land so as to constitute the income derived by the assessee therefrom agricultural income within the definition on that term ? We are of opinion that the mere performance of these subsequent operations on the products of the land, where such products have not been raised on the land by the performance of the basic operations which we have described above would not be enough to characterise them as agricultural operations.
In order to invest them with the character of agricultural operations, these subsequent operations must necessarily be in conjunction with and a continuation of the basic operations which are the effective cause of the products being raised from the land.
It is only if the products are raised from the land by the performance of these basic operations that the subsequent operations attach themselves to the products of the land and acquire the characteristic of agricultural operations.
The cultivation of the land does not comprise merely of raising the products of the land in the narrower sense of the term like tilling of the land, sowing of the seeds, planting, and similar work done on the land but also includes the subsequent operations set out above all of which operations, basic as well as subsequent, form one integrated activity of the agriculturist and the term "agriculture" has got to be understood as connoting this integrated activity of the agriculturist.
One cannot dissociate the basic operations from the subsequent operations, and say that the subsequent operations, even though they are divorced from the basic operations can constitute agricultural operations by themselves.
If this integrated activity which constitutes agriculture is undertaken and performed in regard to any land that land can be said to have been used for " agricultural purposes " and the income 156 derived therefrom can be said to be " agricultural income" derived from the land by agriculture.
In considering the connotation of the term " agriculture" we have so far thought of cultivation of land in the wider sense as comprising within its scope the basic as well as the subsequent operations described above, regardless of the nature of the products raised on the land.
These products may be grain or vegetables or fruits which are necessary for the sustenance of human beings including plantations and groves, or grass or pasture for consumption of beasts or articles of luxury such as, betel, coffee, tea, spices, tobacco etc., or commercial crops like, cotton, flax, jute, hemp, indigo etc.
All these are products raised from the land and the term "agriculture" cannot be confined merely to the production of grain and food products for human beings and beasts as was sought to be done by Bhashyam Ayyangar J. in Murugesa Chetti vs Chinnathambi Goundun (1) or Sadashiva Ayyar J. in Rajah of Venkatagiri vs Ayyappa Reddi (2) but must be understood as comprising all the products of the I and which have some utility either for consumption or for trade and commerce and would also include forest products such as timber, sal and piyasal trees, casuarina plantations, tendu leaves, horranuts etc.
The question still remains whether there is any warrant for the further extension of the term " agriculture " to all activities in relation to the land or having connection with the land including breeding and rearing of livestock, dairy farming, butter and cheese making, poultry farming, etc.
This extension is based on the dictionary meanings of the term and the definitions of agriculture " collated in Wharton 's Law Lexicon, as also the dicta of Lord Cullen and Lord Wright in Lean & Dickinson vs Ball (3) and Lord Glaneley vs Wightman (4) quoted above.
Derbyshire C.J. in Moolji Sicka & Co., In re(5) treated tendu plants growing on the soil as part of the soil and therefore considered the pruning of the shrub (1) Mad.
421, 423.
(2) Mad.
(3) (4) ; 638.
(5) 157 as cultivation of the soil in a legal and technical sense and this extension of the term "agriculture" was also approved by Vishwanatha Sastri J. in Commissioner of Income Tax vs K. E. Sundara Mudaliar (1).
We are however of opinion that the mere fact that an activity has some connection with or is in some way dependent on land is not sufficient to bring it within the scope of the term and such extension of the term "agriculture" is unwarranted.
The term "agriculture" cannot be dissociated from the primary significance thereof which is that of cultivation of the land and even though it can be extended in the manner we have stated before both in regard to the process of agriculture and the products which are raised upon the land, there is no warrant at all for extending it to all activities which have relation to the land or are in any way connected with the land.
The use of the word agriculture in regard to such activities would certainly be a distortion of the term.
A critical examination of the definition of "agricultural income" as given in section 2(1) of the Indian Income tax Act and the relevant provisions of the several Agricultural Income tax Acts of the various States also lends support to this position.
In the first instance, it is defined as rent or revenue derived from land which is used for agricultural purposes; and it is next defined as income derived from such land by agriculture or by the activities described in cls.
2 and 3 of section 2(1)(b) of the Act.
These activities are postulated to be performed by the cultivator or receiver of rent in kind of such land in regard to the products raised or received by him which necessarily means the produce raised on the land either by himself or by the actual cultivator of the land who pays such rent in kind to him.
If produce raised or received by the cultivator or receiver of rent in kind is thus made the subject matter of cls.
(ii) and (iii) in section 2 (1)(b) of the Act, the term "agriculture" used in cl.
(i) of section 2(1)(b) must also be similarly restricted to the performance of the basic operations on the land and there is no scope for reading the term agriculture " in the still wider sense indicated above.
(1) , 271. 158 If the term " agriculture " is thus understood as comprising within its scope the basic as well as subsequent operations in the process of agriculture and the raising on the land of products which have some utility either for consumption or for trade and commerce, it will be seen that the term " agriculture " receives a wider interpretation both in regard to its operations as well as the results of the same '.
Nevertheless there is present all throughout the basic idea that there must be at the bottom of it cultivation of land in the sense of tilling of the land, sowing of the seeds, planting, and similar work done on the land itself This basic conception is the essential sine qua non of any operation performed on the land constituting agricultural operation.
If the basic operations are there, the rest of the operations found themselves upon the same.
But if these basic operations are wanting the subsequent operations do not acquire the characteristic of agricultural operations.
All these operations no doubt require the expenditure of human labour and skill but the human labour and skill spent in the performance of the basic operations only can be said to have been spent upon the land.
The human labour and skill spent in the performance of subsequent operations cannot be said to have been spent on the land itself, though it may have the effect of preserving, fostering and regenerating the products of the land.
This distinction is not so important in cases where the agriculturist performs these operations as a part of his integrated activity in cultivation of the land.
Where, however, the products of the land are of spontaneous growth, unassisted by human skill and labour, and human skill and labour are spent merely in fostering the growth, preservation and regeneration of such products of land, the question falls to be considered whether these subsequent operations performed by the agriculturist are agricultural operations and enjoy the characteristic of agricultural operations.
It is agreed on all hands that products which grow wild on the land or are of spontaneous growth not involving any human labour or skill upon the land are 159 not products of agriculture and the income derived therefrom is not agricultural income.
There is no process of agriculture involved in the raising of these products from the land.
There are no agricultural operations performed by the assessee in respect of the same, and the only work which the assessee performs here is that of collecting the produce and consuming and marketing the same.
No agricultural operations have been performed and there is no question at all of the income derived therefrom being agricultural income within the definition given in section 2(1) of the Indian Income tax Act.
Where, however, the assessee performs subsequent operations on these products of land which are of wild or spontaneous growth, the nature of those operations would have to be determined in the light of the principles enunciated above.
Applying these principles to the facts of the present case, we no doubt start with the finding that the forest in question was of spontaneous growth.
If there were no other facts found, that would entail the conclusion that the income is not agricultural income.
But, then, it has also been found by the Tribunal that the forest is more than 150 years old, though portions of the forest have from time to time been denuded, that is to say, trees have completely fallen and the proprietors have planted fresh trees in those areas, and they have performed operations for the purpose of nursing the trees planted by them.
It cannot be denied that so far as those trees are concerned, the income derived therefrom would be agricultural income.
In view of the fact that the forest is more than 150 years old, the areas which had thus become denuded and replanted cannot be considered to be negligible.
The position therefore is that the whole of the income derived from the forest cannot be treated as non agricultural income.
If the enquiry had been directed on proper lines, it would have been possible for the Income tax authorities to ascertain how much of the income is attributable to forest of spontaneous growth and how much to trees planted by the proprietors.
But no such enquiry had been directed, and in view of the long lapse of time, we do not consider it desirable to direct any such 160 enquiry now.
The expenditure shown by the assessee for the maintenance of the forest is about Rs. 17,000 as against a total income of about Rs. 51,000.
Having regard to the magnitude of this figure, we think that a substantial portion of the income must have been derived from trees planted by the proprietors themselves.
As no attempt has been made by the Department to establish which portion of the income is attributable to forest of spontaneous growth, there are no materials on which we could say that the judgment of the court below is wrong.
The appeal is accordingly dismissed with costs.
Appeal dismissed.
| A deed of trust whereby a sum of Rs. 1 lac was settled on various charities specified therein provided for the acquisition of the business of managing agency on behalf of the trust and with the help of the trust fund.
The trustees of the said trust (appellant) became the managing agents of a public company.
The agreement for the agency provided, inter alia, that the agency was for a period of twenty years but that it was open to the trustees to give up the agency on giving three months ' notice and that the managing agents were to get a remuneration of 10 per cent. ' of the net annual profits subject to a minimum of Rs. 50000 and an office allowance of Rs. 1,000 per mensem.
The appellant claimed that the income derived from the managing agency was income from property held under trust to be applied wholly for charitable purposes, and was, in consequence, exempt from taxation under section 4(3)(i) of the Indian Income tax Act, 1922.
It was contended on behalf of the Income tax authorities (1) that the income in question was remuneration for services rendered and was not derived from any property, as a managing agency could not be considered to be property, and that, therefore, it did not fall within section 4(3)(i) of the Act, (2) that on the terms of the deed of trust the managing agency could not be property held on trust, as no part of the sum of Rs. 1 lac was utilised in the acquisition of the business so as to impress it with the character of accretion, and (3) that even if the managing agency business could be regarded as property within section 4(3)(i), it was governed by the special provision contained in section 4(3)(ia), and as the conditions laid down therein had not been satisfied, no exemption could be claimed.
Held: (1) A managing agency is business which would be property within section 4(3)(i) of the Act.
Lakshminarayan Ram Gopal and Son Ltd. vs The Government of Hyderabad, (1955) I.S.C.R. 393, followed.
All India Spinners ' Association vs Commissioner of Income tax,, Bombay , relied on, 66 (2)Though the office of managing agency carries with it certain obligations, in law there can be no objection to creating a trust over property burdened with obligations, though, if it is onerous by reason of such obligations, the trustee may be entitled to disclaim it.
(3)When trustees carry on business with the aid of trust fund the position in law is the same as if they actually employed it in the business, though, in fact, it be not actually invested therein and, taking the provisions of the deed of trust and the agreement of agency together, the managing agency must be held to be property held on trust.
Rocke vs Hart, ; and Moons vs De Bernales, ; , relied on.
The case was remanded to the High Court for a decision on the question whether profits from business would be exempt from taxation under section 4(3)(i) of the Act when the conditions laid down in section 4(3)(ia) were not satisfied.
|
Appeal No. 79 of 1965.
Appeal from the judgment and order dated August 5, 1964.
of the Rajasthan High Court, Jodhpur, in D.B. Civil Writ Petition No. 536 of 1964.
L,/B(D)SCI 13 174 Sarjoo Prasad, J.B. Dadachanji, O.C. Mathur and Ravinder Narain, for the appellant.
M.M. Tewari, K.K. Jain and R.N. Sachthey, for respondent No. 1.
B.B. Tawakley and K.P. Gupta, for respondent No. 2.
The Judgment of the Court was delivered by Raghubar Dayal, J.
This appeal, on certificate granted by the Rajasthan High Court, is against the dismissal of the appellant 's writ petition under article 226 of the Constitution praying for the issue of a writ of certiorari to the State of Rajasthan, respondent No. 1.
for the canceling and setting aside of its order dated April 1, 1964 granting the contract for collecting royalty on building stones excavated from certain area to respondent No. 2, Dharti Dan Shramik Theka Sahkari Samiti Ltd., a cooperative society.
The appeal arises in these circumstances.
The appellant offered the highest bid at the auction for the grant of royalty collection contract on January 21, 1964.
Respondent No. 2 was also one of the bidders, but stopped after offering a bid of Rs. 33,000.
The final bid of the appellant was for Rs. 42,200.
The State Government made the order in favour of respondent No. 2 on an application made by it on March 5.
stating therein that the appellant had not deposited 25 per cent of the bid amount as security immediately after the completion of the auction in accordance with r. 36(7) of the Rajasthan Minor Mineral Concession Rules, 1959, hereinafter called the rules, and as per the terms and conditions of the Auction Notification and that it was prepared to take the royalty collection contract on the highest bid of Rs. 42,200.
It was further stated in the application that respondent No. 2 was a cooperative society of the laborers who themselves worked on the mines of the area and therefore in view of Government 's policy it should receive preference to an individual bidder.
It was further stated that the benefit accruing out of the contract of royalty collection would be shared by the labourers and workers themselves which would go a long way to improve their socioeconomic conditions and thus ultimately would ameliorate the conditions of the workers who were working hard in quarries since long.
The contention for the appellant is that the Government had merely to confirm the highest bid at the auction by way of formality and was not competent to sanction the contract in favour of someone who had not offered the highest bid at the auction.
Rule 34 of the rules provides that royalty collection contracts may be granted by the Government by auction or tender for a maximum period of two years after which no extension was to be granted.
The procedure for auction is provided by r. 36.
Sub rule 175 (5) thereof provides that no bids shall be regarded as accepted unless confirmed by Government or the competent authority and sub rule (7) provides that on completion of the auction the result will be announced and the provisionally selected bidder shall immediately deposit 25 per cent of the amount of bid for one year and another 25 per cent as security for due observance of the terms and conditions of the lease or contract.
It is admitted for the appellant that on completion of the auction he did not deposit 25 per cent of the bid as security in compliance with the provisions of sub r.
He therefore lost whatever claim he could have had for the final acceptance of his bid by Government and therefore cannot question the grant of the contract to any other person by the Government.
The appellant urges that he held such royalty collection contract for the year 1963 64 and had deposited Rs. 9,250 as security for the due performance of that contract.
On February 12, 1964, over three weeks after the auction, he submitted an application to the Mining Engineer, Jaipur, stating that he had been continuously taking contract for the last three years and that he was depositing Rs. 1,300 and that the balance of the security amount required, i.e. Rs. 9,250 be adjusted against Rs. 9,250 with the Government in connection with the earlier contract.
This letter was not replied to.
The request made in this letter could not possibly be accepted.
The earlier contract was to continue up to March 31, and the security money had to remain with the Government upto that date.
It is only after March 31, that anything could be said with some definiteness as to how much of the security money in deposit would be available to the contractor.
Paragraph 2 of the Form of Agreement of Collection of Royalty on Minor Minerals, prescribed under the rules, and set out in the Schedule to the rules, states that the agreement shall remain in force for a period commencing from first April of a year and ending on March 31 of the next year on which the period of the contract would expire and that the security would be refunded on the termination of the contract.
Para 6 of the Form provides that for the due fulfillment of the terms and conditions of the contract the Contractor shall deposit 25 per cent of the contract money in advance as security which will be refunded on the termination of the contract.
The appellant alleged that there was a practice of adjusting previous security amounts towards the security for the next contract.
The practice is denied on behalf of respondent No. 1 and the practice against the provisions of the rules cannot be recognized as of any binding effect.
It may be mentioned here that the representation which the appellant made to the State Government on April 6, 1964, made no reference to his depositing the security by depositing Rs. 1,300 and by making a request for the adjustment of the balance from the security amount already in deposit and indicates that he too did not consider the request for adjustment of the amount acceptable.
176 There is nothing in r. 36 of the rules which may lead to the conclusion that the Government has to accept the highest bid by formally confirming it or that it cannot grant the contract to any person other than one who had bid the highest.
A bid is not regarded as accepted unless it is confirmed by Government.
The Government has therefore discretion to confirm the bid or not to confirm it.
Further, r. 59 provides for the relaxation of any provision of the rules in the interest of mineral development or better working of mines.
There is the letter dated February 14, 1962 from the Director of Mines and Geology, to All Mining Engineers on the subject of encouragement of cooperative mines and states that cooperative societies ought to be encouraged for mining work also as per directive of the Government of India.
Respondent No. 2 addressed a letter to the Director of Mines and Geology and referred to Government policy for the encouragement of cooperative societies in connection with royalty collection contracts.
The order of Government dated April 1, 1964, after referring to the appellant 's offering the highest bid, stated that the Government was satisfied that the Society, respondent No. 2, was a suitable party for the grant of the said contract.
The view taken by the Government in preferring respondent No. 2 to the appellant for the grant of the contract cannot be said to be arbitrary or without any justification.
The cooperative society is of the labourers who work in the mines and it is obvious that any benefit arising out of the contract would go to the labourers and thus improve their economic position.
In view of the spirit underlying r. 59, Government could therefore relax any such rule which could in any way come in the way of its granting the contract to respondent No. 2.
We therefore hold that the Government was competent to give the contract to respondent No. 2 it being not bound to accept the highest bid at the auction, though usually it accepts such bids.
Another consideration which is decisively against the appellant is that the contract for the collection of royalty for the year 1964 65 is shortly to come to an end and it would not be desirable, even if the appellant 's contentions were acceptable, to interfere with that contract.
Reference, in this connection.
may be made to the decision of this Court in K.N. Guruswamy vs State of Mysore(1) where the appellant was refused a writ solely on the ground that it would have been ineffective, the period of the impugned contract coming to an end after about a fortnight of the order of this Court.
That was a case where on merits the Court was of opinion that the writ should have been issued.
We therefore dismiss the appeal and order the parties to bear their own costs.
Appeal dismissed.
| The appellant, who was a Ruler of a former Indian State, had money dealings with the respondent.
They referred their disputes to an arbitrator who made his award directing the appellant to pay.
a certain sum of money, in installments.
The award also stated that the existing documents relating to debts on lands would remain as before and would remain as securities till the payment of debts The arbitrator filed the award into court and the court, after notice to the parties passed a decree in terms of a compromise modifying the award.
The respondent started execution proceedings and the court passed a prohibitory order under O.XXI, r. 46 of the Civil Procedure Code, 1908, in respect of the sums payable to the appellant by the Central Government on account of the privy purse; but on the application of the appellant, that order was vacated.
The appellant and respondent filed appeals in the High COurt, against the various orders, and the High Court decided all the appeals against the appellant.
In the appeal to the Supreme Court, it was contended that, (i) as the award affected immovable property of the value of more than Rs. 100, and was not registered, a decree could not be passed in terms the award, (ii) the proceedings under the Indian , were incompetent in the absence of the consent of the Central Government under sections 86(1) and 87B of the Code, and therefore the decree passed in those proceedings was without jurisdiction and void and (iii) the amount receivable by the appellant as his privy purse was a political pension within the meaning of section 60(1)(g) of the Code, and not liable to attachment or sale in execution of a decree.
HELD: (i)The award did not create or of its own force declare any interest in any immovable property and since it did not come within the purview of section 17 of the , was not required to be registered.
[(204 H] (ii) A proceeding under section 14 read with section 17 of the , for the passing of a judgment and decree on an award, does not commence with a plaint or a petition in the nature of a plaint, and cannot be regarded as a suit and the parties to whom the notice of the filing of the award is given under section 14(2) cannot be regarded as "sued in any Court otherwise competent to try the suit" within the meaning of section 86.(1) read with section 87B of the Code.
Neither are those provisions of the Code attracted by reason of section 41(a) of the or section 141 of the Code.
It follows that the COurt was competent to entertain the proceedings under section 14 of the and pass a decree in those proceedings though no consent to the institution of the proceedings had been given by the Central Government.
[205 G H; 206 B D] 202 (iii) The amounts of the privy purse of the appellant were not liable to attachment or sale in execution of the respondent 's decree.
[209 C D] The periodical payment of money by the Government to a Ruler of a former Indian State as privy purse on political considerations and under political sanctions and not under a right legally enforceable in any municipal court is strictly a political pension within the meaning of section 60(1)(g) of the Code.
The privy purse satisfies all the essential characteristics of a political pension, and as such is protected from execution under section 60(1) (g).
[209 A C]
|
ivil Appeals Nos.
929. 930 and 931 of 1963.
Appeals by special leave from the judgment and decree dated October 11, 1961 of the Punjab High Court in Regular First Appeals Nos. 136, 137 and 138 of 1959.
Hans Raj Sawhney and B.C. Misra, for the appellant (in all the appeals).
B.R.L. lyengar, S.K. Mehta and K.L. Mehta for the respondents (In C.A. No. 229 of 1963).
V.D. Mahajan, for the respondent.
(In C.A. No. 930 of 1963).
Kanwar Rajendra Singh and Vidya Sagar Nayyar, for the respondent (In C.A. No. 931 of 1963).
The Judgment of the Court was delivered by Subba Rao, J.
These appeals by special leave raise a question, of limitation.
The National Bank of Lahore Limited, hereinafter called the Bank, is a banking concern registered under the Indian Companies Act and having its registered office in Delhi and branches at different places in India.
Though its main business is banking, it carries on the incidental business of hiring out lockers out of cabinets in safe deposit vaults to constituents for safe custody of their jewels and other valuables.
It has one such safe deposit vault at its branch in Jullundur.
The respondents herein hired lockers on rental basis from the Bank at Jullundur through its Manager under different agreements on different dates during the year 1950.
in April 1951 the said lockers were tampered with and the valuables of the respondents kept therein were removed by the Manager of the Jullundur branch of the Bank.
In due course the said Manager was prosecuted before the Additional District Magistrate, Jullundur, and was convicted under sections 380 and 409 of the Indian Penal Code.
The respondents filed 3 suits in the Court of the Subordinate Judge, Jullundur, against the Bank for the recovery of different sums on account of the loss of the valuable contents of the lockers hired by them.
The Bank denied its liability on various grounds and also contended that the suits were barred by Iimitation.
The learned Subordinate Judge held that the Bank was liable to bear the loss incurred by the plaintiffs and that the suits were not barred by limitation.
On appeal, the High Court of Punjab accepted the findings of the learned Subordinate Judge on both the questions and dismissed the appeals.
The present appeals arise out of the said judgment of the High Court.
The only question raised in these appeals is one of limitation.
Before considering the question of limitation it is necessary 295 notice briefly the findings of fact arrived at by the High Court.
The High Court summarized its findings thus: (1) The whole object of a safe deposit vault in which customers of a Bank can rent lockers for placing their valuables is to ensure their safe custody.
The appellant Bank had issued instructions and laid down a detailed procedure for ensuring that safety but in actual practice the Manager alone had been made the custodian with full control over the keys of the strong room and a great deal of laxity had been observed in having no check whatsoever on him.
(2) The lockers had been rented out to the plaintiffs by the Manager Baldev Chand, who was entrusted with the duty of doing so.
It was he who had intentionally rented OUt such lockers to the plaintiffs which had been tampered with by him.
This constituted a fraud on his part there being an implied representation to the plaintiffs that the lockers were in a good and sound condition.
(3) Although the Bank authorities were not aware of what Baldev Chand was doing.
but the fraud, which he perpetrated, was facilitated and was the result of the gross laxity and negligence on the part of the Bank authorities.
(4) The lockers were indisputably being let out by the Manager to secure rent for the Bank.
Having found the said facts, the High Court held that the fraud was committed by the Manager acting within the scope of his authority and therefore, the Bank was liable for the loss incurred by the respondents.
Then it proceeded to consider the question of limitation from three aspects, namely.
(i) the loss was caused to the respondents.
as the Manager of the Bank committed fraud in the course of his employment; (ii) there was a breach of the implied condition of the contract.
namely, that only such lockers would be rented out which were safe and sound and which were capable of being operated in the manner set out in the contract; and (iii) there was a relationship of bailor and bailee between the respondents and the Bank, and therefore the Bank would be liable on the basis of the contract of bailment.
It held that from whatever aspect the question was approached article 36 of the First Schedule to the Limitation Act would be out of place and the respondents ' claims would be governed by either article 95 or some other article of the Limitation Act.
Learned counsel for the appellant accepted the findings of fact, but contended that on the facts found the suits were barred by limitation.
Elaborating the argument the learned counsel pointed out that the theft of the valuables by the Manager was a tort committed by him dehors the contracts entered into by the appellant with the respondents and.
therefore, article 36 of the First Schedule 296 to the Limitation Act was immediately attracted to the respondents ' claims.
The scope of article 36 of the First Schedule to the Limitation Act is fairly well settled.
The said article says that the period of limitation "for compensation for any malfeasance, misfeasance or nonfeasance independent of contract and not herein specifically provided for" is two years from the time when the malfeasance, misfeasance or nonfeasance takes place.
If this article applied, the suits having been filed more than 2 years after the loss of the articles deposited with the Bank, they would be dearly out of time.
Article 36 applied to acts or omissions commonly known as torts by English lawyers.
They are wrongs independent of contract.
Article.
e 36 applies to actions "ex delicto" whereas article 115 applies to actions "ex contractu".
"These torts are often considered as of three kinds, viz. non feasance or the omission of some act which a man is by law bound to do, misfeasance, being the improper performance of some lawful act, or malfeasance, being the commission of some act which is in itself unlawful".
But to attract article 36 these wrongs shall be independent of contract.
The meaning of the words "independent of contract" has been felicitously brought out by Greer, L.J. in Jarvis vs Moy, Davies, Smith, Vanderveil and Co.(1) thus: "The distinction in the modern view, for this purpose, between contract and tort may be put thus.
Where the breach of duty alleged arises out of a liability independently of the personal obligation undertaken by contract it is tort and it may be tort even though there may happen to be a contract between the parties, if the duty ' in fact arises independently of that contract.
Breach of contract occurs where that which is complained of is a breach of duty arising out of the obligations undertaken by the contract.
" If the suit claims are for compensation for breach of the terms of the contracts, this article has no application and the appropriate article is article 115, which provides a period of 3 years for compensation for the breach of any contract, express or implied, from the date when the contract is broken.
If the suit claims are based on a wrong committed by the Bank or its agent dehors the contract, article 36 will be attracted.
Let us now apply this legal position to the claims in question.
One of the contracts that was entered into between the plaintiffs and the Bank is dated February 5, 1951.
It is not disputed that the other two contracts, with which we are concerned, also are of the same pattern.
Under that contract the Bank, the appellant herein, and Sohanlal Sehgal, one of the respondents herein, agreed "to hire, subject to the conditions endorsed, the company 's safe No. 1651/ 405.
297 2203 Class lower for one year from this day at a rent of Rs. 40".
The relevant conditions read as follows: It is agreed that the connection of the renter of the safe and the Bank (and it has no connection) is that of a lessor and lessee for the within mentioned safe and not that of a banker and customer.
The liability of the company in respect of property deposited in the said safe is limited to ordinary care in the performance by employees and officers of company of their duties and shall consist only of (a) keeping the safe in vault where located when this rental contract is entered into or in one of equal specifications, the door to which safe shall be locked at all time except when an officer or an employee is present, (b) allowing no person access to said safe.
except hirer or authorised deputy, or attorney in fact having special power to act identification by signature being sufficient or his/her legal representative in the case of death, insolvency or other disability of Hirer, except as herein expressly stipulated.
An unauthorised opening shall be presumed or inferred from proof of partial or total loss of contents.
The company shall not be liable for any delay caused by the failure of the vault doors or locks to operate.
The company shall not be liable for any loss etc.
The only purpose of the contract was to ensure the safety of the articles deposited in the safe deposit vault.
It was implicit in the contract that the lockers supplied must necessarily be in a good condition to achieve that purpose and, therefore, that they should be in a reasonably perfect condition.
It was an implied term of such a contract.
Condition 15 imposed another obligation on the Bank to achieve the same purpose, namely, that the Bank should not allow access to any person to the safe except the hirer or his authorised agent or attorney.
If the articles deposited were lost because one or other of these two conditions was broken by the Bank, the renter would certainly be entitled to recover damages for the said breach.
Such a claim would be ex contractu and not ex delicto and for such a claim article 115 of the First Schedule to the Limitation Act applied and not article 36 thereof.
Learned counsel for the appellant contended that the suits were not based upon the breach of a contract committed by the Bank but only the theft committed by its agent dehors the terms of the contract.
This leads us to the consideration of the scope of the plaints presented by the respondents.
It would be enough if we take one of the plaints as an example, for others also run on the same lines.
Let us take the plaint in Civil Suit No. 141 of 1954, i.e., the suit flied by Sohanlal Sehgal and others against the Bank for the recovery of d sum of Rs. 26,500.
We have carefully gone through 298 the plaint, particularly paragraphs 8, 9 and 10 thereof.
It will be seen from the plaint that though it was not artistically drafted the relief was claimed mainly on two grounds, namely, (i) that it was an implied term of the contract that the locker rented was in a good condition, and (ii) the valuables were lost because the Manager, on account of the negligence of the Bank in not taking all the necessary precautions, committed theft of the articles in the course of his employment.
In the written statement the defendant denied its liability both under the terms of the contract and also on the basis that it was not liable for the agent 's fraud.
The High Court found that at the time when the lockers were rented out they were in a defective condition and that the Bank, in actual practice, made the Manager the sole custodian with full control over the keys of the strong,room and permitted a great deal of laxity in not having any check whatsoever on him.
In this state of the pleadings and the findings it is not possible to accept the contention of the learned counsel ' for the appellant that the plaintiffs did not base their claims on the branch of the conditions of the contracts.
This argument is in the teeth of the allegations made in the plaint, evidence adduced and the arguments advanced in the Courts below and the findings arrived at by them.
While we concede that the plaint could have been better drafted and couched in a clearer language, we cannot accede to the contention that the plaints were solely based upon the fraud of the Manager in the course of his employment.
We, therefore.
hold that there were clear allegations in the plaints that the defen dant committed breach of the contracts in not complying with some of the conditions thereof and that the defendant understood those allegations in that light and traversed them.
The suit claims, being ex contractu were clearly governed by article 115 of the First Schedule to the Limitation Act and not by article 36 thereof.
If article 115 applied, it is not disputed that the suits were within time.
Even if the claim was solely based on the fraud committed by the Manager during the course of his employment.
we do not see how such a claim fell under article 36 of the First Schedule to the Limitation Act.
To attract article 36.
the misfeasance shall be independent of contract.
The fraud of the Manager committed in the course of his employment is deemed to be a fraud of the principal, that is to say the Bank must be deemed to have permitted its manager to commit theft in violation of the terms of the contracts.
While under the contracts the Bank was under an obligation to give to the respondents good lockers ensuring safety and protection against theft, it .gave defective ones facilitating theft; while under the contracts it should not permit access to the safe to persons other than those mentioned in the contracts.
in violation of the terms thereof it gave access to its Manager and enabled him to commit theft.
In either case the wrong committed was not independent of the contract.
but it directly arose out of the breach of the contract.
299 1n such circumstances article 36 is out of place.
The competition between articles 115 and 120 to take its place need not be considered.
for neither of those Articles hits the claim, as the suits are within 3 years.
which is the shorter of the two periods of limitation prescribed under the said two Articles.
In this view it is not necessary to express our view on the question whether the contracts in question were of bailment.
In the result, the appeals fail and are dismissed with costs one hearing fee.
Appeals dismissed.
| A badli workman worked as the appellant 's employee for more than 240 days, with interruptions in each of the calendar years 1959 and 1960.
He was retrenched in 1961.
An industrial dispute having arisen, it was referred to the Tribunal, which held, that the appellant was not justified in terminating the services of the workman as the provisions of section 25F of the were not com plied with.
In its appeal to this Court, the appellant contended that the section could apply only if the workman had put in 240 days ' continuous service in any of the years 1959 and 1960.
HELD: Section 25B says that, for the purpose of section 25F a workman who, in a period of 12 calendar months has actually worked for not less than 240 days shall be deemed to have completed one year of continuous service.
Service for 240 days in a period of 12 calendar months is equal not only to service for a year but is to be deemed continuous service even if interrupted.
Therefore, though section 25F speaks of continuous service for not less than one year under the employer, both the conditions are fulfilled if the workman has actually worked for 240 days during a period of 12 calendar months.
It is not necessary to read the definition of continuous service in section 2(fee) into section 25B, because, the fiction converts service of 240 days in a period of the twelve calendar months into continuous service for one complete year.
[451C E] The amendments introduced by the Industrial Disputes (Amend ment) Act, 1964 into sections 25B and 25F only removed the discordance between the unmended sections 25B and 25F (b) and vagueness which existed previously.
But neither before the amendments nor after, is uninterrupted service necessary, if the total service is 240 days in a period of 12 calendar months.
[452D E]
|
N: Criminal Appeal Nos.
97, 98, 99 100 & 101 of 1991.
From the Judgment and Order dated 2.12.1989 of the Karnataka High Court in Criminal R. P. No. 458, 459, 460, 461 and 462 of 1989.
A.S. Bobde, Attorney General, Vinod Bobde and section Sukumaran for the Appellant.
G. Ramaswamy, K.N. Nobin Singh and Ms. Lalitha Kaushik for the Respondents.
M.Veerappa for the State of Karnataka.
The Judgment of the Court was delivered by K.N. SAIKIA, J.
Special leaves granted.
399 These five appeals are from as many similar orders of the High Court of Karnataka at Bangalore dismissing the appellant company 's criminal revision petitions impugning the respective orders passed by the Judicial Magistrate First Class, Gokak holding that the appellants ' complaints against the respondents alleging offence under section 630(l)(b) of the Companies Act by not vacating the Company 's quarters as required by it even more than six months after retirement of the respondents, were barred by limitation and the same could not be taken into consideration.
The first respondent in each of these criminal appeals was appointed on 1.8.1942, 11.6.1945, 24.11.1939, 1.5.1939 and 23.1.1937, respectively.
in the service of the appellant company and they retired on 14.3.1984, 1.10.1983, 12.2.1984, 4.10.1983 and 27.1.1981, respectively, from the appellant company 's service, whereafter each of them was required to vacate his company 's quarter.
Each having declined to vacate the company 's quarter even more than six months after retirement, despite legal notice, the appellant company filed a private criminal complaint under section 630(l)(b) of the and s.406 I.P.C. against each of them, before the Judicial Magistrate First Class, Gokak and in each case, after inquiry framed charges for offences under section 406 I.P.C. and section 630(l)(b) of the .
The learned Judicial Magistrate, after prosecution had examined its witnesses, recorded the statements of all the accused under section 313 of the Cr.
P.C. and despite finding that the accused in each case was allotted a quarter by the company for his use and occupation and each had no authority to retain possession of the same after he retired, and that the cause of action in each case arose when the accused failed to deliver possession of the quarter to the company, held that the documents produced by, the company did not disclose anything regarding the retirement of the accused from the service, but at the same time he recorded that during the course of evidence P.W. 1 had deposed that each of the accused retired from service and immediately after the retirement failed to redeliver possession of the company 's quarter which attracted section 630(l)(b) of the and which was punishable only with fine and the complaint, therefore, ought to have been filed within six months from the date of retirement of the accused, and as the complaint was filed only during the year 1985 it was clearly barred by limitation, wherefore, ,the complaint could not be taken into consideration, and consequently, the accused was to be acquitted.
The Company 's revision petition therefrom was dismissed by the High Court holding that the view taken by the trial Magistrate was plausible and reasonable as the complaint was filed in each case 400 beyond six months from the date of the alleged offence and that the question, of limitation was concluded by a decision of the same High Court in W.M.I Cranes Ltd. vs G.G. Advani & Anr., [19841] Kar.
Law Cronicle 462 wherein it was held that the offence under section 30 (1) of the was not a continuing offence and the decisions of this Court in Bhagirath Kanoria and Ors.
vs State of Madhya Pradesh with Bahadur Singh vs Provident Fund Inspector & Ors.
and Raja Bahadur Singh vs Provident Fund Inspector and Ors., AIR 1984 SC 1688 would not be of any assistance to the petitioner.
Mr. A.S. Bobde, the learned counsel appearing for the appellant company, submits that the offence under section 630(1)(b) of the is a continuing offence and the learned courts below erred in holding to the contrary and dismissing the company 's complaints on the ground of limitation.
Mrs. Lalitha Kaushik, the learned counsel for each of the first respondent, submits that when the first respondent upon his retirement failed to vacate and deliver possession of the company 's quarter to the company, the offence must be taken to have been complete, and thereafter right could accrue to the first respondent by adverse possession; and that if this state of affairs continued till completion of the period of limitation the company 's right would be extinguished.
The trial court as well as the High Court, according to counsel, rightly held that the offence was not a continuing one.
The only question to be decided in these appeals, therefore, is whether the offence under section 630(l)(b) of the is a continuing offence for the purpose of limitation.
What then is a continuing offence? According to the Blacks ' Law Dictionary, Fifth Edition (Special Deluxe), 'Continuing means "enduring; not terminated by a single act or fact; subsisting for a definite period or intended to cover or apply to successive similar obligations or occurrences.
" Continuing offence means "type of crime which is committed over a span of time." As to period of statute of limitation in a continuing offence, the last act of the offence controls for commencement of the period. "A continuing offence, such that only the last act thereof within the period of the statute of limitations need be alleged in the indictment or information, is one which may consist of separate acts or a course of conduct but which arises from that singleness of thought, purpose or action which may be deemed a single impulse." So also a 'Continuous Crime ' means "one consisting 401 of a continuous series of acts, which endures after the period of consummation, as, the offence of carrying concealed weapons.
In the case of instantaneous crimes, the statute of limitation begins to run with the consummation, while in the case of continuous crimes it only begins with the cessation of the criminal conduct or act.
" The corresponding concept of continuity of a civil wrong is to be found in the Law of Torts.
Trespass to land in the English Law of Torts (trespass quare clausum fregit) consists in the act of (1) entering upon land in the possession of the plaintiff, or (2) remaining upon such land, or (3) placing or projecting any object upon it in each case without lawful Justification.
Trespass by remaining on land, as we read in Salmond and Heuston on the Law of Torts, 19th Edn., page 50: "Even a person who has lawfully entered on land in the possession of another commits a trespass if he remains there after his right of entry has ceased.
To refuse or omit to leave the plaintiff 's land or vehicle is as much a trespass as to enter originally without right.
Thus any person who is present by the leave and licence of the occupier may, as a general rule, when the licence has been properly terminated, be sued or ejected as a trespasser, if after request and after the lapse of a reasonable time he fails to leave the premises.
" Trespass in Law of Torts may be a continuing one.
The authors write: "That trespass by way of personal entry is a continuing injury, lasting as long as the personal presence of the wrongdoer, and giving rise to actions de die in diem so long as it lasts, is sufficiently obvious.
It is well settled, however, that the same characteristic belongs in law even to those trespasses which consist in placing things upon the plaintiff 's land.
Such a trespass continues until it has been abated by the removal of the thing which is thus trespassing; successive actions will lie from day to day until it is so removed: and in each action damages (unless awarded in lieu of an injunction) are assessed only up to the date of the action.
Whether this doctrine is either logical or convenient may be a question, but it has been repeatedly decided to be the law.
" Again if the entry was lawful but is subsequently abused and continued after the permission is determined the trespass may be ab initio.
In 1610 six carpenters entered the Queen 's Head Inn, Cripplegate, and consumed a quart of wine (7d.) and some bread (1d.), for which they refused to pay.
The question for the court was whether 402 their non payment made the entry tortious, so as to enable them to be sued in trespass quare clausum fregit.
The court held that: "When entry, authority or licence is given to any one by the law, and he doth abuse it, he shall be a trespasser ab initio," but that the defendants were not liable as their non payment did not constitute a trespass.
The rule is that the authority, having been abused by doing a wrongful act under cover of it, is cancelled retrospectively so that the exercise of it becomes actionable as a trespass.
In Halsbury 's Laws of England, 4th Edn.
45 para 1389 it is said: "If a person enters on the land of another under an authority given him by law, and, while there, abuses the authority by an act which amounts to a trespass, he becomes a trespasser ab initio, and may be sued as if his original entry were unlawful.
Instances of any entry under the authority of the law are the entry of a customer into a common inn, of a reversioner to see if waste has been done, or of a commoner to see his cattle.
To make a person a trespasser ab initio there must be a wrongful act committed; a mere nonfeasance is not enough." Against the above background, we may now examine the relevant provision of law, keeping in mind that Some of the Torts have counterparts in Criminal law in India.
Section 441 of the Indian Penal Code defines Criminal trespass as follows: "Whoever enters into or upon property in the possession of another with intent to commit an offence or to intimidate, insult or annoy any person in possession of such property, or having lawfully entered into or upon such property, unlawfully remains there with intent thereby to intimidate, insult or annoy any such person, or with intent to commit an offence, is said to commit 'criminal trespass '.
" House trespass is punishable under section 448 of the Indian Penal Code.
It is significant that when entry into or upon property in possession of another is lawful then unlawfully remaining upon such property 403 with the object Of intimidating,insulting or annoying the person in possession of the property would be criminal trespass.
The offence would be continuing so long as the trespass is not lifted or vacated and intimidation, insult or annoyance of the person legally in possession of the property is not stopped.
The authors of the Code had the following words to say: "We have given the name of trespass to every usurpation,however slight, of dominion over property.
We do not propose to make trespass, as such, an offence, except when it is committed in order to the commission of some offence injurious to some person interested in the property on which the trespass is committed, or for the purpose of causing annoyance to such a person.
Even then we propose to visit it with a light punishment, unless it be attended with aggravating circumstances.
These aggravating circumstances are of two sorts.
Criminal trespass may be aggravated by the way in which it is committed.
It may also be aggravated by the end for which it is committed.
" Section 630 of the reads as under: "Penalty for wrongful withholding of property.
(1) If any officer or employee of a company (a) wrongfully obtains possession of any property of a company or (b) having any such property in his possession, wrongfully withholds it or knowingly applies it to purposes other than those expressed or directed in the articles and authorised by this Act; he shall, on the complaint of the company or any creditor or contributory thereof, be punishable with fine which may extend to one thousand rupees.
(2) The Court trying the offence may also order such officer or employee to deliver up or refund, within a time to be fixed by the Court, any such property wrongfully 404 obtained or wrongfully withheld or knowingly misapplied,or in default, to suffer imprisonment for a term which may extend to two year.
" Thus, both wrongfully obtaining and wrongfully withholding have been made offence punishable under sub sec.
Under sub sec.
(2) knowingly misapplication has also been envisaged.
The offence continues until the officer or employee delivers up or refunds any such property if ordered by the court to do so within a time fixed by the Court, and in default to suffer the prescribed imprisonment.
The idea of a continuing offence is implied in sub section (2).
Section 468 of the Criminal Procedure Code says: "Bar to taking cognizance after lapse of the period of limitation (1) Except as otherwise provided elsewhere in this Code, no Court shall take cognizance of an offence of the category specified in sub section (2), after the expiry of the period of limitation.
(2) The period of limitation shall be (a) six months, if the offence is punishable with fine only; (b) one year, if the offence is punishable with imprisonment for a term not exceeding one year; (c) three years, if the offence is punishable with imprisonment for a term exceeding one year but not exceeding three years.
(3) For the purposes of this section, the period of limitation, in relation to offences which may be tried together, shall be determined with reference to the offence which is punishable with the more severe punishment or, as the case may be, the most severe punishment.
" The parties have not disputed that this case attracted section 468(1) and (2)(a).
Regarding the fact of the first respondent having retired from service though the trial Magistrate observed that the document did not specifically state that the first respondent retired, when after 405 referring to oral evidence the cause of action under section 630(l)(b) was held to have arisen on the first respondent 's failure to vacate and deliver possession of the company 's quarter and that the period of limitation ran therefrom tantamounted to finding that the first respondent did retire.
"Officer" or "employee" in section 630 of the includes both present and past officers and employees.
In Baldev Krishna Sahi vs Shipping Corporation of India Ltd. and Anr., [1987] 4 SCC 361 at paragraph 8 of the report this Court said: "Section 630 of the which makes the wrongful withholding of any property of a company by an officer or employee of the company a penal offence, is typical of the economy of language which is characteristic of the draughtsman of the Act.
The section is in two parts.
Sub section (1) by clauses (a) and (b) creates two distinct and separate offences.
First of these is the one contemplated by clause (a), namely, where an officer or employee of a company wrongfully obtains possession of any property of the company during the course of his employment, to which he is not entitled.
Normally, it is only the present officers and employees who can secure possession of any property of a company.
It is also possible for such an officer or employee after termination of his employment to wrongfully take away possession of any such property.
This is the function of clause (a) and although it primarily refers to the existing officers and employees, it may also take in roast officers and employees.
In contrast, clause (b) contemplates a case where an officer or employee of a company having any property of a company in his possession wrongfully withholds it or knowingly applies it to purposes other than those expressed or directed in the articles and authorised by the Act.
It may well be that an officer or employee may have lawfully obtained possession of any such property during the course of his employment but wrongfully withholds it after the termination of his employment.
That appears to be one of the functions of clause (b).
It would be noticed that clause (b) also makes it an offence if any officer or employee of a company having any property of the company in his possession knowingly applies it to purposes other than those expressed or directed in the articles and authorised by the Act.
That would primarily 406 apply to the present officers and employees and may also include past officers and employees.
There is therefore no warrant to give a restrictive meaning to the term 'officer or employee ' appearing in sub section ( 1) of section 630 of the Act.
It is quite evident that clauses (a) and (b) are separated by the word 'or ' and therefore are clearly disjunctive." This Court also observed at paragraph 7 of the report that the beneficent provision contained in section 630, no doubt penal, has been purposely enacted by the legislature with the object of providing a summary procedure for retrieving the property of the company (a) where an officer or employee of a company wrongfully obtains possession of property of the company, or (b) where having been placed in possession of any such property during the course of his employment, wrongfully withholds possession of it after the termination of his employment.
It is the duty of the court to place a broad and liberal construction on the provision in furtherence of the object and purpose of the legislation which would suppress the mischief and advance the remedy.
"It is the duty of the court to place a broad and liberal construction on the provision in furtherence of the object and purpose of the legislation which would suppress the mischief and advance the remedy.
As was reiterated in Amrit Lal Chum vs Devoprasad Dutta.
Roy and Anr.
, reported in ; that "section 630 of the plainly makes it an offence if an officer or employee of a company who was permitted to use the property of the company during his employment, wrongfully retains or occupies the same after the termination of his employment.
It is the wrongful withholding of such property, meaning the property of the company after the termination of the employment, which is an offence under section 630(1) of the Act.
" What then is the nature of this offence.
The question then is whether it is a continuing offence.
According to Black 's Law Dictionary Revised Fourth Edition, continuing offence means a transaction or a series of acts set on foot by a single impulse, and operated by an unintermittent force, no matter how long a time it may occupy.
In State of Bihar vs Deokaran Nenshi, , the question was whether the failure to furnish returns on the part of the owner of a stone quarry under regulation 3 of the Indian Metalliferrous Mines Regulations, 1926 even after warning from the Chief Inspector was a continuing offences Section 79 of the which provided that no Court shall take cognizance of an offence under the Act unless a complaint was made within six months from the date of the offence 407 and the explanation to the section provided that if the offence in question was a continuing offence, the period of limitation shall be computed wherefore to every part of the time during which the said offence continued Shelat, J. for the court observed: "A continuing offence is one which is susceptible of continuance and is distinguishable from the one which is committed once and for all.
It is one of those offences which arises out of a failure to obey or comply with a rule or its requirement and which involves a penalty, the liability for which continues until the rule or its requirement is obeyed or complied with.
On every occasion that such disobedience or non compliance occurs and recurs, there is the offence committed.
The distinction between the two kinds of offences is between an act or omission which constitutes an offence once and for all and an act or omission which continues and therefore, constitutes a fresh offence every time or occasion on which it continues.
In the case of a continuing offence, there is thus the ingredient of continuance of the offence which is absent in the case of an offence which takes place when an act or omission is committed once and for all." Their Lordships referred to English cases Best vs Butler and Fitz gibbon, ; Verney vs Mark Fletcher and Sons Ltd., [1909] 1 KB 444; Rex vs Yalore, [1908] 2 KB 237 and The London County Council vs Worley, In Best vs Butler and Fitzgibbon (supra) in England, the Trade Union Act, 1871 by section 12 provided that if any officer, member or other person being or representing himself to be a member of a trade union, by false representation or imposition obtained possession of any moneys, books etc.
of such trade union, or, having the same in his possession wilfully withheld or fraudulently misapplied the same, a court of summary jurisdiction would order such person to be imprisoned.
The offence of withholding the money referred to in this section was held to be a continuing offence, presumably because every day that the moneys were wilfully withheld an offence within the meaning of section 12 was committed.
In Verney 's case (supra) Section 10(1) of the Factory and Workshop Act, 1901 inter alia provided that every fly wheel directly connected with steam, water or other mechanical power must be securely fenced.
Its sub section (2) provided that a factory in which there was contravention of the section would be deemed not to be kept in conformity with the Act.
Section 135 provided penalty for an occupier of a factory 408 or workshop if he failed to keep the factory or workshop in conformity with the Act.
Section 146 provided that information for he offence under section 135 shall be laid within three months after the date at which the offence came to the knowledge of the inspector for the district within which the offence was charged to have been committed.
The contention was that in May 1905 and again in March 1908 the fly wheel was kept unfenced to the knowledge of the Inspector and yet the information was not laid until July 22, 1908.
The information, however, stated that the fly wheel was unfenced on July 5, 1908, and that was the offence charged.
It was held that the breach of section 10 was a continuing breach on July 10, 1908, and therefore the information was in time.
The offence under section 135 read with section 10 consisted in failing to keep the factory in conformity with the Act.
Every day that the flywheel remained unfenced, the factory was kept not in conformity with the Act, and therefore, the failure continued to be an offence.
Hence the offence defined in section 10 was a continuing offence.
In London County Council (supra) section 85 of the Metropolis Management Amendment Act, 1852 prohibited the erection of a building on the side of a new street of less than fifty feet in width, which shall exceed in height his distance from the front of the building on the opposite side of the street without the consent of the London County Council and imposed, penalties for offences against the Act and a further penalty for every day during which such offence should continue after notice from the County Council.
The Court construed section 85 to have laid down two offences; (1) building to a prohibited height, and (2) continuing such a structure already built after receiving a notice from the County Council.
The latter offence was a continuing offence applying to any one who was guilty of continuing the building at the prohibited height after notice from the County Council.
State of Bihar vs Deokaran Nenshi, (supra) was explained by this Court in Bhagirath Kanoria & Ors.
vs State of Madhya Pradesh & Ors.
, ; Therein, the Provident Fund Inspector filed complaints against the Directors, the Factory Manager and the respondent company charging them with non payment of employer 's contribution under the Employees ' Provident Fund and Family Pension Fund Act, 19 of 1952, from February 1970 to June 1971.
At the trial the accused contended that since the limitation prescribed by section 468 of the Code of Criminal Procedure, 1973 had expired before the filing of the complaints, the Court had no jurisdiction to take cognizance of the complaints.
The Trial Court having held that the offences of which the accused were charged were continuing offences and, therefore, no question of limitation could arise, and that order having been upheld 409 by the High Court in revision, the Directors in appeal to this Court contended that the offence of non payment of the employer 's contribution could be committed once and for all on the expiry of 15 days after the close of every month and, therefore, prosecution for the offence should have been launched within the period of limitation provided in section 468 of the Code.
Rejecting the contention it was held by this Court that the offence of which the appellants were charged namely, non payment of the employer 's contribution to the Provident Fund before the due date, was a 'continuing offence ' and, therefore, the period of limitation prescribed by section 468 of the Code could not have any application and it would be governed by section 472 of the Code, according to which, a fresh period of limitation began to run at every moment of the time during which the offence continued.
It was accordingly held that each day the accused failed to comply with the obligation to pay their contribution to the fund, they committed fresh offence.
Section 472 of the Code of Criminal Procedure deals with continuing offence and says: "In the case of a continuing offence, a fresh period of limitation shall begin to run at every moment of the time during which the offence continues.
" The concept of continuing offence does not wipe out the original guilt, but it keeps the contravention alive day by day.
It may also be observed that the courts when confronted with provisions which lay down a rule of limitation governing prosecutions, in cases of this nature, should give due weight and consideration to the provisions of section 473 of the Code which is in the nature of an overriding provision and according to which, notwithstanding anything contained in the provisions of Chapter XXXVI of the Code of Criminal Procedure any court may take cognizance of an offence after the expiration of a period of limitation if, inter alia, it is satisfied that it is necessary to do so in the interest of justice.
The expression 'continuing offence ' has not been defined in the Code.
The question whether a particular offence is a 'continuing offence ' or not must, therefore, necessarily depend upon the language of the statute which creates that offence, the nature of the offence and the purpose intended to be achieved by constituting the particular act as an offence.
Applying the law enunciated above to the provisions of Section 630 of the , we are of the view that the offence under 410 this section is not such as can be said to have consummated once for all.
Wrongful withholding, or wrongfully obtaining possession and wrongful application of the company 's property, that is, for purposes other than those expressed or directed in the articles of the company and authorised by the , cannot be said to be terminated by a single act or fact but would subsist for the period until the property in the offender 's possession is delivered up or refunded.
It is an offence committed over a span of time and the last act of the offence will control the commencement of the period of limitation and need be alleged.
The offence consists of a course of conduct arising from a singleness of thought, purpose of refusal to deliver up or refund which may be deemed a single impulse.
Considered from another angle, it consists of a continuous series of acts which endures after the period of consummation on refusal to deliver up or refund the property.
It is not an instantaneous offence and limitation begins with the cessation of the criminal act, i.e. with the delivering up or refund of the property It will be a recurring or continuing offence until the wrongful possession, wrongful withholding or wrongful application is vacated or put an end to.
The offence continues until the property wrongfully obtained or wrongfully withheld or knowingly mis applied is delivered up or refunded to the company.
For failure to do so sub section (2) prescribes the punishment.
This, in our view, is sufficient ground for holding that the offence under section 630 of the is not one time but a continuing offence and the period of limitation must be computed accordingly, and when so done, the instant complaints could not be said to have been barred by limitation.
The submission that when the first respondent upon his retirement failed to vacate and deliver possession of the company 's quarter to the company the offence must be taken to have been complete, has, therefore, to be rejected.
These appeals accordingly succeed.
The impugned orders are set aside and the cases are remanded to the Trial Court for disposal in accordance with law in light of the observations made herein above.
V.P.R. Appeals allowed.
| In a writ petition decided by the High Court of Punjab and Haryana, it allowed the ad hoc appointments made by the Government of Punjab to the posts of Patwaris, to continue for six months from the date of the judgment and directed the Government to make regular appointment of Patwaris within that period.
Since the Service Selection Board, Punjab was not constituted at the relevant time, the Govern ment of Punjab by a Notification dated 26.8.86 amended Rule 2(a) of the Punjab Revenue Patwari Class III Services Rules, 1963, and empowered the State Government to authorise "other authorities" to make recruitment to the service.
According ly, the Government constituted a selection committee for each district.
The District Committee of Patiala consisted of the Dy.
Commissioner, Patiala as Chairman, and District Revenue Officer, the District Sainik Welfare Officer and the District Social Welfare Officer (Scheduled Caste) as its Members.
The pending names of the candidates before the Service Selection Board were sent to the Committee for selection.
The District Collector also invited applications from children affected by the riots at Delhi, terrorists affected families in Punjab and the like special categories.
By the date of the interview the District Revenue Officer was transferred and his successor participated in the Selec tion.
The selections were challenged by unsuccessful candi dates in several writ petitions which were dismissed by the High Court.
Aggrieved the petitioners filed appeals before this Court by special leave.
153 It was contended on behalf of the appellants that the selection was bad because: the Committee was not properly constituted; the District Collector was not competent to invite applications afresh; written test was abandoned and only oral interviews were conducted; no proper opportunity was given to appellants in the interview inasmuch as 821 candidates were interviewed in 15 hours.
It was also prayed that since the appellants had meanwhile become overage, the Government should be directed to relax their age and to give appointments to them.
Dismissing the appeals, this Courts, HELD 1.1 On the transfer of the member having been nominated by virtue of his office, the incumbent in office was entitled to participate in the selection of the candi dates.
The committee constituted was properly composed of the representatives enumerated therein, and the selection of the candidates, therefore, was legal and valid.
[pp. 155 F G; 156 A] 1.2 Although the representation of the Scheduled Castes need be by an officer belonging to Scheduled Caste, and the District Social Welfare Officer (Scheduled Caste), as re quired should be an officer belonging to the members of the Scheduled Castes, yet it is not uncommon that the Social Welfare Officer may be an officer other than one from the Scheduled Castes.
[p. 155 G,H] 2.
If applications from candidates are invited and they are called for interview though under a mistaken compliance on wrong impression, the selection of the candidates, so applying, does not become illegal.
[p. 156 D] 3.
Normally it may be desirable to conduct written test and in particular hand writing that which is vital for a Patwari whose primary duty is to record clearly entries in revenue records followed by oral interview.
The rules did not mandate to have both.
Options were given either to conduct written test or viva voce or both and the committee adopted viva voce as a method to select the candidates which could not be said to be illegal.
[p.157 D E] 4.
On an average three minutes were spent for each candidate for selection.
Keeping in view the facts that educational qualifications were apparent from the record, the candidates normally hailing from rural background had presumptively good knowledge of rural economy and 154 culture, under the circumstances, much time need not be spent on each candidate for selection except asking some questions on general knowledge and aptitude for work as Patwari etc.
[p. 157 B D] Ashok Yadav vs State of Haryana, [1985] Suppl.
1 SCR 657, held inapplicable.
The appellants had taken the chance for selection and they were not selected on the basis of comparative merits.
Merely because they were carrying on the litigation, there could not be any justification to give direction to the Government to consider their cases by relaxing the age qualification for appointment as Patwari.
[157 F G]
|
Civil Appeal No. 2409 of 1969.
From the Judgment and order dated the 19th July, 1968 of the Andhra Pradesh High Court in Writ Petition No. 1994 of 1964.
K. Rajendra Chowdhary and Mrs. Surendra Krishnan for the Appellant.
I. N. Sinha, Sol.
General, Girish Chandra for Respondents.
The Judgment of the Court was delivered by SHINGHAL, J.
This appeal by certificate is directed against the judgment of the High Court of Andhra Pradesh dated July 19, 1968.
It is not in dispute that appellant Mohd. Faisuddin Khan is 780 a citizen of India, and was declared an evacuee by an order of the Deputy Custodian of Evacuee Property, Hyderabad, dated September 18, 1951.
His property, consisting of a building and 350 acres of land, was declared to be evacuee property.
The Custodian of Evacuee Property issued a notice to the appellant on April S, 1961 calling upon him to surrender possession of the property.
That was followed by a notification dated January 20, 1962, of the Central Government, under section 12 of the , hereinafter referred to as the Act, by which that government acquired all properties which had been declared to be evacuee properties, for a purpose connected with the relief and rehailitation of displaced persons, including payment of compensation.
The appellant, challenged the aforesaid notification as unconstitutional and applied for writ of certiorarai on a proper construction of ss.12 and 15 of the Act.
In its impugned judgment, the High Court has taken the view that on publication of the notification under section 12(1) of the Act, the right, title and interest of the evacuee was extinguished in the evacuee property and it vested absolutely in the Central Government free from all encumbrances.
That, in the view of the High Court, was unconditional, and was not made to depend upon the fixation or payment of compensation under section 13, notwithstanding the fact that the principles for payment of compensation had not been agreed upon between the Governments of India and Pakistan and had not therefore been fixed.
It has also been held that the words "or otherwise" in article 31(5) (b) (iii) of the Constitution are sufficiently wide and the protection of the article extends to the relevant provisions of the Act so that there could be no successful challenge on the basis of article 31(2).
The evacuee feels aggrieved and has filed the present appeal.
It has been argued by counsel for the appellant that the view taken by the High Court is not correct, and that acquisition of the appellant 's property under section 12 of the Act was not immune from challenge under article 31(5) (b) (iii) of the Constitution because no compensation had been.
paid or was proposed to be paid for the acquired property.
It will be recalled that a notification was issued by the Central Government under section 12 of the Act to acquire the property of the appellant for rehabilitation of displaced persons.
That notification was published in the gazette and, by virtue of sub section
(2) of that section, the right, title and interest of the appellant in that property (which was admittedly evacuee property) was extinguished and the property vested "absolutely in the Central Government free from all encumbrances.
" Section 13 of the Act provides for the payment of compensation for such acquisition "in accordance with such principles and in such manner as may be agreed upon between the Governments of India and Pakistan.
" Section 14 of the Act goes further and provides for the constitution of a compensation pool.
The appellant has, however, been deprived of the benefit of these provisions because it is the admitted case of the parties that the agreement envisaged by section 12 has not been arrived at so far between the two 781 Governments.
Even so, that.
would not, in our opinion, justify the argument of counsel for the appellant that clause (2) of article 31 of the Constitution would become applicable, for clause 5 (b) (iii) of that article expressly provides as follows: "(5) Nothing in clause (2) shall affect . . . . . . . (b) the provisions of any law which the State may here after make. . . . . . . (iii) in pursuance of any agreement entered into between the Government of the Dominion of India or the Government of India and the Government of any other country, or otherwise, with respect to property declared by law to be evacuee property." (Emphasis added).
It would thus appear that clause (2) of article 31 will not avail the appellant because there is an express provision in clause (5) that it shall not affect the provisions of any law which the State Government may make either in pursuance of an agreement with the Government of any other country "or otherwise".
So even in the absence of an agreement with the Government of Pakistan, it was permissible for the State to make the Act, and its provisions would not be affected by anything contained in clause (2) of article 31 of the Constitution.
It would follow that there is nothing wrong with the view that compensation would have been payable to the appellant under sec.
13 of the Act, in accordance with such Principles and in such manner as might have been agreed upon between the Governments of India and Pakistan, but not otherwise.
The appellant is therefore not entitled to claim such compensation in the absence of the agreement, and there is nothing wrong with the conclusion arrived at by the High Court in the impugned judgment.
The counsel for the appellant tried to argue that the evacuee property in question could not have vested in the Central Government until compensation for its acquisition had been determined and paid.
The argument is however quite futile in face of the clear provision of sub section (2) of section 12 of the Act that on the publication of the notification under sub section (1), the right, title and interest of the evacuee shall be extinguished in the evacuee property and it "shall vest absolutely in the Central Government free from all encumbrances.
" There is thus no force in this appeal and it is dismissed but, in the circumstances of the case, without any order as to the costs.
V.P.S. Appeal dismissed.
| Under section 25A, Income Tax Act, 1922, a Hindu undivided family which has been assessed to tax shall be deemed, for the purpose of that Act, to continue to be treated as undivided and, therefore, liable to be taxed in that status, unless an order is passed in respect of the family recording a partition of its property.
Under section 25A(1), if at the time of making an assessment, it is claimed by or on behalf of the members of the family that the property of the joint family has been partitioned among the members or groups of members in definite proportions, the Income Tax officer shall hold an enquiry and record an order to that effect, if satisfied.
Under section 25A(2) when, such an order has been recorded, the Income Tax officer shall apportion the tax assessed on the total income of the undivided family and assess each member or group of members in accordance with the provisions of section 23 and add to the tax for which such member or group of members may be separately liable, tax proportionate to the portion of the undivided family property allotted to him or to the group, and all members or groups of members, shall be liable jointly and severally for the tax assessed on the total income received by or on behalf of the joint family.
Thus a liability, which, so long as an order is not recorded under section 25A(I), would be restricted to the assets of the Hindu undivided family is by virtue of section 25A(2) transformed, when the order of partition is recorded, into the personal liability of the members for the amount of tax due by the Hindu undivided family.
But, the order could be recorded only if there was total partition as contra distinguished from partial partition.
[49 G 50 E] Section 171 of the Income Tax Act, 1961, corresponds to section 25A of the 1922 Act.
Sub sections 2 to 5 of section 171 contemplate a case where at the time of making assessment under section 143 or 144, a claim is made by or on behalf of any member of a Hindu family that a total or partial partition has taken place among its members and the Income Tax officer has recorded a finding.
In such a case, all the members would be jointly and severally liable for the tax assessed 17 as payable by the joint family and for determining their several liability, the tax assessed on the joint family would be apportioned among the members according to the portion of the joint family property allotted to each of them.
In section 171(6) it is provided that even where no claim of total or partial partition is made at the time of making the assessment under section 143 or section 144 and hence no order recording partition is made in the course of assessment as contemplated under sub sections 2 to 5, if it is found, after the completion of the assessment, that the family has already effected a partition, total or partial, all the members shall be jointly and severally liable for the tax assessed as payable by the joint family and the tax liability shall be apportioned among the members according to the portion of the joint family property allotted to each of them.
Section 171(6), thus, for the first time imposes, in cases of this kind, joint and several liability on the members for the tax assessed on the Hindu undivided family and this is personal liability as distinct from liability limited to the joint family property received on partition.
Section 171(7) provides that the several liability of any member or group of members shall be computed according to the portion of the joint family property allotted to him or it at the partition whether total or partial.
[50 G 51 F; 52 C E] Section 297(2)(d)(ii) of the 1961 Act provides that when a notice under section 148 of the 1961 Act is issued for the reopening an assessment 'all the provisions of this Act shall apply accordingly '.
45 There was a partial partition among the members of a Hindu undivided A family in 1955.
For the assessment years 1950 51 to 1956 57, the assessment on the family were reopened after the 1961 Act had come into force by issuing notices under section 148 and! were completed by orders under section 147 of the 1961 Act.
A much larger amount of tax was determined as payable by the Hindu undivided family than what was found due when the original assessments were made for those assessment years.
Thereafter, the Income Tax officer determined the several liability of the members of the Hindu undivided family under section 171(7) of the 1961 Act.
They filed petitions in the High Court challenging the validity of the orders, which had the effect of imposing personal liability on the members L of the family, on the ground, inter alia, that section 171(6) and (7) do not apply, where the assessment of a Hindu undivided family was made under the 1922 Act, and at the time when the tax was sought to be recovered, it was found that the family had effected a partial partition, since these provisions of the 1961 Act had the effect of imposing on the members of the family a new liability, (namely a personal liability) which did not exist before and they could not be construed so as to have retrospective effect.
The High Court dismissed the petitions.
Allowing the appeals to this Court, ^ HELD: The assessments of the Hindu Undivided Family for the assessment years 1950 51 to 1956 57, were completed in accordance with the provisions of the 1922 Act which included section 25A, and the Income Tax officer was, therefore, not entitled to avail himself of the provisions enacted in section 171(6) and (7) of the 1961 Act, for the purpose of recovering the tax or any part thereof personally from any members of the joint family.
[53 B D] (1) It is a well settled rule of interpretation that unless the terms of a statute expressly so provide or necessarily require it, retrospective operation should not be given to a statute so as to take away or impair an existing right or create a new obligation or impose a new liability otherwise than as regards matters of procedure, the general rule being "all statutes other than those which are merely declaratory or which related only to matters of procedure or of evidence are prima facie prospective and retrospective operation should not be given to a statute so as to affect, alter or destroy an existing right or create a new liability or obligation unless that effect cannot be avoided without doing violence to the language of the enactment.
If the enactment is expressed in language which is fairly capable of either interpretation, it ought to be construed as prospective only.
[52 E G] (2) On this principle, section 171(6) applies only to a situation where the assessment of a Hindu Undivided Family is completed under section 143 or section 144 of the 1961 Act.
It can have no application where the assessment of Hindu Undivided Family was completed under the corresponding provisions of the old Act.
Such a case would be governed by section 25A of 1922 Act which does not impose any personal liability on the members in case of partial partition.
Since, in the present case, there was only a partial partition, tho liability of the undivided family to tax for the various years could be recovered only out of the assets of the joint family are it could not be apportioned among the members nor could the members be held jointly and severally liable for payment of such tax liability under section 25A. To construe section 171(6) of the 1961 Act as applicable in such a case with the consequential effect of casting on the members personal liability which did not exist under section 25A, would be to give retrospective operation to the sub section which is not warranted either by the express language of that provision or by necessary implication.
Section 171(6) can be given full effect by interpreting it as applicable only in a case where the assessment of a Hindu Undivided Family is made under section 143 or section 144 of the 1961 Act.
[52 G 53 B] (3) The words "all the provisions of this Act shall apply accordingly in section 297(2)(d)(ii), merely refer to the machinery provided in the 1961 Act for the assessment of escaped income.
They do not import any substantive provisions of the 1961 Act which create rights or liabilities.
The word "accordingly", in 'the context, means nothing more than "for the purpose of assessment" and it clearly suggests that the provisions of the 1961 Act which are made applicable arc those relating to the machinery of assessment.
Though sub sections (1) to 46 (5) of section 171 merely lay down the machinery for assessment of a Hindu undivided family after partition, section 171(6) is clearly a substantive provision imposing a new liability on the members for the tax determined as payable by the joint family.
The words "all the provisions of this Act shall apply accordingly" cannot, therefore, be construed as incorporating, by reference, section 171(6), so as to make it applicable for the recovery of tax re assessed on the Hindu Undivided Family in cases falling within section 297(2)(d)(ii).
[54 C F]
|
N: Criminal Appeal No. 440 of 1976.
Appeal by Special leave from the Judgment and Order dated the 3rd September, 1975 of the Allahabad High Court in Criminal Misc.
Case No. 3291 of 1972.
Shankar Ghose, R.P. Bhatt, section R. Aggarwala, Praveen Kumar, and Anil Kumar Sharma for the Appellants.
B.D. Sharma, Dalveer Bhandari, H. M. Singh, and R. section Yadav for the Respondent (State).
324 Yogeshwar Prasad and Mrs. Rani Chhabra for Municipal Board.
The Judgment of the Court was delivered by VENKATARAMIAH, J.
This appeal by special leave arises out of a complaint instituted under section 155 of the U.P. Municipalities Act, 1916 (Act.
No. II of 1916) (hereinafter referred to as 'the Act ') by the Municipal Board of Pilibhit in the court of the Sub Divisional Magistrate, Puranpur, District Pilibhit against the Managing Director, the General Manager and the Cane Manager of L. H. Sugar Factory Pilibhit and one Bishan Swaroop, an employee of the said Sugar Factory, the appellants herein, alleging that they had brought by railway on November 30, 1967 into their godown at the railway siding situated within their Sugar Factory which was within the limits of the Pilibhit Municipal Board for purposes of consumption or use three wagon loads of sugarcane weighing in all 804 maunds for which octroi of Rs. 8.48 P. was payable under the bye laws of the Municipal Board published under notification dated May 18, 1960 without paying the said octroi.
The said complaint was filed on September 12, 1968.
During the proceedings before the Magistrate the appellants pleaded that since the payment of octroi by the factory of the appellants on sugarcane brought by railway had been exempted by an order of the Government of the United Provinces bearing G. O. No. 3613(1)/XI 395 dated November 20, 1936, the prosecution should fail.
The relevant part of the Government order which is contained in a letter addressed by the Municipal Department of the Government of the United Provinces to the Commissioner of Rohilkhand Division reads thus: "I am directed to say that Government have, after full examination of the question of local taxation of sugarcane imported for the manufacture of sugar in factories situated within the limits of certain municipalities, decided that there is no justification for the continuance of taxes on rail borne cane which is delivered at the railway sidings situated inside the sugar factories because the municipalities concerned render no service with regard to it.
The Governor acting with his ministers is accordingly pleased to exempt, under section 157(3) of the United Provinces Municipalities Act, 1916, with immediate effect, all such sugarcane from the octroi duty levied in the municipality of Pilibhit.
The Municipal 325 Board of Pilibhit may be informed accordingly and also directed to take formal action to amend its octroi schedule to that effect.
" After the above plea was raised, the complainant Municipal Board went on seeking adjournments in the criminal case and the case remained undisposed of for nearly four years.
So the appellants filed a petition under section 561 A of the Code of Criminal Procedure, 1898 (Act No. V of 1 98) before the High Court of Allahabad in Criminal Misc.
Case No. 3291 of 1972 in September, 1972 requesting the High Court to quash the proceedings on the ground that they were vexatious.
In the High Court the appellants admitted that they had brought into the municipal area of Pilibhit sugarcane by railway as pleaded by the Municipal Board without paying octroi but submitted that octroi was not payable in view of the exemption granted by the State Government under section 157(3) of the Act.
The High Court rejected the plea of the appellants and dismissed the petition filed by them on the ground that the case was governed by certain earlier judgments of the High Court and that the exemption was no longer available as the octroi claimed was a new levy not covered by it.
Although there was some dispute about the existence of the Government order granting the exemption, the High Court held that such an order had been passed by the Provincial Government but it was of no avail to the appellants.
Accordingly the High Court dismissed the petition filed by the appellants.
Against the judgment of the High Court, this appeal has been filed.
At the outset it should be stated that until the complaint was filed in the year 1968 the Municipal Board had not collected any octroi from the factory in question on sugarcane brought by railway.
We are also informed that by an order communicated to all the Divisional Commissioners and the District Magistrates of the State of Uttar Pradesh on June 3, 1982, the levy of octroi on sugarcane brought by sugar factories into the municipalities in the State of Uttar Pradesh for crushing purposes is generally exempted irrespective of the mode of transport used to bring such sugarcane.
The relevant part of that communication reads thus: "Sub:Exemption from octroi on sugarcane brought for crushing in sugar mills within municipal limits.
326 Sir, On the above subject, in continuation of the radiogram of the Government No. 2065 B/11 9 82 dated 27.5.1982, I have been directed to state that in exercise of the powers conferred under sec.
157(3) of the U.P. Municipalities Act, 1916, the Governor exempts sugarcane brought within municipal limits for crushing in sugar mills from octroi duty with immediate effect.
You are requested to ensure that the order is carried out and acknowledge receipt of the Government order.
Yours faithfully, Sd/ Shashi Kant Jain Under Secretary" This communication may, however, have no bearing on the period in question but only shows how the State Government has understood the scope of its power under section 157(3) of the Act.
Since all the facts are admitted the only question which requires to be considered is whether on the relevant date the appellants were liable in law to pay octroi on sugarcane brought by them by railway into the sugar factory which was situated within the municipal limits of Pilibhit.
Chapter V of the Act contains the provisions relating to municipal taxation.
Section 128(1) (viii) and section 157 of the Act are in that Chapter.
The relevant part of section 128 (as it stood in the year 1936) and section 157 are as follows: "128.
Taxes which may be imposed (1) Subject to any general rules or special orders of the Local Government in this behalf, the taxes which a board may impose in the whole or any part of a municipality are (i) a tax on the annual value of buildings or lands or of both; (ii) a tax on trades and callings carried on within the municipal limits and deriving special advantages from, or imposing special burdens on, municipal services; 327 (iii)a tax on trades, callings and vocations including all employments remunerated by salary or fees; (iv) tax on vehicles and other conveyances plying for hire or kept within the municipality or on boats moored therein; (v) a tax on dogs kept within the municipality; (vi) a tax on animals used for riding, driving, draught or burden, when kept within the municipality; (vii)a toll on vehicles and other conveyances, animals and laden coolies entering the municipality; (viii)an octroi on goods or animals brought within the municipality for consumption or use therein;" (There are seven other clauses in section 128(1) which relate to other taxes).
Exemption (1) A board may exempt, for a period not exceeding one year, from the payment of a tax, or any portion of a tax, imposed under this Act by any person who is in its opinion, by reason of poverty, unable to pay the same and may renew such exemption as often as it deems necessary.
(2)A board may, by a special resolution confirmed by the Local Government in the case of cities and by the Commissioner in other cases, exempt from the payment of a tax, or any portion of a tax, imposed under this Act any person or class of persons or any property or description of property.
(3)The Local Government may, by order, exempt from the payment of a tax, or any portion of a tax, imposed under this Act any person or class of persons or any property or description of property.
" 328 It may be noted that while the power of exemption under sub sections (1) and (2) of section 157 of the Act is vested in the Municipal Board, the power of exemption under sub section (3) of section 157 is exercisable by the Local Government.
Under sub section (2) of section 157 the resolution of the Municipal Board granting exemption should, however, be confirmed by the Local Government or the Commissioner, as the case may be.
The first submission made before us is somewhat subtle and needs to be considered in some detail.
It is argued that since the exemption had been given under the order dated November 20, 1936 on the ground that there was no justification for the continuance of the levy of taxes on rail borne sugarcane as the municipalities were not rendering any service in regard to it, the levy from which exemption had been given by that order was either a terminal tax or a fee and not a tax.
Since what is being levied as octroi from the year 1960 was a tax, the order of exemption would be inapplicable to it.
In support of the first part of this argument that the tax referred to in the order of exemption could only be a terminal tax reliance was placed on a decision of the Federal Court in The Punjab Flour and General Mills Co., Ltd. Lahore vs The Chief Officer, Corporation of the City of Lahore and the Province of the Punjab.(1) In that case the Federal Court had to construe the meaning of entry 58 of List I of the Seventh Schedule to the Government of India Act, 1935 which read as '58.
Terminal taxes on goods or passengers carried by railway or air; taxes on railway fares and freights ' and of entry 49 of List II of the Seventh Schedule to the Government of India Act, 1935 which read as '49.
Cesses on the entry of goods into a local area for consumption, use or sale therein '.
The facts in that case were these: The Lahore Municipality had in the year 1926 imposed under its then existing power of taxation a tax called terminal tax calculated on the gross weight of consignments or per tail as the case might be at the rates and on the specified articles or animals, specified in the Schedule to the notification imposing the levy, imported into its municipal limits by rail or by road.
This was superseded by a notification issued in the year 1938 by which the municipality gave notice of the imposition of a new tax called 'octroi (without refunds) ' which was to be calculated on the gross weight of consignments and on animals per tail at the rates and on the articles specified in the Schedule to the relevant notification 329 imported into its limits.
This notification was superseded by a further notification of the year 1940 by which a tax called 'octroi (without refunds) ' was to be charged at the new rates with effect from May 11, 1940 on consignments including grain, imported into its limits.
The Punjab Flour and General Mills Co. Ltd., Lahore which was importing for use or consumption grain into its factory which was situated within the Lahore municipal limits contended that the tax in question was a terminal tax, by whatever name it might have been called, falling under entry 58 of List I of the Seventh Schedule to the Government of India Act, 1935 and was not imposable in 1938 or in 1940 after the relevant provisions of the Government of India Act, 1935 had come into force.
It was contended by the company that the tax in question did not fall under entry 49 of List II of the Seventh Schedule to the Government of India Act, 1935.
The Federal Court after explaining the difference between the terminal taxes and cesses which can be levied on goods imported into a local area for purposes of use, consumption or sale therein rejected the contention of the company with these observations: "There appears to us a definite distinction between the type of taxes referred to as terminal taxes in entry No. 58 of List 1 of the Seventh Schedule and the type of taxes referred to as cesses on the entry of goods into a local area in entry No. 49 of List II.
The former taxes must be (a) terminal (and) (b) confined to goods and passengers carried by railway or air.
They must be chargeable at a rail or air terminus and be referable to services (Whether of carriage or otherwise) rendered or to be rendered by some rail or air transport organisation.
The essential features of the cesses referred to in entry No. 49 of List II are on the other hand simply (a) the entry of goods into a definite local area and (b) the requirement that the goods should enter for the purpose of consumption, use sale therein.
It is to be noted that there is no limitation on the manner by which the goods to be subjected to such cesses may enter.
There is no ground for suggesting that entry of goods by rail or air is any less contemplated than entry by waterway or road.
It was argued by the appellant 's counsel that because by entry No. 20 of List I Federal railways and the regulation of railways and so forth is included in the Central Government Legislative List and by List II the Provincial 330 Government is mainly given powers of legislation over roads and internal waterways and transport thereon (entry No. 18), it should therefore be deduced that all taxation on rail and air borne goods must be imposed, if at all, under the powers conferred by entry No. 58 of List 1 and that powers of taxation conferred by entry No. 49 of List II must be confined to goods that enter by road or internal waterway only.
We cannot accept this argument.
It is not in our judgment justified by the wording of the various entries in the two Lists and would impose a limitation on local taxation under entry No. 49, in List II, which would often work most inequitably in practice between those importing goods by road or waterway and those who could import by rail or air.
In our judgment there is no limitation to be implied in entry No. 49 List II, in regard to the manner in which goods may be transported into a local area.
It follows that so far as rail borne goods are concerned the same goods may well be subjected to taxation under entry No. 58 of List I as well as to local taxation under entry No. 49 of List II.
The grounds of taxation under the two entries are as indicated above, radically different, and there is no case for suggesting that taxation under the one entry limits or interferes in any way with taxation under the other.
" It is true that in the course of the above decision it is observed that the element of service to be rendered is treated as an ingredient of a terminal tax but that does not mean that when tax is clearly laid on goods when they are brought into a local area for purposes of use, sale or consumption, it ceased to be a tax levied under section 128 (1) (viii) read with entry 49 of List II of the Seventh Schedule to the Government of India Act, 1935 merely because of the reason given for granting exemption under the order the Provincial Government dated November 20, 1936 issued under section 157 (3) of the Act.
There is no doubt that the octroi which was being levied in 1936 when the exemption was granted and the subsequent levy imposed in the year 1960 are both taxes levied under the Act and fall within the State List both under the Government of India Act, 1935 and under the Constitution.
It was not a terminal tax falling under entry 58 of List I of the Seventh Schedule to the Government of India Act, 1935.
It does not 331 also fall under entry 89 of List I of the Seventh Schedule to the Constitution now.
The said levy came within entry 49 of List II of the Seventh Schedule to the Government of India Act, 1935 and now falls under entry 52 of List II of the Seventh Schedule to the Constitution.
The exemption granted in the year 1936 should be construed as an exemption from all taxation by way of octroi leviable and levied under the Act on rail borne sugarcane and that exemption would continue until it is either rescinded or modified or becomes inapplicable for any other reason.
The second part of the above submission was that the levy was in the nature of a fee and not a tax as it had been described as a cess in entry 49 of List II of the Seventh Schedule to the Government of India Act, 1935.
There is no merit in this submission also.
A cess may either be a tax or a fee.
Whether a cess in a given context is a tax or a fee depends upon the purpose for which it is levied.
The very decision relied on by the respondents in this connection, namely The Hingir Rampur Coal Co., Ltd. & Ors.
vs The State of Orissa & Ors.(1) substantiates the above view.
In that case this Court held that the cess imposed by the Orissa Mining Areas Development Fund Act, 1952 was a fee relatable to entries 23 and 66 of List II of the Seventh Schedule to the Constitution having regard to the object and the scheme of that Act and the purpose for which the cess collected under it was to be used.
There is no doubt that in entry 49 of List II of the Seventh Schedule to the Government of India Act, 1935 the expression 'cesses ' is used in the sense of 'taxes '.
In entry 52 of List II of the Seventh Schedule to the Constitution, the expression 'taxes ' is substituted in the place of the expression 'cesses ' which was in the former entry 49 in the Government of India Act, 1935 but the nature and content of the legislative power under both are the same.
The decision of the Federal Court in the case of the Punjab Flour and General Mills Co. Ltd. (supra) itself shows that a cess levied in exercise of the power under entry 49 of List II of the Seventh Schedule to the Government of India Act, 1935 was a tax irrespective of any refund allowed or not allowed by the Government as can be seen from the following observation made by the Federal Court at page 26 of the Report: "We can see no cause whatsoever for holding that if cesses are imposed in pursuance of the powers conferred 332 by entry No. 49 in List II, any provision need be made for refunds.
Whether or not there should be any refunds in respect of such cesses appears to us to be a matter open for determination by Provincial or local taxing authority, and the existence or non existence of a provision of system of refunds cannot affect the tax being or not being a cess within entry No. 49.
" It is also significant that the word 'octroi in section 128 (1) (viii) of the Act is found in the group of taxes referred to in section 128.
All sums received by a Municipal Board on account of the various levies made under section 128 have to be credited to the municipal fund under section 114 of the Act which can be utilised for the purposes of the Municipal Board as stated in section 120 of the Act.
The sum received as octroi is also dealt with like any other tax.
There is no element of quid pro quo between the person who pays the octroi and the Municipal Board.
Hence octroi being a tax it was competent to the Provincial Government to make an order under section 157 (3) of the Act exempting railborne sugarcane from payment of octroi.
The next submission urged before us is that the appellants having failed in an earlier writ petition in which they had questioned the validity of the levy of octroi cannot now be permitted to challenge the levy again in these proceedings.
The facts bearing on the above contention are these: In the year 1960, by a notification published in the Official Gazette dated April 23, 1960 the Municipal Board of Pilibhit promulgated new rules relating to the levy of octroi and also published a fresh schedule of rates of octroi in the Official Gazette dated May 18, 1960.
This was done with the previous sanction of the State Government under section 133 of the Act.
The octroi imposed by these notifications related to number of articles including sugar, sugarcane etc.
The appellants who were liable to pay octroi on many of those articles challenged in a petition filed under Article 226 of the Constitution in Civil Misc.
Writ No. 2310 of 1960 on the file of the High Court of Allahabad the validity of the levy on the ground that the procedure followed in imposing octroi at the fresh rates was not valid It was also pleaded that sugar industry being a controlled industry levy of octroi on sugar was invalid.
By that notification octroi had been imposed also on the import of sugarcane into the municipal limits of Pilibhit for purposes of sale, use or consumption.
That petition was 333 dismissed by the High Court.
It is urged that because that petition had been dismissed, it is not open to the appellants now to contend that the exemption granted under the order of 1936 was still available.
The High Court has accepted this contention urged on behalf of the respondents.
With due respect, we should say that the conclusion of the High Court on the above point is erroneous.
In the earlier writ petition, the appellants had challenged the validity of the new octroi bye laws and the imposition of octroi on many articles brought by them into the municipal limits.
By reason of the dismissal of the writ petition, they would no doubt be not entitled to reagitate the same question.
In this case the question involved is a different one and that is whether even if the octroi bye laws and the imposition of octroi on sugarcane was good, the Municipal Board of Pilibhit is competent to recover octroi on sugarcane brought by rail by reason of the exemption accorded under section 157 (3).
There is however, no dispute that octroi would be payable under the octroi bye laws when sugarcane is brought by the appellants by any other means of transport.
In the circumstances, the High Court was in error in holding that the order of exemption granted under section 157 (3) was the same as any general rule or special order of the State Government referred to in sub section (1) of section 128 subject to which the Municipal Board may impose any tax referred to therein and the effect of the exemption granted in 1936 was also in issue in the earlier writ petition.
In that writ petition the said question was neither directly nor constructively in issue in that case.
An exemption becomes operative only when the tax is validly imposed under section 128.
The restriction that may be imposed by any general rule or special order of the State Government under section 128 (1) affects the initial power of the Municipal Board to levy a tax.
An order under section 157 (3) operates only after a tax is validly imposed with the sanction of the State Government or of the Commissioner as the case may be, as stated in section 133 of the Act.
It is, therefore, open to the appellants to contend even after the dismissal of their earlier petition that they are entitled to the limited exemption granted by the order of 1936, generally in favour of a number of sugar factories in several municipal areas.
The decision of the High Court of Allahabad in Vir Singh & Ors.
vs Municipal Board & Anr.(1) also has no bearing on this question.
334 The next question is whether the nature of the tax levied under clause (viii) of section 128(1) of the Act has undergone any change after the commencement of the Constitution.
The said clause has not been materially amended after the commencement of the Constitution.
While it formerly read as 'an octroi on goods or animals brought within the municipality for consumption or use therein ' now it reads as 'an octroi on goods or animals brought within the municipality for consumption, use or sale therein ' by reason of the addition of the word 'sale ' by an amending Act passed subsequent to the commencement of the Constitution.
The High Court has observed that after the commencement of the Constitution there has been a material change in the nature of octroi levied under the Act and on account of the framing of the new bye laws the exemption granted under section 157(3) would no longer be available for the following reasons: "It is significant that under Government of India Act, 1935, 7th Schedule, List II, item No. 49 provides cess on the entry of goods into the local area for consumption or use or sale therein.
For the purposes of cess, it was necessary that the local body should render some service as principle of quid pro quo applies.
Under the Constitution of India 7th Schedule, List II, item No. 52 provides for levying taxes on the entry of goods into the area for consumption or use or sale therein.
The tax certainly is different from cess and as such different considerations arise for levying taxes.
Learned counsel for the opposite party has also pointed out that by Act VII of 1953, section 128(1) (viii) has been substituted and as such more powers were conferred on the Municipal Board.
The only difference is that octroi can now be imposed on goods meant for sale also.
The fact remains that the Government order of 1936 was under section 157(3) of the Act and as such had the effect of allowing exemption with regard to levy of octroi duty on sugarcane according to the rules then in force.
When the rules themselves were changed and new bye laws had been enforced, which had the sanction of State Government or the delegated authority that exemption could no longer apply unless fresh order was passed under section 157(3) of the Act.
" 335 With respect, we should express our disagreement with the above view.
As already observed by us, under the Government of India Act, 1935, octroi leviable under entry 49 of List II of the Seventh Schedule thereto was not a fee but was a tax.
The new set of bye laws with the modified rates of octroi brought into force in 1960 by the Municipal Board though with the sanction of the State Government does not have the effect of rescinding or annulling the exemption granted under section 157(3) by the former Provincial Government.
An order under section 157(3) can be withdrawn or modified by the State Government only.
Even if the said provision is capable of a construction that when the new bye law or rates of tax imposed by the Municipal Board with the sanction of the Government under section 133 which are totally inconsistent with the exemption granted earlier under section 157(3) the exemption would cease, in the instant case we do not find any such irreconcilable inconsistency between the notification published in 1960 and the order of exemption made in the year 1936 which is in respect of a number of municipalities.
While under the notification of 1960 octroi is payable on the import of sugarcane into the municipal limits for purposes of sale, use or consumption, by virtue of the order made in 1936 under section 157(3) sugarcane brought by rail and delivered at the railway siding inside the factory premises alone is exempted from the levy of octroi.
Sugarcane brought by other means of transport would be governed by the notification issued in 1960.
It is worthy of note that there is no provision in the notification of 1960 to the effect that the said exemption is either withdrawn or that sugarcane brought by rail would be taxable.
The order of exemption does not say that it relates to a particular tax levied under a specific notification issued by a particular Municipal Board.
It is in general terms and therefore the exemption would continue to operate even after the notification was issued in 1960 in supersession of the former notification in so for as rail borne sugarcane is concerned.
If the contention urged by the Municipal Board is accepted, then it would indirectly arm a Municipal Board to get over any order of exemption passed by the State Government by merely amending its taxation bye laws.
It may be noted here that in the case of municipalities other than city municipalities, the sanctioning authority is the Commissioner and not the State Government while under section 157(3) the State Government alone can grant exemption.
Hence such a construction should be avoided.
It is significant that for nearly eight years after the promulgation of the new bye laws no claim was made by the Municipal Board in respect of octroi payable on rail borne sugarcane 336 and subsequently the State Government by the letter dated June 3, 1982 referred to above has enlarged the scope of exemption by exempting from payment of octroi on sugarcane brought into the municipal limits of all municipalities for crushing in the sugar mills irrespective of the mode of transport employed for bringing it.
On a consideration of all the contentions urged by the parties before us we hold that the Municipal Board of Pilibhit was not entitled to collect octroi on sugarcane brought into its municipal limits by the appellants by rail on the relevant date.
The prosecution, therefore, is not sustainable.
In the result, this appeal is allowed, the judgment of the High Court is set aside and the proceedings in the Magistrate 's court out of which this appeal has arisen are quashed.
There will be no order as to costs.
H.S.K. Appeal allowed.
| Sub section (l) of section S of the Bihar Finance Act, 1981 provides for the levy of a surcharge in addition to the tax payable, on every dealer whose gross turnover during a year exceeds Rs. 5 lakhs and, sub section
(3) thereof prohibits such a dealer from collecting amount of surcharge payable by him from the purchaser.
In exercise of the power conferred by this section, the State Government fixed the rate of surcharge at 10 per cent of the total amount of tax payable by a dealer.
Two of the appellants in this batch of appeals were companies engaged in the manufacture and sale of the medicines throughout India whose branches sales depots in Bihar were registered as dealers.
Their products were sold through wholesale distributors/stockists appointed in almost all the districts of the Slate and their gross turnover within the State during the relevant period ran into crores of rupees.
Most of the medicines and drugs sold by them were covered by the Drugs (Price Control) Order, 1919 issued under sub section
(l) of 131 section 3 of the Essential Commodities Act in terms of which they were expressly prohibited from selling those medicines and drugs in excess of the controlled A price fixed by the Central Government from time to time but were allowed to pass on the liability to the consumer.
During the assessment years 1980 81 and 1981 82 they had to pay the surcharge under section 5(1) of the Bihar Finance Act, 1981 at 10 per cent of the tax payable by them.
The appellants challenged the Constitutional validity of sub section
(3) of section 5 but the same was repelled by the High Court relying on the decision in section Kodar.
vs State of Kerala, [1979]1 S.C.R. 121.
It was contended on behalf of the appellants: (i) that sub section
(3) of section S of the Act which is a State law relatable to Entry 54 of List 11 of the Seventh Schedule to the Constitution and which provides that no dealer shall be entitled to collect the surcharge levied on him is void in terms of the opening words of article 246(3) of the Constitution as it is in direct conflict with paragraph 21 of the Drugs (Price Control) order 1979, issued under sub section
(1) of section 3 of the essential Commodities Act, 1955 which is a Union Law relatable to Entry 33 of List III and which enables the manufacturer or producer of drugs to pass on the liability to pay sales tax to the consumer; (ii) that the words "a law Mads by Parliament which Parliament is competent to enact ' contained in article 254(1) must be construed to mean not only a law made by Parliament with respect to one of the matters enumerated in the Concurrent List but also to include a law made by Parliament with respect to any of the matters enumerated in the Union List and therefore sub section
(3) of section 5 of the Act being repugnant to Paragraph 21 of the Control order is void under article 254(iii) that if both sub section
(1) and sub section
(3) of section 5 were relaxable to Entry 54 of List II, there was no need for the Governor to have referred the Bihar Finance Bill, 1981 to the President for his assent and that the President 's assent is justiciable; (iv) that dealers of essential commodities who cannot raise their sale prices beyond the controlled price cannot be equated with other dealers who can raise their sale prices and absorb the surcharge and since sub section
(3) of section S treats "unequals as equals" it is arbitrary and irrational and therefore Violative of article 14 of the Constitution: (v) that sales tax being essentially an indirect tax, the legislature was not competent to make a provision prohibiting the dealer from collecting the amount of surcharge and that the true nature and character of surcharge being virtually a tax on income, sub section
(3) of section 5.
is unconstitutional as it imposes an unreasonable restriction upon the freedom of trade guaranteed under article 19(1)(g).
(vi) that sub section
(3) of section S of the Act which is a State law being repugnant to paragraph 21 of the Drugs (Price Control) Order which is issued under a Union law, the latter must prevail in view of the non obstants clause in section 6 of the Essential Commodities Act and the former which is inconsistent therewith should be by passed in terms of the decision in Hari Shankar Bagla and Anr.
vs State of Madhya Pradesh, [1955] I S.C.R. 380.
and (vii) that in view of the decision in A. V fernandez vs State of Kerala.[1957] S.C.R. 837, sub section
(1) of section 5 of the Act which makes the "gross turnover" as defined in section 2(j) of the Act which includes transactions taking place in the course of inter state or International Commerce to be the basis for the levy of surcharge is ultra vires the State Legislature, 132 Dismissing the appeals, ^ HELD: 1. (a) It cannot be doubted that the surcharge partakes of the nature of sales tax and therefore it was within the competence of the State Legislature to enact sub section (1) of section 5 of the Act for the purpose of levying surcharge on certain class of dealers in addition to the tax payable by them.
When the State Legislature had competence to levy tax on sale or purchase of goods under Entry 54 of List II of the Seventh Schedule it was equally competent to select the class of dealers on whom the charge would fall.
If that be so, the State Legislature could undoubtedly have enacted sub section
(3) of section S prohibiting the dealers liable to pay the surcharge under sub s.(l) thereof from recovering the same from the purchaser.
[156 H 157 B] (b) The power of the State Legislature to make a law with respect to the levy and imposition of a tax on sale or purchase of goods relatable to Entry 54 of List II and to make ancillary provisions in that behalf is plenary and is not subject to the power of Parliament to make a law under Entry 33 of List III.
There is no warrant for projecting the power of Parliament to make a law under Entry 33 of List III into the State s power of taxation under Entry 54 of List II.
Otherwise, Entry 54 of List II will have to be read as: "Taxes on sale or purchase of goods other than the essential commodities, etc.
" When one entry is made 'subject to ' another entry, all that it means is that out of the scope of the former entry, a field of legislation covered by the latter entry has been reserved to be specially dealt with by the appropriate legislature.
Entry 54 of List II is only subject to Entry 92A of List I and there can be no further curtailment of the State 's power of taxation.
[183 F H, 184 A B] (c) The Constitution effects a complete separation of the taxing power of the Union and of the States under article 246 The various entries in the three lists are not 'powers of legislation, but 'fields of legislation.
The power to legislate is given by article 246 and other Articles of the Constitution.
Taxation is considered to be a distinct matter for purposes of legislative competence.
Hence, the power to tax cannot be deduced from a general legislative entry as an ancillary power.
Further, the element of tax does not directly flow from the power to regulate trade or commerce in, and the production supply and distribution of essential commodities under Entry 33 of List II, although the liability to pay tax may be a matter incidental to the Centre 's power of price control.
[184 E G] (d) A scrutiny of Lists I and II would show that there is no overlapping anywhere in the taxing power and that the Constitution gives independent sources of taxation to the Union and the States.
There is a distinction made between general subjects of legislation and taxation and these are dealt with in separate groups of entries: in List I, Entries I to 81 deal with general subjects of legislation and entries 82 to 92A deal with taxes; in List II Entries I to 44 deal with general subjects of legislation and Entries 45 to 63 deal with taxes.
This mutual exclusiveness is also brought out by the fact that in List III, there is no entry relating to a tax it only 133 contains an entry relating to levy of fees.
Thus, in our Constitution, a conflict of taxing power of the Union and of the States cannot arise.
The two A laws viz., sub section
(3) of section S of the Act and paragraph 21 of the Drugs (Price Control) order issued under sub s (I) of section 3 of the Essential Commodities Act operate on two separate and distinct fields and both are capable of being obeyed.
There is no question of any clash between them.
[184 H 185 F] M.P. Sundararamier and Co. vs State of Andhra Pradesh and Anr., ; , referred to.
Seervai: Constitutional Law of India, 3rd Ed., Vol, I, pp. 81 82, referred to.
(e) The words `Notwithstanding anything contained in cls.
(2) and (3) in cl.
(1) of article 246 and the words "Subject to cls.
(1) and (2)" in cl.
(3) thereof lay down the principle of Federal Supremacy viz., that in case of inevitable conflict between Union and State powers, the Union power as enumerated in List I shall prevail over the State power as enumerated in Lists ll and III, and in case of overlapping between Lists li and III, the former shall prevail.
But the principle of Federal Supremacy laid down in article 246 cannot be resorted to unless there is an 'irreconcilable ' conflict between the Entries in the Union and State Lists.
The non obstante clause in cl.
(I) of article 246 must operate only if reconciliation should prove impossible.
However, no question of conflict between the two Lists will arise is the impugned legislation, by the application of the doctrine of 'pith and substance ' appears to fall exclusively under one List, and encroachment upon another List is only incidental [165 A E] (f ) The true principle applicable in judging the constitutional validity of sub section
(3) of section S of the Act is to determine whether in its pith and substance it is a law relatable to Entry 54 of List II and not whether there is repugnancy between it and paragraph 21 of the Drugs (Price Control) order The constitutionality of the law has to be judged by its real subject matter and.
not by its incidental effect upon any topic of legislation in another field.
Once it is found that in pith and substance the impugned Act is a law on a permitted field any incidental encroachment on a forbidden field does not affect the competence of the legislature to enact that Act.
No doubt, in many cases it can be said that the enactment which is under consideration may be regarded from more than one angle and as operating in more than one field.
If, however, the matter dealt with comes within any of the classes of subjects enumerated in List II, then, under the terms of article 246(3) it is not to be deemed to come within the classes of subjects assigned exclusively to Parliament under article 246(1) even though the classes of subjects looked at singly overlap in many respects.
The whole distribution of powers must be looked at from the point of view of determining the question of validity of the impugned Act.
It is within the competence of the State Legislature under article 246(3) to provide for matters which though within the competence of Parliament, are necessarily incidental to effective legislation by the State Legislature on the subject of legislation expressly enumerated in List II.
[162 B, 171 D, 177 C E] 134 In the Central Provinces and Berar Sales of Motor Spirit and Lubricants Taxation Act, 1938, ; Citizen Insurance Company vs William Parsons, ; Attorney General for the Province of ontario vs Attorney General for the Dominion of Canada, ; A.L.S.P.P.L. Subrahmanyam Chettiar vs Muttuswami Goundan, ; Governor General in Council vs Province of Madras, ; The Province of Madras vs Messers Boddu Paidanna & Sons, , Prafulla Kumar Mukherjee & Ors vs Bank of Commerce Ltd., Khulna, A.I.R. ; and Grand Trunk Railway Company of Canada vs Attorney General of Canada, L R [19071 A.C. 65, referred to.
2.(a) The question of repugnancy under article 254(1) between a law made by Parliament and a law made by the State Legislature arises only in case both the legislations occupy the same field with respect to one of the matters enumerated in the Concurrent List and there is direct conflict between the two laws.
It is only when both these requirements are fulfilled that the State law will, to the extent of repugnancy become void.
article 254(1) has no application to cases of repugnancy due to overlapping found between List ll on the one hand and List I and List Ill on the other.
If such overlapping exists in any particular case, the State law will be ultra Vires because of the non obstante clause in article 246(1) read with the opening words 'Subject to ' in Art 246(3).
In such a case, the State law will fail not because of repugnance to the Union law but due to want of legislative competence.
[145 C, 181 F] (b) It is no doubt true that the expression "a law made by Parliament which Parliament is competent to enact" in article 254(1) is susceptible of a construction that repugnance between a State law and a law made by Parliament may take place outside the Concurrent sphere because Parliament is competent to enact law with respect to subjects included in List III as well as List I.
But, if article 254(1) is read as a whole, it will be seen that it is expressly made subject to cl.
(2) which makes reference to repugnancy in the field o Concurrent List.
In other words, if cl.
(2) is to be the guide in the determination of the scope of cl.
(l), the repugnancy between Union and State law must be taken to refer only to the Concurrent field.
article 254(1) speaks of a State law being repugnant to a law made by Parliament or an existing law.
The words "with respect to qualify both the clauses in article 254(1) viz., a law made by Parliament which Parliament is competent to enact as well as any provision of an existing law.
The underlying principle is that the question of repugnancy arises only when both the legislatures are competent to legislate in the same field, i.e., with respect to one of the matters enumerated the Con current List.
[181 G 182 A, R C] Deep Chand vs State of Uttar Pradesh & Ors [1959] Supp. 2 S.C.R. 8 Ch.
Tika Ramji & ors vs State of Uttar Pradesh & Ors., ; zaverbhai Amidas vs State of Bombay, [1955] I S.C.R. 799; M. Karunanidhi vs Union of India, ; ; T. Barai vs Henry Ah Hoe, [1983] I S.C.C. 177; A. section Krishna vs State of Madras, [1957] S.C.R. 399; Clyde Engineering C xf8.
Ltd. vs Cowburn, [1926] 37 Com.
L.R. 465; Ex Parte Mclean, [1930] 43 ; and Stock Motor Ploughs Limited vs Forsyth, , referred to.
(c) Entry 54 of List II is a tax entry and therefore there is no question of repugnancy between sub section
(3) of section 5 of the Act and paragraph 21 of the Control order.
The question of repugnancy can only arise in connection with the subjects enumerated in the Concurrent List as regards which both the Union and the State Legislatures have concurrent powers.
[178 G 179 B] B 3.
It is clear from articles 200 and 201 that a Bill passed by the State Assembly may become law if the Governor gives his assent to it or if, having been reserved by the Governor for the consideration of the President, it is assented to by the President.
There is no provision in the Constitution which lays down that a Bill which has been assented to by the President would be ineffective as an Act if there was no compelling necessity for the Governor to reserve it for the assent of the President.
It is for the Governor to exercise his discretion and to decide whether he should assent to the Bill or should reserve it for consideration of the President to avoid any future complication.
Even if it ultimately turns out that there was no necessity for the Governor to have reserved a Bill for the consideration of the President still he having done so and obtained the assent of the President, the Act so passed cannot be held to be unconstitutional on the ground of want of proper assent.
This aspect of the matter, as the law now stands, is not open to scrutiny by the Courts.
In the instant case, the Finance Bill which ultimately became the Act in question was a consolidating Act relating the Different subjects and perhaps the Governor felt that it was necessary to reserve it for the assent of the President The assent of the President is not justifiable and the Court cannot spell out any infirmity arising out of his decision to give such assent.
[193 A 194 B] Teh Chang Poh @ Char Meh.
vs Public Prosecutor.
, Malaysia, referred to.
(a) There is no ground for holding that sub section
(3) of section 5 of the Act is arbitrary or irrational or that it treats "unequals as equals" or that it imposes a disproportionate burden on a certain class of dealers.
A surcharge in its true nature and character is nothing but a higher rate of tax to raise revenue for general purposes.
The levy of surcharge under sub section
(l) of section S falls uniformly on a certain class of dealers depending upon their capacity to bear the additional burden.
The economic wisdom of a tax is within the exclusive province of the legislature.
The only question for the Court to consider is whether there is rationality in the behalf of the legislature that capacity to pay the tax increases by and large with an increase of receipts.
The view taken by the Court in kodar 's case that, to make the tax of a large dealer heavier is not arbitrary discrimination, but an attempt to proportion the payment to capacity to pay, and thus to arrive at a more genuine equality, is in consonance with social justice in an egalitarian State.
[186 H 187 A, 191 B, 191 A] section Kodar vs State of Kerala, [1975] I S.C.R. 121, relied on.
136 (b) There is no basis for the submission that the Court was wrong in Podar 's case.
The contention that ability to pay is not a relevant criterion for upholding the validity of sub section
(3) of section 5 of the Act in question cannot be accepted.
On questions of economic regulations and related matters, the Court must defer to the legislative judgment.
When the power to tax exists, the extent of the burden is a matter for the discretion of the law makers It is not the function of the Court to consider the propriety or justness of a tax or enter upon the realm of legislative policy.
If the evident intent and general operation of the tax legislation is to adjust the burden with a fair and reasonable degree of equality, the constitutional requirement is satisfied The equality clause in article 14 does not take away from the State the power to classify a class of persons who must bear the heavier burden of tax.
The classification having some reasonable basis does not offend against that clause merely because it is not made with mathematical nicety or because in practice it results in some inequalities.
[189 H 190 G] (c) There is no lacteal foundation laid to support the contention that the levy of surcharge imposes a disproportionate burden on a certain class of dealers such as manufacturers or producers of drugs, etc.
The business carried on by the appellants in the State of Bihar alone is of such magnitude that they have the capacity to bear the additional burden of surcharge That apart under the scheme of the Control order the profit margins of manufacturers and producers of medicines and drugs is considerably higher than that of wholesalers.
If the appellants find that the levy of surcharge cannot be borne within the present price structure of medicines and drugs, they have the right to apply to the Centrals Government for revision as the retail price of 'formulations under paragraph I S of the Control order.
G, 189 G] 5.
It is no doubt true that a sales tax is, according to the accepted notions, intended to be passed on to the buyer, and the provisions authorising and regulating the collection of sales tax by the seller from the purchaser are a usual feature of sales tax legislation.
However, it is not an essential characteristic of sales tax that the seller must have the right to pass it on to the consumer; nor is the power of the legislature to impose a tax on sales conditional on its making a provision for sellers to collect the tax from the purchasers Whether a law should be enacted, imposing a sales tax, or validating the imposition of sales tax, when the seller is not in a position to pass it on to the consumer, is a matter of policy and does not affect the competence of the legislature.
The contention based on article 19(1)(g) cannot therefore be sustained.
[191 E H] The Tata Iron & Steel Co., Ltd. vs The State of Bihar, ; ; M/s. J. K Judge Mills Co. Ltd. vs 'The State of Uttar Pradesh; , and section Kodar vs State of Kerla, [1975] I S.C.R. 121, referred to.
(a) The appellants being manufacturers or producers of 'formulations ' are not governed by paragraph 21 of the Control order but by paragraph 24 thereof and therefore the price chargeable by them to wholesaler or distributor is inclusive of sales tax.
There being no conflict between sub section (3) of 137 section 5 of the Act and paragraph 24 of the Control order, the question of the non obstante clause to section 6 of the Essential Commodities Act coming into play does A not arise.
[158 G] Hari Shankar Bagla & Anr.
vs State of Madhya Pradesh, , referred to.
(b) Even otherwise, i.e., if some of the appellants were governed by paragraph 21 of the Control order, that would hardly make any difference.
Under the scheme of the Act, a dealer is free to pass on the liability to pay sales tax payable under section 3 and additional sales tax payable under section 6 to the purchasers.
Sub section
(3) of section 5 however imposes a limitation on dealers liable to pay surcharge under sub section
(I) thereof from collecting the amount of surcharge payable by them from the purchasers which only means that surcharge payable by such dealers under sub section
(I) of section 5 will cut into the profits earned by such dealers.
The controlled price or retail price of medicines and drugs under paragraph 21 remains the same, and the consumer interest is taken care of inasmuch as the liability to pay surcharge; under sub section
(3) of section 5 cannot be passed on.
That being so, there is no conflict between sub section
(3) of section 5 of the Act and paragraph 21 of the Control order.
[158 H 159 C] The predominant object of issuing a control order under sub section
(I) of section 3 of the Essential Commodities Act is to secure the equitable distribution and availability of essential commodities at fair prices to the consumers, and the mere circumstance that some of those engaged in the field of industry, trade or commerce may suffer a loss is no ground for treating such a regulatory law to be unreasonable, unrest the basis adopted for price fixation is so unreasonable as to be in excess of the lower to fix the price, or there is a statutory obligation to ensure a fair return to the industry.
[159 G H] Shree Meenakshi Mills Ltd. vs Union of India, ; and Prag Ice & oil Mills vs Union of India, ; referred to 7.
The decision in Fernandez 's case is an authority for the proposition that the State Legislature, notwithstanding article 286 of the Constitution, while r making a law under Entry 54 of the List II can, for purposes of registration of a dealer and submission of returns of sales tax, include the transactions covered by article 286.
That being so, the constitutional validity of sub section (I) of section 5 which provides for the classification of dealers whose gross turnover during a year exceeds Rs. 5 lakhs for the purpose of levy of surcharge in addition to the tax payable by them, is not assailable.
So long as sales in the course of inter State trade and Commerce or sales outside the State and sales in the course of import into, or export out of the territory of India are not taxed there is nothing to prevent the State Legislature while making a law for the levy of surcharge under Entry 54 of the List II to take into account the total turnover of the dealer within the State and provide that if the gross turnover of such dealer exceeds Rs. 5 lakhs in a year he shall, in addition to the tax, also pay a surcharge at such rate not exceeding 10% of the tax as may be provided.
The liability to pay the surcharge is not on the Gross turnover 138 including the transactions covered by article 286 but is only on inside sales and A the surcharged is sought to be levied on dealers who have a position of economic superiority.
The definition of gross turnover in section 2(j) is adopted not for the purpose of bringing to surcharge inter State sales etc., but is only for the purpose or classifying dealers within the State and to identify the class of dealers liable to pay such surcharge.
There is sufficient territorial nexus between the persons sought to be charged and the State seeking to tax them.
[196 F 197 D] A. V. Fernandez vs State of Kerala, ; ; State of Bombay vs R.M.D. Chamarbaugwala, ; ; The Tata Iron and Steel Company Ltd. vs State of Bihar, ; ; and International Tourist Corporation etc.
vs State of Haryana and Ors.
, ; , referred to.
|
minal Appeal No. 187 of 1965.
Appeal by special leave from the judgment and order dated August 3, 1965 of the Allahabad High Court in Criminal Misc.
Contempt Case No. 7 of 1965.
U. P. Singh and D. N. Mishra, for the appellant.
Sobhagmal Jain, section P. Singh and J. P. Goyal, for the respondent.
The Judgment of the Court was delivered by Bachawat, J.
The appellant is the manager of Hiralal Memo rial Intermediate College, Bhaurauli, in the District of Azamgarh.
The respondent was the principal of the College.
On December 14, 1963 the respondent drew from the Boys ' Fund of the college two sums of Rs. 189 for payment of scholarship to the two Harijan students for, the period from May to November 1963.
On withdrawal of the monies he sent to the Harijan.
Tatha Samaj Kalyan Adhikari a form called Form No. 14 to the Adhikari containing a receipt of the scholarship signed by the two students and counter signed by himself.
The Adhikari wrote to the appellant informing him of the complaint.
made by the students that in spite of the submission of Form No. 14 they had not received the scholarship.
On March 24, 1964 the District Inspector of Schools visited the College and on finding that the scholarships had not been paid called for an explanation for nonpayment.
On April 10, 1964 the appellant forwarded the Inspector 's letter of March 24 to the respondent and asked him to give an, explanation.
The respondent sent a reply stating that payments were made to the students on March 31, 1964 and that the delay in payment was due to the absence of the students from the College and the fact that the register on which receipts had to be obtained were with the Inspector from December. 8, 1963 to March 10, 1964.
A meeting of the managing committee was called on April 14, 1964 to consider the Inspector 's letter and the respondent 's explanation.
According to the appellant, on April 19, 1964 the managing committee met and resolved to take disciplinary action against the respondent.
On April 21, 1964 the appellant passed an order suspending the respondent pending the inquiry.
The order stated that it was passed in exercise of the power vested in the appellant by the rules and the resolution of the managing committee dated April 19, 1964.
A copy of the resolution was attached.
On April 24, 1964 the respondent filed a writ petition in the High Court of Allahabad praying for appropriate writs quashing the order of suspension.
He alleged that the appellant had no authority to pass the order and that the order was made in bad faith.
On the same date the respondent obtained an ex parte order from the High Court 136 staying the, operation of the suspension order.
On July 22, 1964 after hearing both the parties the High Court vacated the stay order.
On December 25, 1964 the appellant served a charge,sheet on the respondent.
Charge No. (IV) was as follows "The scholars hip amounts of Rs. 216/25 and Rs. 216/25 of Sri Karam Deo Ram and Sri Jai Raj Ram students of Class XII for the months of May 1963 to November 1963 were withdrawn by you on 14 12 1963 but the same have neither been disbursed to the students concerned nor refunded to the, Treasury.
Thus you are guilty for misappropriation of the aforesaid amount.
Evidence which is proposed to be considered in support of the charge : 1.
Letter of D.J.O., dated 24 3 1964.
Letter of H.W.O., dated 31 3 1964.
Statement of students.
Thus it is evidently clear that you being entrusted with the aforesaid money have dishonestly misappropriated the amount for your own use and the poor students have been put to loss by your misconduct.
As such you have committed criminal breach of trust dis honestly punishable under sec.
406 I.P.C." The respondent was required to submit his explanation by January 24, 1965.
Instead of submitting his explanation the respondent filed a petition in the High Court asking for committal of the appellant for contempt of court.
His contention was that the aforesaid charge was the subject matter of inquiry in the pending writ petition, and that as the respondent had launched a parallel inquiry in the matter he had committed contempt of court.
The 'High Court accepted the contention and held that the respondent 'was guilty of contempt of court and directed him to pay a fine .,of
Rs. 500 and costs.
The respondent has filed this appeal after , obtaining special leave from this Court.
The conditions of service of the teachers in the College are governed by sec.
16 G of the Intermediate Education Act, 1921.
(U.P. Act 11 of 1921) and the Regulations framed thereunder. 'Regulations 31 to 45 provide for punishment, inquiry and suspension.
The Committee of Management is the, punishing ,authority.
The punishments of dismissal, removal, discharge and reduction in rank and dimunition in emoluments require prior approval of the Inspector.
If it is decided to take disciplinary action against an employee, the inquiry is made by an authority :appointed by the committee.
The ground on which it is proposed 137 to take action is reduced in the form of definite charges.
The charges are communicated to the employee, who is required to submit a written statement of his defence.
If the employee or the inquiring authority so desires, an oral inquiry takes place.
The inquiring authority then makes a report.
On receipt of the report the punishing authority takes its decision on the case.
On receipt of the decision of the committee the Inspector gives his decision.
The Committee then implements the decision of the Inspector.
The Regulations indicate definite time limits for the communica tion of the charge, submission of the written statement of defence,completion of the inquiry, the making of the report by the inquiring authority, the taking of decisions by the punishing authority and the Inspector and the implementation of the decision.
Pending the inquiry and final orders, the employee may be suspended by the committee.
The power of suspension may be exercised by the manager if it is delegated to him under the rules of the institution.
The employee under suspension is paid a subsistence allowance of an amount equal to half his pay.
The issue in the disciplinary proceedings is whether the em ployee is guilty of the charges on which it is proposed to take action against him.
The same issue may arise for decision in a civil or criminal proceeding pending in a court.
But the pendency of the court proceeding does not bar the taking of disciplinary action.
The power of taking such action is vested in the disciplinary authority.
The civil or criminal court has no such power.
The initiation and continuation of disciplinary proceedings in good faith is not calculated to obstruct or interfere with the course of justice in the pending court proceeding.
The employee is free to move the court for an order restraining the continuance of the disciplinary proceedings.
If he obtains a stay order, a wilful violation of the order would of course amount to contempt of court.
In the absence of a stay order the disciplinary authority is free to exercise its lawful powers.
An authority holding an inquiry in good faith in exercise of the powers vested in it by statutory regulations is not guilty of contempt of court, merely because a parallel inquiry is imminent or pending before a court.
In Tukaram Gaokar vs section AT.Shukla(1) this Court held that the initiation and continuance of proceedings for imposition of penalty on the appellant for his alleged complicity in the smuggling of gold under sec.
112(b) of the Sea did not amount to a contempt of court though his trial in a criminal court for offences under sec.
135(b) of that Act and other similar offences was imminent and identical issues would arise in the proceedings before the customs authorities and in the trial before the criminal court.
This Court observed (1) ; 138 "To constitute contempt of court, there must be involved some 'act done or writing published calculated to bring a court or a judge of the court into contempt or to lower his authority ' or 'something calculated to obstruct or interfere with the due course of justice or the lawful process of the court. ' Reg.
vs Gray(1) Arthur Reginald Perors vs The King(2).
The customs officers did nothing of this kind.
They are acting bona fide discharging their statutory duties under sections 111 and 112.
The power of adjudicating penalty and confiscation under those sections is vested in them alone.
The criminal court cannot make this adjudication.
The issue of the show cause notice and proceedings there under are authorised by the Act and are not calculated to obstruct the course of justice in any Court.
We see no justification for holding that the proceedings amount to contempt of court.
" In Re: Shr Mehra(3) the High Court of Madhya Pradesh held that the bona fide holding of a departmental inquiry on a charge of misappropriation against a government servant did not amount to contempt of court merely because a criminal prosecution on the same charge was pending against him.
A fortiori the inquiry cannot amount to contempt court if it is not a parallel investigation on a matter pending before a court, see Saibal Kumar Gupta V. B. K. Sen(4).
In Delhi Cloth and General Mills Ltd. vs Kaushal Bhan(5) and Tata Oil Mills Co., Ltd., vs The Workmen(6) the Court held that a domestic inquiry by the employer into the charges against a workman was not vitiated because it was held during the pendency of a criminal trial into the same or similar charges.
It may be desirable to stay the domestic inquiry pending the final disposal of the criminal case but the inquiry could not be characterised as mala fide merely because it was held during the pendencY of the criminal proceedings.
In The King vs Parmanand(7) a Full Bench of the Patna High Court held that the giving or withholding of consent to the withdrawal of the prosecution under sec.
494 of the Code of Criminal Procedure was a judicial act and it was improper for the court to permit withdrawal of the prosecution on orders of the Government without making any attempt to exercise its discretion, that the power to grant adjournments of pending proceedings under section 344 of the Code and the power to call for records in A pending or completed case under secs.
423, 435 of the (1) [1900] 2Q.B.36.
(2) (1951] A.C.482.488.
(3) A.I.R, 1962 M.P.72.
(4) ; (5) [1960] 3S.C.R.227.
(6) ; (7) A.I.R. 1949 Pat 282.
139 Code and the general rules and circular orders were vested in the court and not in executive officers.
Those questions do not arise for decision in this case.
Narayan, J. in a separate judgment observed that in an inquiry with regard to a matter which is sub judice was bound to interfere with the even and ordinary course of justice and a parallel inquiry of this kind would amount to opening the door for contempt.
In that case the executive officers were issuing orders to the criminal court calling for its records and asking it to adjourn the proceedings and to consent to the withdrawal of the prosecution and on those facts it might be possible to hold that the officers were guilty of contempt.
But we cannot agree with the broad observation that a parallel inquiry on a matter pending before a court necessarily amounts to a contempt of court.
We think that an inquiry by a domestic tribunal in good faith into the charges against an employee does not amount to contempt of court merely because an inquiry into the same charges is pending before a civil or criminal court.
In D. J. Shield vs
Ramesam (1) the Andhra Pradesh High Court agreed with the observations of Narayan, J. but the decision is distinguishable because the court found that the inquiry by the Collector into the charges against a sub magistrate was not a parallel inquiry and did not amount to contempt of court.
After the High Court vacated the stay order the appellant bona fide believed that the disciplinary proceedings could be continued.
The service of the charge sheet on the respondent was made in good faith and was not intended or calculated to interfere with the court proceedings.
We are inclined to think that the respondent instituted the contempt proceeding with ulterior motives.
He was under suspension and was drawing half pay for doing nothing.
His intention was to delay the inquiry into the charges against him.
Having failed to obtain the stay order he launched the contempt proceeding so that the inquiry might be indefinitely held up.
In view of the order under appeal he has successfully delayed the inquiry so far.
In the result, we allow the appeal, set aside the judgment and order of the High Court dated August 3, 1965 and dismiss the petition filed under the Contempt of Courts Act.
Y.P. Appeal allowed (1) A. 1.
| Pending an inquiry into the conduct of the respondent Principal of a college in respect of certain allegations, the respondent was suspended.
The respondent filed a writ petition in the High Court to quash the order of suspension and also obtained ex parte stay against the continuation of the inquiry.
The ex parte stay was vacated.
Thereafter the appellant manager of the college, served a charge sheet on the respondent and called upon him to explain the allegations.
The respondent moved the High Court for holding the appellant guilty of contempt of Court.
The High Court held the appellant guilty of contempt of Court.
In appeal, this Court.
HELD:The appeal must be allowed.
An authority holding an inquiry in good faith in exercise of the powers vested in it by statutory eegulations is not guilty of contempt of Court, merely because a parallel inquiry is imminent or pending before a Court.
The issue in the disciplinary proceedings is whether the employee is guilty of the charges on which it is proposed to take action against him.
The same issue may arise for decision in a civil or criminal proceeding pending in a Court.
But the pendency of the court proceeding does not bar the taking of disciplinary action.
The power of taking such action is vested in the disciplinary authority.
The civil or criminal court has no such power.
The initiation and continuation of disciplinary proceedings in good faith is not calculated to obstruct or interfere with the course of justice in the pending court proceeding.
The employee is free to move the court for an order restraining the continuance of the disciplinary proceedings.
If he obtains a stay order, a wilful violation of the order would of course amount to contempt of court.
In the absence of a stay order the dirciplinary authority is free to exercise its lawful powers.
[137D G] In this case, after the stay order was vacated by the High Court, the appellant bona fide believed that the disciplinary proceedings could be continued, and the charge sheet was served in good faith and was not intended or calculated to, interfere with the court proceedings.
Rather the respondent instituted the contempt proceedings with ulterior motives to indefinitely hold up the inquiry after having failed to obtain the stay order.
[139 E F] Tukaram Gaokar vs section N. Shukla, ; , Reg, vs Gray, , Arthur Reginald Perors vs The King , 488, Re : Shri Mehra A.I.R. 1962 M.P. 72; Saibal Kumar Gupta vs B. K. Sen ; ; Delhi Cloth and General Mills Ltd., vs Kaushal Bhan, ; ; Tata Oil Mills Co., Ltd. vs The Workmen, A.I.R. 1965 S.C. 155; The King vs Parmanand, A.I.R. 1949 Pat. 282; D. J. Shield vs Ramesam, A.T.R. 1955 Andhra Pradesh, 156 referred to. 135
|
: Criminal Appeal No. 50 of 1976.
Appeal by Special leave from the Judgment and order dated the 2nd October, 1975 of the Rajasthan High Court in S.B. Criminal Appeal No. 850 of 1971.
V.B. Raju and N.N. Sharma for the Appellant.
Badri Das Sharma for the Respondent The Judgment of the Court was delivered by RANGANATH MISRA J.
This appeal by special leave seeks to assail the conviction of the appellant under section 161 of the Indian Penal Code as also section 5(1) (d) and section 5(2) of the Prevention of Corruption Act, 1947 ( 'Act ' for short), and a consolidated sentence of two years ' rigorous imprisonment.
Appellant 's conviction by the Special Judge has been upheld in appeal by the Rajasthan High Court.
Appellant at the relevant time was a Head Constable attached to the Bhusawar Police Station within the District of Bharatpur.
Prosecution alleged that PW. 2 Ram Swaroop had given first Information Report of two offences but appropriate investigation was not being furnished to the Court.
He had approached Shanker Lal, Head Constable attached to the Police Station and had, on demand, paid him some money by way of bribe to expedite submission of the charge sheet, Shanker Lal got transferred and appellant came in his place.
When contacted, appellant also demanded money.
2 thereupon informed the Anti Corruption Department about the demand and Kastoori Lal, Dy.
Superintendent of Police attached to the Anti Corruption Department at Jaipur agreed to lay a trap.
Details were fixed up and the trap was laid on March 30, 1969.
An amount of Rs. 50 was to be passed on as the bribe.
Five currency notes each of Rs. 10 denomination with marked initials were made over to PW. 2 to be given as bribe to the accused.
For that purpose 1139 Ram Swaroop, PW. 2, Kastoori Lal, PW. 6, Prabhu Dayal, a literate Constable attached to the Anti Corruption Department, PW. 1, accompanied by two Panch witnesses Girdhari, PW. 3 and Gulji, PW. 4 came to Bhusawar.
Ram Swaroop came to the bus stand adjacent to the Police Station.
Banshi Kumar, the waterman at the bus stand (DW. 1) was requested by PW. 2 to inform the accused at the Police Station that he (Ram Swaroop) had come prepared for the purpose as arranged earlier and accused should came and contact him.
Prosecution further alleged that the accused come pursuant to the request and the money was passed on and the payment of bribe was duly detected.
In due course sanction was obtained and the case came up for trial before the Special Judge.
Prosecution led evidence of 8 witnesses five as indicated above and PW. 5, the Superintendent of Police (Intelligence), Jaipur; PW. 7 Kedar Nath, a literate Constable attached to the Bhusawar Police Station and PW. 8 the Superintendent of Police, Bharatpur, who proved sanction for the prosecution.
Certain documents were also produced to support the charge.
Defence examined four witnesses in support of its stand that the accused had not received any bribe and he was falsely implicated without any basis.
The Special Judge accepted the prosecution case and convicted the appellant in the manner already indicated.
His appeal to the High Court has failed.
Ordinarily the Supreme Court does not enter into re appreciation of evidence in exercise of its jurisdiction under Article 136 of the Constitution (see Ram Parkash Arora vs State of Punjab).
It is also true that in the case of State of Bihar vs Basawan Singh a five Judge Bench of this Court has laid down that if any of the witnesses are accomplices, their evidence is admissible in law but the Judge should indicate in his judgment that he had the rule of caution in mind namely, the danger of convicting the accused on the uncorroborated testimony of an accomplice and give reasons for considering it unnecessary to require corroboration; if, however, the witnesses are not accomplices but are merely partisan or interested witnesses, who are concerned in the success of the trap, their evidence must be tested, in the same way as any other interested evidence is tested, and in a proper case, the Court may look for independent corroboration before convicting the accused person.
There are certain features in this case which appear to have been overlooked both by the trial Court as also the High Court.
The 1140 two panch witnesses have not only turned hostile, but have disclosed fact which support the defence version of the incident.
PW. 2, the decoy witness has stated facts which probabilise the defence stand.
Even the literate Constable PW. 7 who has not been declared hostile has supported the defence version.
The place and the manner in which the bribe is said to have been offered and received make the prosecution story totally opposed to ordinary human conduct a feature which the two Courts have overlooked.
We are of the opinion that this is a case where the evidence has to be looked into with a view to finding out whether the prosecution case can at all be accepted.
The restriction on appreciation of evidence of an appeal by special leave is a self imposed one and is not a jurisdictional bar.
While we reiterate that ordinarily this Court would refrain from reexamining the evidence, in a case where serious injustice would be done if the evidence is not looked into it would not be proper for the Court to shun attention by following the self imposed restriction.
Prosecution has examined 8 witnesses in all.
PW. 5, as already noted, is the Superintendent of Police (Intelligence) at Jaipur who is not a material witness at all.
Similarly, PW.8 being the Superintendent of Police of Bharatpur, is connected with sanction for prosecution and is not material for any other purpose.
This leaves six witnesses in the field.
Of them, PWs.
1 and 6 are of the Anti Corruption Department, PW. 1 being a literate Constable attached to that establishment and PW. 6 being the Dy.
Superintendent of Police under whose active supervision the trap was laid.
PW. 2 is the decoy witness himself on whose report the trap was laid.
3 and 4 are the Panch witnesses and PW. 7 is a literate Constable attached to the Police Station.
PW. 2 is a supplier of water at the bus stand like DW. 1.
From his own evidence it appears that he has been involved in laying of traps.
In his cross examination he has admitted: "before this occurrence, I took the Dy.
section P. for arresting another employee Shankerlal.
The statement A V in exhibit P. 8 was given by me in the presence of the Deputy Sahib.
" He seems to have made two other complaints before the police and those were found to be false and police had already decided to prosecute him under section 182, I.P.C.
It is after that incident that present move had been taken.
PW. 2 has admitted in his cross examination: "Prior to this I took the Deputy Sahib to get Shankerlal caught but Shankerlal could not be caught and the Deputy said that you have harassed me for nothing.
" It is the case of the prosecution that Shankerlal was the Head Constable 1141 attached to the police station and that PW. 2 had negotiated with him.
PW. 3 who is a Panch witness has stated that the Deputy Superintendent of Police had told him that Ram Swaroop was giving illegal gratification to Shankerlal.
PW. 3 was previously employed in the Police Department, and had been discharged.
According to him, the name of the accused was never discussed and even at the time of payment it was Shankerlal who was supposed to receive the bribe.
PW. 3 has said that he is not a literate person and his statement and signature had been extracted from him under pressure.
PW. 4, the other Panch witness has similarly stated that he had been told that Shankerlal was to be bribed and he made no statement with reference to the accused.
In view of this evidence it becomes doubtful whether the Panch witnesses had really anything to do with the offer of bribe to the present accused.
Since PW. 2 admitted the position that the Deputy Superintendent of Police had been taken previously in respect of a bribe to Shankerlal and the two Panch witnesses have referred to that incident, it appears logical to infer that these two witnesses were really referring to the other incident.
The defence version seems to be that the trap had been arranged with reference to Shankerlal.
Ram Swaroop on reaching the bus stand requested DW. 1 to ask Shankerlal to come but since Shankerlal was absent from the Police Station, the accused who was the senior most of the lot then available within the police station came out.
This part of the defence story has been supported by PW. 7 Kedar Nath, a Constable attached to the Police Station.
He in his cross examination has stated: "Banshi Kumar said that Shankerlal Head Constable is being called at the stand.
There I, Babu Ram, Constable and Khilli Ram (accused) were present.
We said, 'Khilli Ram, you being the Head may go '.
Accordingly he went.
" To that effect is the evidence of DW.
I, the person whose services Ram Swaroop had admittedly taken to call the accused from the police station.
He stated: "Shankerlal was sent for from the police station at 6 p.m. 2 years 20 days ago.
Then one more person was with him.
I went to the Police station Bhusawar.
Shankerlal was not found there.
The two constables and the accused present in the Court were there.
On the advice of the police constables the accused accompanied me to the bus stand.
" The evidence of PW. 7 and DW. 1 thus clearly support the position we have indicated above.
It is quite probable, therefore, that PW. 2 had negotiated with Shankerlal only and so far as the accused is concerned there was no negotiation and he had come out to the bus stand after being told by DW. 1 in the manner and circumstances indicated by PW. 7 and DW. 1.
If that be so, 1142 implicating the accused for the offence of receiving bribe would be without any basis.
PW. 2 stated in his evidence that the appellant had demanded a sum of Rs. 100.
When this was pointed out to him in cross examination he stated that the accused demanded Rs. 100 from him for taking out the application and this was settled between to be paid to the accused.
This part of the story runs counter to the deposition of PW. 6 who stated: "Ram Swaroop came to my office on 30.3.69 and said that Shankerlal has been transferred and in his place Khilli Ram, Head Constable has came and the latter has settled with me to accept bribe of Rs. 50.
" The discrepancy is indeed a material one in the facts of the case.
The defence of the appellant has all throughout been that he never received any bribe.
PW. 1 in his evidence in chief has stated that the Deputy Superintendent of Police demanded the bribe amount to be taken out and the accused stated that he had not received the amount.
To the same effect is the evidence of PW. 2.
This evidence of PWs.
1 and 2 makes it clear that the first reaction of the accused when accosted was a denial of receipt of any bribe.
That has reiterated the same in his examination under section 342, Cr. P. C.
According to the defence version of the matter there was really no passing of any money.
PW. 1, the Constable accompanying the Dy.
Superintendent of Police, according to the prosecution, searched the person of the accused and found the five currency notes.
There is no acceptable evidence that the Constable had given search of his person before he started searching the person of the accused.
PW. 6, the Dy.
Superintendent of Police was at a distance.
He had not seen the actual passing of the money.
Once PWs.
3 and 4 the Panch witnesses did not support the prosecution case, the only evidence for the passing of the money has to rest is of PWs.
1 and 2.
Both of them were vitally interested in the fate of the prosecution and would, therefore, be disposed to support the prosecution case.
We have already indicated that PW. 2 was anxious to satisfy the police as he was about to face the prosecution under section 182, I.P.C. for having made false allegation in two cases.
The Deputy Superintendent of Police has stated that he had taken PW. 2 to task for having brought him once to Bhusawar on the allegation that Shankerlal was to receive the bribe and that had failed.
In these circumstances it is quite likely that these two witnesses would go out of their way to support the prosecution version.
1143 If Shankerlal was the person with whom PW. 2 had negotiated in the matter of taking of the bribe, it would indeed be difficult to accept, the position that the accused readily agreed to receive the amount when offered.
The accused was, according to the prosecution evidence, in full uniform.
He had been called up to the bus stand which is a public place.
There is evidence to show that there were many people moving around and the area was crowded.
There is also evidence that the place where PW. 2 met the accused with the money was close to a hotel where people were standing.
In such a surrounding a police man in uniform would ordinarily not accept a bribe.
The police station was not far away and if the accused wanted actually to receive the bribe he would try to chose a better environment for it than the one where the bribe is said to have been given.
Human compunction would not permit a man in the position of the accused to behave in the manner prosecution has pictured him to have.
There is also evidence that the money had not really been received by the accused and PW. 1 raised shouts that the bribe had been accepted before the amount was paid.
PW. 3 has narrated this part of the story thus.
"There the Deputy Sahib and we all stood at on place and Ram Swaroop (PW. 2) and Prabhu Dayal (PW. 1) went towards the police station.
Both had some talks.
Prabhu Dayal remained this side and Ram Swaroop went inside the police station.
Ram Swaroop returned and looked here and there.
In the meantime Prabhu Dayal constable shouted that the money has been found, come on; come on. " PW. 4 stated that he did not see anybody giving or taking illegal gratification.
DW. 1 has stated: "I told pointing toward Ram Swaroop and his companions that they are summoning.
Thereupon the companion of Ram Swaroop (refereeing to Prabhu Dayal) shouted near the 'Imli ' tree that 'caught, caught '.
He took out from the pocket of his pant notes like and putting them in his hand shouted, 'caught, caught '.
" DW. 3 the hotelier has stated: "I and the Inspector went together, then the notes were in the hand of a Constable." He has further said that the Constable was shouting that the amount had been recovered from Khilli Ram.
DW. 4, an independent witness 1144 described this part of the story thus: "At the same time, Banshi waterman and Killi Ram accused present in the Court came from the side of Police Station.
The man standing near Ram Swaroop (obviously Prabhu Dayal), shouted: 'caught, caught '.
He took out the currency notes of Rs. 50 from his (witness ') pocket and raised this alarm." In cross examination this witness stated that the person who raised the cry said that the notes have been recovered from Khilli Ram but Khilli Ram was saying that he did not take the notes.
Two other aspects are relevant to be indicated here.
According to PW. 1, Kastoori Lal, the Deputy Superintendent of Police ordered him to take the search of the accused whereupon he proceeded to do the needful.
PW. 2, however, stated that it was the Dy.
Superintendent of Police who recovered the notes from the accused.
PW. 6 has, however, indicated that under his orders search was conducted by PW. 1.
There is again material discrepancy as to from where the amount was recovered.
PW. 2 has stated that the accused kept the notes of Rs. 50 given by him in the left side pocket of his shirt.
PW. 6 has stated: "When Prabhu Dayal conducted the search of the accused, Ext.
P 1, 2, 3, 4 and 5 notes of the denomination of Rs. 10 each were found out from the right side pocket of the shirt of the accused." Ext.
P 1 is the recovery memo purported to have been prepared att he spot.
It indicates: "Then the settled five currency notes of the denomination of Rs. 10 each were recovered from the right hand pocket of the worn shirt of khaki uniform.
" There is thus a discrepancy as to the place from where recovery was made.
It was pointed out by this Court in Raghbir Singh vs State of Punjab: "Where a trap is laid for a public servant, it is desirable that the marked currency notes which are used for the purpose of trap, are treated with phenolphthalein powder so that the handling of such marked currency notes by the public servant can be detected by chemical process and the Court does not have to depend on oral evidence which is sometimes of dubious character for the purpose of deciding the fate of the public servant." Ordinarily in cases of this type the powder treatment is made.
There is no material at all on the record to explain why such a 1145 process was not followed in the instant case even though detection is alleged to have been handled by experienced people of the Anti Corruption Department.
PW. 6 was a very senior officer and in fact by the time the trial took place he had retired from service.
It is difficult for us to accept the position that he was not aware of the powder treatment.
It has been in vogue for well over three decades now.
If such powder treatment had been made, the passing of the bribe would indeed not have been difficult to be proved.
We are prepared to agree with counsel to the State of Rajasthan that ordinarily a case of type is difficult to prove and the law is settled that even the uncorroborated testimony of trap witnesses can be acted upon as indicated by this Court in the case of Prakash Chand vs State (Delhi Administration), and Kishan Chand Mangal vs State of Rajasthan, but in the present case the evidence of the panchas is not available to support the prosecution case.
There is discrepancy in many material aspects.
The prosecution story is opposed to ordinary human conduct.
The discrepancies go to the root of the matter and if properly noticed would lead any court to discard the prosecution version.
Without powder treatment, for the absence of which no explanation has been advanced, the prosecution story becomes liable to the rejected.
An overall assessment of the matter indicates that the story advanced by the prosecution is not true and the defence version seems to be more probable.
In these circumstances we are of the view that sufficient material has been brought out to merit interference in this appeal.
We allow the appeal, set aside the conviction of the appellant and acquit him.
He is discharged form his bail bond.
N.V.K. Appeal allowed.
| In accordance with the provisions of the and in terms of Para 2 of the contract of apprenticeship the appellants completed a one year apprenticeship under respondent No. 2, Punjab State Electricity Board.
Contrary to the Instructions, noticed on March 23rd, 1983 and issued by of the Ministry of Labour and Rehabilitation, Department of Labour (D.G.E.T ) Government of India to all officers asking them to take necessary action to ensure that the trained apprentices are absorbed in industries upto a minimum of 50 per cent of direct recruitment vacancies, the Board advertised on July 27, 1983 50 posts of Junior Engineers II (Electrical) in its establishment for which the appellants had successfully completed a one year apprenticeship under it.
The appellants, therefore, filed a writ petition in the High Court of Punjab and Haryana, challenging the issuance of the advertisement on the ground that under their respective letters of appointment, they were entitled to be appointed to 50 per cent of posts which were advertised by respondent No 2.
The writ petition was dismissed by the High Court on the ground that the letters of appointment issued to the appellant did not contain any assurance or undertaking that they will be absorbed in the service of the Punjab State Electricity Board; that 47 per cent of the vacancies were already reserved for Scheduled Castes, Scheduled Tribes, backward classes, ex servicemen, etc, and that, if another 50 per cent of the posts were to be reserved for apprenticeship trainees, almost 100 per cent posts shall have been put in the reserved category which would be contrary to law.
Hence the appeal by special leave Allowing the appeal, the Court, ^ HELD. 1.
The object of Section 22(2) of the Apprentice Act 1961 is to guarantee to the extent of the existence of vacancies that the apprentices will not be rendered jobless after they complete their training.
153 2.1.
Sub section (2) of section 22 leaves no doubt that, despite the A provision contained in sub section (1), the employer is under an obligation to offer suitable employment to the apprentice if the contract of apprentice.
ship contains a condition that the apprentice shall serve the employer after the successful completion of the training.
Indeed, when such an offer is made the apprentice on his part is bound to serve the employer in the capacity in which he was working as an apprentice.
In a contract of apprenticeship, if a condition is not happily expressed the Court must take a broad and commonsense view of the terms of the employment.
It in not proper in such cases to indulge in a hair splitting approach and find an escape for defeating the rights of employees.
[155 F G] 2.2.
Paragraph 2 of the letters of appointment is intended to convey the meaning that there is an obligation on the apprentices to serve the employer after the successful completion of the training.
When paragraph 2 says that the apprentice "shall be absorbed in the department" the only reasonable interpretation to put upon that expression is that it creates reciprocal rights and obligations on the parties to the contract of apprenticeship, namely, the employee and the employer.
"You shall be absorbed" is a double edged term of the contract.
It binds the employer to offer employment to the apprentice (if there is a vacancy) and, equally, it binds the apprentice to accept the offer.
In the context in which the expression "without any commitment" occurs, it only means that the obligation of the employer to offer employment to the apprentice and the corresponding obligation of the apprentice to serve the employer arises only if and when there is a vacancy in which the apprentice can be appointed.
Paragraph 2 of the letters of appointment creates a binding obligation upon the employer to absorb the apprentices in the department on the successful completion of the training period, provided there is a vacancy in which the apprentices can be appointed.
It would be contrary both to the letter and spirit of paragraph 2 of the letters of appointment to hold that even if there is a vacancy in which an apprentice can be appointed after the successful completion of his training, the employer is free not to appoint the apprentice and fill that vacancy by appointing an outsider Such a reading of the assurance contained in paragraph 2 will also frustrate the very object of the provision made by the legislature in section 22(2) of the apprentice Act.
[157 B; E F] 3.
The contention that the Executive Engineer, who sent the letters of appointment, had no authority to incorporate the particular condition in those letters cannot be accepted in as much as a senior officer in the position of an Executive Engineer would not incorporate a specific term in the contract of apprenticeship without being authorised to do so.
[156 G H] 4.
In the instant case, offering employment to the appellants to the extent of 50 per cent of the posts will not violate the law, as laid down by this Court, in regard to reservation of posts.
The appellants are entitled to be appointed in the available vacancies not because of any reservation of posts in their favour but because of the provisions of section 22(2) of the 154 Apprertices Act and the contractual obligations arising under paragraph 2 of the letters of appointment.
[157 H; 158 A]
|
Appeal No. 326 of 1955.
1250 Appeal by special leave from the judgment and decree dated April 10, 1953, of the Madras High Court in Second Appeal No. 1815 of 1949, arising out of the judgment and decree dated January 28, 1949, of the Court of Subordinate Judge, Bapatla, in A. section No. 188 of 1947, against the judgment and decree dated December 23, 1946, of the District Munsif, Ongole, in O. section No. 139 of 1946.
M. C. Setalvad, Attorney General for India and R.Ganapathy Aiyar, for the appellants.
A. V. Viswanatha Sastri, M. R. Rangaswami Aiyangar, T. section Venkataraman and K. R. Choudhury, for the respondents.
September 4.
The Judgment of the Court was delivered by VENKATARAMA AIYAR J.
This appeal arises out of a suit for partition of joint family properties instituted on April 2, 1942, in the Court of the District Munsif, Ongole, on behalf of one Kakumanu Ramanna, a minor of the age of about 2 1/2 years by his material grandfather, Rangayya, as his next friend.
The first defendant is his father.
The second and third defendants are the sons of the first defendant by his deceased first wife.
The fourth defendant is the second wife of the first defendant and the mother of the plaintiff .
The fifth defendant is the daugther of the first defendant by the fourth defendant.
In the plaint, three grounds were put forward as to why the minor plaintiff should have partition: (1) It was said that the mother of the plaintiff was ill treated, and there was neglect to maintain her and her children.
Both the District Munsif and the Subordinate Judge on appeal, held that this had not been established, and no further notice need be taken of it.
(2) It was then said that there had been a sale of the family properties to one Akkul Venkatasubba Reddi for Rs. 2,300, that there was no necessity for that sale, and that its object was only to injure the plaintiff.
That sale is dated May 9, 1939.
(3) Lastly, it was alleged that item 2 had been purchased on June 1, 1938, and item 11 on June 14, 1939, with joint family 1251 funds, but that the sale deeds had been taken in the names of the second and third defendants with a view to diminish the assets available to the plaintiff.
In addition to these allegations, it was also stated in the plaint that the family was in good circumstances, and that there were no debts owing by it.
On June 20, 1942, the defendants filed their written statements, wherein they claimed that the purchase of items 2 and 11 had been made with the separate funds of the second and third defendants, and that the joint family had no title to them.
They further alleged that the family had debts to the extent of Rs. 2,600.
Sometime in January 1943, the minor plaintiff died, and his mother who was the fourth defendant was recorded as his legal representative, and transposed as the second plaintiff.
The suit was in the first instance decreed, but on appeal, the Subordinate Judge remanded the case for trial on certain issues.
At the rehearing, it ",as proved that the first plaintiff was born on December 20, 1939.
On that, the District Munsif held that the sale of the family properties to Akkul Venkatasubba Reddi and the purchase of items 2 and II in the names of the second and third defendants having been anterior to the birth of the minor plaintiff, no cause of action for partition could be founded thereon.
The District Munsif also held on the evidence that the purchase of items 2 and 11 was not shown to have been made with separate funds, and that therefore they belonged to the joint family and further that the family owed no debts and that the allegations contra in the statements were not made out.
But he held, however, that this did not furnish a cause of action for partition.
In the result, he dismissed the suit.
There was an appeal against this judgment to the Court of the Subordinate Judge of Bapatla, who affirmed the findings of the District Munsif that items 2 and 11 belonged to the joint, family, and that there were no debts owing by it.
But he also agreed with him that as the sale and purchases in question were prior to the birth of the minor plaintiff, the suit for 159 1252 partition based thereon was not maintainable.
He accordingly dismissed the appeal.
The second plaintiff took the matter in second appeal to the High Court of Madras, and that was heard by Satyanarayana Rao J. who held that as the defendants had falsely claimed that items 2 and 11 were the separate properties of the second and third defendants, their interest was adverse to that of the minor and that the suit for partition was clearly beneficial to him.
He accordingly granted a preliminary decree for partition.
The present appeal has been brought against it on leave granted by this Court under article 136.
The learned Attorney General who appeared for the appellants advanced two contentions in support of the appeal: (1) that there was a concurrent finding by both the courts below that the suit was not instituted for the benefit of the minor, and that the High Court had no power to reverse it in second appeal; and (2) that, in any event, as the minor plaintiff had died before the suit was heard and before the court could decide whether the institution of the suit was for his benefit, the action abated and could not be continued by his mother as his legal representative.
On the first question, the contention of the appellants is that it is a pure question of fact whether the institution of a suit is for the benefit of a minor or not, and that a finding of the courts below on that question is not liable to be interfered with in second appeal.
But it must be observed that the finding of the Subordinate Judge was only that as the impugned sale and purchases were made before the minor plaintiff was born, no cause of action for partition could be founded by him thereon, and that, in our opinion, is a clear misdirection.
The transactions in question were relied on by the minor plaintiff as showing that the defendants were acting adversely to him, and that it was therefore to his benefit that there should be a partition.
It is no doubt true that as the plaintiff was not born on the date of those transactions, the defendants could not have entered into them with a view to injure him, though even as to this it should be noted that in May and June, 1253 1939 when the transactions were concluded, the first plaintiff was in the womb, and the first defendant admits knowledge of this, in his evidence.
But assuming that there was no intention to defeat the rights of the first plaintiff at the time when the transactions in question were entered into, that does not conclude the matter.
The real point for decision is whether the defendants were acting adversely to the minor, and if, after he was born, they used documents which might have been innocent when they came into existence, for the purpose of defeating his rights to the properties comprised therein, that would be conduct hostile to him justifying partition.
Now, what are the facts ? In the written statements which were filed shortly after the institution of the suit while the first plaintiff was alive, defendants I to 3 combined to deny his title to items 2 and I 1, and at the trial, they adduced evidence in support of their contention that they were the separate properties of defendants 2 and 3.
Even in the Court of Appeal, the defendants persisted in pressing this claim, and further maintained that the joint family had debts, and both the courts below had concurrently held against them on these issues.
These are materials from which it could rightly be concluded that it was not to the interest of the minor to continue joint with the defendants, and that it would be beneficial to him to decree partition.
In holding that as the transactions in question had taken place prior to his birth the minor could not rely on them as furnishing a cause of action, the courts below had misunderstood the real point for determination, and that was a ground on which the High Court could interfere with their finding in second appeal.
We accept the finding of the High Court that the suit was instituted for the benefit of the minor plaintiff, and in that view, we proceed to consider the second question raised by the learned Attorney General and that is the main ques tion that was pressed before us whether the suit for partition abated by reason of the death of the minor before it was heard and decided.
The contention on behalf of the appellants is that while in the case of an adult coparcener a clear and 1254 unambiguous expression on his part of an intention to become divided will have the effect of bringing about a division in status and the filing of a suit for partition would amount to such an expression, that rule can have no application in the case of a minor, as under the law he is incapable of a volition of his own.
It is conceded by the appellants that a suit for partition could be entertained on behalf of a minor plaintiff, and decreed if the court decides that it, is in the interests of the minor.
But it is said that in such a case, the court exercises on behalf of the minor a volition of which lie is incapable, that it is not until that volition is exercised by the court that there can be a division in status, and that, therefore, when a minor plaintiff dies before the court adjudicates on the question of benefit to him, he dies an undivided coparcener and his interest survives to the other coparceners and does not devolve on his heirs by inheritance.
The contention of the respondents, on the other hand, is that a suit for partition instituted on behalf of a minor coparcener stands on the same footing as a similar suit filed by an adult coparcener, with this difference that if the suit is held by the court not to have been instituted for the benefit of the minor it is liable to be dismissed, and no division in status can be held to result from such an action.
In other words, it is argued that a suit for partition on behalf of a minor effects a severance in status from the date of the suit, conditional on the court holding that its institution is for the benefit of the minor.
The question thus raised is one of considerable importance, on which there has been divergence of judicial opinion.
While the decisions in Chelimi Chetty vs Subbamma (1), Lalta Prasad vs Sri Mahadeoji Birajman Temple (2) and Hari Singh vs Pritam Singh(3), hold that when a suit for partition is filed on behalf of a minor plaintiff there is a division in status only if and when the Court decides that it is for his benefit and passes a decree, the decisions in Rangasayi vs Nagarathnamma (4), Ramsing vs Fakira (5) and Mandliprasad vs Ramcharanlal (6), lay down that when such a (1) 442.
(2) All.
(3) A.I.R. 1936 Lah.
(4) Mad.
(5) I.L.R. (6) I.L.R. 1255 suit is decreed, the severance in status relates back to the date of the institution of the suit.
While Chelimi Chetty vs Subbamma (1) decides that when a minor on whose behalf a suit is filed dies before hearing, the action abates, it was held in Rangasayi vs Nagarathnamma (2) and Mandliprasad vs Ramcharanlal (3) that such a suit does not abate by reason of the death of the minor before trial, and that it is open to his legal representatives to continue the suit and satisfy the court that the institution of the suit was for the benefit of the minor, in which case there would be, a division in status from the date of the plaint and the interests of the minor in the joint family properties would devolve on his heirs.
To decide which of these two views is the correct one, we shall have to examine the nature of the right which a minor coparcener has, to call for partition and of the power which the court has, to decide whether the partition in question is beneficial to the minor or not.
Under the Mitakshara law, the right, of a coparcener to share in the joint family properties arises on his birth, and that right carries with it the right to be maintained out of those properties suitably to the status of the family so long as the family is joint and to have a partition and separate possession of his share, should he make a demand for it.
The view was at one time held that there could be no partition, unless all the coparceners agreed to it or until a decree was passed in a suit for partition.
But the question was finally settled by the decision of the Privy Council in Girja Bai vs Sadashiv Dhundiraj (4), wherein it was held, on a review of the original texts and adopting the observation to that effect in Suraj Narain vs lqbal Narain (5), that every coparcener has got a right to become divided at his own will and option whether the other coparceners agree to it or not, that a division in status takes place when he expresses his intention to become separate unequivocally avid unambiguously, that the filing of a suit for partition is a clear expression of such an intention, and that, in consequence, (1) Mad.
(2) Mad.
(3) I.L.R. (4) (1916) L.R. 43 I.A. 151.
(5) (1912) L.R. 40 I.A. 40,45.
1256 there is a severance in status when the action for partition is filed.
Following this view to its logical conclusion, it was held by the Privy Council in Kawal Nain vs Prabhu Lal (1), that even if such a suit were to be dismissed, that would not affect the division in status which must be held to have taken place, when the action was instituted.
Viscount Haldane observed: "A decree may be necessary for working out the result of the severance and for allotting definite shares, but the status of the plaintiff as separate in estate is brought about by his assertion of his right to separate, whether he obtains consequential judgment or not." The law being thus settled as regards coparceners who are sui juris, the question is whether it operates differently when the coparcener who institutes the suit for partition is a minor acting through his next friend.
Now, the Hindu law makes no distinction between a major coparcener and a minor coparcener, so far as their rights to joint properties are concerned.
A minor is, equally with a major, entitled to be suitably maintained out of the family properties, and at partition, his rights are precisely those of a major.
Consistently with this position, it has long been settled that a suit for partition on behalf of a minor coparcener is maintainable in the same manner as one filed by an adult coparcener, with this difference that when the plaintiff is a minor the court has to be satisfied that the action has been instituted for his benefit.
Vide the authorities cited in Rangasayi vs Nagarathnamma (2 ) at p. 137.
The course of the law may be said, thus far, to have had smooth run.
But then came the decision in Girja Bai vs Sadashiv Dhundiraj (3) which finally established that a division in status takes place when there is an unambiguous declaration by a coparcener of his intention to separate, and that the very institution of a suit for partition constituted the expression of such an intention.
The question then arose how far this principle could be applied, when the suit for partition was instituted not by a major but by a minor acting through his next friend.
The view was expressed that (1) (1917) L.R. 44 I.A. 159.
(2) Mad.
(3) (1916) L.R. 43 I.A. 151.
1257 as the minor had, under the law, no volition of his own ' the rule in question had no application to him it was not, however, suggested that for that reason no .suit for partition could be maintained on behalf of a minor, for such a stand would be contrary to the law as laid down in a series of decisions and must, if accepted, expose the estate of the minor to the perils of waste and spoliation by coparceners acting adversely to him.
But what was said was that when a court decides that a partition is for the benefit of a minor, there is a division brought about by such decision and not otherwise.
It would follow from this that if a minor died before the court decided the question of benefit lie would have died an undivided coparcener of his family and his heirs could not continue the action.
In Chelimi Chetty vs Subbamma (1), the point directly arose for decision whether on the death of a minor plaintiff the suit for partition instituted on his behalf could be continued by his legal representatives.
It was held that the rule that the institution of a suit for partition effected a severance of joint status was not applicable to a suit instituted on behalf of a minor, and that when he died during the pendency of the suit" his legal representative was not entitled to continue it.
The ground of this decision was thus stated: " It was strongly argued by the learned pleader for the respondent that as the plaint states facts and circumstances which, if proved, would be good justification for the court decreeing partition, therefore at this stage we must proceed on the basis that there was a good cause of action and there was thus a severance of status effected by the institution of the suit.
This clearly does not amount to anything more than this, that it is open to a person who chooses to act on behalf of a minor member of a Hindu family to exercise the discretion on his behalf to effect a severance.
What causes the severance of a joint Hindu family is not the existence of certain facts which would justify any member to ask for partition, but it is the exercise of the option which the law lodges in a member of the joint family to say whether he shall continue to remain (1) Mad.
1258 joint or whether he shall ask for a division.
In the case of an adult he has not got to give any reasons why lie asks for partition but has simply to say that he wants partition, and the court is bound to give him a decree.
In the case of a minor the law gives the court, the power to say whether there should be a division or not, and we think that it will lead to considerable complications and difficulties if we are to say that other persons also have got the discretion to create a division in the family, purporting to act on behalf of a minor.
" This decision was cited with approval in Lalta Prasad vs
Sri Mahadeoji Birajman Temple (1), wherein it was observed: " The effect, therefore, we think, of an action brought by a minor through his next friend is not to create any alteration of status of the family, because a minor cannot demand as of right a separation; it is only granted in the discretion of the court when, in the circumstances, the action appears to be for the benefit of the minor.
See Chelimi Chetty vs Subbamma (2).
" In Hari Singh vs Pritam Singh (3), a suit for partition instituted on behalf of a minor was decreed, the court finding that it was for the benefit of the minor.
The question then arose as to the period for which the karta could be made liable to account.
It was held, following the decisions in Chelimi Chetty vs Subbamma (2 ) and Lalla Prasad vs Sri Mahadeoji Birajman Temple (1), that as the severance in status took place only on the date of the decision and not when the suit was instituted, the liability to account arose only from the date of the decree and not from the date of the suit.
It may be mentioned that in Chhotabhai vs Dadabhai (4) Divatia J. quoted the decision in Chelimi Chetty vs Subbamma (2) with approval, but as pointed out in Ramsing vs Fakira (5) and by the learned judge himself in Bammangouda vs Shankargouda (6), the point now under consideration did not really arise for decision in that case, and the (1) All. 461.
(2) Mad.
(3) A.I.R. 1936 Lah.
(4) A.I.R. 1935 Bom.
(5) I.L.R. (6) A.I.R. 1944 Bom.
1259 observations were merely obiter.
It is on the strength of the above authorities that the appellants contend that when the minor plaintiff died in January 1943, the suit for partition had abated, and that his mother had no right to continue the suit as his heir.
Now, the ratio of the decision in Chelimi Chetty vs Subbamma (1) and it is this decision that was followed in Lalta Prasad 's Case (2 ), Hari Singh vs Pritam Singh (3) and Chhotabhai vs Dadabhai (4) is that the power to bring about a division between a minor and his coparceners rests only with the court and not with any other person, and that, in our judgment, is clearly erroneous.
When a court decides that a suit for partition is beneficial to the minor, it does not itself bring about a division in status.
The court is not in the position of a super guardian of a minor expressing on his behalf all intention to become divided.
That intention is, in fact, expressed by some other person, and the function which the court exercises is merely to decide whether that other person has acted in the best interests of the minor in expressing on his behalf ail intention to become divided.
The position will be clear when regard is had to what takes place when there is a partition outside court.
In such a partition, when a branch consisting of a father and his minor son becomes divided from the others, the father acts on behalf of the minor son as well; and the result of the partition is to effect a severance in status between the father and his minor son, oil the one hand and the other coparceners, on the other.
In that case, the intention of the minor to become separated from the coparceners other than his father is really expressed on his behalf by his father.
But it may happen that there is a division between the father and his own minor son, and in that case, the minor would normally be represented by his mother or some other relation, and a partition so entered into has been recognised to be valid and effective to bring about a severance in status.
The minor has no doubt the right to have the partition set aside if it is shown to have been prejudicial to him but if that is not established, the partition (1) Mad.
(3) A.I.R. 1936 Lah.
(2) All.
(4) A.I.R. 1935 BOM.
160 1260 is binding on him.
Vide Balkishen Das vs Ram Narain Sahu (1).
And even when the partition is set aside on the ground that it is unfair, the result will be not to annul the division in status created by the partition but to entitle the minor to a re allotment of the properties.
It is immaterial that the minor was represented in the transaction not by a legal guardian but by a relation.
It is true, as held in Gharib Ul Lah vs Khalak Singh (2) that no guardian can be appointed with reference to the coparcenary properties of a minor member in a joint family, because it is the karta that has under the law the right of management in respect of them and the right to represent the minor in transactions relating to them.
But that is only when the family is joint, and so where there is disruption of the joint status, there can be no question of the right of a karta of a joint family as such to act on behalf of the minor, and on the authorities, a partition entered into on his behalf by a person other than his father or mother will be valid, provided that person acts in the interests of and for the benefit of the minor.
If, under the law, it is competent to a person other than the father or mother of a minor to act on his behalf, and enter into a partition out of court so as to bind him, is there any reason why that person should not be competent when he finds that the interests of the minor would best be served by a division and that the adult coparceners are not willing to effect a partition, to file a suit for that purpose on behalf of the minor, and why if the court finds that the action is beneficial to the minor, the institution of the, suit should not be held to be a proper declaration on behalf of the minor to become divided so as to cause a severance in status? In our judgment, when the law permits a person interested in a minor to act on his behalf, any declaration to become divided made by him on behalf of the minor must be held to result in severance in status, subject only to the court deciding whether it is beneficial to the minor; and a suit instituted on his behalf if found to be beneficial, must be held to bring about a division in status.
That (1) (1903) L.R. 30 I.A. 139.
: (2) (1903) L.R. 30 I.A. 165.
1261 was the view taken in a Full Bench decision of the Madras High Court in Rangasayi.
vs Nagarathnamma (1), wherein Ramesam J. stated the position thus: " These instances show that the object of the issue whether the suit was for the benefit of the minor is really to remove the obstacle to the passing of the decree.
It is no objection to the maintainability of the suit.
In my opinion therefore in all such cases the severance is effected from the date of the suit conditional on the court being able to find that the suit when filed was for the benefit of the minor.
" The same view has been taken in Ramsing vs Fakira (2) and Mandliprasad vs Ramcharanlal (3), and we agree with these decisions.
On the conclusion reached above that it is the action of the person acting on behalf of a minor that brings about a division in status, it is necessary to examine what the nature of the jurisdiction is which the courts exercise when they decide whether a suit is for the benefit of a minor or not.
Now, the theory is that the Sovereign as parens patriae has the power, and is indeed under a duty to protect the interests of minors, and that function has devolved on the courts.
In the discharge of that function, therefore, they have the power to control all proceedings before them wherein minors are concerned.
They can appoint their own officers to protect their interests, and stay proceedings if they consider that they are vexatious.
In Halsbury 's Laws of England, 3rd Edn., Vol.
XXI, p. 216, para.
478, it is stated as follows: " Infants have always been treated as specially under the protection of the Sovereign, who, as parens patriae, had the charge of the persons not capable of looking after themselves.
This jurisdiction over infants was formerly delegated to and exercised by the Lord Chancellor; through him it passed to the Court of Chancery, and is now vested in the Chancery Division of the High Court of Justice.
It is independent of the question whether the infant has any property or not.
" (1) Mad.
(2) I.L.R. (3) I.L.R. 1262 It is in the exercise of this jurisdiction that courts require to be, satisfied that the next friend of a minor has in instituting a suit for partition acted in his interest.
When, therefore, the court decides that the suit has been instituted for the benefit of the minor and decrees partition, it does so not by virtue of any rule, special or peculiar to Hindu law but in the exercise of a jurisdiction which is inherent in it and which extends over all minors.
The true effect of a, decision of a court that the action is beneficial to the minor is not to create in the minor proprio vigore a right which he did not possess before but to recognise the right which had accrued to him when the person acting on his behalf instituted the action.
Thus, what brings about the severance in status is the action of the next friend in instituting the suit, the decree of the court merely rendering it effective by deciding that what the next friend has done is for the benefit of the minor.
It remains to consider one other argument advanced on behalf of the appellants.
It was urged that the cause of action for a suit for partition by a minor was one personal to him, and that on his death before hearing, the suit must abate on the principle of the maxim, actio personalis moritur cum persona.
But that maxim has application only when the action is one for damages for a personal wrong, and as a suit for partition is a suit for property, the rule in question has no application to it.
That was the view taken in Rangasayi vs Nagarathnamma (1) at pp.
137 138 and in Mandliprasad vs Ramcharanlal (2) at p. 871, and we are in agreement with it.
All the contentions urged in support of the appeal have failed, and the appeal is accordingly dismissed with costs.
The amounts paid by the appellants to the respondents in pursuance of the order of this Court dated March 7, 1958, will be taken into account in adjusting the rights of the parties under this decree.
(1) Mad.
Appeal dismissed.
| In a suit instituted on behalf of a Hindu minor for partition of the joint family properties, the minor plaintiff died during the pendency of the suit and his mother as the legal representative was allowed to continue the suit as the second plaintiff, and the suit was decreed as it was found that the defendants had been acting against the interests of the minor and that the suit for partition was therefore beneficial to him.
It was contended for the appellants that the suit had abated by reason of the death of the minor before the suit was heard and before the Court could decide whether the institution of the suit was for his benefit.
Held, that when a suit is instituted by a person acting on behalf of a minor for the partition of the joint family properties, a declaration made by him on behalf of the minor to become divided brings about a severance in status, subject only to the decision of the Court that the action is beneficial to the minor.
The true effect of the decision of the Court is not to create in the minor a right which he did not possess before but to recognise the right which had accrued to him when the action was instituted.
Rangasayi vs Nagarathnamma, Mad. 95, Ramsingh vs Fakira, I. L. R. and Mandilprasad vs Ramcharanlal, I.L.R. , approved.
Case law reviewed.
Accordingly, the suit did not abate and the legal represen tative was entitled to continue the suit and obtain a decree on showing that when the suit was instituted it was for the benefit of the minor.
Held, further, that the suit did not abate on the ground either that the cause of action for a suit for partition by a minor was one personal to him, because such a suit is one relating to property.
|
TION: Civil Appeal No. 2427 of1966.
Appeal by special leave from the judgment and order dated August 27, 1964 of the Madhya Pradesh High Court in Misc.
Appeal No. 20 of 1964.
section C. Majumdar and R. K. fain, for the appellant.
W. section Barlingay, Ramesh Mali and Ganpat Rai, for the respondent.
The Judgment of S, M. SIKRI, C.J., G. K. MITTER, K. section HEGDE and V. BHARGAVA, JJ. was delivered by HEGDE, J. P. JAGAMOHAN REDDY, J. gave a separate Opinion: Hegde, J. This is an execution appeal.
The decree holders are the appellants herein.
This case has a long and chequered history.
The decree holders obtained a decree against the respondents in the court of Sub Judge, Bankura (West Bengal) for a sum of over Rs. 12,000/ , on December 3, 1949.
On March 28, 1950 they applied to the court which passed the decree to transfer the decree together with a certificate of non satisfaction to the court at Morena in the then Madhya Bharat State for execution.
It was ordered accordingly.
The execution proceedings commenced in the court of Additional District Judge at Morena on September 21, 1950 (Money Execution Case No. 8 of 1950).
The judgment debtors resisted the execution on the ground that the court had no jurisdiction to execute the same as the decree was that of a foreign court and that the same had been passed exparte.
The court accepted that contention and dismissed the execution petition on December 29, 1950.
On April 1, 1951 the Code of Civil Procedure (Amendment) Act, (Act 11 of 1951) came into force.
As a result of that the Code of Civil Procedure (in short the 'Code ') was extended to the former State of Madhya Bharat as well as to various other places.
Meanwhile the decree holders appealed against the order of the learned Additional District Judge, Morena dismissing the execution petition, to the High Court of Madhya Pradesh.
The Madhya Pradesh High Court allowed their appeal.
As against that the judgment debtors appealed to this Court.
This Court allowed the appeal of the judgment debtors and restored the order of the learned Additional District Judge,, 'Morena.
The decision of this Court is reported in Hansraj Nathu Ram vs Lalji Raj and sons of Bankura(1).
Therein this Court ruled that the transfer ordered by (1) 819 the Bankura court was without jurisdiction as on that date 'the Code ' did not apply to the Morena court.
This Court held that Morena court not being a court to which the, Code ' apple, the decree could not have been transport to it It further bed that sections 38 and 39 of 'the Code ' did not afford jurisdiction for such a transfer.
It may be noted that at the time the Bankura Court ordered the transfer of the decree, the Morena court was governed by the Indian Code of Civil Procedure as adapted by the Madhya Bharat Adaptation Order, 1948.
In other words it was governed 'by a law passed by the then Madhya Bharat State.
In the course of its judgment this Court observed that under 'the Code ' " a decree can be executed by a court which passed the decree or to which it was transport for executing and the decree which could be transferred has to be a decree 'passed under the Code and the court to which it could be transferred has to be a court which was governed by the Indian Code of Civil Procedure".
The first stage of the execution proceedings came to an end by the decision of this Court rendered on April 30, 1962.
On February 15, 1963, the decree holders filed another exe cution case before the Bankura court.
Therein they prayed for the transfer of the decree again to the Morena court for execution.
As noticed earlier, by that time 'the Code ' had been extended to the Madhya Bharat State which had become a part of the State of Madhya Pradesh.
The Bankura court again ordered the mans fer of the decree to the Morena court.
The execution proceedings were started afresh in the Morena court on August 31, 1963 (Execution Case No. 1 of 1963).
The judgment debt resisted the execution on various grounds viz. (a) that it is barred by res judicata in view of the decision of this Court referred to earlier , (b) that it is barred by section 48.
of 'the. Code '; (c) that it is barred by limitation; and (d) that the decree is not executable as it is a decree of a foreign court.
The learned Additional District Judge rejected the objections raised by the judgment debtors.
The judgment debtors appealed against that order to the High Court of Madhva Pradesh.
The High Court agreed with the executing court that the execution petition is neither barred by res judicata nor by section 48 of "the Code ', nor is there any bar of limitation.but it disagreed with that court and held that the decree was not evecutable as the court which passed the decree was a foreign court.
In arriving at that conclusion it purported to rely on the decision of this Court in Rai Rajendra Sardar Maloji Narsingh Rao Shitole vs vs Sri Shankar Saran and Ors. (1).
Aggrieved by that decision the decree holders have brought this appeal by special leave.
From the contentions advanced before us, two questions arise 1.
[1963]2 S.C.R. 577. 820 for decision.
They are (1) whether the decree under execution is not executable by courts situate in the area comprised in the former State of Madhya Bharat and (2) whether the decree is barred by section 48 of 'the Code '.
The contention of the Judgment debtors is that the decree under execution being a decree of a foreign court is a nullity qua the courts in the former State, of Madhya Bharat and therefore the same is not executable in the Morena court.
According to the decree holders the decree in question is not a decree of a foreign court as contemplated by 'the Code ' and the court to which the decree is transferred for execution namely the Morena court is a 'court ' ascontemplated by sections 38 and 39 of 'the Code ' and therefore therecan be no valid objection to its execution in the Morena court.
Before referring to the decided cases on the point it is necessary to read the relevant provisions of 'the Code ' as the execution is sought in accordance with the provisions therein. 'Foreign Court is defined in section 2(5) of 'the Code '.
That definition as it stood on the date the decree under execution was passed read thus "foreign court" means a Court situate beyond the limits of British;: India which has no authority in British India and, is: not established or continued by the Central Government.", A new definition of foreign court" was substituted by the Code of Civil Prcedure (Amendment) Act 11 of 1951.
That definition reads "foreign court" means a court situate outside India and not established or continued by the authority of the Central Government".
Whether we take the earlier definition or the present definition into consideration the Bankura court, cannot be considered as a "foreign court" within 'the meaning of that expression in 'the Code '.
Foreign judgment is defined in 'the Code ' as the judgment of 'a foreign court '.
(section 2(6) of 'the Code ').
Hence the decree under execution cannot be considered as a foreign decree for the purpose of the Code.
Section 13 of 'the Code ' provides that "A foreign judgment shall be conclusive as to any matter thereby directly adjudicated upon between the same parties or, between parties under whom they or any of them claim litigating under the same title except (b) where it hasnot, been given on the merits of the case.
" 821 The judgment with which we are concerned in this case was an ex parse judgment.
The Bankura court had no jurisdiction over the judgment debtors.
The Judgment debtors did not submit themselves to the jurisdiction of that court though they were served with a notice of the suit.
Hence if the Bankura court can be considered as a foreign court then s, 13(b) would have come to the rescue of the Judgment debtors and it would have enabled them to pread that the judgment in question was not conclusive and consequenty the decree is not binding against them.
But as the judgment in question cannot be considered as a judgment of a foreign court, they can take no assistance from section 13(b).
But assistance was sought to be taken from section 13(d) which says that the foreign judgments are not conclusive "where the proceedings in which the judgment was obtained are opposed to natural justice".
It was urged on behalf of the judgmentdebtors that as the decree under execution was an ex parte decree, we must hold that the proceedings in which the judgment was obtained were opposed to natural justice.
We are unable to accede to this contention.
As mentioned earlier, the judgment debtors were served with the notice of the suit.
They did not choose to appear before the court, Hence there is no basis for the contention that any principle of natural justice had been contravened.
Further as held earlier the judgment in question is not a foreign judgment.
Reliance was placed on Private International Law in support of the contention that in a personal action, a decree pro nounced in absentee by a foreign court, to the jurisdiction of which the defendant had not in any way submitted himself is an absolute nudity.
It was urged that the Bankura court had no jurisdiction over the judgment debtors and therefore the decree passed being one pronounced in absentem is a nullity.
In support of this contention reliance was placed on the decision of the Judicial Committee in Sirdar Gurdval Singh vs The Rajah of Faridkote(1).
Therein the Judicial Committee observed "In a personal action, to which none of these causes of jurisdiction apply, a decree pronounced in absentem by a foreign Court, to the jurisdiction of which the Defendant has not in any way submitted himself, is by international law an absolute nullity." But the Board qualified those observations by the following words : "He is under no obligation of any kind to obey it; and it must be regarded as a mere nullity by the Courts (1).
21 I.A. 171.
822 of every nation except (when authorised by special local legislation) in the country of the forum by which it was pronounced.
" The above remarks of the Board indicate that even a decree which is pronounced in absentem by a foreign court is valid and executable in the country of the forum by which it was pronounced when authorised by special local legislation.
A decree passed by ' a foreign court to whose jurisdiction a judgment debtor had not submitted is an absolute nullity only if the local legislature had not conferred upon jurisdiction on the domestic courts over the foreigners either generally or under specified circumstances.
Section 20(c) of 'the Code ' confers jurisdiction on a court in India over the foreigners if the cause of action arises within the jurisdiction of that court.
Hence the observation of the Board quoted in some of the decisions of the courts in India including the decision of this Court in Shitole 's case(1) that such a decree is an absolute nullity ' may not be apposite.
It may be more appropriate to say that the decree in question is not executable in courts outside this country.
The board itself had noticed that this rule of Private International law is subject to special local legislation.
Clause (c) of section 20 of 'the Code ' provided at the relevant time and still provides that subject to the limitations mentioned in the earlier sections of 'the Code ', a suit can be instituted in a court within the local limits of whose jurisdiction the cause of action.
wholly or in part, arises.
There is no dispute in this case that the cause of action for the suit which led up to the decree under execution arose within the jurisdiction of Bankura court.
Hence it must be held that the suit in question was a properly instituted suit.
From that it follows that the decree in question is a valid decree though it might not have been executable at one stage in courts in the former Indian States.
This takes us to sections 38 and 39 of 'the Code '.
Section 38 provides that a decree may be executed either by the court which passed it, or by the court to which it is sent for execution.
Section 39(1) to the extent it is material for our present purpose prescribes "The Court which passed a decree may, on the application of the decree holder, send it for execution to another Court (a) if the person against whom the decree is passed actually and voluntarily resides or carries on business, or personally works for gain within the local limits of the jurisdiction of such other Court. . (1) ; 823 Section 40 prescribes "Where a decree is sent for execution in another State, it shall be sent to such Court and executed in such manner as may be prescribed by rules in force in that State.
" Rules are defined in section 2(12) as meaning Rules and Forms contained in the 1st Schedule or made under section 122 or section 125 of 'the Code '.
On a combined reading of sections 2(12), 33, 39 and 40, it follows that a decree can be transferred for execution only to a court to which 'the Code ' applies.
This is what was ruled by this Court in Hansraj Nathu Ram vs Lalji Raja and sonw cf Bankura(1).
But by the date the impugned transfer was made, 'the Code ' had been extended to the whole of India.
In fact the court to which the decree was transferred is now an entirely new court in the eye of the Iaw see the decision of this Court in Shitole 's case(2).
From the foregoing discussion.
, it follows that the decree under execution is not a foreign decree and its transfer to the Morena court is in accordance with the provisions of the Code '.
That being so, the decree under execution satisfies the dictum of this Court in Hansraj Nathu Ram vs Lalji Raja and sons(1) that "a decree can be executed by a court which passed the decree or to which it was transferred for execution and the decree which could be transferred has to be a decree Passed under the Code and the Court to which it could be transferred has to be a Court which was governed by the Indian Code of Civil Procedure.
" It was next urged on behalf of the judgment debtor that in view of the decision of this Court in Shitole 's cave (supra) we must hold that the decree is a nullity and that it cannot be executed at all in the courts situate in the former State of Madhya Bharat.
In Shitole 's case (sunra) this Court was called upon to consider a converse case.
Therein the decree under execution was one passed by a court in Gwalior State in a suit instituted in May 1947.
The defendants were the residents of U.P.
They did not appeal before the Gwalior court though served with the notice.
An ex parte decree was passed against them in November, 1948.
On September, 1951, the Gwalior court transferred the decree for execution to Allahabad and on October 16.
1951, the decree holder filed an application for execution of the decree before the Allahabad Court.
The judgmentdebtors contended that the decree being a decree of foreign court to whose jurisdiction they had not submitted, was a mullity and the execution application in respect thereof was not majntanable.
That contention was accented by this Court.
It may be noted that the Gwalior Court was not a court constituted under the (1) [1963]2 S.C.R. 619.
(2) [1963]2 S.C.R. 577.
824 provisions of 'the Code '.
It was admittedly a foreign court for the purpose of any proceedings under the Code '.
The ratio of that decision is wholly inapplicable to the present case.
The question whether a decree is a foreign decree or whether it can be transferred to another court for execution has to be judged by the provisions of 'the, Code '.
It was ' next contended that in view of section 20 cl.
(b) of 'the Code ' of Civil Procedure (Amendment) Act, 1951 by which the Code is extneded to Madhya Bharat and other areas, the judg ment debtors ' right to resist the execution of the decree is protected.
Section 20(1) of the Act deals with Repeals and Savings.
That section to the extent relevant for our present purpose reads : "If, immediately before the date on which the said Code comes into force in any part B State corresponding to the said Code, that law shall on that date stand repealed.
Provided that the repeal shall not affiec (b) any right, privilege, obligation or liability acquired, accrued or incurred under any law so repealed. . . . ;. . . as if this Act had not been passed.
This provisions undoubtedly protects the rights acquired and privileges accrued under the law repealed by the amending Act.
Therefore the question for decision is whether the non executability of the decree in the Morena court under the law in force in Madhya Bharat before the extension of 'the Code ' can be said to be a right accrued under the repealed law.
We do not think that even by straining the language of the provision it can be said that the non executabity of a decree within a particular territory can be considered as a privilege.
Therefore the only question that we have to consider is whether it can be considered as a 'right accrued ' within the meaning of section 20(1) (b) of the Code of Civil Procedure (Amendment) Act, 1950.
In the first place, in order to get the 'benefit of that provision, the noli executability of the decree must be a right and secondly it must be a right that had accrued from the provisions of the repealed law.
It is contended on behalf of the judjment debtors that when the decree was passed, they had a right to resist the execution of the decree in Madhya Bharat in view of the provisions of the Indian Code of Civil Procedure (as adapted) which was in force in the Madhya Bharat at that time and the same is a vested right.
It was further urged on their behalf that right was preserved by section 20 (1 ) (b) of the Code of Civil Procedure Amendment Act, 825 1950.
It is difficult to ' consider the non executability of the decree in Madhya Bharat as a vested right of the judgmentdebtors.
The non executability in question pertains to the jurisdiction of certain courts and not to the rights of the judgmentdebtors.
Further the relevant provisions of the Civil Procedure Code in force in Madhya Bharat did not confer the right claimed by the judgment debtors.
All that has happened in view of the extension of 'the Code ' to the whole of lndia in 1951 is that the decree which could have been executed only by courts in British India are pow made executable in the whole of India.
The change made is one relating to procedure and Jurisdiction.
Even before 'the Code ' was extended to Madhay Bharat the dccree in question could have been executed either against, the person of the judgment debtors if they hid happened to come to British India or against any of their properties situate in British India.
The execution of the decree within the State of Madhya Bharat was not Permissible because the arm of 'the Code ' did not reach Madhya Bharat.
It was the invalidity of the order transferring the decree to the Morena court that stood in the way of the decree holders in executing their decree in that court on the earlier occasion and not because of any vested rights of the judgment debtors.
Even if the judgment debtors had not objected to the execution of the decree, the same could not have been executed by the court at Morena on the previous occasion as that court was not promly seized of the execution , proceedings.
By the extension of 'the Code ' to Madhya Bharat, want of jurisdiction on the part of the Morena court was remedied and that court is now made competent to execute the decree. ' That a provision to preserve the right accrued under a repealed Act "was not intended to preserve the abstract rights conferred by the repealed Act .
It only applies to specific rights given to an individual upon happening of one or the other of the events specified in statute case Lord Atkins ' observations in Hamilton Gell vs White(1).
The mere right.
existing at the date of repealing statute; to take advantage of provisions of the statute repealed is not a "right accrued" within the meaning of the usual saving clause see Abbot vs Minister for lands (2 ) and G. Ogden Industries Pty. Ltd. vs Lucas(3).
From what has been said above, it follows that the view taken by the High Court that the decree in question is a nullity qua the Morena court cannot be accented as correct.
The decree in question is neither a 'foreign decree ' as contemplated by 'the Code ' nor its transfer to the Morena court impermissible under 'the Code '.
By the provisions of 'the Code ' the Morena court is re (1) (2) (3) [1969] 1 All E. Report 121.
826 quired to proceed with the execution unless there is any valid objection.
We now come to the question whether the execution is barred by section 48 of 'the Code.
(That section was repeated in 1963).
Both the executing court as well as the High Court have taken the view that on the facts of this case, the limitation prescribed in section 48 of 'the Co& ' is extended under section 14(2) of the Limitation Act, 1908.
Both those courts have concurrently come to the conclusion that the previous execution proceedings had been prosecuted by the decree holders with due diligence and with good faith and the same, became infructuous in view of the fact that the Morena court had no jurisdiction to proceed with the execu tion.
The finding that the previous execution proceedings were carried on with due diligence and good faith and that the same became infructuous for want of jurisdiction on the part of the Morena court was not challenged before us.
But it was urged on behalf of the judgment debtors that section 48 prescribed a bar and not a period of limitation and consequently the decree holders cannot take the benefit of section 14(2) of the Limitation Act.
It is necessary to examine the correctness of this contention.
Section 48 read thus "(1) Where an application to execute a decree not being a decree grantincg an injunction has been made, no order for the execution of the same decree shall be made upon any fresh application presented after the expiration of 12 years from (a) the date of the decree sought to be executed or (b) 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, the date of the default in making the payment or delivery in respect of which the applicant seeks to execute the decree.
(2) Nothing in this section shall be deemed (a) to preclude the Court from ordering the execution of a decree upon an application presented after the expiration of the said term of twelve years, where the judgment debtor has, by fraud or force, prevented the execution of the decree at some time within twelve years immediately before the date of the application; or (b) to limit or otherwise affect the operation of article 183 of the First Schedule to the Indian Limitation Act, 1908".
827 article 18 3 of the Indian Limitation Act, 1908 read thus "Description of application.
Period of Time from which period Limitationbegins to run.
To enforce a judgment, decree Tweleve years When a present right to enor order of any Court established force the judgment, decree or by Royal Charter in the exercise order accrues to some person of its ordinary origiial civilcapable of releasing,the right.
jurisdiction or an order of the Provided 'that when the Supreme Court.judgment, decree or order has been revived, or some part of the principle money secured thereby or some interest on such money has been paid, or some acknowledgment of the right thereto has been given in writing signed by the person liable to pay such principal or interest or his agent, to the person entitled thereto or his agent, the twelve years shall be computed from the date of such revivor, payment or acknowledgment or the latest of such revivors payments or acknowledgments, as the case may be.
At this stage it is also necessary to read article 181 of the Limitation Act of 1908.
That Art prescribed that an application for which no period of limitation is provided elsewhere in the Sch.
to the Limitation Act, 1908 or by section 48 of the Code, the period of Limitation is three years and that period begins to run when the right to apply accrues.
article 182 of that Act provided that for the execution of a decree or order of any Civil Court not provided for by article 183 or by section 48 of 'the Code ', the period of limi tation is three years or where a certified copy of the decree or order has been registered six years.
The time from which the period was to run is set out in the 3rd column of the Sch.
The argument advanced on behalf of the judgment debtors is that section 48 is a self containecr Code and the period prescribed therein is a bar and not a period of limitation and hence the decree holders cannot take the benefit of section 14(2).
In support of this argument reliance is placed on sub section 2 (a) of section 48 of 'the Code '.
That sub section undoubtedly lends some support to the contention of the judgment debtors.
It indicates as to when the period prescribed under section 48(1) can be extended.
By implication it can be urged that the period prescribed under section 48(1) of the Code can only be extended under the circumstances mentioned in that clause and not otherwise.
But in assessing the correct 828 ness of that contention we have to take into consideration cl.
(b) of sub section
(2) of section 48 of the Code ' as well as articles 181 and 182 of the Limitation Act, 1908.
These provisions clearly go to indicate that the period prescribed under section 48(1) of 'the Code ' is a period of limitation.
This conclusion of ours is strengthened by the subsequent history of the legislation.
By the , section 48 of 'the Code ' is deleted.
Its place has now been taken by article 136 of the of 1963.
At one stage, there was considerable conflict of judicial opinion as to whether section 48 is controlled by the provisions of the Limitation Act 1908.
But the High Courts which had earlier taken the view that section 48 prescribes a bar and not limitation have now revised their opinion.
The opinion amongst the High Courts is now unanimous that section 48 of 'the Code ' is controlled by the provisions of the Limitation Act, 1908 see Kandaswami Pillai vs Kamappa Chetty(1); Durg vs Panchanti(2) Sitaram vs Chunnilalsa(3); Amarendra vs Manindra ( 4) Krishna Chandra vs Paravatamma(5); and Ramgopal vs Sidratm(6).
We are of the opinion that the ratio of the above decisions correctly lays down the law.
That apart, it would not be appropriate to unsettle the settled position in law.
For the reasons mentioned above this appeal is allowed and the order of the High Court is set aside and that of the trial court restored.
The executing court is directed to proceed with the execution.
The respondents shall pay the costs of the appellants both in this Court as well as in the High Court.
P.Jaganmohan Reddy, J. I agree with my learned brother Hedge J., that the Appeal should be allowed.
In the case of Kishendas vs Indo Carnatic Bank Ltd.(7) I bad while delivering the Judgment of the Bench expressed certain views which may appear to conflict with the view now taken.
In that case the executability of a decree passed by the Madras High Court in 1940 by the City Civil Court Hyderabad on the ground of its be a foreign decree was called in question.
The Respondent went into liquidation and a liquidator was appointed by the original side of Madras High Court.
The liquidator filed an application under Sec.
191 of the Indian Companies Act for the recovery of a sum of Rs. 1375 from the APPellant who was a subject of H.E.H the Nizam and a resident of Hyderabad on account (1) A,I.R. (3) I.L.R. [1944] Nag.250.
(5) A.I.R. 1953 Orissa 13.
(2) I.L.R. [1010] All. 647.
(4) A.I.R. 1955 Cal.
(6) A.I.R. 1943 Bom.
(7) A.I.R. 1958 A.P. 407. 829 of unpaid calls and the Court passed on ex parte decree on 15 8 1940 against the appellant.
The liquidator field an execution petition in that Court praying for a transfer of the decree to the City Civil Court Hyderabad which was ordered on 15 3 1951 when.
the Hyderabad Civil Procedure Code was in force in the Hyderabad Stat under which the decree of the Madras High Court would be a foreign decree and the only way in which the liquidator could recover the decreetal amount was by filing a suit on that decree.
No doubt the Madras High Court could not on that date i.e. 15 3 1951 pass an order directing the transfer of the decree as it was to a Court which was not governed by the Indian Civil Procedure Code (hereinafter called the Code) nor on that date were there any reciprocal arrangements for ex cuting those decrees in the Hyderbad State.
Madras High Court could not therefore transfer a decree passed by it for execution to a Court which did not satisfy the provisions of Sectons 43 to 45 on that date.
It did not also appear from the facts of that case whether any notice was served on the appellant but following the decision of the majority of the High Courts in this country and also relying on the observations of their Lordships of the Privy Council in Sardar Gurdayal Singh vs Raja of Faridkot (1) that a decree pronounced in absentum by a foreign Court the Jurisdiction to which the defendant has not in any way submitted himself is by international law a nullity, I also took the view that the non executability of the decree is to be determired as on the date on which it was passed and that no distinction can conceivably be made between the. decree passed by British Indian Courts before the merger or before the Independence when it was a foreign decree and a decree passed by the Courts of a native State before the Independence or merger in both cases the character of the Judgment would be that of a foreign Judgment and if it suffers from any want of jurisdiction or otherwise it will continue to be subject to that defect.
This Court had also expressed a similar view in Raj Rajendra Sardar Malaji Marsingh Rao Shitole vs Sri Shankar Saran & OrS.(2) when it held that an ex parte decree passed in 1948 by the Gwalior, Court against residents of U.P. who did not appear was not executable in Allahabad even though the Gwalior Court had transferred the decree in October 1957 after the Civil Procedure Amendment Act IT of 1951 come info force after which the Gwalior Court was a Court under the Cade.
It was held by a majority that the decree passed by the Gwalior Court did not change it,, nationality in spite of subsequent constitional changes or amendments in the Code of Civil Procedure.
that if a decree was unenforceable in a particular Court at the time it was passed it would not become enforceable and valid simply because of the political changes that (1) 21 I.A. 171.
(2) [1963]2 S.C.R. 577.
830 took place unless there is a specific provision to the contrary and that the decree being a nullity outside the Courts of the United States (Madhya Bharat) in the absence of any specific Provision it could not be enforced in the United States (Madhya Bharat) Kapur J., speaking for himself, Ralagopala Ayyangar and MUDholker JJ., observed at pages 594 595 thus : "It will not be correct to say that the decree which was a nullity before the Constitution came into force suffered only from the defect of enforcibility by execution.
Sec. 13 creates substantive rights and is not merely procedural and therefore defenses which were open to the Respondents were not taken away by any Constitutional changes in the absence of a specific provision to the contrary.
It is erroneous to say therefore that the decree of the Gwalior Court was unenforceable when passed because of some impediment which the subsequent Constitutional changes had removed; but that decree suffered from a more fundamental defect of being a nullity and the rights and liabilities created under it remained unaffected.
by subsequent changes".
The contention that the decree of the Gwalior Court could be executed after its transfer on September 14, 1951 when the Civil Procedure Code came into force throughout India by virtue of Act 11 of 1951 and that therefore the Gwalior Court had the power to transfer the decree which the Allahabad Court had under the law authority to execute was also negatived for the reason that the "Court which made the order of transfer in September 1951 was then not the Court which passed the decree within the meaning of Sec. 39".
Das Gupta J., with whom Sarkar J., as he then was, concurred, did not find it necessary to deal with the question of foreign decree which as he said the Allahabad Court rightly considered a nullity.
On the second and third question he held that Allahabad had no power to execute the decree under Sec.
38 of the Civil Procedure Code as there was no valid transfer to it from the Court which passed the decree nor did Section 43 of the Civil Procedure Code as it stood applied to the execution of that decree.
Even though the observations in Kishendas 's case find support in the above Judgment the ratio of the decision in that case being that the Madras Court on the date of the order could not transfer the decree to the Hyderabad Court, the facts of the case however do not warrant an application of the principles of international law or of the decree being a nullity.
The earlier execution proceedings ended unsuccessfully with the decision in Hansraj Nathu Ram vs Lalji Raja & Sons of Bankura(1).
It was decided in that case, (1) [1963]2 S.C.R. 619. 831 that Morena Court not being a Court to Which the Code applied the decree could not have been transferred and that Section 38 and 39 of the Code did not afford jurisdiction for such transfer as the Morena Court at the time of transfer was governed by the Madhya Bharat Civil Procedur Code and not by the Code.
What is relevant in the present case is that when the decree holder again applied to the Bankura Court for execution of his decree by the Morena Court after the decision of this Court in Hansraj 's case, both the Court that passed the decree and the Court to which it is transferred for execution were Courts under the Code, as such no question of the Bankura decree being a foreign decree or it being a nullity could arise.
The Morena Court on the date when the order of transfer of the decree was passed by the Bankura Court is not a Court governed by the Gwalior law or Madhya Bharat law as such the impediment to executability of the Bankura decree no longer exists nor could it be considered in the light of Section 20(c) of the Amendment Act 11 of 1951 as having saved any right or privileges under the repealed procedure code of Gwalior or Madhya Bharat.
Whatever may be the views expressed in the several decisions a view which I was also inclined to take in the decision referred to, though on the facts of that case it may not have been necessary, on a further a fuller Qonsideration I agree with great respect with the views of my learned brother Hegde, J., that no question of a vested right or a privilaeae arises to entitle the Respondent to challenge the execution proceedings in Morena Court.
The decree granted by Bankura Court was executable by the Courts governed by the same Code by the Court which passed it or by the Court to which it transferred.
Once the Code is ' made applicable to the whole of India by the Amendment Act II of 1951 the decree is no longer a foreign decree qua the Morena Court which is a Court under the Code to which the Bankura Court could transfer the decree for execution.
No doubt in Shitole case it was observed that Section 13 of the Code creates substantive rights and not merely procedural and therefore defence that were open to the Respondents were not taken away by any Constitutional changes but the ratio of the decision was that the Gwalior Court not being a Court that passed the decree after the coming into force of Act IT of 1951 the Allahabad Court could not execute it.
That im.
pediment does not exist now in that the Bankura Court has transferred the decree to a Court under I the Code. 'Me plea that Section 48 Civil Procedure Code presents a bar of limitation is also not tenable.
In the result I agree that the appeal should beallowd as directed by my learned brother.
G.C. Appeal allowed.
| The appellants obtained a decree against the respondent in the court of Sub Judge, Bankura (West Bengal) on December 3, 1949.
On March 28, 1950 they applied to the court which passed the decree to transfer the decree with a certificate of non satisfaction of the court at Morgan in the then State of Madhya Bharat.
It was ordered accordingly.
The Judgment debtors resisted the execute on the ground that the court had no jurisdiction to execute the same as the decree was that of a foreign court and that the same had been passed ex parte.
The court accepted that contention and dismissed the execution petition on December 29, 1950.
On April , 1951 the Code of Civil Procedure (Amendment) Act 2 of 1951 came into force.
By this Act the Code was extended to the former State of Madhya Bharat as well as various other places.
Meanwhile the appellants appealed against the order of the Additional District Judge Morena dismissing the execution petition to the High Court of Madhya pradesh.
The appeal was allowed.
In further appeal this Court 'restored the order of the Addl.
District Judge, Morena.
Thereafter on February 15, 1963 the appellants filed another execution case before the Bankura Court praying for the transfer of the decree to the Molrena Court for execution.
The Bankura Court again ordered the transfer of the decree of the Morena Court.
The judgment debtors resisted execute on the flowing grounds : (1) that it was barred by yes judicature in view of the aforesaid decision of this Court; (2) that it was barred by section 48 of the Code of Civil Procedure; (3) that it was barred by limitation and (4) that it was not executable because it was the decree of a foreign court.
The Addl.
District Judge rejected the objections.
The High Court in appeal agreed with the executing court that the execution petition was neiber barred by resjudicata nor was there any bar of limitation but it disagreed with that court and held that the decree was not executable as the court which passed the decree was a foreign court.
The decree holders filed the present appeal by special leave.
The questions which fell for consideration were : (i) whether the decree under execution was not executable by courts situate in the area comprised in the former State of Madhya Bharat; (ii) whether the decree was barred by section 48 of the Code.
HELD:Per Sikri C.J., Mitter, Hyde and Bhargava JJ.
(1) (a) On the date when the decree under execution was passed foreign court ' was 8 1 100 SupCII71 816 defined in section 2(5) of the Code as a court situate beyond the limits of British India which had no authority in British India and was not established or continued by the Central Government.
After the amendment of the Code of Civil Procedure in 1951. 'foreign court ' under the Code means a court situate outside India and not established or continued by the authority of the Central Government.
Whether we take the earlier definition or the present definition the Bankura Court could not be considered as a foreign court within the meaning of that expression in the Code. 'Foreign judgment ' is defined as the 'judgment of a foreign court '.
Hence the decree under execution could not be considered as a foreign decree for the purpose of the Code.
[820 D G] Accordingly the judgment debtors could not take advantage of the provision in section 13(b) of the Code under which the ex parte decree of a foreign court is not conclusive.
Nor could they take advantage of section 13(d).
They were served with notice of suit but did not choose to appear before the court.
Hence, there was Po basis for the contention that any principle of natural justice has been contravened.
Further section 13(d) was not applicable because the judgment in question was not a foreign judgment.
[821 D] (b) Under Private International Law a decree passed by a foreign court to whose juri diction a judgment debtor had not submitted is an absolute nullity only if the local legislature had not conferred jurisdiction on the domestic courts over the foreigners either generally or in specified circumstances.
Clause (c) of section 20 of the Code provides that subject to the limitations mentioned in the earlier sections of the Code a suit can be instituted in a court within the local limits of whose jurisdiction the cause of action wholly or in part, arises.
This provision confers jurisdiction on a court in India over foreigners when the cause of action arises within its jurisdiction.
There was not dispute in the present case that the cause of action for the suit which led up to the decree under execution arose within the jurisdict on of the Bankura Court.
Hence, it must be held that the suit in question was properly instituted.
Accordingly the decree in question was a valid decree though it might not have been executable at one stage in courts in the former Indian States [822 B F] Sardar Gurdyal Singh vs The Rajah of Faridkot, 21 I.A. 171, referred to.
(c) A combined reading of sections 2(12), 38, 39 and 40 of the Code shows that a decree can be transferred for execution only to a court to which the Code apple .
This is what was ruled by this Court in Hansraj Nathu Ram 's case.
But by the date the transfer in the present case was made, the Code had been extended to the whole of India.
It followed that the transfer of the decree in question which was not a foreign decree, to the Morena Court, was in accordance with the provisions of the Code.
[823 B D] Hansraj Nathu Ram vs Lalii Raja & Sons of Bankura, , applied.
Narsingh Rao Shitole vs Shri Shankar Saran & Ors., ; , distinguished.
(d) Section 20(1)(b) of the Code of Civil Procedure Amendment Act, 1951 by which the Code was extended to Madhya Bharat and other areas undoubtedly protects the right acquired and privileges accrued under the law repealed by the amending Act.
But even by straining the language of the provision it cannot be said that the non executabilitv of the decree within a particular territory can be considered a privilege [824 E F] 817 Nor is it a 'right accrued ' within the meaning of section 20(1) (b) of the Code of Civil Procedure (Amendment) Act, 1950.
In the first peace in order to get the benefit of this provision the non executability of the decree must be a right, and secondly it must be a right that had accrued from the provisions of the repealed law.
It Was difficult to consider the non executability of the decree in Madhya Bharat as a vested right of the judgment debtors.
The non executability in question pertained to the jurisdiction of certain courts and not to the "rights of the judgment debtors.
Further the relevant provision of the Code of Civil Proedue in force in Madhya Bharat did not confer the, right claimed by the judgment debtors.
All that had happened in view of the extension of +he Code to the whole of India in 1951 was that the decrees which could have been executed only by courts in British India were made ' executable in the whole of India.
The change made was one relating to procedure and jury diction.
By the extension of the Code to Madhya Bharat, want of jurisdiction on the part of the Morena Court was remedied and that court was now competent to execute the decree [825 A E] Hamilton Gell vs White , Abbot vs Minister for Lands, and G. Ogden Industries Pvt. Ltd. vs Lucas, , applied.
(ii)The execution was also not barred, by section 48 of the Cod .
For considering the true impact of cl.
(b) of sub section
2 of section 48 of the Code provisions of articles 181 and 182 of the Limitation Act, 1908 have also to be taken into consideration.
These provisions clearly go to indicate that the period prescribed under section 48(1) of the Code is a period of limitation.
This interpretation is strengthened by the subsequent history of the legislation.
By the section 48 of the Code is deleted.
It , place has not been taken by article 136 of the Limtation Act of 1963 The High Courts also are now unanimous that section 48 of tile (ode is controlled by the provisions of the Limitation Act, 1908.
[828 A C] Kandaswami Pillai vs Kamappa Chetty, A I R, , Durg vs Poncham, I.L.R. [1939] All.
647, Sitaram vs Chunnilalsa, I.L.R. , Amarendra vs Manindra, A.I.R. '1955 Cal.
269, Krishna Chandra v Parovatamma, A.I.R. 1953 Orissa 13 and Ramgopal vs Sidram, A.I.R. 1943 Bom.
164 referred to.
Per Jaganmohan Reddy, J. (Concurring) No question of 'a vested right or privilege arose to entitle the respondent to challenge execution proceedings in Morena Court.
The decree granted by the Bankura Court was executable by the Courts governed by the same Code, by talk Court which passed it or by the Court to which it was transferred.
One the Code was made applicable to the whole of India by Amendment Act 11 of 1951 the decree was no longer a foreign decree qua the Morena Court which was a court under the Code to which the Bankura Court could transfer the decree for execution.
No doubt in ' Shitole 's case it was observed that section 13 of the Code creates substantive rights and not merely procedural and therefore defenses that were open to the resno dents were not taken away by any constitutional changes, but the ratio of the decision was that the Gwalior Court not being a court that passed the decree after the coming into force of Act 11 of 1951 the Allahabad Court could not execute it.
The impediment did not exist now in that the Bankura Court bad transferred the decree to a court under the Code.
the plea that section 48 Civil Procedure Code presents a bar of limitation was also not tenable.
[831 F H] 818 Kishendas vs Indo Carnatic Bank Ltd. A.I.R. 1958 A.P. 407 Sardar Gurdayal Singh V. Raja of Firidkote, 21 I.A. 171, Rai Rajendra Sardar Maloji Narsingh Rao Shirole vs Shri Shankar Saran, ; and Hansaj Nathuram Y. Lalji Raja
|
Appeal Nos.
1616 1621 69 Appeals from the Judgment and Order dated 16th/l9th of Jun& 1967 of the Bombay High Court in S.C.A. Nos.
1971/64, 115:, 216, 343, 345 and 579/65 and CIVIL APPEAL NOS.
1411 1413/69 Appeals from the Judgment and Order dated 16 6 67 of the Bombay High Court in S.C.A. Nos.
1971/64, 115 and 345/65.
M. Natesan, A.K. Sen (In CA 1412/69), Nannit Lal and Lalita Kohli In CAs.
1616 1621/69 and Respondents in CAs.
1411 1413/ 69.
M.H. Phadke, M.N. Shroff for Respondents In CAs.
16161621/69 and for Appellants in CAs.
1411 1413/69.
The Judgment of the Court was delivered by BEG, J.
There are nine appeals before us, after certifi cation of fitness of the cases for appeals to this Court, directed against orders governed by the same judgment of a Division Bench of the High Court of Maharashtra disposing of Writ Petitions relating to four groups of lands, which were sought to be acquired under the provisions of the Land Acquisition Act, 1894 (hereinafter referred to as 'the Act ').
A notification dated 11th October, 1963, under ' Section 4 of Act, was published in the Maharashtra Government Gazette with regard to the first group.
The public purpose recited in the notification was "development and utilisation of said land as a residential and industrial area".
The noti fication goes on to state: "AND WHEREAS the Commissioner, Bombay Division, is of the opinion that the said lands were waste or arable lands and their acquisition is urgently necessary, he is further pleased to direct under sub section (4) of Section 17 of the said Act, that the provisions 01; Section 5 A of the said ' Act shall not apply in respect of the said land".
Thereafter, a notification was issued under section 6 of the Act on 19th December, 1963, followed by notices under Sec tion 9(3) and (4) the Act.
With regard to the second group of lands, identically similar notifications under Section 4 together with identi cally worded.
declarationcure direction, under section 17(4) of the Act, were issued on 13th June, 1965.
As proceedings with regard to land comprised in this group were not fol lowed up by notification under section 6 of the Act.
it was conceded by Counsel, in the course of arguments on behalf of the State in the High Court, that the proceedings had: become invalid.
769 We arc, therefore, not concerned with lands in this. ' group in the appeals now before us: Nevertheless, it is not devoid of significance that the terms of the notification under section 4(1) and the declaration cure directions, under section 17(4) of the Act, in this group are also identical with those in the first two groups.
This cer tainly suggests that directions under section 17(4) could have been.
mechanically issued in all the groups in identi cal terms without due application of mind t0 the factual requirements prescribed by law.
The third group of land was also the subject matter of identically similar notifications under section 4 of the.
Act dated 13th June, 1964, together with identically worded declarations cum directions under section 17(4) of the Act.
This land was notified under section 6 of the Act on 28th September, 1964, followed by the notice under section 9; sub sections (3) and (4) of the Act on 28th October, 1964.
With regard to the land= in the fourth group, a notifi cation under Section 4 01 ' the Act took place on 13th Novem ber, 1963, in substantially the same terms as those in the other three groups; but, there was no direction under sec tion 17(4) of the Act.
Consequently, the appellant filed his objection ' on 9th January, 1964.
Later, a notification under section 6 of the Act on 13th July, 1964, was accompa nied by identically worded vague declaration of urgency under section 17(4) of the Act.
This strange course of action suggests that notification under section 17(4) was probably made only to save the botheration of the inquiry begun under section 5A of the Act which should and could have been concluded quite easily before 13th July, 1964.
In Writ Petitions before the High Court, the submission that no public purpose existed was not pressed in view of the decision of this Court in Smt.
Somavanti & Ors.
vs The State of Punjab & Ors.
U ') In Shri Ramtanu Co operative Housing Society Ltd. & Anr.
vs State Maharashtra.
& Ors.(2) acquisition of land for development of industrial areas and residential tenements for persons to live on industrial estates was held to be legally valid for a genuinely public purpose.
This ground, therefore, need not detain us, although file appellants, who are owners of the properties acquired, have formally raised it also by means of the six appeals filed by them (Civil Appeals Nos.
161 '6 1621 of 1969).
In agreement with the High Court, we hold that notification under section 4(1) of the Act were valid in all these cases.
The real question which has been argued before us is raised by the State of Maharashtra in its three appeals Nos. 1411 to 1413 of 1969, against the view taken by a Division Bench of the Bombay High Court in its judgment dated 16th June, 1967.
It had held that, although notifications under section 4( 1 ) of the Act were valid, yet, the Government of Maharashtra had not discharged its burden of showing facts constituting the urgency which impelled it to give declara tionscum directions under section 17(4) of the Act dispens ing with the (1)[1963] 2 SCR 774 (2) ; at 723 770 enquiries under section 5A of the Act, Therefore, actions taken pursuant to those declarations under section 17(4) of the Act were held to be invalid and quashed.
The result was that parties were relegated to the position they could take up in the absence of declarations under section 17(4) of the Act in the cases decided by the High Court.
The correctness of this view is assailed before us.
The case of the State of Maharashtra is stated as fol lows in the affidavit filed by the Special Land Acquisition officer: "I deny, the allegation that the urgency clause has been applied without any valid reason.
I respectfully submit that whether an urgency exists or not for exercising the powers under section 17(1) of the Act is a matter solely for the determination of the State Government or the Com missioner.
Without prejudice to this, respect fully submit that as mentioned in the impugned Notifications, the 3rd Respondent formed the opin ion that the said lands were urgently acquired for the public purposes mentioned therein, and, accord ingly, he was pleased to so direct under the provi sions of Section 17(4) of the Act.
" The respondent No. 3 referred to in the affidavit is the Commissioner of Bombay Division.
It is significant that, in the affidavit filed in reply to the assertions of peti tioners, denying the existence of such urgency as to attract the provisions of section 17(4) of the Act.
the position primarily taken up, on behalf of the State of Maharashtra, was that the existence of the urgency is not a justiciable matter at all left for determination by Courts.
After that, there is a bare submission stating the alternative case that the 3rd respondent had formed the opinion that the said lands were urgently required for the public purpose mentioned therein.
But, no facts or particulars are stated to which the mind of the Commissioner could have been ap plied in forming the opinion that the situation called for declarations cum directions, under section 17(4) of the Act, to dispense with inquiries under section 5A of the Act in these cases.
It is important to.
remember that the mind of the officer or authority concerned has really to be directed towards formation of an opinion on the need to dispense with the inquiry under Section 5A of the Act.
It is true that, in such cases, the formation of an opinion is a subjective matter, as held by this Court re peatedly with regard to situations in which administrative authorities have to form certain opinions before taking actions they are empowered to take.
They are expected to know better the difference between a right or wrong opinion than Courts could ordinarily on such matters.
Neverthe less, that opinion has to be based upon some relevant mate rials in order to pass the test which Courts do impose.
That test basically is: was the authority concerned acting within the scope of its powers or in the sphere where its opinion and discretion must be permitted to have full play? Once the Court comes to the conclusion that the authority concerned was acting within the scope of its powers and had some materiaL, however 771 meagre, on which it could reasonably base its opinion, the Courts should not and will not interfere.
There might, however, be cases in which the power is exercised in such an obviously arbitrary or perverse fashion, without regard to the actual and undeniable facts, or, in other words, so unreasonably as to leave no doubt whatsoever in the mind of a Court that there has been an excess of power.
There may also be cases where the mind of the authority concerned has not been applied at all, due to misunderstanding of the law or some other reason, what was legally imperative for it to consider.
The High Court had put its point of view in the following words: "When the formation of an opinion or the satisfaction of an authority is subjective but is a condition precedent to the exercise of a power, the challenge 'to the formation of such opinion or to such satisfaction is limited, in law, to three points only.
It can be challenged, firstly, on the ground of malafides; secondly, on the ground that the authority which formed that opinion or which 'arrived at such satisfaction did not apply its mind to the material on which it formed the opinion or arrived at the satisfaction; and, third ly, that the material on which it formed its opin ion or reached the satisfaction was so insuffi cient that no man could reasonably reach that conclusion.
So far as the third point is con cerned, no Court of law can, as in an appeal, consider that, on the material placed before the authority, the authority was justified in reaching its conclusion.
The Court can interfere only in such cases where there was no material at all or the material was so insufficient that no man could have reasonably reached that conclusion.
It is not necessary to refer to the authorities which lay down these propositions because they have by now been well established in numerous judgments and they are not in dispute before us at the Bar.
In this case, however, there is no challenge on any of these three grounds.
The dispute in this case therefore narrows down to the point as to the burden of proof.
In other words, the dispute is whether it is the petitioner who has to bring the material before the Court to support his contention that no urgency existed or whether, once the peti tioner denied that any urgency existed, it was incumbent upon the respondent to satisfy the Court that there was material upon which the respondents could reach the opinion as mentioned in section 17(4).
" On the evidence before it, the High Court recorded its conclusions as follows: "In the case before us the petitioner has stated in the petition more than once that the urgency clause had been applied without any valid reason.
The urgency clause in respect of each of the said two notifications concerning the lands m groups Nos. 1 and 2 is contained in the relative section 4 772 notification itself.
The public purpose stated in the notification is 'for development and utiliza tion of the said lands as an industrial and resi dential area '.
To start with, this statement itself vague, in the sense that it is not clear whether the development and utilization of the lands referred to in that statement was confined to the lands mentioned in the schedule to the Notification or it applied to a. wider area of which such lands formed only a part.
So far as the affidavit in reply is concerned, no facts whatever are stated.
The affidavit only states that the authority, i.e., the Commissioner of the Bombay Division, was satisfied t,hat the possession of the said lands was urgently required for the purpose of carrying out the said development.
Even Mr. Setal vad conceded that the affidavit does not contain a statement of facts on which the authority was satisfied or on which it formed its opinion.
It is, therefore, quite clear that the respondents have failed to bring on record any material what ever on which the respondents formed the opinion mentioned in the two notifications.
The notifica tions themselves show that they concern many lands other than those failing in the said first and third groups.
It is not possible to know what was the development for which the lands were being acquired, much less is it possible to know what were the circumstances which caused urgency in the taking of possession of such lands.
We have held that the burden of proving such circumstances, at least prima facie is on the respondents.
As the respondents have brought no relevant material on the record, the respondents have failed to dis charge that burden.
We must, in conclusion, hold that the urgency provision under section 17(4) was not validly resorted to".
It has been submitted on behalf of the State that we need decide nothing more than a simple question of burden of proof in the cases before us.
We do not think that a question relating to burden of proof is always free from difficulty or is quite so simple as it is sought to be made out here.
Indeed, 'the apparent simplicity of a question relating to presumptions and burdens of proof, which have to always viewed together, is often deceptive.
Over simplification of such questions leads to erroneous statements and misapplications of the law.
Our Evidence Act is largely a codification, with certain variations, of the English law of evidence, as it stood when Sir James Fits James Stephens drafted it.
Therefore, in order to fully grasp the significance of its provisions we have to sometimes turn to its sources in English ' law which attained something resembling clarity only by stages.
In Woolmington vs Director of Public Prosecu tions(1), Lord Sankey pointed out that rules of evidence contained in early English cases are quite confusing.
He observed: "It was only later that Courts began to discuss such things as presumption and onus".
He also said that "the word onus is used indifferently throughout the books.
(1) ; 773 sometimes meaning the next move or step in the process of proving and sometimes the conclusion".
In Phipson on Evidence (11th Edn.) (at page 40, paragraph 92), we find the principles stated in a manner which sheds considerable light on the meanings of the relevant provisions of our Evidence Act: "As applied to judicial proceedings the phrase 'burden of proof ' has two distinct and frequently confused meanings: (1) the burden of proof as a matter of law and pleading the burden, as it has been called, of establishing a case, whether by preponderance of evidence, or beyond a reasonable doubt; and (2) the burden of proof in the sense of adducing evi dence.
" It is then explained: "The burden of proof, in this sense, rests upon the party, whether plaintiff or defendant, who substantially asserts the affirmative of the issue. 'It is an ancient ' rule rounded on considerations of good sense, and it should not be departed from without strong reasons '.
It is fixed at the begin ning of the trial by the state of the pleadings, and it is settled as a question of law, remaining unchanged throughout the trial exactly where the pleadings place it, and never 'shifting in any circumstances whatever.
If, when all the evidence, by whomsoever introduced, is in, the party who has this burden not discharged it, the decision must be against him".
The application of rules relating to burden of proof in various types of cases is thus elaborat ed and illustrated in Phipson by reference to decided cases (see p. 40, para 93): "In deciding which party asserts the affiramative, regard must of course be had to the substance of the issue and not merely to its grammatical form, which latter the pleader can frequently vary at will, moreover a negative alle gation must not be confounded with the mere tra verse of an affirmative one.
The true meaning of the rule is that where a given allegation, whether affirmative or negative, forms an essential part of a party 's case, the proof of such allegation rests on him; e.g. in an action against a tenant for not repairing according to covenant, or against a horse dealer that a horse sold with a warranty is unsound, proof of these allegations is on the plaintiff, so in actions of malicious prosecution, it is upon him to show not only that the defendant prosecuted him unsuccessfully, but also the absence of reasonable and probable cause: while in actions or false imprisonment, proof of the existence of reasonable cause is upon the defendant, since arrest unlike prosecution, in prima facie a tort and demands justification.
In bailment cases, the bailee must prove that the goods were lost without his fault.
Under the Courts (Emergency Powers) Act 1939, the burden of proving that the defendant was unable immediately to satisfy the judgment and that inability arose from circumstances attributa ble to the 774 war rested on the defendant.
But it would seem that in an election petition alleging breaches of rules made under the Representation of the People Act, 1949, the Court will look at the evidence as a whole, and that even if breaches are proved by the petitioner, the burden of showing that the elec tion was conducted substantially in accordance with the. law does not rest upon the respondent.
Where a corporation does an act under 'statutory powers which do not prescribe the method, and that act invades the rights of others, the burden is on the corporation to show that there was no other practi cal way of carrying out the power which would have that effect".
Turning now to the provisions of our own Evi dence Act, we find the general or stable burden of proving a case stated in section 101 as follows: "101.
Whoever desires any Court to give judgment as to any legal right or liability depend ent on the existence of facts which he asserts, must prove that those facts exist.
When a person is bound to prove the existence of any fact, it is said that the burden of proof lies on that person".
The principle is stated in section 102 from the point of view of what has been sometimes called the burden of leading or introducing evidence which is placed on the party initiating a proceeding.
It says: "102.
The burden of proof in a suit or pro ceeding lies on that person who would fail if no evidence at all were given on either side".
In practice, this lesser burden is discharged by merely showing that there is evidence in the case which supports the case set up by the party which comes to Court first, irrespective of the side which has led that evidence.
An outright dismissal in limine of a suit or proceeding for want of evidence is thus often avoided.
But, the burden of establishing or general burden of proof is heavier.
Sometimes, evidence coming from the side of the respondents, in the form of either their admissions or conduct or failure to controvert, may strengthen or tend to support a petitioner 's or plaintiff 's case so much that the heavier burden of proving or establishing a case, as distinguished from the mere duty of introducing or showing the existence of some evidence on record stated in section 102, is itself discharged.
Sufficiency of evidence to discharge the onus probandi is not, apart from instances of blatant perversity in assessing evi dence, examined by this Court as a rule in appeals by special leave granted under Article 136 of the Constitution.
It has been held that the question whether an onus probandi has been discharged is one of fact (see: AIR 1930 P.C. p. 90).
It is gener ally so.
"Proof", which is the effect of evidence led, is defined by the provisions of section 3 of the Evidence Act.
The effect of evidence has to be distinguished from the duty Or burden of showing to the Court 775 what conclusions it should reach.
This duty is called the "onus probandi", which is placed upon one of the parties, in accordance with appropriate provisions of law applicable to various situations, but, the effect of the evidence led is a matter of inference or a conclusion to be arrived at by the Court.
The total effect of evidence is determined at the end of a proceeding not merely by considering the general duties imposed by sections 101 and 102 of the Evidence Act but also the special or particular ones imposed by other provisions such as sections 103 and 106 of the Evidence Act.
Section 103 enacts: "103.
The burden of proof as to any particular fact lies on that person who wishes the Court to believe in its existence, unless it is provided by any law that the proof of that fact shall lie on any particular person".
And, section 106 lays down: "106.
When any fact is especially within the knowledge of any person, the burden of proving that fact is upon him".
In judging whether a general or a particular or special onus has been discharged, the Court will not only consider the direct effect of the oral and documentary evidence led but also what may be indirectly inferred because.
certain facts have been proved or not proved though easily capable of proof if they existed at all which raise either a pre sumption of law or of fact.
Section 114 of the Evidence Act covers a wide range of presumptions of fact which can be used by Courts inthe course of.
administration of justice to remove lacunae in the chain of direct evidence before iL It is, therefore, said that the function of a presumption often is to "fill a gap" in evidence.
True presumptions, whether of law or of fact, are always rebuttable.
In other words, the party against which a presumption may operate can and must lead evidence to show why the presumption should not be given effect to.
If, for example, the. party which initiates a proceeding or comes with a case to Court offers no evidence to support it, the presumption is that such evidence does not exist.
And, if some evidence is shewn to exist on a question in issue, but the party which has it within its power to produce it, does not, despite notice to it to do so,.
produce it, the natural presumption is that it would, if produced, have gone against it.
Similarly, a presumption arises from failure to discharge a special or particular onus.
The result of a trial or proceeding is determined by a weighing of the totality of facts and circumstances and presumptions operating in favour of one party as against those which may tilt the, balance in favour of another.
Such weighment always takes place at the end of a trial or proceeding which cannot, for purposes of this final weighment, be split up into disjointed and disconnected parts simply because the requirements of procedural regularity and logic, embodied in procedural law, prescribe a sequence, a stage, and a mode of proof for each party tendering its evidence.
What is weighed at the end is one 776 totality against another and not selected bits or scraps of evidence against each other.
Coming back to the cases before us, we find that the High Court had correctly stated the grounds on which even a subjective opinion as to the existence of the need to take action under section 17(4) of the Act can be challenged on certain limited grounds.
But, as soon as we speak of a challenge we have to bear in mind the general burdens laid down by sections 101 and 102 of the Evidence Act.
It is for the petitioner to substantiate the grounds of his challenge.
This means that the petitioner has to either lead evidence or show that some evidence has come from the side of the respondents to indicate that his challenge to a notification or order is made good.
If he does not succeed in discharging that duty his petition will fail.
But, is that the position in the cases before us ? We find that, although the High Court had stated the ques tion before it to be one which "narrows down to the point as to the burden of proof", yet, it had analysed the evi dence sufficiently before it to reach the conclusion that the urgency provision under section 17(4) had not been validly resorted to.
The High Court had remarked that the public purpose itself was vaguely stated, although it could not, in its opinion, be challenged on that ground.
As we have already indicated, the purpose was sufficiently specified to be, prima facie, a legally valid purpose.
We do not think that the vagueness of the purpose, as stated in the notification under section 4 (1 ), really affected the judgment of t, he High Court so much as the absence of facts and circumstances which could possibly indicate that this purpose had neces sarily to be carried out in such a way as to exclude the application of section 5A of the Act.
The High Court had rightly referred to the absence of any statement of circum stances which could have resulted in such urgency that no enquiry under section 5A of the Act could reasonably be held.
The High Court had relied on the following passage from Barium Chemicals Ltd. vs Company Law Board(1): " .
An action, not based on circumstances suggesting an inference of the; enumerated kind will not be valid.
In other words, the enumeration of the inferences which may be drawn from the circumstances, postulates the absence of a general discretion to go on a fishing expedi tion to find evidence.
No doubt the formation of opinion is subjective but the existence of circumstances relevant to the inference as the sine qua non for action must be demon strable.
If the action is questioned on the ground that no circumstances leading to an inference of the kind contem plated by the section exists, the action might be exposed to interference unless the existence of the circumstances is made out .
Since the existence of circumstances ' is a condition funda mental to the making of an opinion, the existence of the circumstances, if questioned, has to be proved at least prima facie.
It is not sufficient to assert that the circumstances (1) ; to 309. 777 exist and give no clue to what they are because the circum stances must be such as lead to conclusions of certain definiteness".
The High Court also cited the following passage from the judgment of Spens, CJ., in King Emperor vs Sibnath Banerjee(1), which was relied upon on behalf of the State to contend that it was the duty of the petitioners to remove the effect of a recital in an order showing that conditions precedent to the exercise of a power had been fulfilled: "It is quite a different thing to question the accuracy of a recital contained in a duly authenticated order, particularly where that recit al purports to state as a fact the carrying out of what I regard as a condition necessary to the valid making of that order.
In the normal case, the existence of such a recital in a duly authenticated order will, in the absence of any evidence as to.
its inaccuracy be accepted by a Court as establish ing that the necessary condition was fulfilled.
The presence of the recital in the order will place a difficult burden on the detenu to produce admissi ble evidence sufficient to establish even a prima facie case that the recital is not accurate.
If, however, in any case, a detenu can produce admis sible evidence to that effect, in my judgment the mere existence of the recital in the order cannot prevent the court considering such evidence and, if it thinks fit, coming to a conclusion that the recital is inaccurate".
The High Court opined that the presumption of regularity, attached to an order containing a technically correct recit al, did not operate in cases in which section 106 Evidence Act was applicable as it was to the cases before us.
We do not think that we can lay down such a broad general propo sition.
An order or notification, containing a recital, technically correct on the face of it, raises a presumption of fact under section 114 illustration (e) of the Evidence Act.
The well known maxim of law on which the presumption, found is illustration (e) to section 114 of Evidence Act is: "Omain prae sumunt ur rite esse acta" (i.e. all acts are presumed to have been rightly and regularly done).
This presumption, however, is one of fact.
It is an optional presumption.
It can be displaced by circumstances indicat ing that the power lodged in an authority or official has not been exercised in accordance with the law.
We think that the original or stable onus land down by section 101 and section 102 of the Evidence Act can not be shifted by the use of section 106 of the Evidence Act, although the particular onus of proving facts and circumstances lying especially within the knowledge of the official who formed the opinion which resulted in the notification under sec tion 17(4) of the Act rests upon that official.
The recit al, if it is not defective, may obviate the need to look further.
But, there may be circumstances in the case which impel the Court to look beyond it.
And, at that stage, section 106 Evidence Act can be invoked by the party assail ing an order or notification.
It is most unsafe in such cases for the official or authority concerned to rest content with non disclosure of facts especially with (1)[1944] E.C.R 1 at 42.
778 in his or its knowledge by relying on the sufficiency of a recital.
Such an attitude may itself,justify Further judi cial scrutiny.
In Sibnath Banerjee 's case (supra) also, facts which led an authority to pass a detention order could be said to lie especially within its knowledge.
If there could be certain facts, in Sibnath Banerjee 's ease (supra), winch Sibnath Banerjee as well as the official making the order kneW, it could, similarly, be urged that, in the cases before us some facts could be known to both sides.
We do not think that the principle laid down in Sibnath Banerjee 's case (supra) can be circumvented by merely citing section 106 of the Evidence Act as the High Court did.
We think that the total ity of circumstances has to be examined, including the recitals, to determine whether and to what extent each side had discharged its general or particular onus.
It has been repeatedly laid down that the doctrine of onus of proof becomes unimportant when there is sufficient evidence before the Court to enable it to reach a particular conclusion.
The principle of onus of proof ' becomes important in cases of either paucity of evidence or in cases where evidence given by two sides is so equivalanced that the Court is unable to hold where the truth lay.
In the cases before us, if the total evidence, from whichever side any of it may have come, was insufficient to enable the petitioners to discharge their general or stable onus, their petitions could not succeed.
On the other hand, if, in addition to the bare assertions made by the petition ers, that the urgency contemplated by section 17(4) did not exist, there were other facts and circumstances, including the failure of the State to indicate facts and ' circum stances which it could have easily disclosed if they exist ed, the petitioners could be held to have discharged their general onus.
We think that the ,matter, is not so simple as to capa ble of decision on an examination of a mere recital in the order or notification as was, urged on behalf of the State of Maharashtra.
Indeed, even if a recital in a notifica tion is defective or does not contain the necessary state ment that the required conditions have been fulfilled, evidence can be led to show that conditions precedent to the exercise of a power ' have been actually fulfilled.
This was clearly laid down by this Court in Swadeshi Cotton Mill 's case (supra), where Wanchoo, J. speaking for the Constitution Bench of this Court said: "The difference between a case where a gener al order contains a recital on the face of it and one where it does not contain such a recital is that in the latter case the burden is thrown on the authority making the order to satisfy the Court by other means that the conditions precedent were fulfilled, but in the former case the Court will presume the regularity of the order including the fulfilment of the conditions precedent and then it will be for the party challenging the legality of the order to show that the recital was not correct and that the conditions precedent were not in fact 779 complied with by the authority: (see the observa tions of Spens C.J. in King Emperor vs Sibnath Banerjee(1) which were approved by the Privy Coun cil in King Emperor vs Sibnath Banerjee"(2).
This Court also said there: "Our conclusion therefore is that where certain conditions precedent have to be satisfied before a subordinate authority can pass an order, (be it executive or of the character of subordi nate legislation), it is not necessary that the satisfaction of those conditions must be recited in the order itself, unless the statute requires it, though, as we have already remarked, it is most desirable that it should be so, for in that case the presumption that the conditions were satisfied would immediately ' arise and burden would be thrown on the person challenging the fact of satis faction to show that what is recited: is not cor rect.
But even where the recital is not there on the face of the order, the order will not become illegal ab initio and only a further burden is thrown on the: authority passing the order to satisfy the Court by other means that the condi tions precedent were complied with.
In the present case this has been done by the filing of an affidavit before us.
" It is also clear that, even a technically correct recit al in an order or notification stating that the conditions precedent to the exercise of a power have been fulfilled may not debar the Court in a given case from considering the question whether, in fact, those conditions have been ful filled.
And, a fortiori, the Court may consider ,red decide whether the authority concerned has applied its mind to really relevant facts.
of a case with a view to determining that a condition precedent to the exercise of a power has been fulfilled.
If it appears, upon an examination of the totality of facts in the case, that the power conferred has been exercised for an extraneous or irrelevant purpose or that the mind has not been applied at all to the real object or purpose of a power, so that the result is that the exer cise of power could only serve some other or collateral object, the Court will interfere.
In Raja Anand Brahma Shah vs State of U.P. & Ors.
,(3) a Constitution bench of this Court held: "It is true that the opinion of the State Government which is a condition for the exercise of the power under section l 7(4) of the Act, is subjec tive and a Court cannot normally enquire whether there were sufficient grounds or justification for the opinion formed by the State Government under section 17(4).
The legal position has been explained by the Judicial Committee in King Emperor vs Shibnath Banerjee (72 [1944]F.C.R. 1,42.
(2)[1945]F.C.R, 195,216 17.
[1967]1 S.C.R. 373 at .381.
234SC1/76 780 I.A. 241) and by this Court in a recent case Jaichand Lal Sethia vs State of West Bengal & Ors.
(Criminal Appeal No. 110 of 1968 decided on July, 1966 [1966] Suppl.
S.C.R.)But even though the power of the State Government has been formulated under section 17(4) of the Act in subjective terms the expression of opinion of the State Government can be challenged as ultra vires in a Court of Law if it, could be shown that the State Government never applied its mind to the.
matter or that the action of the State Government is malafide If therefore in a case the land under acquisition is not actual ly waste or arable land but the State Government has formed the opinion that the provisions of sub s.(1) of section 17 are applicable the Court may legiti mately draw an inference that the State Government did not honestly form that opinion or that in forming that opinion the State Government did not apply its mind to the relevant facts bearing on the question at issue.
It follows therefore that the notification, of the State Government under section 17(4) of the Act directing that the provisions of section 5A shall not apply to the land is ultra vires".
In Brahma Shah 's case (supra), a condition precedent to the application of section 17(4) was held to be unsatisfied inasmuch as the land in respect of which the proceeding was taken was found to be forest land which could not be classified as "arable or waste land".
Learned counsel for the State relied strongly on the judgment of this Court in I. G. joshi Etc.
vs State of Gujarat & Anr.
(1) where this Court had pointed out how, in Sibnath Banerjee 's case (supra), the initial burden of the petitioner, arising from a prima facie correct order had been repelled by an affidavit filed by Mr. Porter, Additional Home Secretary on behalf of the State, showing that the mind 'of the authority concerned had not been independently applied to the require ments of law but a routine order had apparently been passed on materials supplied by the Police.
We have carefully considered the following observa tions made by this Court in I. G. Joshi 's case (supra) after noticing facts of Sibnath Baner jee 's case (supra) (at p. 278): "The High Court, having before it allega tions, counter allegations, and denials, dealt first with the legal side of the matter.
Then it readily accepted the affidavits on the side of Government.
If it had reversed its approach it need not have embarked upon (what was perhaps unnecessary) an analysis of the many principles on which onus is distributed between rival parties and the tests on which subjective opinion as distin guished from an opinion as to the existence of a fact, is held open to review in a court of law.
As stated already there is a strong presumption of regularity of official acts and added thereto is the (l) [1968]2 S.C.R. 267.
781 prohibition contained in article 166(2).
was not called upon to answer the kind of affidavit which was filed with the petition because bare denial that Govt.
had not formed an opinion could not raise an issue.
Even if Govt.
under advice offered to disclose how the matter was dealt with, the issue did not change and it was only this.
Whether any one at all formed an opinion and if he.did whether he had the necessary authority to do so.
The High Court having accepted the affidavits that Raval and Jayaraman had formed the necessary opinion, was only required to see if they had the competence.
The High Court after dealing with many matters held that they had".
In I. G. Joshi 's case (supra), it appears to us that the principal round of attack on a notification, was that it was not duly authenticated in accordance with the require ments of Article 166 and the Rules ' of Business.
The notification was held not to have been vitiated on the grounds on which it had been assailed.
It was observed that the High Court, after considering the evidence, was satisfied, on the evidence produced before it, that the required opinion had been formed even though it was not necessary for the Government in view of the presumption of regularity attached to official acts.
to produce anything more than the notification.
We do not find that any of the matters placed before us ' now was in issue there.
On the other hand, this.
Court held, on that occasion, that the mere assertion of the petitioner that the Government had not formed an opinion about the need for action under section 17(4) of the Act "could not raise an issue".
We do not think that we need express any opinion here on the question whether such an assertion can or cannot even raise a triable issue.
All we need say is that a triable issue did arise and was decided by the High Court in the cases now before us.
This issue was whether the conditions precedent to exercise of power under section 17(4) had been fulfilled or not.
We think that such a question can only be decided rightly after determining what was the nature of compliance with the conditions of section 17(4) required by the Act.
We think that section 17(4) cannot be read in isolation from sections 4(1) and 5A of the Act.
The immediate purpose of a notification under section 4(1 ) of the Act is to enable those who may have any objections to make to lodge them for purposes of an enquiry under section 5A of the Act.
It is true that, although only 30 days from the notification under section 4(1) are given for the filing of these objec tions under section 5A of the Act, yet, sometimes the pro ceedings under section 5A are unduly prolonged.
But, considering the nature of the objections which are capable of being successfully taken under section 5A, it is diffi cult to see why the summary enquiry should not be concluded quite expeditiously.
In View of the authorities of this Court, the existence of what are prima facie public pur poses, such as the one present in the cases before us, cannot be successfully challenged at all by objectors.
It is rare to find a case in which.
objections to 782 the validity of a public purpose of an acquisition can even be stated in a form in which the challenge could succeed.
Indeed, questions relating to validity of the notification on the ground of malafides do not seem to US to be ordinari ly open in a summary enquiry under section 5A of the Act.
Hence, there seems to us to be little difficulty in completing enquiries contemplated by section 5A of the Act very expeditiously.
Now, the purpose of section 17(4) of the Act is, obvi ously, not merely to confine action under it to.
waste and arable land but ,also to situations in which an inquiry under section 5A will serve no useful purpose, or, for some overriding reason, it should be dispensed with.
The mind of the Officer or authority concerned has to be applied to the question whether there is fan urgency of such a nature that even the summary proceedings under section 5A of the Act should be eliminated.
It is not just the existence of an urgency but the need to dispense with an inquiry under section 5A which has to be considered.
Section 17(2) deals with a case in which an enquiry under section 5A of 'the Act could not possibly serve any useful purpose.
Sudden change of the course of a river would leave no option if essential communications have to be maintained.
It results in more or less indicating, by an operation of natural physical forces beyond human control, what land should be urgently taken possession of.
Hence, it offers no difficulty in applying section 17(4) in public interest.
And, the particulars of '.
what is .obviously to be done in public interest need not be concealed when its validity is questioned in a Court of justice.
Other cases may raise questions involving consideration of facts which are especially within the knowledge of the authorities concerned.
And, if they do not discharge their special burden, imposed by section 106 Evidence Act, without even disclosing a sufficient reason for their abstention from disclosure, they have to take the consequences which flow from the non production of the best evidence which could be produced on behalf of the State if its stand was correct.
In the case before us, the public purpose indicated is the development of an area for industrial and residential pur poses.
.This in itself, on the face of it, does not call for any such action, barring exceptional circumstances, as to make immediate possession, without holding even a summary enquiry under section 5A of the Act, imperative.
On the other hand, such schemes generally take sufficient period of time to enable at least summary inquiries under section 5A of the Act to be completed without any impediment whatso ever to the execution of the scheme.
Therefore, the very statement of the public purpose for which .the land was to be 'acquired indicated the absence of such urgency, on the apparent facts of the case, as to require the elimination of an enquiry under 'section 5A of the Act.
Again, the uniform and set recital of a formula, like a ritual or mantara, apparently applied mechanically to every case, itself indicated that the mind of the Commissioner concerned was only applied 783 to the question whether the land was waste or arable and whether its acquisition is urgently needed.
Nothing beyond that seems to have been considered.
The recital itself shows that the mind of the Commissioner was not applied at all to the question whether the urgency is of such a nature as to require elimination of the enquiry under section 5A.of the Act.
If it was, at least the notifications gave no inkling of it at all.
On the other hand, its literal mean ing was that nothing beyond matters stated there were con sidered.
All schemes relating to development of industrial and residential areas must be urgent in the context of the country 's need for increased production and more residential accommodation.
Yet, the very nature of such schemes of development does not appear to demand such emergent action as to eliminate summary enquires under section 5A of the Act.
There is no indication whatsoever in the affidavit filed on behalf of the State that the mind of the Commis sioner was applied.
at all to the question whether it was a case necessitating the elimination of the enquiry under section 5A of the Act.
The recitals in the notifications, on the other hand, indicate that elimination of the enquiry under section 5A of the Act was treated as an automatic consequence of the opinion formed on other matters.
The recital does not say at all that any opinion was formed on the need to dispense with the enquiry under section 5A of the Act.
It is certainly a case in which ' the recital was atleast defective.
The burden, therefore, rested upon the State to remove the defect, if possible, by evidence to show that some exceptional circumstances which necessitated the elimination of an enquiry under section 5A of the Act and that the mind of the Commissioner was applied to this essen tial question.
It seems to us that the High Court correctly applied the provisions of section '106 of the Evidence Act to place the burden upon the State to prove those special circumstances.
although it also; appears to us.
that the High Court was not quite correct in stating its view in such a manner as to make it appear that some part of the initial burden of the petitioners under sections 101 and 102 of the Evidence Act had been displaced by the failure of the State, to discharge its duty under ' section 106 of the Act.
The correct way of putting it would have been to say that the failure of the State to produce the evidence of facts espe cially ' within the knowledge of its officials, which rested upon it under section 106 of the Evidence Act, taken together with the attendant facts gnu circumstances, includ ing the contents of recitals, had enabled the petitioners to discharge their burdens under sections 101 and 102 of the Evidence Act.
We may also observe that if, instead of prolonging litigation by appealing to this Court, the State Government had ordered expeditious enquiries under section 5A of the Act or even afforded the petitioners some opportunity of being heard before acting under section 17(4) of the Act, asking them to show cause why no enquiry under section 5A of the Act should take place at all, the acquisition proceed ings need not have been held up so long.
In fact, we hope that the acquisition proceedings have not actually been held up.
784 On the view we take of the cases before us, we find no force in either the appeals by the owners of land or in those preferred by the State of Maharashtra.
Consequently, we dismiss all the nine appeals before us.
The parties will bear their own costs.
P.B.R. Appeals dismissed.
| The City of Bangalore Municipal Corporation Services (General) Cadre and Recruitment Regulations, 1971, framed under the City of Bangalore Municipal Corporation Act, 1949, came into force on 3rd March,1971.
In accordance with the ' practice of the Corporation prevailing before that date to have one half of the cadre of Senior Health Inspec tors manned by deputation of Senior Health Inspectors from the Karnataka State Civil Service, the appellants were taken on deputation by the Corporation from the Karnataka State Civil Service.
In 1974, the Corporation passed a resolution that the appellants would be absorbed by the Corporation if they were willing to accept their ranking as juniors to the Senior Health Inspectors of the Corporation, and the State Government accorded its sanction to the resolution of the Corporation as required by the Act.
But coming to know that the chances of promotion of the permanent officials of the Corporation would be prejudicially affected by such absorp tion, the State Government withdrew its sanction accorded earlier.
The appellants preferred writ petitions for quashing the withdrawn but the High Court dismissed the petitions.
In appeal to this Court, it was contended that the appellants became permanent employees of the Corporation and ceased to be Government servants as soon as the State Gov ernment accorded sanction to the Resolution of the Corpora tion and that therefore, the State Government could not, thereafter, by its unilateral action, reverse the process and annihilate the relationship of employer and employee between the Corporation and the.
appellants and restore their status as Government servants.
Dismissing the appeals, HELD : (1) The Resolution read with the Government sanction did not operate to put an end to the status of the appellants as government servant and to create the rela tionship of master and servant between the Corporation and the appellants, and therefore, it was competent to the State Government to withdraw the sanction accorded earlier; and this would be so irrespective of whether the appellants expressed their willingness to be absorbed as SeniOr Health Inspectors by the Corporation or not.
[797 BC] (a) Regulation 3 of the Regulations which were in force when the Resolution was passed by the Corporation recognised only two modes of recruitment to the post of Senior Health Inspectors namely, by promotion from the cadre of Junior Health Inspectors and by deputation.
Therefore, to absorb Senior Health Inspectors from the State Directorate of Health Services as permanent employees of the Corporation would be plainly contrary to the express mandate of this statutory provision.
[796 C & F] (b) It could not be urged that because they were already on deputation in the cadre of Senior Health Inspectors under the Corporation, their absorption as permanent Senior Health Inspectors did not constitute fresh entry into the cadre so as to require compliance with the Regulations.
Not only 792 their entry but also their continuance in the cadre of Senior Health Inspectors on the Corporation establishment depended on their being on deputation, because, it is only by way of deputation that Senior Health Inspectors from the State Directorate of Health Services can find place in the cadre of Senior Health Inspectors on the establishment of the Corporation Since absorption is appointment, without amendment of the Regulations permitting appointment of Senior Health Inspectors drawn from the State Directorate of Health Services as permanent Senior Health Inspectors under the Corporation, the appellants could not be absorbed on the Corporation Establishment.
[796 G H]
|
Appeals Nos. 104 of 1954 and 169 of 1956.
Appeal by special leave from the judgment and decree dated November 13, 1950, of the Madras High Court in A. section No. 484 of 1947 arising out of the judgment and decree dated December 21, 1946, of the Court of the Subordinate Judge, Devakottai in Original Suit No. 156 of 1944 and Appeal from the judgment and decree dated September 17, 1952 and October 24, 1952, of the Madras High Court in A.S. No. 243 of 1947 arising out of the judgment and decree dated December 21, in Original Suit No. 164 of the Subordinate Judge, Devakottai in Original Suit No. 164.
A.V. Vishwanatha Sastri and M. section K. Aiyangar, for the appellants in C.A. No. 104 of 1954.
216 A.V. Vishwanatha Sastri and U. section K. Sastri, for the appellants in C.A. No. 169 of 1956.
K.S. Krishnaswamy Iyengar and R. Ganapathy Iyer, for respondent No. 1 (in both the appeals).
May 24.
The judgment of Jagannadhadas and B. P. Sinha JJ. was delivered by Jagannadhadas J. Govinda Menon J. delivered a separate judgment.
JAGANNADHADAS J.
These two are appeals against two separate decrees of the High Court of Madras arising, out of two suits as between the same contesting parties with reference to a connected set of facts.
Civil Appeal No. 104 of 1954 is before us by virtue of special leave granted by this Court under article 136(1) of the Constitution.
Civil Appeal No. 169 of 1956 has come up by reason of certificate granted by the High Court under article 133(1)(a) of the Constitution.
The parties to the litigation are Nattukottai Chetties, a wealthy banking community in South India who, at the time, were having large banking transactions in Burma and other places in South East Asia.
One AL.
Periakaruppan Chettiar (hereinafter referred to as Periakaruppa) owned and possessed considerable properties.
He adopted one AL.
Alaska Chettiar (hereinafter, referred to as Alaska) in or about the year 1914. 'there arose acute differences between them from about the year 1924 owing to the alleged wasteful habits of Alagappa who ran into debts.
This led to criminal complaints between them, each against the other, in 1926.
(See Exs.
P 5 and D 12).
One of Alagappa 's creditors obtained a decree against him and attached Alagappa 's half share in the family residential house including the site on which it was situated.
This resulted in a regular suit in which the question at issue was whether the site was ancestral site and whether the super structure was constructed out of the ancestral funds.
It was found that the site was ancestral Periakaruppa maintained that the super structure which was substantial in value compared with the site was built out of his self acquired funds and was not joint family property, while Alagappa and the attaching 217 creditor contended to the contrary.
The litigation went up to the High Court and the High Court accepted the contention of Periakaruppa and made a declaration that the site was ancestral and that the super structure was the self acquisition of Periakaruppa.
The judgment of the High Court was dated November 19, 1926, and is reported in Periakarappan vs Arunachalam (1).
During the pendency of this litigation in the High Court the adopted son Alagappa filed a suit on September 9, 1926, on behalf of himself and his minor son by name AL.
Periakaruppan Chettiar (hereinafter, for distinction, referred to as junior Periakaruppa) represented by his mother and next friend by name Mutbayi Act.
It has to be mentioned that in or about June 27, 1926, Periakaruppa purported to make a second adoption of a 'young boy by name AL.
Ranganathan Chettiar (hereinafter referred to as Ranganatha) on the footing that such an adoption was permitted by special custom in Nattukottai Chetti families.
The suit O.S. No. 114 of 1926 filed by Alagappa and his minor son, junior Periakaruppa, was therefore filed as against Periakaruppa and his second adopted son Ranganatha, who at the time was also a minor.
It was for delivery of a half share of the properties of the family on the footing that all the properties were joint family properties and for a declaration that the second adoption was invalid.
The first defendant therein, Periakaruppa, filed a written statement contesting both these matters and claiming that all the suit properties in their entirety were his self acquisition and that the plaintiffs had absolutely no rights therein and also asserting that the second adoption was valid.
Before the suit proceeded to the stage of issues and trial, the dispute between the parties was compromised by a Rajinama brought about by four Panchayatdars, who were all respectable members of the Nattukottai Chetti community.
Some of the questions that arise in the present appeals centre round the proper construction of some of the terms of this.
Rajinama, which will be noticed later.
It is sufficient to state at this stage that by that Rajinama the two plaintiffs, Alagappa and his (1) Mad.
582, 28 218 minor son, junior Periakaruppa, obtained Rs. 75,000 each and Alagappa 's wife Muthayi Achi, the mother of the minor son and his next friend in the suit, was to get a sum of Rs. 14,000 as her Stridhan, These amounts were paid by means of four hundis, Rs. 25,000 and Rs. 50,000 for Alagappa, Rs. 75,000 for junior Periakaruppa and Rs. 14,000 for the mother, Muthayi Achi, on Nattukottai Chetti bankers of Periakaruppa in Burma.
It was one of the express terms of the Rajinama that all the properties mentioned in the plaint in that suit and other properties belonging to the first defendant, Periakaruppa, were admitted to be his self acquisitions and that the plaintiffs therein had.
no right and connection whatsoever in any of them or in the charities founded by Periakaruppa and in the properties belonging thereto or their management, either in the lifetime of Periakaruppa or subsequent thereto.
It was also one of the specific terms of the Rajinama that the plaintiffs should remove themselves from the family house with all their belongings and that the possession of the aforesaid house be delivered to Periakaruppa.
It was also expressly stipulated that the petition then pending for leave to appeal to the Privy Council against the judgment reported in Periakaruppan vs Arunachalam (1) was to be withdrawn.
This compromise was certified to be for the benefit of the minor plaintiff concerned, as also of the minor defendant Ranganatha and was accepted by the Subordinate Judge before whom the compromise petition was filed.
As a result, the compromise was accepted by the court on August 15, 1927, and the suit was dismissed in terms thereof on the same date.
About a year and a half later Periakaruppa executed a will on April 4, 1929.
The genuineness and due execution thereof are not in question.
But the effect of that will is also one of the main points in dispute.
Periakaruppa died about three months later i.e. on July 14, 1929, and his wife Lakshmi Achi died within a year thereof on March 11, 1930.
By the will, broadly speaking, Periakaruppa made arrangements for certain religious gifts and (1) Mad.
219 charities and made arrangements for the management thereof and gave the residue of the property to his wife Lakshmi Achi for her life and thereafter to his second adopted son Ranganatha.
Ranganatha, who, some time in or about the date of Lakshmi Achi 's death in 1930, appears to have attained majority, has been in undisputed possession and enjoyment of Periakaruppa 's properties ever since till late in 1944.
Alagappa 's son junior Periakaruppa attained majority in December, 1943, and filed two suits on November 11, 1944, in the Subordinate Judge 's Court of Devakottai, one numbered as O.S. 156 of 1944 and the other as O.S. 160 of 1944.
O.S. No. 156 of 1944 was on the footing that Rs. 75,000 which was given to him under the above mentioned Rajinama of the year 1927, was, under the terms thereof constituted a trust for his benefit during his minority under the trusteeship of Periakaruppa himself and another person A. P. section Chockalingam Chettiar of Athangudi, (hereinafter referred to as Chockalingam) the junior paternal uncle of the minor 's mother, Muthayi Achi, and that the money was wrongly appropriated by Chockalingam owing to his straightened circumstances.
His case was that Periakaruppa as a co trustee with Chockalingam was equally responsible for breach of the trust and that therefore he was entitled to have the moneys found due on account, paid out of the estate of Periakaruppa in the hands of Ranganatha as well as from the estate of Chockalingam in the hands of his son.
The second suit O.S. No. 164 of 1944 was a suit to recover the entire properties of Periakaruppa in the possession of Ranganatha for himself and his father Alagappa who was made the first defendant in the suit, on the ground that Ranganatha 's adoption was invalid, that the will of Periakaruppa was ineffective and that the properties devolved on himself and his father Alagappa.
It may be noticed that so far as the father Alagappa is concerned the suit would prima facie be time barred since it has been filed about 15 years after the death of Periakaruppa.
The plaintiff junior Periakaruppa however filed the suit on the footing that in view of his minority for all this period until December, 1943, 220 the suit was not barred.
Hereinafter, for convenience, the first suit O.S. No. 156 of 1944 will be referred to as the trust suit, and the second suit O.S. No. 164 of 1944 will be referred to as the succession suit, In the succession suit the main questions that arose for decision were: (1) whether the adoption of Ranganatha as a second adopted son was valid; (2) if not, whether the will was effective to convey the property of Periakaruppa to Ranganatha after the death of his wife Lakshmi Achi, notwithstanding the invalidity of his adoption; (3) whether, in case the will was ineffective the properties of Periakaruppa devolved on both Alagappa and his son junior Periakaruppa together or on Alagappa alone to the exclusion of junior Periakaruppa ; (4) if the devolution was on both together, whether the rights of junior Periakaruppa were barred by reason of section 7 of the Indian Limitation Act, 1908 (Act IX of 1908).
This involved the further questions: (a) whether by and under the Rajinama Alagappa and his son became divided in status inter se so as to make section 7 inapplicable.
(b) whether in case the devolution was on both together as members of a joint family, section 7 had application to the factual situation in the family.
So far as the adoption of Ranganatha was concerned both the courts below, while holding that the adoption as a fact was proved, have found against existence of the custom pleaded as to its validity and hence concurrently found the adoption to be invalid.
That conclusion is no longer in dispute in this Court.
As regards the will both the courts held that the will was ineffective to vest any title in Ranganatha though on slightly different grounds.
As regards question No. 4 relating to limitation, the two courts came to different conclusions with the result that the trial court dismissed the suit as barred by limitation, while the High Court reversed it and granted a decree for the half share of 221 Periakaruppa 's properties in favour of junior Periakaruppa holding that in respect of the other half share the rights of Alagappa were barred and that Ranganatha acquired the same by his adverse possession.
As regards question No. (3) and the subordinate questions (a) and (b) of question No. (4), there appears to have been no serious question raised in the trial court by the defendant as to the exclusion of junior Periakaruppa by Alagappa in the matter of succession to Periakaruppa 's properties, or any serious questions raised by the plaintiff as to the Rajinama bringing about a partition inter se between the father Alagappa and his minor son junior Periakarpppa and of Alagappa not being the de facto manager of the family.
It was accordingly found by the trial court that both of them succeeded as members of the joint family and that therefore the minor, junior Periakaruppa, was barred by virtue of section 7 of the Limitation Act.
When the matter came up on appeal to the High Court, a question was raised that section 7 would not be applicable in this case unless it was further made out that the father Alagappa was the de facto manager of the family consisting of himself and his minor son of which it is alleged there was no proof or finding.
Both the Judges allowed this point to be raised and called upon the trial court to take evidence and submit a finding in respect of that contention.
The trial court accordingly took evidence in regard thereto and returned a finding that on the evidence, both the father and the minor son were living as members of a joint family and that the father was in fact the de facto guardian.
When the matter was rehear by the same Bench of the High Court on the return of the finding, the Bench did not go into the correctness or otherwise of this finding, on the view that this finding was of no consequence, if it is found that by virtue of the Rajinama both the father and the minor son became divided inter se.
The learned Judges while realising that the finding was called for on the undisputed assumption that the father and the son were undivided in status, were of the opinion that there was nothing to prevent them from reopening 222 the same and held on a construction of the Rajinama that it brought about divided status inter se between the father Alagappa and his minor son junior Periakaruppa.
In that view they found section 7 of the limitation Act had no application to the case and same to the conclusion that the succession suit by junior Periakaruppa was not barred by limitation in so far as it related to his own share though barred in respect of Alagappa 's share.
Hence the succession suit ended in favour of junior Periakaruppa in respect of a half share of the properties left by Periakaruppa.
As regards the trust suit the contentions raised were : (1)that under the Rajinama both Periakaruppa and Chockalingam became trustees in respect of the sum of Rs. 75,000 to be invested in Chetti firms as provided in the Rajinama; (2)that as a fact the amount was invested with Chockalingam, one of the trustees themselves, contrary to the law; (3)that such investment itself constituted breach of trust for which Periakaruppa was also responsible.
It appeared on the evidence that out of the trust amount, a sum of Rs. 30,000/ was invested in the purchase of a house at Athangudi in South India (the place of Chocklingam) and that Alagappa and his minor son, the junior Periakaruppa, and his family have been since that purchase on July 23,1928, living in that house.
At the trial, therefore, credit was given to this amount as being proper investment of the trust funds in the matter of account taking by concession of the lawyer for junior Periakaruppa.
The defendant Ranganatha in addition to contending that no trust was created, also contended that as a result of subsequent transactions junior Periakaruppa got the benefit not only of the purchase of the house above referred to but also of a mortgage executed in favour of himself and another by Chockalingam in 1930 for a lakh of rupees of which Rs. 70,000 was his, of which he obtained the benefit, and that therefore the alleged breach of trust must be taken to have been waived and that in any case he was entitled to have 223 the mortgage document as much as the purchase of the house to be taken into consideration for reducing his liability in respect of the alleged breach of trust.
These contentions were negatived by both the courts with the result that there was a decree against Ranganatha and his minor son in respect of half the loss occasioned by the breach of trust, payable out of the half share of Periakaruppa 's properties in their hands.
The result of the two judgments of the High Court in both the suits was against Ranganatha and hence the two present appeals before us by him.
It will now be convenient to take up first the con sideration of the succession appeal.
The points arising therein have already been set out in the preliminary narration and need no repetition.
The main points argued before us on this appeal are (1)The conclusion of the High Court that the will of Periakaruppa was ineffective is erroneous and Ranganatha took under the will as persona designata.
(2) In case the will is held to be ineffective and in the view taken by the High Court that Alagappa and junior Periakaruppa became divided in status under the Rajinama the property of Periakaruppa devolved on Alagappa to the exclusion of junior Periakaruppa and hence the plaintiff has no right to sue.
(3)The conclusion of the High Court that the Rajinama brought about divided status inter se between the father Alagappa and the minor son junior Periakaruppa is erroneous and hence the suit is barred by virtue of section 7 of the Limitation Act.
A few other minor points have been raised on both sides which, after consideration, appeared to be unsubstantial and we intimated our view at the hearing and it is not necessary to refer to and deal with them any further.
We have heard elaborate arguments on the above three points and have given our careful consideration to them.
It is obvious that having regard to the course of events in this family narrated earlier the primary question for consideration is whether or not the will left by Periakaruppa has brought about an effective disposition of his properties 224 in favour of Ranganatha.
It is only if that has become ineffective that the other questions argued before us on this appeal as set out above arise for consideration.
In view of the fact that the genuineness of the will is not disputed and no question arises as to the disposing capacity of Periakaruppa, the plaintiff in this case, junior Periakaruppa, can succeed only if he displaces the will.
He has accordingly raised three contentions.
1.That there is no effective dispositive clause in the will.
2.That the disposition, if any, in favour of Ranganatha under the will was an attempt to create an estate in tail male and hence invalid.
3.The disposition in favour of Ranganatha was by reason of and on account of, his having been considered by the testator as his duly adopted son, i.e., the validity of the adoption was the basis and the condition for the disposition.
Since that has now been found to be invalid, the disposition fails.
Of these three questions the first two though upheld by the trial court have been rejected by the High Court.
We agree with the reasoning of the High Court on these two points and they do not call for any further consideration.
We are satisfied that there is no substance in these contentions.
The real question that arises on a consideration of the will is whether the disposition of the residue in favour of Ranganatha contained therein was to him as a _persona designata or is dependent on his being a duly and validly adopted son.
For a proper appreciation of this contention on both sides, it is necessary to set out the relevant clauses in the will. "(1) I am now 68 years of age, taking into consideration the fact that I have been in indifferent health for sometime past I have decided to make an arrangement after my lifetime in regard to my properties and in regard to the charities established by me and accordingly I have executed this will wholeheartedly.
(2)All the immovable and movable properties entirely, which belong to me as my own and which are 225 in my possession are my self acquired properties.
Excepting myself no other person has any interest or right whatever in the said properties.
(3). . . . . . . . . . . (4)Sometime back I took as my foster (son), Alagappan, son of Nachandupatti Chidambaram Chettiar, and brought him up in my house and also got him married.
But the aforesaid Alagappan conducted himself in immoral ways and had evil intentions and further fell into bad company and after being duped brought into existence several documents falsely and colourfully by making it appear that he had borrowed debts to the tune of about one lakh of rupees and also caused decrees to be passed in respect of some of the abovementioned debts and estranged my feelings and became inimical towards me, and left my family and was living separately for the past about 10 years and he was also living in.
his father in law 's house.
(5)Thereafter while the aforesaid person had instituted a suit O.S. No. 114 of 1926 against me in the Sub Court of Devakotta for his share in the properties which were in my possession, some of our community people acted as the panchayatdars and gave an award in the above suit and a razinama was filed in the Court, and all the amounts which were payable by me according to the said razinama were already paid by me entirely.
Neither the aforesaid Alagappa Chetti nor his heirs shall have any manner of right or interest whatever in the properties which are now in my possession and in the properties which might be acquired hereafter.
(6)Subsequently I took in adoption Nachandupatti Ramanathan Chettiar 's son, namely, Ranganathan, aged about 17 1/2 years, and he is living with me.
(7)to (12). . . . . . . . (13)My adopted son Ranganathan and his male heirs shall after the lifetime of my wife Lakshmi Achi properly conduct the aforesaid charities.
In order to supervise and see whether Ranganathan conducts the charities properly without any defect whatever, I have 29 226 appointed the following persons as the executors, namely, (1) my son in law Arunachalam Chettiar, son of Alagapuri Alagappa Chettiar who is interested in both myself and Ranganathan, the two sons of Kanadukathan AL.
K. Chandra Mouli Chettiar, namely, (2) Karuppan Chetty, (3) Peria Karuppan Chetty, and (4) Murugappan, son of Konapattu Subra manian Chettiar.
The said persons shall accordingly supervise (the performance of the charities) in a proper manner.
(14) I am entertaining a desire that I should spend my lifetime and die at Tiruvarur alone.
My body shall not be cremated according to our caste custom, and a samadhi (tomb) shall be erected for me, and a lamp shall be lit therein daily and a person shall be appointed to perform Neivedhiyam (by preparing food) with 1/4 measure of rice by the big measure daily.
Guru pooja shall be performed once a year in the Star in which I die, by distributing food to the mendicants, and by spending an amount to the extent of Rs. 250 (Rupees two hundred and fifty) every year by inviting my relations.
A sum of Rs. 15,000 (rupees fifteen thousand) shall be sent for and obtained from the Saigon firm from out of my own funds for the aforesaid Tirupani (service) in the temple and my wife shall conduct the aforesaid Tirupani.
The daily expenses of the Samadhi aforesaid and Guru pooja etc.
, shall be met from the Patasala charity funds and conducted.
(15) Apart from the properties which have been set apart for the abovementioned charities and the properties which have to be newly purchased hereafter for the same, as my adopted son Ranganathan and his male heirs have to take all the immovable and movable properties belonging to me and as the aforesaid adopted son namely Ranganathan is now a minor the said Ranganathan shall after he attains majority and if he is of good behaviour (take in his possession) the aforesaid properties after my lifetime and after the lifetime of my wife Lakshmi Achi and enjoy them.
(16) In case the aforesaid Ranganathan does not conduct himself properly or if my wife Lakshmi Achi 227 does not like, the following two persons, namely, (1) K. AS.
P. Rm.
Ramaswami Chettiar, son of Athangudi Palaniappa Chettiar, and (2) PL.
T. Rm.
Ramasami Chettiar, son of Karaikudi Thenappa Chettiar shall manage my properties after the lifetime of my wife Lakshmi Achi till Ranganathan comes of good behaviour.
The amount which may be found just for family expenses shall be paid till such time when the aforesaid Ranganathan begins to conduct himself properly and when the properties are delivered in his possession.
(17). . . . . . . . . . . (18) For the expenses of the maintenance right, etc., of my wife Lakshmi Achi and for the necessary expenses of pilgrimage to sacred places a sum of Rs. 15,000 (fifteen thousand) dollars has been credited in her name in the Saigon firm, and she shall send for and obtain the amount of interest alone got for the said amount every year and spend it according to her pleasure.
My adopted son Ranganathan and his male heirs shall take the principal amount.
(19). . . . . . . . . . . (20)As regards the substantial tiled building which belongs to me and which is in my own place and which I am residing, and one bungalow building built by me in the Therodam veedhi (street in which the chariot is drawn) in the said place, my wife shall enjoy them after my lifetime and after her my adopted son Ranganathan and his male heirs shall permanently and for ever enjoy the said buildings.
Apart from enjoying the abovementioned two buildings, none of them shall have any right to alienate them in any manner.
(21)If apart from the matters specified by me herein, it is necessary that any documents should be brought into existence after my lifetime during the lifetime of my wife regarding the properties belonging to me and regarding the charity properties and regarding the family maintenance from time to time I have hereby given authority to my wife Lakshmi Achi mentioned above to execute such documents regarding 228 the same.
My adopted son Ranganathan shall perform the funeral obsequies for myself and for my wife.
(22 and 23). . . . . . (Sd.) A.L. P.R. Periakaruppan Chetty.
" In order to understand the background of this will, it is necessary to recapitulate the previous family history which has already been adverted to at the commencement of this judgment.
That is as follows.
Periakaruppa adopted Alagappa in or about 1914.
He apparently was a spendthrift in his habits and incurred many debts.
There developed ill feeling between them which led to mutual criminal complaints against each other in 1926.
One of his creditors obtained a decree and attached the family house.
This led to litigation in which Periakaruppa asserted and succeeded in establishing that the super structure of the family house, which was a costly one, was his own self acquisition.
During the pendency of this litigation Periakaruppa adopted for the second time, Ranganatha, claiming to do so by way of custom in the Nattukottai Chetti community.
This led to a suit for partition by Alagappa claiming all the properties to be joint properties and for a declaration that the second adoption was in valid.
This suit was at a very early stage compromised on the terms that Alagappa and his son were to take away as between themselves a sum of Rs. 1,50,000 in cash and would have no claim of any kind to any of the properties in the possession of Periakaruppa and no claim to interfere in any manner with the various charities and religious endowments which Periakaruppa made The properties were all admitted to be the self acquisitions of Periakaruppa and his right to alienate the property by will was specifically recognised.
Alagappa with his wife and son was to clear out of the family house with all their belongings.
Alagappa got his share of the cash under the Rajinama by means of two hundis one for Rs. 25,000 and another for Rs. 50,000.
They were specifically delivered over, as recited in one of the terms of, the Rajinama, to one Chockalingam who was made responsible to discharge all the encumbered debts so far incurred by Alagappa, from out of the moneys 229 of those two hundis so as to make sure that no liability would arise out of the debts previously incurred by Alagappa which might affect Periakaruppa.
It is in evidence that after this compromise Alagappa and his family consisting of his wife and son cleared out of the original family house built by Periakaruppa and that they were living separate from Periakaruppa.
Periakaruppa and his second adopted son Ranganatha were presumably living together in that original family house as stated in the will.
This Rajinama was on August 15, 1927, and the will was executed on April 4, 1929, i.e., a year and eight months thereafter.
It may be noticed at this stage that the Rajinama while it admits one of the points in controversy in suit, viz., that the property is self acquired property of Periakaruppan, is silent about the other question at issue, viz., as to the validity of the second adoption and in fact the suit was terminated by a formal dismissal thereof presumably leaving this disputed question at large.
The will starts with an assertion that all the movable and immovable properties in his possession are his self acquired properties and that excepting himself no other person has any interest or right therein.
It asserts that Alagappa conducted himself in immoral ways, fell into bad company, brought into existence several false and colourable documents and borrowed debts to the tune of about a lakh of rupees and caused decrees to be passed in some of them and became inimical towards him.
It asserts that Alagappa left his family and was living separately for the past about ten years.
Notwithstanding that he was an undisputed adopted son, he referred to him in the will as 'Abhimanaputra ' (foster son).
In contrast with this he states that Ramganatha was taken in adoption by him, that Ranganatha was at the time of the will about 17 1/2 years old and that he was liviny with him.
Clauses 7 to 14 of the will refer to various religious and charitable endowments which he had made and the properties which he gave to them.
It also enumerates the arrangements for their management.
By cl. 8 he makes provision for the construction and maintenance of 230 Brahmana Veda Patasala attached to the temple of Sri Sri Theagarajaswami in Thiruvarur.
Clauses 8 and 9 set apart certain properties for the due maintenance of the said Patasala.
Clause 10 relates to the establishment of three charities in addition to the above Patasala charity, to be conducted and maintained out of the income of the same properties as have been set apart for the Patasala charity.
In cl. 11 he states that no person shall have any right to alienate or encumber the properties set apart for the charities.
By cl. 12 he appoints his wife Lakshmi Achi as the manager to conduct the above charities after his lifetime.
By el. 13 he directs that his adopted son ' Ranganatha and his male heirs shall after the lifetime of his wife Lakshmi Achi properly conduct the above said charities.
He appoints three persons as executors to supervise the management by 'Ranganatha '.
By cl. 14 he expresses a desire to spend the rest of his lifetime at Thiruvarur and die there.
He says that his body shall not be cremated according to custom but that a samadhi (tomb) should be erected for him and that a lamp is to be lit there daily and that a person should be appointed to perform Neivedhiyam daily, of a specified quantity of rice.
By the same clause he also enjoins that Guru pooja should be performed once ail year in the star in which he dies by distributing food to the mendicants by spending Rs. 250 every year.
He does not specifically indicate who is to perform the Guru pooja.
The context may well be taken to indicate that the paid employee was to do it.
He indicates that a sum of Rs. 15,000 was set apart for the above purpose in a Saigon firm and that it should be sent for and utilised by his wife for the aforesaid Tirupani.
This, in the context, seems to refer to the construction of the Samadhi.
He also says that the daily expenses of the samadhi and the Guru pooja expenses should be met from the Patasala charity funds.
Thereafter come the various provisions relating to the disposition of the residue of his property.
The effect of these provisions in cls.
15 and 16 is that after his lifetime his wife, Lakshmi Achi should enjoy the residue and that thereafter the "adopted son Ranganatha" is to take them 231 into his possession and enjoy them (after the death of himself and his wife) on his attaining majority and if he is of good behaviour.
It is specifically provided that if " the aforesaid Ranganatha " does not conduct himself properly or if his wife Lakshmi Achi does not like (him) two specified persons, K.AS.P.Rm.
Ramaswamy Chettiar and PL.
T. Rm.
Ramasami Chettiar should manage the properties after the lifetime of Lakshmi Achi till "Ranganatha" comes of good behaviour and that he should be paid by them just enough for his family expenses till such time when 'the aforesaid Ranganatha ' begins to conduct himself properly and that the properties are to be delivered into his possession then.
Under el.
18 the 'adopted son Ranganatha ' should take the principal amount of Rs. 15,000 set apart for his wife Lakshmi Achi after her death.
There is also el. 20 which provides that the substantial tiled building belonging to him which is in his own place and in which he was residing and one bungalow built by him in the Therodum Veedhi (Car Street) shall be enjoyed by his wife after his own lifetime and that after her lifetime "his adopted son Ranganatha" and his male heirs shall permanently and for ever enjoy the said buildings.
There area few other specific legacies in cls.
17 and 18 which require no notice.
The scheme of the will is clear, viz., that Periakaruppa wanted his own wife to enjoy the properties and to manage the charities so long as she was alive and that the adopted son Ranganatha should do the same after her death, that in respect of the charities he set up a committee of supervision over his management (but not in respect of his wife 's management) while as respects enjoyment of the properties he specifically provided that the adopted son Ranganatha should enjoy his properties after be attains majority only if he is of good behaviour and that so long as he was not of good behaviour or his wife ' did not like him, he was to get only some maintenance out of the properties.
These provisions are reminiscent of his past experience with the first adopted son Alagappa and are obviously inspired by the experience of bad conduct and wasteful 232 ways which he thought the first adopted son was guilty of.
In the will he refers to "adopted son Ranganatha" in quite a number of places and to "aforesaid Ranganatha " or to " Ranganatha " in some places.
There is no doubt that in what may be taken to be the dispositive clause, el. 15, he refers to him as "my adopted son Ranganatha" though in the next connected clause, cl. 16, he refers to him as ,aforesaid Ranganatha " or as " Ranganatha ".
The question for consideration is whether the validity of adoption was the condition for the effectiveness of these dispositions.
The question as to whether a disposition in such terms is to the person intended therein as a persona designata or by reason of his filling a particular legal status which turns out to be invalid is one of some difficulty and has been considered by the courts in quite a large number of cases, some of which have been cited before us.
An elaborate consideration of these various cases cannot finally determine the question that arises in individual cases, which must ultimately depend on its own facts and the terms of the particular document containing the disposition.
It is enough to refer to two cases of the Privy Council cited before us, viz., Nidhoomoni Debya vs Saroda Pershad Mookerjee (1) and Fanindra Deb Raikat vs Rajeshwar Das (2 ).
As pointed out in the first case the question in all such cases is whether the gift of the property by the testator to a person who is referred to as having been adopted is one which is dependent on whether all the requisites of a valid adoption have been complied with or whether it is to a designated person notwithstanding that it was desired and expected that the requisites for a valid adoption were complied with.
As pointed out by their Lordships in the second case "the distinction between what is description only and what is the reason or motive of a gift or bequest may often be very fine, but it is a distinction which must be drawn from a consideration of the language and the surrounding circumstances".
In that case their Lordships gave an illustration which is very apt for the present case.
It is as follows: (1) (1876) L.R. 3 I.A. 253.
(2) (1884) L.R. 12 I.A. 72, 89. 233 " If a man makes a bequest to his "wife A.B.", believing the person named to be his lawful wife, and he has not been imposed upon by her, and falsely led to believe that he could lawfully marry her, and it afterwards appears that the marriage was not lawful, it may be that the legality of the marriage is not essential to the validity of the gift.
Whether the marriage was lawful or not may be considered to make no difference in the intention of the testator." Now in the present case learned counsel for the res pondent very strongly relies on the repeated reference to Ranganatha in the will in the dispositive clauses as the adopted son and says that the disposition was made in his favour by reason of the fact that he was adopted and that he was believed to be duly and validly adopted.
He points out that Periakaruppa was apparently a religious man as seen from the various charitable and religious endowments he had made in the will itself.
He also placed stress on the fact that by virtue of cl. 21 of the will, he directs that his adopted son shall perform the Putra krutyangal (ceremonies to be performed by a son) for himself and his wife (after their respective deaths).
It is said that the performance of the various ceremonies after death by a person who was not a son in the eye of sastras would be abhorrent to any devout Hindu which Periakaruppa clearly appears to be.
This contention is not without force.
But taking an overall picture of the provisions in the will and the background of the previous history, it is not possible to say in this case that the validity of the adoption was contemplated by Periakaruppa as the condition on which the validity of disposition should depend.
As has been previously pointed out the will has been clearly in spired by his previous experience with his first adopted son Alagappa.
When Alagappa did in fact challenge the validity of the second adoption in the suit which he filed and asked for a specific declaration in respect thereof by his plaint, that suit was allowed to be merely dismissed and there was no reference to the validity or otherwise of the second adoption in the Rajinama.
Apparently it left the question at large.
The will having been executed only within about one 30 234 year and eight months after the Rajinama in the suit, the testator Periakaruppa must have been conscious of the fact that the second adoption was open to serious challenge.
In this context the reference to Ranganatha as the adopted son in the will as against the reference to Alagappa as a mere Abhimanaputra may indicate no more than that testator is anxious to make it quite clear that he would acknowledge Ranganatha as his adopted son in preference to Alagappa and is indicative of his clear intention that he desires him to get his properties to the exclusion of Alagappa and his minor son.
That her is desirous of excluding by his will Alagappa and his son is apparent from his very categorical statement in cl. 5 of the will that neither the aforesaid Alagappa nor his heirs shall have any manner of right or interest whatever in the properties which were then in his possession and any properties which may be acquired thereafter.
The will itself is, therefore, obviously intended to exclude them from succeeding to his property.
Being aware of the likelihood of the challenge as to the validity of adoption of Ranganatha he could not have intended the ' disposition to fail in the contingency of the second adoption being held invalid thereby letting in the very persons whom he wanted to exclude.
The provisions in the will which give the property to Ranganatha, only if he is of good behaviour seem rather to indicate that he attached greater importance to the character of the boy rather than to his legal status as an adopted son.
It is true that he contemplated ceremonies to himself and his wife after their death being performed by the adopted son Ranganatha.
But it is noteworthy that he chose the course of having his body enshrined in a tomb after his death and making arrangements for worship being conducted every day and Guru pooja on the day of his own annual sradh day.
This may well have been felt by him to be a substitute for the regular annual sradh by an undisputedly valid adopted son whom he did not like.
It is also noteworthy that there is no indication that he contemplated the Guru pooja as having to be done by Ranganatha, after the death of his wife.
How exactly the testator viewed the second adoption of 235 Ranganatha and the alleged custom enabling him there unto may well be gathered from para.
8 of his written statement in O. section 114 of 1926 which is as follows: "The allegations in paragraph 11 of the plaint are false.
This defendant has really taken in adoption the 2nd defendant.
The aforesaid adoption is valid in accordance with the custom of Nattukottai Chettiars.
There are many differences in the matter of adoption between Nattukottai Chettiars and other caste people as stated below.
Their custom alone can prevail in the matter of the adoption taken by them and neither the law nor the Sastras can bind them.
As adoption is made among Nattukottai Chettiars only with the intention that the adopted son should render them help and assistance (1) those who make adoption pay money to the parents Vagaira as price for the adopted boy.
(2) Neither Dattaka Chandrika or Dattaka Mimamsa can bind them.
(3) If one person has two wives, the two wives adopt two sons.
(4) If the son of a person dies leaving his widow, the father takes a boy in adoption for himself, and the widowed daughter inlaw takes another boy in adoption.
(5) If a grandson by son is born to one person and the son dies, the aforesaid person takes a boy in adoption even when the aforesaid grand son is living.
The customs with regard to adoption among Nattukottai Chettiars are in existence as stated above.
(6) As the aforesaid Chettiars are traders, a person can take in adoption another boy, if the adopted son acts against the will of the adoptive father without improving the property.
" This seems to indicate that in his view such a customary adoption was made for temporal rather than for spiritual reasons.
Taking an overall picture of the various provisions in the will, it appears to be reasonably clear that Ranganatha notwithstanding his description as adopted son in the will in several places, was intended by the testator to take the property as persona designata and that the will was therefore effective to convey title to him to residue of properties left by Periakaruppa after his death, 236 No question has been raised that the condition in the will that Ranganatha is to take the property only if he is of good conduct and behaviour, has operated to prevent the title vesting in him and it may be doubtful whether if a clear intention of the testator can be gathered from the will, to bequeath the residue to Ranganatha as persona designata the condition of good conduct and behaviour would be valid to prevent the vesting of the title.
We have, therefore, come to a clear conclusion that Ranganatha obtained title to the properties of Periakaruppa under the will.
This is in accord with the conduct of Alagappa for over 14 years after the death of Periakaruppa and his wife, in keeping silent and allowing Ranganatha to enjoy the. properties without laying any claim to the property on the ground of the invalidity of the will and the invalidity of the adoption, thereby indicating how he understood the will.
In this view the other questions raised in this appeal do not call for consideration.
This appeal, i.e., Civil Appeal No. 169 of 1956, is accordingly allowed with costs throughout and the plaintiff 's suit dismissed.
The questions that arise for decision in the trust appeal may now be taken up for consideration.
The plaintiff in the trust suit also is junior Periakaruppa.
There were five defendants in the suit.
First and second defendants are Ranganatha and his minor son.
The third defendant is the son of Chockalingam.
The fourth and fifth defendants are the father, Alagappa and Muthayi Achi, mother of junior Periakaruppa.
The plaintiff 's case as set out in the plaint is that by the terms of the compromise in O.S. No. 114 of 1926 on the file of the Subordinate Judge of Devakottai " Periakaruppa and Chockalingam were constituted joint trustees for himself who was then a minor and that they were enjoined the duty of having the amount invested from time to time in Cheyenne firms, that the above terms were accepted by all the parties concerned including Periakaruppa and that consequently both Periakaruppa and Chockalingam accepted the position of joint trustees for the plaintiff for duly safeguarding and improving 237 his moneys." He alleges that the "said trustees were, therefore, bound to see to the proper investment of the said moneys in reliable and sound Chetti firms and for their accumulation with accrued interest during the plaintiff 's minority and to pay the *accumulation to the plaintiff on his demand on his attaining majority." He says further in the plaint that he learned after attaining majority that the entire amount was appropriated by Chockalingam for discharging his own personal debts and that he made it appear as if he had credited the trust amount in his own firm, that eventually when his firm became involved (financially) he (Chockalingam) appears to have executed of his own accord a simple mortgage dated May 3, 1930, (i.e., during the minority of junior Periakaruppa) of his house at Athangudi (in South India) together with a small item of property in Burma in favour of the plaintiff and another creditor for a sum of Rs. 1,00,000 of which Rs. 70,000 was intended to be the plaintiff 's money and the other Rs. 30,000 of the other creditor.
The plaintiff further says in his plaint that the house which was the main item of security in the mortgage had no marketable value, that the mortgage was a one sided affair and that he repudiates the same.
He claims accordingly that both the trustees Periakaruppa and Chockalingam were bound to render to him an account of the trust amount and if they had not properly invested it they were bound to repay it to the plaintiff with interest.
He alleges that the trustees were bound to invest the amount in securities authorised by law and that they were bound to invest the moneys in sound third party Chetti firms.
He also alleges that Periakaruppa knew at the time the involved circumstances of his co trustee and either colluded with him or failed in his duty to protect the plaintiff 's interests.
He accordingly claims that Peria karuppa jointly with Chockalingam were liable for the gross breach of trust in respect of the said amount.
He further alleged that on the, death of Periakaruppa on July 14,1929, and of Chookalingam in September/ October, 1934, he the plaintiff was entitled to recover the amount due to him from the estate of Periakaruppa 238 in the hands of defendant No. I and of Chockalingam in the hands of defendant No. 3.
The first defendant filed, along with his minor son the second defendant, an elaborate written statement the substance, of which was that Periakaruppa was not constituted a trustee nor did he accept or assume the position of or acted as a trustee for the plaintiff in respect of the sums mentioned in the plaint.
He states that, on the other hand, the only persons who were competent to act on behalf of the plaintiff were his guardians or his parents and the Rajinama conferred no right on Periakaruppa to override any acts done by play Dtiff 's legal guardians on behalf of the plaintiff 's moneys.
It is further stated that there was nothing improper on the part of Chockalingam along with the plaintiff 's father and mother in realising the ,same under the hundi (for Rs. 75,000 due to junior Periakaruppa) and handing it over to Rangoon A.P.S. Firm (Chockalingam 's firm) for being invested.
He further states that the said firm was in a flourishing and solvent condition then and during all the time Periakaruppa was alive, and that there was absolutely no negligence or improper motive on the part of any body in entrusting to the said firm for investment or in investing in the said firm, the money realised for the said hundi drawn by Periakaruppa.
It was further stated that the first defendant therein understood that out of the said moneys with Chockalingam 's firm a sum of Rs. 30,000 was withdrawn by the parents and guardians of the plaintiff and invested the same bona fide in the purchase of a house for the benefit of the plaintiff on July 23,1928, which was proved to be in the possession of the plaintiff and continued to be so and that the plaintiff must be taken to have ratified the said purchase.
The written statement also states that in or about the year 1930 after the death of Periakaruppa there were some disturbances in Burma and that the parents and guardians of the plaintiff, with a view to safeguard the interests ,of the plaintiff completely and effectively, wanted from the said Chockalingam security of landed property and thus obtained the mortgage referred to in the plaint of his residential 239 house and bungalow at Athangudi and of the business premises of Chockalingam at Bogale in Burma.
The written statement proceeds to say that the plaintiff is bound by the acts of his parents and guardians in entering into such an arrangement made in his interest and for his benefit.
It is also further stated that on February 17, 1936, the house and bungalow of Cbockalingam at Athangudi which was the subject matter of the mortgage above mentioned, were purchased in court auction by Alagappa the father of junior Periakaruppa for a small sum of Rs. 1,000 subject to the mortgage and that this course was adopted as a means of realising the amount due to the plaintiff on the mortgage deed without the necessity to incur any costs of a suit.
It is thus claimed that the mortgage as well as the subsequent purchase of equity of redemption were all transactions by Alagappa for the benefit of his minor son and acting for him and that the plaintiff is not entitled to repudiate these transactions.
The third defendant, son of Chockalingam, also filed a written statement denying that there was any trusteeship or acceptance thereof by his father, that the relations between the minor represented by his mother and father on one side, and Chockalingam on the other side, with whom the moneys were kept was solely one of creditor and debtor and that the minor 's money was properly invested with Chockalingam and that by then he was in a flourishing condition, that the hypothecation of May 3, 1930, was more than sufficient to cover the debt due and that the Properties covered by the mortgage were brought to sale in court auction subject to the mortgage and were purchased by the plaintiff 's father acting in his interest, that one of the properties so purchased has been resold and the sale proceeds realised by the plaintiff, that the other property is still in possession and enjoyment of the plaintiff and that therefore there was no loan outstanding.
He further says that the remedy, if any, of the plaintiff was against his father and mother and not against himself.
The suit was decreed in the trial court by ordering defendants 1 to 3 to pay a sum of Rs. 1,39,672 13 6 with interest from out of the assets of Periakaruppa 240 and Chockalingam in their hands.
Now, it does not appear that the third defendant appealed against this decree either to the High Court or to this Court.
His liability under that decree is not, therefore, in any way affected by the subsequent proceedings on appeal to the High Court and this Court and it is unnecessary to refer to him or his liability in what follows.
The contention of the plaintiff 's counsel that Periakaruppa and Chockalingam constituted joint trustees for the sum of Rs. 75,000 payable to him under the compromise dated August 15, 1927, is one that is founded on the terms of the compromise.
It is necessary therefore to set out the relevant terms thereof. "1.As settled by the four Panchayatdars, viz (1)N. AR.
Arunachalam Chettiar of A. Muthupattanam, (2) SP.
section Chidambaram Chettiar of Athangudi, (3) M.T.A.M.
Muthiah Chettiar of Kottaiyur, and (4) RM.
Alagappa Chettiar of A. Muthupattanam directing the first defendant to pay to the plaintiffs separately in respect of the right claimed by the plaintiffs in the suit filed by the plaintiffs herein for partition on the ground that they are also entitled to a share in the properties mentioned in the plaint in this suit, the first defendant has executed 3 hundis mentioned hereunder and issued on the 29th Ani, Prabhava (13th July 1927) in the names of the plaintiffs for Rs. 1,50,000, i.e., Rs. 75,000 to the first plaintiff and 75,000 to the second plaintiff with instructions to separately pay to the aforesaid plaintiffs and accordingly the plaintiffs have, at any time hereafter, no right and future connection whatever either in the properties mentioned in the plaint in this suit, or in any other property in the possession of the first defendant, or in any property that the first defendant shall hereafter acquire.
The first defendant alone shall, as he pleases, enjoy as usual the aforesaid entire properties, as hisself acquired properties with all Swatantrani and right and powers of alienation such as gift, exchange, sale, etc.
The first defendant has the right also to alienate the aforesaid entire properties either by a will or otherwise.
241 2.
The first defendant shall for the hundis Nos. 1 and 2 out of the 3 hundis for Rs. 1,50,000 mentioned in paragraph I herein, pay the principal of Rs. 75,000 and interest within Purattasi of this Prabhava year (16th October 1927).
The principal of Rs. 75,000 under the remaining hundi No. 3 shall be paid within the 30th Panguni of the year Prabhava (11th April 1928).
The Sridhanam amount of Rs. 14,000 of Muthayi Achi., mother of the second plaintiff, and the second plaintiff 's amount of Rs. 75,000 out of the aforesaid amount of Rs. 1,50,000 under the hundis, shall be invested in Chetti houses in the name of the second plaintiff to the order of Periakaruppan Chettiar, the first defendant, and to the order of A.P.S. Chockalingam Chettiar of Athangudi, the junior paternal uncle of the aforesaid Muthayi Achi, and the aforesaid two persons shall be in management.
The signature letters and accounts pertaining to the aforesaid amounts shall be with the aforesaid Chockalingam Chettiar.
4 to 9. . . . . 10.
As A.P.S. Chockalingam Chettiar is liable for the discharge of the encumbrances that have been created by the first plaintiff as mentioned in paragraph 4 herein, the first plaintiff Alagappa Chettiar has endorsed on the undermentioned first and second hundis that they are payable to the order of the aforesaid Chockalingam Chettiar and they have been delivered to the aforesaid Chockalingam Chettiar.
It is therefore prayed that the Court may be pleased to record the razinamah in the suit and to dismiss this suit.
Details of the hundis.
The hundi for Rs. 50,000 issued on the 29th Ani of the year Prabhava (13th July, 1927) directing Rangoon Thamappan PL.
T. RM.
Karuppan Chettiar to pay money with Rangoon nadappu interest.
The hundi for Rs. 25,000 issued on the 29th Ani of the year Prabhava (13th July, 1927) directing Rangoon M. A. M. section Meiyappa Chettiar to pay money with Rangoon nadappu interest, 242 3.
Hundi for Rs. 75,000 issued on the 29th Ani of the year Prabhava (13th July, 1927) directing Rangoon RM.
P. A. Muthiah Chettiar to pay money with Rangoon nadappu interest.
" The whole argument for the plaintiff is based on the provision contained in para 3 that the Sridhanam amount of Rs. 14,000 of Muthayi Achi, mother of the second plaintiff (which, it is said, has been given up by the plaintiff 's mother in his favour) and the second plaintiff 's amount of Rs. 75,000 out of Rs. 1,50,000 under the hundis, shall be invested in Chetti houses in the name of the second plaintiff to the order of Periakaruppa Chettiar and to the order of A. P. section Chockalingam Chettiar of Athangudi.
This provision it is contended, shows that the money under the hundi meant for the minor was to be invested, by Peria karuppa and Chockalingam in Chetti houses in the name of the plaintiff but to their order.
It is said that the amount so invested was, therefore, payable to themselves or to their order and that they were charged with the duty of seeing that the money was properly invested by operating on the minor 's deposit in their joint names and changing the investments when found necessary.
It is urged that, therefore, both of them were constituted thereby as the legal owners of the amount, the beneficial ownership remaining with the minor and that to this legal ownership was attached the obligation of seeing to the proper investment of the money and the augmentation of fund by the addition of substantial interest obtainable from reliable Chetti firms.
In order to determine whether this contention is correct, it is necessary to notice the terms of the relevant hundi of the same date as the Rajinama.
This and other hundis issued by reason of the Rajinama must be taken to be part of the Rajinama inasmuch as they were referred to therein by description under the heading "Details of the hundis".
Learned counsel for the respondent, junior Periakaruppa, urges that for this purpose it is the Rajinama alone that has to be looked into but not the terms of the hundi.
We are unable to agree with this contention.
We have no doubt that the Rajinama and the hundis are integrally 243 one and must be read together.
The hundi dated August 15, 1927, for Rs. 75,000 issued by Periakaruppa for the benefit of junior Periakaruppa as part of the Rajinama is as follows: "Credit to minor Periakaruppa Chetti, son of AL.
Alagappa Chetti of A. Muthupattanam Debit to AL.
Periakaruppan Chettiar.
Out of the sum of Rs. 1,50,000 payable by me according to the razinamah entered into in 0.
section No. 114 of 1926 of the file of the Sub Court, Devakotta, on the 29th Ani of this year (13th July, 1927). . . . . the amount towards your share for improving the same by making investments in Chetti firms for interest in your name and to my order and to the order of Athangudi A. P. section Chockalingam Chettiar, is Rs. 75,000.
Rangoon RM.
P. A. Muthiah Chetti shall, on demand, pay money for this sum of Rs. 75,000 together with Rangoon nadappu interest from the 29th Ani of this year (13th July, 1927) to the order of the three viz., (1) AL.
Alagappa Chetti, (2) Muthayi Achi, mother and guardian of minor Periakaruppan Chetti, son of the aforesaid person, and (3) A. P. section Chockalingam Chettiar of Athangudi, and debit it in my account with endorsement of payment made herein.
Periakaruppan Chettiar.
" Now taking para 3 of the Rajinama and this hundi together, it is clear that the banker of Periakaruppa one RM.
P.A. Muthiah Chetti of Rangoon was to pay this amount to the order of the three persons, Alagappa, Muthayi Achi, and Chockalingam and that the said amount was to be invested in the name of the minor in Chetti firms to the order of Periakaruppa and Chockalingam.
Now it is the contention of the learned counsel for junior Periakaruppa that the word 'order ' used in both these places has the same meaning as in the , (XX VI of 188 1) and that therefore what is contemplated is that the money under the hundi was in the first instance payable by Muthiah Chetti on whom it was drawn on the joint signatures of all the three persons named in the hundi 244 i.e., Alagappa, Muthayi Achi and Chockalingam and that what is further contemplated is the investment of that money by Periakaruppa and Chockalingam in Chetti firms in the name of junior Periakaruppa to the joint order of both of them.
On this view, it is said that both these persons have the power to draw the money so invested whenever they choose and have the control of the money and in that sense have the legal ownership of the money vested in themselves notwithstanding that the amount is invested in the name of the minor to indicate his beneficiary ownership.
Learned counsel for the appellant Ranganatha contends that this is not the proper interpretation of the word ' order ' as used in reference to the joint names of Periakaruppa and Chockalingam.
He refers us to certain cases of the Madras High Court which recognised the practice of Chetti firms receiving deposits in the name of a particular person to the maral of certain other person or persons and that the idea of maral is merely to indicate that the change of investment was to be made with the consent of the maraldar without in any way affecting the ownership of the person in whose name the money is deposited.
According to the cases on which he relies, the maraldar has no right to operate on the account and withdraw the money.
It has been pointed out to us on the other side that the material word used in this context both in para 3 of the Rajinama and in the hundi itself is " order ' and not maral '.
It is also urged that the word maral has acquired no such settled meaning, as the appellant ascribes to it.
There are decisions showing that the question as to what the word maral means is one that must depend on the proof in each particular case of usage of that word by the Nattukottai Chetti firms.
This has been laid down by the Privy Council in Arunachalam vs Vairavan (1) and in Muthuraman vs Periannan (2).
In view of these decisions and the fact to which our attention has been drawn that there is no pleading in this case as to the meaning of the word 'maral ' or that the word 'order ' in the context of this case has been used in the sense (1) A.I.R. 1929 P.C. 254, 256.
(2) A.I.R, 1934 Mad. 621, 622.
245 of maral, we are not prepared to uphold the contention that the word ' order ' in this case can be given the meaning which is attributed to the word 'maral ' in some of the cases which have been cited to us for the appellant.
It does not, however, follow that the word ' order ' in this case in its application to the two persons Periakaruppa and Chockalingam, is used in the sense which it has under the Negotiable Instruments,Act.
Learned counsel for the respondent, junior Periakaruppa, relies on section 13(1), Explanation (iii), taken with sections 8, 9, and 78 of the .
He urges that in the case of a negotiable instrument the person who is indicated as the ' orderer ' (if that word may be used in this context) is the holder thereof and is the person who is entitled to receive the amount thereunder and to give a discharge in respect thereof and that, therefore, he is virtually the legal owner thereof.
If, as held in Krishnashet bin Ganshet Shetye vs Hari Valjibhatye (1), the , (in the absence of any local usage to the contrary) applies to hundis, what is urged above may well be applicable to the money of the original hundi for Rs. 75,000 drawn on Muthiah Chetti and specifically payable on demand to the order of the three persons, Alagappa, Muthayi Achi and Chockalingam.
But the position as regards the amount so collected, and thereafter invested in the name of junior Periakaruppa, is not necessarily the same.
It is true that para 3 of the Rajinama and the narration in the relevant hundi clearly show that the amount of the hundi (apparently after realisation thereof) is to be invested in Chetti firms in the name of minor Periakaruppa and that such investment is to be to the order of both Periakaruppa and Chockalingam.
This is obviously nothing more than a deposit in the name of the minor after such collection.
The investment would presumably be covered by an ordinary deposit receipt in the name of the minor.
A deposit receipt of that kind does not fall within the definition of 'negotiable instrument ' under section 13 of the .
There is no authority for showing that such a deposit receipt is a# (1) Bom.
246 document to which the notions of as to the use of the word order ' and the legal implications thereof would be applicable.
On the other hand there appears to, be authority to the contrary.
See Sethna vs Hemmingway(1) and In re Travancore National and Quilon Bank Ltd.(1).
Both these cases indicate that a deposit receipt is not a negotiable instrument.
It is true that in the language of the hundi, at both places, i.e., (1) where the hundi is to be cashed, and (2) at the place where the cash so collected is to be invested, the same word 'order ' is used with reference to different sets of persons.
It is, therefore, suggested that they have to be understood in the same sense.
But the hundi, though intended for the minor and credited to him, is not drawn specifically in favour of the, minor but only to the order of certain named individuals, while the investment is to be made specifically in the name of the minor indicating that he is the owner thereof.
It would be begging the question to say that the orderdars in this context are the legal owners and that hence this indicates only his beneficial ownership.
It appears to us reasonably clear that merely because para 3 of the Rajinama and the narration in the relevant hundi both contemplate the amount of hundi on realisation to be invested in Chetti firms in the name of the minor to the order of both Periakaruppa and Chockalinga, it does not ipso facto follow as a matter of law that both of them are authorised to operate on it in the sense that they can withdraw the money and have the control of it in the same way as a person, to whose.
order a bill of exchange or a cheque is payable, can have.
While it is true that the appellant Ranganatha has not made out that the word 'order ' is used in the ,sense of the word 'maral ' and has not pleaded or proved what maral or order in this case means, the plaintiff has not equally made out that the word 'order ' in para 3 of the Rajinama in its application to Periakaruppa and Chockalingam in the context, authorises them to obtain absolute control of the money deposited.
But it is urged that this is implicit (1) A.I.R. 1914 BOM.
286, 287.
(2) A.I.R. 1940 Mad. 157, 159.
247 in the language of para 3 which refers to investment and management.
Undoubtedly under the terms of the Rajinama the amount is to be invested in Chetti firms in the name of the second plaintiff and the two persons, Periakaruppa and Chockalingam, are to be associated with the investment, by its being designated as being to their order, whatever that may mean, and they are also enjoined and associated with it in the following terms.
" Iruvarghalum mel parthu varavendiyadu This clause which is in Tamil language has been translated in the official translation as " the aforesaid two persons shall be in management.
" Two out of us in this Bench who have a fairly working acquaintance with Tamil language are not satisfied that ' management is a correct translation for the word 'mel parthu '.
What the clause contemplates is ' mel parve ' which literally means 'over seeing '.
It conveys the idea of ,;supervision ' and does not imply the capacity to operate on the deposit.
But it is suggested that the relevant clause taken as a whole indicates that both together have the power of investment and reinvestment as indicated by the use of the phrase in Tamil, viz., 'koduthu vangi ', which means 'giving and taking ', i.e., 'lending and taking back. ' This phrase is generally used to indicate 'investing. ' But it is not very clear in the structure of the sentence in which this phrase occurs that it is the two persons Periakaruppa and Chockalingam that are to do this 'investing. ' The word 'iruvarkalum ' in this sentence follows 'koduthu vangi ' and precedes 'mel parthu varavendiyathu` and indicates rather that their joint responsibility relates to only 'mel parvai ' and not 'koduthu vangal '.
In a matter like this, however, relating not merely to the meaning of a particular word such as ' mel parthu ' as above but to the contextual meaning of an entire clause in which a particular phrase like 'koduthu vangi ' is used, we do not wish to base the decision on our own impression as to the implication of that phrase in the context and would prefer to go by the official English translation which is as follows; 248 "The amount. . . shall be invested in Chetti houses in the name of the second plaintiff, to the order of Periakaruppan Chettiar, the first defendant, and to the order of A.P.S. Chockalingam Chettiar of Athangudi, the junior paternal uncle of the aforesaid Muthayi Achi, and the aforesaid two persons shall be in management.
" But even this does not indicate that the power of investment is vested in them but only 'mel parve ' which, in our view, has been wrongly translated as 'management. ' Taking the whole of this clause carefully we are not satisfied that the language clearly indicates that the power of operating in respect of the deposit by way of withdrawing the amount and being in control thereof is vested in Periakaruppa and Chockalingam.
All that the language indicates with certainty is that these two persons are specially enjoined to supervise the investments and that they are "orderdars," whose meaning has not been made out.
In such an ambiguous situation as to the, meaning of the words used and the intention of the parties thereto, it is permissible to look into and consider what the contemporaneous actings of the parties are which may be treated as virtually part of the same transaction.
The hundi for Rs. 75,000 for the benefit of junior Periakaruppa dated August 15, 1927, was, according to para 2 of the Rajinama, payable by April 11, 1928.
There is an endorsement on the hundi signed by Alagappa, Muthayi Achi and Chockalingam dated May 31, 1928, to the effect that the money due under that hundi is to be paid to Rangoon A. P. section Firm (which means Chockalingam 's firm) together with interest thereon.
On the terms of the hundi the interest was payable from July 13, 1927, on which date the Panchayatdars appear to have settled the terms of the Rajinama.
This shows that the amount was actually drawn on the signatures of the three persons and was intended to be collected by Chockalingam 's firm at Rangoon.
The hundi also bears a note signed by Chockalingara 's agent, A. P. section Somasundaram, that the principal and interest of the hundi amounting to Rs. 80,726 15 3 was received through another banker 249 named KM.
Somasundaram Chetti as per letter of Periakaruppa to KM.
Somasundaram Chetti on April 10, 1928.
It is in the evidence of this A. P. section Somasundaram, clerk of Chockalingam, who was examined as P.W. 2 on commission, that after its withdrawal the money was in fact credited on or about June 19, 1928, in the accounts of A. P. section Firm at Rangoon in the name of junior Periakaruppa, to the order of (senior) Periakaruppa and Chocklingam under the directions of Chockalingam.
It is the evidence of this Somasundaram that Chockalingam directed him to invest the amount in Rs. 4,000 or Rs. 5,000 in reliable and sound Chetti firms, presumably meaning thereby that the idea was to keep the money in the A.P.S. Firm provisionally until he was able to invest the money safely by distributing it over several reliable Chetti firms in comparatively small sums.
That this was the real intention of everybody concerned in entrusting the money to the A.P.S. Firm is confirmed by what is narrated in exhibit P 4, a receipt issued in favour of Periakaruppa, for the total sum of Rs. 75,000 collected in respect of the two hundies for the amounts of Rs. 50,000 and Rs. 25,000 respectively, belonging to Alagappa under the compromise.
That receipt shows the collection of a sum of Rs. 76,274 1 9 being the principal and interest of the two hundies, and recites also some other matters.
It ends with the following significant narration : "We shall obtain money for the hundi for Rs. 75,000 of minor Periakaruppan Chettiar and for the hundi for Rs. 14,000 credit it in the firm of Rangoon A.P.S. invest it in our Nattukottai Chetti firms for thavani to the order of (1) AL.
Periakaruppan Chetti of A. Muthupattanam, and (2) A.P.S. Chockalingam Chetti of Athangudi, and deliver the copy of the aforesaid debit and credit account, and copies of the signature letters.
" This is signed by A.P.S. Chockalingam Chettiar as the power agent of AL.
Alagappa Chettiar and also by Muthayi Achi for herself and for minor Periakaruppan Chetti.
This narration in the receipt 32 250 indicates quite clearly that it was the father and the mother of the junior Periakaruppa that took the responsibility of authorising the A.P.S. firm to collect the hundi amount and of investing it in other Nattukottai Chetti firms for thavanai.
The intention clearly appears to be that it is Chockalingam that was to collect the money on the hundi and it was Chockalingam that was to arrange for the investment of the same (on the legal responsibility of Alagappa and Muthayi Achi, the natural guardians of the minor).
This is exactly what is borne out as to what happened thereafter as appears from the evidence of Chocka lingam 's clerk, Somasundaram, P. W. 2.
This seems really to indicate that what the parties throughout intended was that while the collection of the money under the hundi was to be under the signature of all the three, viz., Alagappa, Muthayi Achi and Chockalingam, the agency actually to collect was to be the firm of Chockalingam in Rangoon and it is that firm that was to arrange for distributing the money over various other Nattukottai Chetti firms by way of safe and good investments on the implied authority of the natural guardians, viz., the father and mother.
This obviously would take some time and during this time Chockalingam 's firm would naturally have to be in charge of the funds.
It appears reasonably clear, however, that a long term investment in Chockalingam 's firm as such was not contemplated.
This may be inferred from the wording in para 3 of the Rajinama which says that "the signature letters and accounts pertaining to the aforesaid amount shall be with the aforesaid Chockalingam Chettiar.
In the context this obviously means that the deposit receipt and the periodical accounts relating to that deposit by way of addition of interest and so forth were to be in the custody of Chockalingam.
Thus Chockalingam was the person primarily intended to collect the money and to be in charge of the investment, that pending final investment Chockalingam was to have temporary custody of the amount.
The point to be noted about this subsequent conduct of the persons concerned is that in respect of these various matters Periakaruppa 251 does not at all come into the picture.
The narration in the receipt, exhibit P 4, which recites under the two signatures thereto, of Chockalingam as agent of Alagappa and Muthayi Achi as guardian, is that they undertake to obtain the money and invest it in Nattukottai Chetti firms for thavanai.
It does not indicate that it will be so invested on the instructions or consent also of Periakaruppa.
Nor does Somasundaram, P.W. 2, in his evidence give any indication that the collection by and investment in, Chockalingam 's firm was actually done under the instructions of Periakaruppa or that it was thereafter contemplated that in splitting the amount into smaller sums, it would have to be under instructions of Periakaruppa also.
There is no evidence that Chockalingam sent his instructions to his clerk Somasundaram with the knowledge and consent of Periakaruppa or in collaboration with him.
It is also significant that the only further act of reinvestment which was made during Periakaruppa 's lifetime, viz., the purchase of a house for Rs. 30,000 at Athangudi in the name of junior Periakaruppa and of which the minor is admittedly enjoying the benefit, does not.
appear to have been with the knowledge or consent of Periakaruppa.
Thus looking at the actings of the parties concerned, there is nothing to show that the parties understood the term in para 3 of the Rajinama as laying on Periakaruppa the responsibility of actually making investments and reinvestment for that purpose to operate and withdraw the amounts from the banker or bankers with whom the hundi money after collection was to be invested.
Learned Judges of the High Court were greatly influenced by the assumption that it could not have been the intention of Periakaruppa to allow a spendthrift like Alagappa to handle the funds of the minor for purposes of investment or change of investment, and that therefore it must have been intended that both the persons Periakaruppa and Chockalingam were to have that power and that this was what was meant by directing that the minor 's money must be invested " to the order of Periakaruppa and Chockalingam ".
It is true that the handling of the minor 's funds by his 252 father Alagappa alone was not likely to have been contemplated.
But that does not necessarily mean that Periakaruppa took upon himself the responsibility for such handling either by himself or jointly with Chockalingam.
On the other hand it looks as though that it was Chockalingam that took such responsibility.
Though not himself a panchayatdar he must have helped to bring about the compromise on the side of Alagappa, Muthayi Achi and junior Periakaruppa.
This is indicated by his having signed the Rajinama as a witness thereto.
The entire set up of the Rajinama and the subsequent actings show that all the parties concerned including Periakaruppa himself had con fidence in Chockalingam who was no other than the paternal uncle of Muthayi Achi, the mother of the minor.
In fact even as regards the sum of Rs. 75,000/payable to Alagappa himself under the two hundies it was Chockalingam alone that was constituted virtually the trustee for collecting the said hundi amounts and paying thereout the debts which had by then been incurred by Alagappa.
This is clear from the fact appearing in paras 4 and 10 of the Rajinama.
Para 10 says that the plaintiff Alagappa has endorsed on the two hundies belonging to him that they are payable to the order of Chockalingam and it further recites that the hundies have been delivered to the aforesaid Chockalingam.
It is specifically stated in that para that Chockalingam was liable for the discharge of encumbrances that have been created by the first plaintiff therein (Alagappa).
This was reiteration of what was stated in para 4 which says that whatever be the encumbrances created by the first plaintiff in respect of any property mentioned in the plaint in the suit, the aforesaid Chockalingam shall discharge them without any liability whatever to the first defendant.
It is clear that Periakaruppa was willing to trust Chocklingam completely even in respect of a matter which would directly affect him, viz., the discharge of Alagappa 's debts incurred by way of encumbrances, so as to relieve him from all liabilities for such debts.
It is unreasonable, therefore, to assume that he was not prepared to leave the responsibility for the collection 253 and investment of the minor 's funds also with Chockalingam but that he undertook a joint responsibility with him in respect of the same.
Undoubtedly para 3 of the Rajinama indicates that the amount was to be deposited to the order of Periakaruppa as also Chockalingam and that both together are to have 'mel parve ' (supervision).
But whatever may be the connotation of this provision, it does not appear to us, with great respect to the learned Judges of the High Court, reasonable to attribute to Periakaruppa the undertaking of the responsibility of a trustee on its basis.
Trusteeship is a position which is to be imputed to a person on clear and conclusive evidence of transfer of ownership and of the liability attached to such ownership on account of confidence reposed, and on such liability having been accepted by the alleged trustee.
There is no clear and conclusive proof of any of these elements in the present case so far as Periakaruppa is concerned.
Learned counsel for the respondent has also relied upon a statement in the affidavit of Muthayi Achi,mother of junior Periakaruppa dated August 6, 1927, in respect of the application for compromise the litigation on behalf of the minor in which it is stated as follows: " The first defendant (meaning Periakaruppa) has given a hundi for Rs. 75,000 to my junior paternal uncle A. P. section Chockalingam Chettiar on behalf of the minor 2nd plaintiff in accordance with the award of the Panchayatdars.
It has been settled that the aforesaid amount of Rs. 75,000 should be deposited in Chetti firms in the name of the aforesaid minor, to the order of the 1st defendant and the aforesaid A. P. section Chockalingam Chettiar and improved.
" It is urged that when the hundi itself has been handed over to Chockalingam, as this affidavit indicates, the very property belonging to the minor must be taken to have been delivered over to Chockalingam as one of the two persons in whose order the money was to be deposited and that this, in law, amounts to transfer of ownership to one, on behalf of both, with the obligation attached and that the acceptance thereof 254 must be assumed in view of the fact that the whole of the Rajinama including this term was agreed to by Periakaruppa along with the others.
It is quite clear, however, in this case that the mere delivery of the hundi to Chockalingam cannot be treated as itself transfer of ownership of the money which was to be collected in respect thereof.
Paras 1 and 2 of the Rajinama itself are in substance as follows: " That the Panchayadars directed the first defendant (Periakaruppa) to pay to the plaintiffs a total of 1,50,000, and that the first defendant accordingly executed three hundies in the names of the plaintiffs.
" Thus by virtue of the direction to pay, the compromise brought about between Periakaruppa on one side and Alagappa and junior Periakaruppa on the other the relationship of debtor and creditor.
It is obvious that until the hundies are realised that relation would continue.
There is no transfer of ownership till then.
(See In re Beaumont, Beaumont vs Ewbank(1).
Further, as has already been noticed, the hundi issued by Periakaruppa in respect of junior Periakaruppa 's share of Rs. 75,000 was originally issued upon Muthiah Chettiar of Burma but was ultimately realised through one KM.
Somasundaram Chetti on a letter written by Periakaruppa to him.
This indicates that for some reason or other the hundi could not be cashed on the original banker and had to be realised through another banker.
In this state of facts it is not feasible to say that the mere handing over to Chockalingam of the original hundi drawn on Muthiah Chettiar on the date of the compromise itself (as mentioned in the affidavit of Muthayi Achi) can be treated as transfer to Chockalingam of the very property of junior Periakaruppa under the Rajinama.
The trust, therefore, if any, in respect of that amount must attach only after realisation of the amount and by reason of the acting of the parties subsequent thereto implying acceptance of the obligations under the trust.
The more fact that Periakaruppa agreed to all the terms of the Rajinama does not constitute such acceptance.
It is at best only indication of a prospective willingness to accept.
As already stated there is absolutely no evidence of an (1) 255 actual acceptance after the hundi was cashed and the amount was in fact treated by Chockalingam as an investment in his firm.
Indeed even if it be assumed that Periakaruppa became a joint trustee with Chockalingam in respect of the amount belonging to the minor it does not follow that Periakaruppa was responsible for the breach of trust in this case, committed obviously by Chockalingam only.
As already stated ' it appears quite clearly that collection by Chocka lingam of the minor 's hundi and his keeping custody thereof in his own firm until the amount is regularly invested in other Chetti firms was a matter which was under the initial contemplation of everybody concerned and in particular of the father and the mother who are his natural guardians.
That this was the position as late as July, 1928, is quite clear from the evidence of Chockalingam 's clerk, Somasundaram, P. W. 2.
Periakaruppa died in July, 1929, about an year later.
There is absolutely nothing to indicate that 'the provisional retention of the amount in Chockalingam 's firm for that period, was unreasonable or that Periakaruppa had any notion that Chockalingam was financially in embarrassed circumstances and that he made use of the funds.
It is true that, under law, the investment of funds by a trustee with himself would constitute breach of trust.
But before a co trustee can be made liable therefor some kind of knowledge or connivance or gross negligence or the like contributing factor on his part has got to be made out.
It may be that in this case the minor 's funds have been frittered away by the embarrassed circumstances of Chockalingam in whom everybody seems to have reposed confidence.
If that was in fact what happened, it may be unfortunate for the minor.
But that cannot be any reason for affecting Periakaruppa or his estate with the liability for Chockalingam 's breach on an assumed construction of what appears at best to be equivocal and ambiguous language in the Rajinama.
The burden is on the plaintiff, junior Periakaruppa, to make out clearly that by the Rajinama Periakaruppa became a trustee for the minor 's fund and incurred 256 liability therefor for his co trustee 's breach.
At the time of the compromise the minor was less than two years in age.
Periakaruppa was more anxious to get rid of all his liabilities arising from his son 's past and wanted his son 's family to clear out bag and baggage from the family house.
In such a situation if he was anxious for the minor boy 's welfare to the extent of taking responsibility for his money on himself though it be jointly with Chockalingam, clearer and decisive language was to be expected.
In our opinion this has not been made out.
Hence this suit of the plaintiff, junior Periakaruppa, also fails, against Ranganatha and his minor son.
The appeal is accordingly allowed and the suit is dismissed as against defendants 1 and 2 with costs throughout.
GOVINDA MENON J.
I am in perfect agreement with the reasoning and conclusions contained in the judgment of my learned brother B. Jagannadhadas J. in Civil Appeal No. 169 of 1956, and I agree that the appeal be allowed with costs.
In Appeal No. 104 of 1954, 1 have considerable doubts regarding the construction of cl.
(3) of Exhibit P. 1.
If Periakaruppa and Chockalingam were entrusted with the duty of investment, there can be no doubt whatever that they are constituted trustees.
The Tamil expression 'Koduthu Vanghi ' clearly signifies investment, but the question is who is to make the investment.
If Periakaruppa and Chockalingam have merely to supervise the investment, as the Tamil expression 'Mel Parthu ' means, and not actually invest the amount then the view taken by my learned brothers is right.
I am inclined to think that the duty of investment is cast on Periakaruppa and Chockalingam, but as this is a matter which is not free from doubt, not without hesitation, I agree with the order passed by my learned brothers.
Appeals allowed.
| The auction of the property of judgment debtor No. 1, in execution of a money decree, was held on July 26, 1985.
The highest bid of Rs.22,000 offered by the auction purchaser was accepted.
The case for confirmation of sale was fixed on September 30, 1985.
In the mean while, judgment debtor No. l deposited the bid amount on August 29, 1985 together with an application under O,XXI,r.90 read with section 151 of the Civil Procedure Code for setting aside the sale.
On September 6, 1985, he made another application under O.XXI r. 89 read with section 151 of the Code and made a deposit of the balance amount.
The objection raised by the auction purchaser that the deposit required by r. 89 not having been made within 30 days of the date of the sale as required by r. 92(2) of the Code, the sale was liable to be con firmed under sub r.
(1) thereof, was overruled by the Principal Munsif.
This order was upheld by the High Court.
Dismissing the SLP, this Court, ^ HELD: 1.
Under O.XXI, r. 89 as it now exists, both the application and the deposit must be made within 30 days of the sale.
The failure to make such deposit within the time allowed at once attracts the consequences set forth under sub r.
(2) of r. 92.
[737 A B] 2.
The limitation prescribed for an application under O.XXI, r. 735 89 was 30 days from the date of sale under Schedule I, article 166 of the Limitation Act, 1908, now replaced by article 127 of the . article 127 has now been amended by Act 104 of 1976 and the words 'sixty days ' have been substituted for the words 'thirty days '.
[736 F G] 3.
As a result of this amendment, the limitation for an application to set aside a sale in execution of the decree including any such application by a judgment debtor under O.XXI, r. 89 or r.90 is, therefore, sixty days now.
[736 G] 4.
Sub r.
(2) of r. 92 of O.XXI of the Code is inconsistent with article 127 of the .
The Parliament must enact the necessary change in law for an appropriate amendment of sub r.
(2) of r. 92 of the Code.
[737 A B] In the instant case, the judgment debtor No. 1 having deposited the decretal amount together with 5% of the purchase money and having made the application under O.XXI, r. 89 within sixty days of the sale i.e. within the period as provided by article 127 of the , the sale was liable to be set aside.
[737 G H] 5.
The provision of O.XXI, rr. 89 and 92(2) of the Code of Civil Procedure and that of article 127 of the , should receive harmonious construction.
[737 F G] Thangammal & Ors.
vs K. Dhanalakshmi & Anr., AIR 1981 Mad.
254, approved.
|
Criminal Appeal No. 139 of 1987.
From the Judgment and Order dated 25.4.
1986 of the Madhya Pradesh High Court in Misc.
Criminal Case No. 1 135 of 1985.
Shanti Bhushan, K.M. Tiwari, L.P. Gaur and Ms. Rani Jethmalani for the Appellant.
U.R. Lalit (not present), P.S. Poti, S.K. Gambhir, Sanjay Sarin, S.N. Khare and T.C. Sharma for the Respondents.
`The Judgment of the Court was delivered by JAGANNATHA SHETTY, J.
We grant special leave and proceed to dispose of the appeal.
The appeal is directed against the order of the High Court of Madhya Pradesh dated April 35, 1986 quashing the final order made under sec.
145 of Cr.
P.C. in respect of a shop premises.
The shop was in possession of one Asgarali son of Akbar Ali as, mortgagee since October 17, 1969.
On August 7, 1982, Asgarali was said to have leased out the shop to the petitioner and also delivered possession thereof.
The entering of possession by the petitioner became a subject matter of dispute.
Apprehending breach of peace, the police initiated proceedings under sec.
145 Cr.
P.C. before the Additional District Magistrate, Ujjain.
In that proceedings, the petitioner was party No. 2 and respondent PG NO 586 No. 2 was party No. 1, On August 13, 1982 the Magistrate made a preliminary order.
The proceedings continued for about three years.
On May 17, 1985, the Magistrate made the final order in the following terms: "Hence I believe that the party No. 2, Jhummamal alias Devandass S/o Jethanand had the occupation within two months from 13.8.
1982 on which summons were issued by the court under sec.
145 sub sec.
Hence I order that party No. 2 Jhummamal is entitled for the occupation of the shop unless he is evicted by procedure established by law.
And I issue injunction that there should not be any obstacle in handing over the possession to Jhummamal.
And if there are locks placed by Motilal or his accomplices, the same should be broken open.
And the goods, if any, found in the shop should be handed over to a responsible person after making a panchnama.
" It will be seen from the above order that the petitioner is entitled to restoration of possession since he was dispossessed forcibly and wrongfully within the terms of proviso to sec.
145(4) of Cr.
P.C. But unfortunately, the petitioner could not be put into possession.
On July 15, 1985, the respondent filed a suit for injunction.
On August 14, 1985, he obtained temporary injunction against the appellant.
But upon appeal that temporary injunction was vacated.
The learned First Additional District Judge, who delivered the Judgment in that appeal, has recorded the following findings: "Consequently it is clear from the above analysis that Asgar Ali was in possession of the disputed shop till 7. 8.82.
It seems to be his prima facie right to rent out the shop.
That it seems that he received the rent in advance executed the rent deed and transferred the possession to appellant/Jhummamal.
As it is mentioned above the First Information Report lodged by Kanhayalal on behalf of Jhummamal in which it is stated that Jhummamal obtained possession on 9.8.82, does not seem right, when only respondent has demanded possession in his petition dated 13.8.82.
Hence I believe that Jhummamal obtained the possession of the disputed shop in the capacity as tenant.
Respondent and his brothers put their locks later on.
And PG NO 587 as in my opinion on the date of occurrence of incident, Jhummamal was in possession of the shop, respondent,plaintiff does not have a prima facie case in his favour Hence, I believe that the temporary injunction order passed by the lower court is not just and as per law.
Consequently while disagreeing with the order passed by the lower court, I accept the appeal and quash the order passed by the lower court.
" In between the parties, there were also certain criminal proceedings regarding the theft from and house trespass on the same premises.
A couple of days before the preliminary order was made under sec.
145 Cr.
P.C. a relation of the appellant filed report before the Police complaining against the respondent.
On that report the respondent was prosecuted under secs.
380 and 454 of the IPC.
On February 22 1984, he was convicted of the said offences.
But upon appeal, he as acquitted by the Additional District Judge.
The revision against the order of acquittal was also dismissed by the High Court.
It may also be relevant to state that the respondent challenged the final order under sec.
145(6) of the Cr.
P.C. in a revision before the sessions Judge.
On September 27, 1985, that revision was dismissed.
After becoming unsuccessfull in the proceedings under sec.
145 Cr.
P.C. and also before civil court in the suit to or injunction.
the respondent moved the High Court under sec.
482 of Cr.
P.C. to quash the proceedings under sec.
145 Cr.
The High Court accepted the petition and quashed the proceedings by following the judgment of this Court in Ram Sumer Puri ,Mahant vs State of U. P.[1985] 1 SCC 427.The operative portion of the High Court order is as follows; "In view of the fact that civil proceedings in respect of the disputed premises is pending before the competent civil court, where interim reliefs have been prayed for and obtained, the reappears to be no justification for continuing with the proceedings u/s 145 Cr.
P.C. pending before the S.D.M. Shri Tiwari learned counsel submitted that in case the plaintiff 's suit is either withdrawn or dismissed, he would be left with no remedy.
This submission cannot be accepted PG NO 588 in view of the Supreme Court judgment as reported in Ram Sumer Puri vs State of U.P. AIR 1985 SC 472.
Section 145 is intended to provide a special remedy for the prevention of breach of peace arising out of a dispute relating to immovable property.
Its primary object is to maintain the public peace and not to decide disputes between the contending parties or adjudicate upon the rights of the parties to possession.
Now, that the civil court is seized of the matters it is desirable that such parallel proceedings in respect of the same subject matter and dispute should not be allowed to continue in the criminal court as it amounts to an abuse of the process of the court which is one of the grounds for invoking section 482 Cr.
For the foregoing reasons, this petition deserves to be allowed.
It is accordingly allowed.
The proceedings u/s 145 Cr.
P.C. pending before the Sub Divisional Magistrate Ujjain, along with the orders passed therein is, therefore, quashed.
" The validity of the aforesaid order has been called into question in this appeal.
It will be obvious from the order of the High Court that the decision of this Court in Ram Sumer 's case has been totally misunder stood.
In that case, a title suit for possession and injunction in respect of certain property was instituted before the civil court.
The suit was dismissed on February 28, 1981.
The matter was taken up in appeal.
When the appeal was pending for disposal, proceedings under sec.
145 Cr.
P.C. were initiated with regard to the same property.
In that proceedings, the Magistrate passed a preliminary order under sec.
145(1) of the Cr.
P.C. and also attached the property.
The aggrieved party challenged that order in a revision petition before the Allahabad High Court.
The High Court refused to interfere with that order.
But this Court quashed the proceedings under sec.
145 Cr.
P.C. observing : There is no scope to doubt ar dispute the position that the decree of the civil court is binding on the criminal court in a matter like the one before us.
Counsel for respondents 2 5 was not in a position to challenge the proposition that parallel proceedings should not be permitted to continue and in the event of a decree of the civil court, the criminal court should not be allowed to PG NO 589 invoke its jurisdiction particularly when possession is being examined by the civil court and parties are in a position to approach the civil court for interim orders such as injunction or appointment of receiver for adequate protection of the property during pendency of the dispute.
Multiplicity of litigation is not in the interest of the parties nor should public time be allowed to be wasted over meaningless litigation.
We are therefore, satisfied that parallel proceedings should flat continue and the order of the learned Magistrate should be quashed.
We fail to understand how the High Court in this case took advantage of the decision of this Court in Ram Sumer 's case.
The ratio of the said decision is that a party should not be permitted to litigate before the criminal court when the civil suit is pending in respect of the same subject matter.
That does not mean that a concluded order under sec.
145 Cr.
P.C. made by the Magistrate of competent jurisdiction be set at naught merely because the unsuccessful party has approached the civil court.
An order made under sec.
145 Cr.
P.C. deals only with the factum of possession of the party as on a particular day.
It confers no title to remain in possession of the disputed property.
The order is subject to decision of the civil court.
The unsuccessful party therefore must get relief only in the civil court.
He may move the civil court with properly constituted suit.
for may file a suit for declaration and prove a better right to possession.
The civil court has jurisdiction to give a finding different from that which the Magistrate has reached.
Counsel for the respondent, however, suggested that having regard to the nature of dispute and the rights of parties relating to the property in question, we should not exercise our extraordinary jurisdiction under article 136 of the Constitution.
We do not think that the contention could be accepted in view of the patently erroneous order of the High Court.
In the result, we allow the appeal, set aside that order of the High Court and restore that of the Magistrate.
The parties may work out their rights as per law.
P.S.S. Appeal allowed.
| % The Emergency Risks (Factories) Insurance Act, 1962 was enacted to provide for expeditious rehabilitation of industrial undertakings in the event of damage in times of war.
The Central Government accordingly undertook to insure the factories against war risks.
The Act envisaged the promulgation and effectuation of the Emergency Risks (Factories) Insurance Scheme mandating a compulsory insurance of factories against war risks on payment of prescribed premia.
The Director of Emergency Risks Insurance Scheme, after giving an opportunity to the appellant to show cause, determined the sum of Rs.47,59,109.00 as balance of premia due from the appellant.
The appellate authority the Central Government dismissed the appellant 's appeal.
The legality of the proceedings so culminating in the said appellate order was assailed by the appellant in the Writ Petition before the High Court of Andhra Pradesh, which was rejected.
Hence this appeal by special leave.
The contentions pressed by the appellant were (1) that "Distribution and Transmission lines" did not constitute 'Factory ' in the concept of 'insurable property ' under the 'Act '; (2) that in ascertaining the value of the insurable property, depreciation had had to be granted under the relevant provisions of the Income Tax, Act, 1922; (3) and that the 'Act ' was itself a piece of temporary legislation and the notice dated 217 28.11.1968 issued after 10.1.1968 when the legislation had spent itself out by efflux of time was without the authority of law.
Dismissing the appeal, it was ^ HELD: (1) The inhibitions of the limited import of the expression 'factory ' do not limit the identity of the 'insurable property ' which will have to be ascertained and determined in accordance with the provisions of the 'scheme '.
The Act enables the Central Government to declare that provisions of the 'Act ' and of the 'scheme ' shall apply to assets specified in section 17(1)(d), which include the whole or a specified part of the distribution and transmission system.
The 'scheme ' prepared and promulgated by notification S.O. 3974 which came into force with effect from 1.1.1963 provides, among other things, that the whole of the "Distribution and Transmission Systems" shall constitute 'insurable property ' and that the 'Act ' and the 'scheme ' shall be applied to them.
[220C H] (2) The provisions as to depreciation in a taxing law like the Income Tax Act contain elements of incentives and are also informed by considerations of policy of the tax and do not reflect purely economic criteria relevant to the determination of the depreciation.
In the instant case, the High Court found that the Electricity (Supply) Act itself provided a formula for working out the allowance of depreciation and the appellant had been adopting that formula for valuation of its properties, assets, etc.
There was, therefore, no error in principle in applying the standard of depreciation provided in .
[221G; 222D] (3) Whatever be the principles of construction of temporary statutes and the effect of the rights and obligations under them after the expiry of the statute itself, the 'Act ' in the instant case contains specific provisions preserving the rights and obligations.
For that purpose the 'Act ' invokes the provisions of section 6 of the General Clauses Act.
The principle behind section 6 of the General Clauses Act is that all the provisions of Acts would continue in force for purposes of enforcing the liability incurred when the Acts were in force and any investigation, legal proceedings, or remedy, may be instituted, continued or enforced as if the Acts had not expired.
[222F H; 223A B] Amadalavalasa Cooperative Agricultural & Industrial Society Ltd. vs Union of India, ; at 738, followed.
|
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